UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended ~~September 30, 2022~~March 31, 2023
OR
☐		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-40785

ASSURE HOLDINGS CORP.

(Exact Name of Registrant as Specified in its Charter)


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

7887 E. Belleview Ave., Suite 500 Denver, Colorado		80111
(Address of ~~Principal Executive Offices)~~principal executive offices)		(Zip Code)

(720) 287-3093

(Registrant’s ~~Telephone Number,~~telephone number, including ~~Area Code)~~area code)

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


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

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

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

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

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

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

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

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

The number of the registrant’s shares of common stock outstanding as of ~~November 10, 2022~~May 12, 2023 was ~~18,512,605~~1,101,598.

Table of Contents

ASSURE HOLDINGS CORP.

FORM 10Q

FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2022~~MARCH 31, 2023

TABLE OF CONTENTS


	PAGE
Part I – Financial Information	2
Item 1. Financial Statements (unaudited)	2
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Operations	3
Condensed Consolidated Statements of Cash Flows	4
Condensed Consolidated Statements of Changes in Shareholders’ Equity	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	1817
Item 3. Quantitative and Qualitative Disclosures About Market Risk	2824
Item 4. Controls and Procedures	2825

Part II – Other Information	2825
Item 1. Legal Proceedings	2825
Item 1A. Risk Factors	2925
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	2925
Item 3. Defaults Upon Senior Securities	2926
Item 4. Mine Safety Disclosures	2926
Item 5. Other Information	3026
Item 6. Exhibits	3026

Signatures	3127

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and par amounts)

(unaudited)


	September 30,		December 31,		March 31,		December 31,
	2022		2021		2023		2022
ASSETS
Current assets
Cash	$	3,798	$	4,020	$	505	$	905
Accounts receivable, net		20,860		27,810		12,887		15,143
Income tax receivable		157		136
Other current assets		217		151		401		340
Due from MSAs		6,602		5,886		4,797		5,006
Total current assets		31,634		38,003		18,590		21,394
Equity method investments		474		525		273		310
Fixed assets		35		85		66		76
Operating lease right of use asset, net		725		956		617		672
Finance lease right of use asset, net		469		743		305		382
Deferred tax asset, net		2,536		—
Intangibles, net		3,311		3,649		293		390
Goodwill		4,448		4,448		1,025		1,025
Total assets	$	43,632	$	48,409	$	21,169	$	24,249
LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	$	2,585	$	2,194	$	3,615	$	2,919
Current portion of debt		—		515		2,620		965
Current portion of lease liability		622		702		524		550
Current portion of acquisition liability		306		306		306		306
Other current liabilities		133		—		136		231
Total current liabilities		3,646		3,717		7,201		4,971
Lease liability, net of current portion		1,102		1,482		826		964
Debt, net of current portion		12,628		13,169		10,429		11,874
Acquisition liability		255		459		102		179
Fair value of stock option liability		—		25
Deferred tax liability, net		—		601		1,170		796
Total liabilities		17,631		19,453		19,728		18,784
Commitments and contingencies (Note 8)
SHAREHOLDERS’ EQUITY
Common stock: $0.001 par value; 180,000,000 shares authorized; 18,512,605 and 12,918,866 shares issued and outstanding, as of September 30, 2022, and December 31, 2021, respectively		19		13
Common stock: $0.001 par value; 9,000,000 shares authorized; 1,101,098 and 1,051,098 shares issued and outstanding, as of March 31, 2023 and December 31, 2022, respectively						22		21
Additional paid-in capital		49,044		43,387		50,289		50,000
Accumulated deficit		(23,062)		(14,444)		(48,870)		(44,556)
Total shareholders’ equity		26,001		28,956		1,441		5,465
Total liabilities and shareholders’ equity	$	43,632	$	48,409	$	21,169	$	24,249

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
Revenue
Technical services	$	1,190	$	4,421	$	2,653	$	11,649	$	1,234	$	1,396
Professional services		4,278		2,738		7,605		3,704		1,874		2,473
Other		736		1,387		2,292		4,180		444		832
Total revenue		6,204		8,546		12,550		19,533		3,552		4,701
Cost of revenues, excluding depreciation and amortization		3,685		4,254		11,564		9,956		3,373		3,877
Gross margin		2,519		4,292		986		9,577		179		824
Operating expenses
General and administrative		3,340		3,180		11,177		10,275		3,211		4,241
Sales and marketing		198		247		688		748		128		252
Depreciation and amortization		243		293		761		965		184		258
Total operating expenses		3,781		3,720		12,626		11,988		3,523		4,751
(Loss) income from operations		(1,262)		572		(11,640)		(2,411)
Loss from operations										(3,344)		(3,927)
Other income (expenses)
Income from equity method investments		9		139		18		136		25		5
Gain on Paycheck Protection Program loan forgiveness		—		—		1,665		—		—		1,665
Other income (expense), net		(37)	��	(27)		29		(29)
Other expense, net										58		38
Accretion expense		(170)		(171)		(511)		(386)		(170)		(170)
Interest expense, net		(471)		(264)		(1,317)		(500)		(509)		(407)
Total other expense		(669)		(323)		(116)		(779)		(596)		1,131
(Loss) income before income taxes		(1,931)		249		(11,756)		(3,190)
Income tax benefit (expense)		498		(158)		3,138		743
Net (loss) income	$	(1,433)	$	91	$	(8,618)	$	(2,447)
(Loss) income per share
Loss before income taxes										(3,940)		(2,796)
Income tax (expense) benefit										(374)		337
Net loss									$	(4,314)	$	(2,459)
Loss per share
Basic	$	(0.09)	$	0.01	$	(0.63)	$	(0.21)	$	(4.09)	$	(3.81)
Diluted	$	(0.09)	$	0.01	$	(0.63)	$	(0.21)	$	(4.09)	$	(3.81)
Weighted average number of shares used in per share calculation – basic		15,220,948		11,838,032		13,686,686		11,528,371		1,054,933		645,950
Weighted average number of shares used in per share calculation – diluted		15,220,948		15,724,103		13,686,686		11,528,371		1,054,933		645,950

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


	Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2023		2022
Cash flows from operating activities
Net loss	$	(8,618)	$	(2,447)	$	(4,314)	$	(2,459)
Adjustments to reconcile net loss to net cash used in operating activities
Income from equity method investments		(18)		(136)		(25)		(5)
Stock-based compensation		464		818		(10)		323
Depreciation and amortization		408		599		184		258
Amortization of debt issuance costs		120		53		39		40
Provision for stock option fair value		(25)		24		—		(23)
Gain on Paycheck Protection Program loan		(1,665)		—		—		(1,665)
Accretion expense		511		386		170		170
Change in operating assets and liabilities
Accounts receivable, net		6,950		(5,723)		2,256		1,351
Prepaid expenses		(66)		177		(61)		(248)
Right of use assets		585		291		135		80
Accounts payable and accrued liabilities		391		(1,045)		697		467
Due from MSAs		(716)		(1,121)		234		(66)
Lease liability		(540)		(399)		(244)		(171)
Income taxes		(3,158)		(743)		374		(358)
Other assets and liabilities		117		(86)		(95)		(15)
Net cash used in operating activities		(5,260)		(9,352)		(660)		(2,321)
Cash flows from investing activities
Purchase of fixed assets		(26)		—		—		(26)
Net cash paid for acquisitions		(204)		(204)		(77)		(51)
Distributions received from equity method investments		69		312		37		35
Net cash provided by (used in) investing activities		(161)		108
Net cash used in investing activities						(40)		(42)
Cash flows from financing activities
Proceeds from exercise of stock options		4		19		—		4
Proceeds from share issuance, net		5,195		832		300		—
Proceeds from Paycheck Protection Program loan		—		1,665
Proceeds from debenture		—		7,360
Repayment of short-term debt		—		(4,100)
Net cash provided by financing activities		5,199		5,776		300		4
Decrease in cash		(222)		(3,468)		(400)		(2,359)
Cash at beginning of period		4,020		4,386		905		4,020
Cash at end of period	$	3,798	$	918	$	505	$	1,661
Supplemental cash flow information
Interest paid	$	1,093	$	301	$	550	$	410
Income taxes paid	$	—	$	—	$	—	$	—
Supplemental non-cash flow information
Purchase of equipment with finance leases	$	79	$	431	$	—	$	79

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)

Additional



Total

Common Stock

paid-in

Accumulated

shareholders'


Shares

Amount

Capital

deficit

equity
Balances, June 30, 2021

11,833,431

$
12

$
38,136

$
(14,226)

$
23,922
Exercise of stock options

3,000

—

19

—

19
Stock-based compensation

—

—

210

—

210
Convertible debt converted into common shares

2,858

—

20

—

20
Other

15

—

—

—

—
Net income

—

—

—

91

91
Balances, September 30, 2021

11,839,304

$
12

$
38,385

$
(14,135)

$
24,262

Balances, June 30, 2022

12,919,666

$
13

$
43,963

$
(21,629)

$
22,347
Share issuance, net

5,576,087

6

5,189

—

5,195
Stock-based compensation

16,852

—

(108)

—

(108)
Net loss

—

—

—

(1,433)

(1,433)
Balances, September 30, 2022

18,512,605

$
19

$
49,044

$
(23,062)

$
26,001


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

Balances, December 31, 2021	12,918,866	$	13	$	43,387	$	(14,444)	$	28,956	645,943	$	13	$	43,387	$	(14,444)	$	28,956
Exercise of stock options	800		—		4		—		4	40		—		4		—		4
Stock-based compensation										—		—		323		—		323
Net loss										—		—		—		(2,459)		(2,459)
Balances, March 31, 2022										645,983	$	13	$	43,714	$	(16,903)	$	26,824

Balances, December 31, 2022										1,051,098	$	21	$	50,000	$	(44,556)	$	5,465
Share issuance, net	5,576,087		6		5,189		—		5,195	50,000		1		299		—		300
Stock-based compensation	16,852		—		464		—		464	—		—		(10)		—		(10)
Net loss	—		—		—		(8,618)		(8,618)	—		—		—		(4,314)		(4,314)
Balances, September 30, 2022	18,512,605	$	19	$	49,044	$	(23,062)	$	26,001
Balances, March 31, 2023										1,101,098	$	22	$	50,289	$	(48,870)	$	1,441

See accompanying notes to condensed consolidated financial statements.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1.NATURE OF OPERATIONS

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

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

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

Neuromonitoring was formed on August 25, 2015 in Colorado and currently has multiple ~~wholly owned~~wholly-owned subsidiaries. The Company’s services are sold in the United States, directly through the Company.

Networks was formed on November 7, 2016 in Colorado and holds varying ownerships interests in numerous Provider Network Entities (“PEs”), which are professional IONM entities. These entities are accounted for under the equity method of accounting. Additionally, Networks manages other PEs that Networks does not have an ownership interest and charges those PEs a management ~~fee.~~

~~COVID~~~~-19~~

feels during surgical procedures and to pre-emptively notify the underlying surgeon of any nervous related issues that are identified. The ~~Company’s commitment to~~INPs perform their services in the ~~health, well-being and peace of mind of our employees and~~operating room during the people we serve remains our focus as the pandemic environment evolves. We continue to leverage our resources, expertise, data, and actionable intelligence to assist customers, clients and care providers throughout this time.

surgeries. The ~~situation surrounding COVID-19 remains fluid with continued uncertainty and~~INPs are certified by a wide range of potential outcomes. We continue to actively manage our response and assess impacts to our financial position and operating results, as well as mitigate adverse developments in our business. Further discussion of the potential impacts on our business from the COVID-19 pandemic is provided under Part I, Item 1A – Risk Factors of the Form 10-K filed on March 14, 2022.third-party accreditation agency.

2.BASIS OF PRESENTATION

Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, and majority-owned entities. The accompanying consolidated financial statements have been prepared in accordance with ~~U.S.~~accounting principles generally accepted ~~accounting principles~~in the United States of America (“GAAP”), which contemplates continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. All significant intercompany balances and transactions have been eliminated in consolidation.

~~Table of Contents~~

~~ASSURE HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

For entities in which management has determined the Company does not have a controlling financial interest but has varying degrees of influence regarding operating policies of that entity, the Company’s investment is accounted for using the equity method of accounting. All significant intercompany balances and transactions have been eliminated in consolidation.

Liquidity

The Company’s current cash balance and estimated cash from operations for the next 12 months is not sufficient to meet the Company’s working capital needs for the next 12 months. The Company intends to seek equity or debt financing and have implemented significant cost cutting measures to mitigate its going concern. Such financings may include the issuance of shares of common stock, warrants to purchase common stock, convertible debt or other instruments that may dilute our current stockholders. Financing may not be available to us on acceptable terms depending on market conditions at the time we seek financing. The Company plans to file for a refund from the IRS under the CARES Act Employee Retention Credit program, however, there is no guarantee when, or if, these funds will be received during 2023. The accompanying consolidated financial statements do not include any adjustments that might become necessary should the Company be unable to continue as a going concern. See Note 9 for discussion of equity financing.

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Accounting Policies

There have been no changes to the Company’s significant accounting policies or recent accounting pronouncements during the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, as compared to the significant accounting policies disclosed in the 10-K for the year ended December 31, ~~2021~~2022 as filed on March ~~14, 2022.~~31, 2023.

On January 1, 2023, the Company adopted Accounting Standards Update No, 2016-13, Measurement of Credit Losses on Financial Instruments, and its related amendments using the prospective method. The new standard requires the use of a current expected credit loss impairment model to develop and recognize credit losses for financial instruments at amortized cost when the asset is first originated or acquired, and each subsequent reporting period. The adoption of this standard did not have a material impact to the Company’s 2023 financial statements.

Common Stock Reverse Split

During ~~September 2021,~~March 2023, the Company effectuated a ~~five~~twenty-for-one reverse stock split. All share, stock option and warrant information has been retroactively adjusted to reflect the stock split. See Note 6 for additional discussion.

Reclassifications

Certain amounts for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 have been reclassified to conform to the ~~2022~~2023 presentation.

3. REVENUE

The Company disaggregates revenue from contracts with customers by revenue stream as this depicts the nature, amount, timing and uncertainty of its revenue and cash flows as affected by economic factors. Commercial insurance consists of ~~neuromonitoring~~all Neuromonitoring cases whereby a patient has healthcare insurance. Facility billing consists of ~~neuromonitoring cases~~services related to uninsured or government patients whereby the ~~company~~Company has an agreement with the facility for ~~services. In these cases,~~services for the ~~hospital’s~~ patient ~~may be uninsured or have government insurance.~~and other contracted agreements with facilities.

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


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022

Commercial insurance	$	4,283	$	6,164	$	6,801	$	12,507	$	1,796	$	2,824
Facility billing		1,185		995		3,457		2,846		1,312		1,045
Managed service agreements		400		965		1,247		3,024
Other		336		422		1,045		1,156
Managed service agreements and other										444		832
Total	$	6,204	$	8,546	$	12,550	$	19,533	$	3,552	$	4,701

~~Accounts Receivable~~

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

September 30,

December 31,

2022

2021

Technical service

$
9,539

$
18,904
Professional service

10,971

8,209
Other

350

697
Total accounts receivable, net

$
20,860

$
27,810

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Accounts Receivable

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


	March 31,			December 31,
	2023		2022

Technical service	$	2,614	$	3,072
Professional service		10,067		11,829
Other		206		242
Total accounts receivable, net	$	12,887	$	15,143

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


	As of September 30,		As of December 31,		As of March 31,		As of December 31,
	2022		2021		2023		2022

Commercial insurance	91	%	91	%	88	%	84	%
Facility billing	6	%	2	%	8	%	9	%
Other	3	%	7	%	4	%	7	%
Total	100	%	100	%	100	%	100	%

4. LEASES

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

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

Operating leases

The Company leases corporate office facilities under an operating lease which expires October 31, 2025. The incremental borrowing rate for this lease was 10%.

Finance leases

The Company leases medical equipment under various financing leases with stated interest rates ranging from 5.2% — 13.4% per annum which expire at various dates through 2026.

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

September 30,

December 31,

2022

2021
Operating

$
725

$
956
Finance

469

743
Total

$
1,194

$
1,699

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

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The condensed consolidated balance sheets include the following amounts for right of use (“ROU”) assets as of March 31, 2023 and December 31, 2022 (in thousands):


	March 31,			December 31,
	2023		2022
Operating	$	617	$	672
Finance		305		382
Total	$	922	$	1,054

Finance lease assets are reported net of accumulated amortization of $2.5 million and $2.4 million as of March 31, 2023 and December 31, 2022, respectively.

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


	Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2023		2022
Lease cost:
Operating leases:
Amortization of ROU assets	$	231	$	227	$	77	$	77
Interest on lease liabilities		68		—		19		23
Total operating lease cost		299		227		96		100
Finance leases:
Amortization of ROU assets		353		372		77		169
Interest on lease liabilities		64		69		14		24
Total finance lease cost		417		441		91		193
Total lease cost	$	716	$	668	$	187	$	293

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


	As of	As of	As of	As of
	September 30, 2022	September 30, 2021	March 31, 2023	March 31, 2022
Weighted average remaining lease term (years):
Operating leases	3.0	—	2.5	3.5
Finance leases	2.6	3.1	1.9	2.9
Weighted average discount rate (%):
Operating leases	10.0	—	5.6	10.0
Finance leases	7.8	8.1	9.2	7.8

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

Future minimum lease payments and related lease liabilities as of ~~September 30, 2022~~March 31, 2023 were as follows (in thousands):


					Total						Total
	Operating		Finance		Lease		Operating		Finance		Lease
	Leases		Leases		Liabilities		Leases		Leases		Liabilities
Remainder of 2022	$	84	$	165	$	249
2023		303		360		663
Remainder of 2023							$	219	$	247	$	466
2024		328		268		596		328		268		596
2025		279		152		431		279		153		432
2026		—		23		23		—		23		23
Total lease payments		994		968		1,962		826		691		1,517
Less: imputed interest		(145)		(93)		(238)		(104)		(63)		(167)
Present value of lease liabilities		849		875		1,724		722		628		1,350
Less: current portion of lease liabilities		231		391		622
Noncurrent lease liabilities	$	618	$	484	$	1,102

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Less: current portion of lease liabilities			243			281			524
Noncurrent lease liabilities		$	479		$	347		$	826

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

~~Table of Contents~~

~~ASSURE HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

5. DEBT

The Company’s debt obligations are summarized as follows:


	September 30,		December 31,		March 31,		December 31,
	2022		2021
Paycheck Protection Program loan	$	—	$	1,687
					2023		2022
Face value of convertible debenture		3,450		3,450	$	3,450	$	3,450
Less: principal converted to common shares		(60)		(60)		(60)		(60)
Less: deemed fair value ascribed to conversion feature and warrants		(1,523)		(1,523)		(1,523)		(1,523)
Plus: accretion of implied interest		990		705		1,181		1,086
Total convertible debt		2,857		2,572		3,048		2,953

Face value of Centurion debenture		11,000		11,000		11,000		11,000
Less: deemed fair value ascribed to warrants		(1,204)		(1,204)		(1,204)		(1,204)
Plus: accretion of implied interest		402		176		552		476
Less: net debt issuance costs		(427)		(547)		(347)		(386)
Total Centurion debt		9,771		9,425		10,001		9,886
Total debt		12,628		13,684		13,049		12,839
Less: current portion of debt		—		(515)		(2,620)		(965)
Long-term debt	$	12,628	$	13,169	$	10,429	$	11,874

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

The following table depicts accretion expense and interest expense (excluding debt issuance cost amortization) related to the Company’s debt obligations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
Accretion expense
Convertible debenture	$	95	$	95	$	285	$	285	$	95	$	95
Centurion debenture		75		76		226		101		75		75
	$	170	$	171	$	511	$	386	$	170	$	170

Debt issuance cost amortization
Centurion debenture									$	39	$	40

Interest paid
Convertible debenture	$	—	$	—	$	221	$	220	$	174	$	77
Centurion debenture		324		190		872		236		376		263
	$	324	$	190	$	1,093	$	456	$	550	$	340

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As of ~~September 30, 2022,~~March 31, 2023, future minimum principal payments are summarized as follows (in thousands):


	Convertible				Convertible
		Debt	Debenture			Debt	Debenture
Remainder of 2022	$	—	$	—
2023		965		—	$	2,560	$	—
2024		2,425		—		830		—
2025		—		11,000		—		11,000
Total		3,390		11,000		3,390		11,000
Less: fair value ascribed to conversion feature and warrants		(1,523)		(1,204)		(1,523)		(1,204)
Plus: accretion and implied interest		990		402		1,181		552
Less: net debt issuance costs		—		(427)		—		(347)
	$	2,857	$	9,771	$	3,048	$	10,001

Paycheck Protection Program

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

Convertible Debt

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

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

Centurion Debt

In June 2021, Assure issued a debenture to Centurion (the “Debenture”) with a maturity date of June 9, 2025 (the “Maturity Date”), in the principal amount of $11 million related to a credit facility comprised of a $6 million senior term loan (the “Senior Term Loan”), a $2 million senior revolving loan (the “Senior Revolving Loan”) and a $3 million senior term acquisition line (the “Senior Term Acquisition Line” and together with the Senior Term Loan and the Senior Revolving Loan, the “Credit Facility”). Additionally, the Company issued ~~275,000~~13,750 warrants with an exercise price of $7.55 which expire on June 14, 2025. During November 2021, the Company and Centurion entered into an amendment to allow the Senior Short Term Acquisition Line to be utilized for organic growth and general working capital purposes. Under the terms and conditions of the debt arrangement, Centurion ~~temporarily~~ modified their debt covenant calculations to allow bad debt expense to be excluded. The Company’s was in compliance with the debt covenants as of March 31, 2023.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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

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

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

6. SHARE CAPITAL

Common stock

Common stock: ~~180,000,000~~9,000,000 authorized; $0.001 par value. As of ~~September 30, 2022,~~March 31, 2023, and December 31, ~~2021,~~2022, there were ~~18,512,605~~1,101,098 and ~~12,918,866~~1,051,098 shares of common stock issued and outstanding, respectively.

Reverse Share Split

During ~~September 2021,~~March 2023, the total number of shares of common stock authorized by the Company was reduced from ~~900,000,000~~180,000,000 shares of common stock, par $0.001, to ~~180,000,000~~9,000,000 shares of common stock, par $0.001, and the number of shares of common stock held by each stockholder of the Company were consolidated automatically into the number of shares of common stock equal to the number of issued and outstanding shares of common stock held by each such stockholder immediately prior to the reverse split divided by ~~five~~twenty ~~(5)~~(20): effecting a ~~five~~twenty ~~(5)~~(20) old for one (1) new reverse stock split.

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

Additionally, all options, warrants and other convertible securities of the Company outstanding immediately prior to the reverse split were adjusted by dividing the number of shares of common stock into which the options, warrants and other convertible securities are exercisable or convertible by ~~five~~twenty ~~(5)~~(20) and multiplying the exercise or conversion price thereof by ~~five~~twenty ~~(5)~~(20), all in accordance with the terms of the plans, agreements or arrangements governing such options, warrants and other convertible securities and subject to rounding to the nearest whole share.

All shares of common stock, options, warrants and other convertible securities and the corresponding price per share amounts have been presented to reflect the reverse split in all periods presented within this Form 10-Q.

~~2022~~ Share Issuance

During March 2023, the Company completed a private placement for 50,000 common shares at $6.00 per common shares for gross proceeds of $300 thousand.

Stock options

On December 10, 2020, shareholders approved amendments to the Company’s stock option plan, which amended the plan previously approved on November 20, 2019 (the “Amended Stock Option Plan”). On December 10, 2020, the Company’s shareholders approved the adoption of a new fixed equity incentive plan (the “Equity ~~Financing~~Incentive Plan”), which authorizes the Company to grant (a) stock options, (b) restricted awards, (c) performance share units, and other equity-based awards for compensation purposes (collectively, “Awards”).

In ~~August 2022,~~November 2021, the Company ~~completed an underwritten public offering with gross proceeds~~adopted and approved the 2021 Stock Incentive Plan and the 2021 Employee Stock Purchase Plan. The intent of the Company and the Board of Directors is that while the Amended 2020 Stock Option Plan and the 2020 Equity Incentive Plan will continue in existence in relation to the ~~Company of approximately $6.2 million, before deducting underwriting discounts~~options and other estimated expenses payable by the Company. Under the offering 5,576,087 common shares were issued at a price to the public of $1.12 per share. The Company is utilizing the net proceeds from this offering for general corporate purposes, including, but not limited to, repayment of indebtedness and increasing working capital expenditures.

~~In addition, the Company~~awards previously granted, the ~~underwriter a~~ ~~45-day~~ ~~option~~Board will not grant future options or awards thereunder. Instead, only the 2021 Stock Incentive Plan will be used for the grant of options and awards to purchase additional shares of common stock, representing up to 15% of the number of the shares offered in the base deal, solely to cover over-allotments, if any, which would increase the total gross proceeds of the offering to approximately $7.2 million, if the over-allotment option is exercised in full. The overallotment expired unexercised in October 2022.

eligible participants.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Stock options~~

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

As of ~~September 30, 2022,~~March 31, 2023, there was 40,940 stock options outstanding under the Amended Stock Option Plan. No additional stock options will be issued under the Amended Stock Option Plan. As of March 31, 2023, there was 4,000 stock options outstanding and an aggregate of ~~1,870,000~~96,000 shares of common stock were available for issuance under the 2021 Stock Option Plan. As of ~~September 30, 2022,~~March 31, 2023, no transactions have occurred under the 2021 Employee Stock Purchase Plan.

Options under the 2021 Stock Option Plan are granted from time to time at the discretion of the Board of Directors, with vesting periods and other terms as determined by the Board of Directors.

A summary of the stock option activity is presented below:


	Options Outstanding						Options Outstanding
		Weighted		Weighted				Weighted		Weighted
		Average		Average				Average		Average
	Number of	Exercise		Remaining	Aggregate		Number of	Exercise		Remaining	Aggregate
	Shares Subject	Price Per		Contractual	Intrinsic Value		Shares Subject	Price Per		Contractual	Intrinsic Value
	to Options	Share		Life (in years)	(in thousands)		to Options	Share		Life (in years)	(in thousands)
Balance at December 31, 2021	1,204,233	$	5.56	3.6			60,212	$	111.20	3.60
Options granted	130,000	$	5.16				6,500	$	103.20
Options exercised	(800)	$	5.04				(40)	$	100.80
Options canceled / expired	(103,633)	$	5.45				(17,632)	$	50.20
Balance at September 30, 2022	1,229,800	$	4.98	3.0	$	78
Vested and exercisable at September 30, 2022	882,542	$	5.14	2.3	$	78
Balance at December 31, 2022							49,040	$	129.60	2.8
Options canceled / expired							(4,100)	$	112.72
Balance at March 31, 2023							44,940	$	131.09	2.4	$	—
Vested and exercisable at March 31, 2023							34,900	$	134.36	2.2	$	—

The following table summarizes information about stock options outstanding and exercisable under the Company’s Stock Option Plan at ~~September 30, 2022:~~March 31, 2023:

Options Outstanding

Options Exercisable


Weighted






Average

Weighted

Weighted

Remaining

Average

Average
Number of

Contractual

Exercise Price

Number

Exercise Price
Outstanding

Life (in years)

Per Share

Exercisable

Per Share
200,000

2.9

$
0.25

200,000

$
0.25
12,000

0.1

$
14.00

12,000

$
14.00
15,000

5.3

$
9.00

15,000

$
9.00
85,000

1.0

$
9.00

85,000

$
9.00
145,800

1.3

$
7.80

145,800

$
7.80
73,900

2.0

$
6.40

64,047

$
6.40
83,000

3.2

$
4.85

49,800

$
4.85
278,100

3.3

$
5.30

166,860

$
5.30
30,000

3.5

$
5.60

14,000

$
5.60
177,000

4.0

$
7.65

86,702

$
7.65
130,000

4.4

$
5.16

43,333

$
5.16
1,229,800

3.0

$
4.98

882,542

$
5.14

~~Table of Contents~~

~~ASSURE HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~


Options Outstanding				Options Exercisable
	Weighted
	Average	Weighted			Weighted
	Remaining	Average			Average
Number of	Contractual	Exercise Price		Number	Exercise Price
Outstanding	Life (in years)	Per Share		Exercisable	Per Share
750	4.8	$	180.00	750	$	180.00
4,200	0.5	$	180.00	4,200	$	180.00
7,290	0.8	$	156.00	7,290	$	156.00
3,395	1.5	$	128.00	3,395	$	128.00
3,900	2.7	$	97.00	2,860	$	97.00
12,255	2.8	$	106.00	9,174	$	106.00
1,500	3.0	$	112.00	900	$	112.00
7,650	3.5	$	153.00	4,465	$	153.00
4,000	3.9	$	103.20	1,866	$	103.20
44,940	2.4	$	131.09	34,900	$	134.36

The Company uses the Black-Scholes option pricing model to determine the estimated fair value of options. The fair value of each option grant is determined on the date of grant and the expense is recorded on a straight-line basis and is included as a component of general and administrative expense in the consolidated statements of operations. The assumptions used in the model include expected

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

life, volatility, risk-free interest rate, dividend yield and forfeiture rate. The Company’s determination of these assumptions is outlined below.

Expected life — The expected life assumption is based on an analysis of the Company’s historical employee exercise patterns.

Volatility — Volatility is calculated using the historical volatility of the Company’s common stock for a term consistent with the expected life.

Risk-free interest rate — The risk-free interest rate assumption is based on the U.S. Treasury rate for issues with remaining terms similar to the expected life of the options.

Dividend yield — Expected dividend yield is calculated based on cash dividends declared by the Board for the previous four quarters and dividing that result by the average closing price of the Company’s common stock for the quarter. The Company has not declared a dividend to date.

Forfeiture rate — The Company does not estimate a forfeiture rate at the time of the grant due to the limited number of historical forfeitures. As a result, the forfeitures are recorded at the time the grant is forfeited, which can result in negative stock based compensation expense in the period of forfeiture.

The following assumptions were used to value the awards granted during the ~~nine~~three months ended ~~September 30, 2022 and 2021:~~March 31, 2022:

Nine Months Ended September 30,

2022

2021

Expected life (in years)

5.0

5.0

Risk-free interest rate

1.7
%
0.4
%
Dividend yield

—
%
—
%
Expected volatility

132
%
91
%


Expected life (in years)	5.0
Risk-free interest rate	1.7	%
Dividend yield	—	%
Expected volatility	132	%

Stock-based compensation (benefit) expense for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ was ~~$(108)~~$(10) thousand and ~~$210~~$323 thousand, respectively. The stock-based compensation benefit for the three months ended ~~September 30, 2022~~March 31, 2023, was related to the reversal of expense due to stock option forfeitures and cancellations. ~~Stock-based compensation expense for the nine months ended September 30, 2022 and 2021 was $464 thousand and $818 thousand, respectively.~~ As of ~~September 30, 2022,~~March 31, 2023, there was approximately ~~$1.0~~$1.3 million of total unrecognized compensation cost related to ~~347,258~~10,040 unvested stock options that is expected to be recognized over a weighted-average remaining vesting period of 3.2 years.

~~Derivative Liability~~Warrants

The following table details warrant activity for the three months ended March 31, 2023:


		Number of Warrants outstanding
Balance at December 31, 2021		197,000
Debenture, warrants issued		9,000
Balance at December 31, 2022		206,000
Warrants cancelled		(9,830)
Balance at March 31, 2023		196,170

Stock options granted to consultants that have an exercise price that is stated in a different currency than the Company’s functional currency are treated as a liability and are revalued at the end of each reporting period for the term of the vesting period. Any change in the fair value of the stock option after the initial recognition is recorded as a component of other income, net in the consolidated statements of operations. These stock options expired, unexercised during October 2022. There were no stock options granted to consultants during the nine months ended September 30, 2022 and 2021 that required recurring fair value adjustments.

Table of Contents

ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

~~Changes in the Company’s stock option liability for the nine months ended September 30, 2022, was as follows (stated in thousands):~~

Balance at December 31, 2021

$
25
Gain on revaluation

25
Balance at September 30, 2022

$
—

~~The assumptions used for the Black-Scholes Option Pricing Model to revalue the stock options granted to consultants as of September 30, 2022 and December 31, 2021 were as follows:~~

As of September 30,

As of December 31,

2022

2021

Risk free rate of return

2.8
%

0.4
%
Expected life

0.1
years

1.8
years
Expected volatility

99
%

186
%
Expected dividend per share

nil

nil

~~Warrants~~

~~As of September 30, 2022, and December 31, 2021, there were 3,940,006 warrants outstanding.~~

The following table summarizes warrants issued by transaction type:


		Number of Warrants outstanding
Convertible debt, warrants issued (Note 5)		~~380,874~~9,841
Debenture, warrants issued (Note 5)		~~275,000~~13,750
~~July 2020 private placement,~~Other warrants issued⁽¹⁾		~~12,592~~9,000
December 2020 equity financing warrants issued ⁽¹⁾		~~3,271,540~~163,579
Total warrant outstanding		~~3,940,006~~196,170

(1)

For a complete discussion of the warrants issued during ~~July and~~ December 2020, see Note 11 to the consolidated financial statement for the year ended December 31, 2021 as filed on Form 10-K on March 14, 2022.

~~Table of Contents~~

~~ASSURE HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

7. ~~(LOSS) INCOME~~LOSS PER SHARE

The following table sets forth the computation of basic and fully diluted ~~(loss) income~~loss per share for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ (in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
Net (loss) income	$	(1,433)	$	91	$	(8,618)	$	(2,447)
Net loss									$	(4,314)	$	(2,459)
Basic weighted average common stock outstanding		15,220,948		11,838,032		13,686,686		11,528,371		1,054,933		645,950
Basic loss per share	$	(0.09)	$	0.01	$	(0.63)	$	(0.21)	$	(4.09)	$	(3.81)
Net (loss) income	$	(1,433)	$	91	$	(8,618)	$	(2,447)
Basic weighted average common shares outstanding		15,220,948		11,838,032		13,686,686		11,528,371
Dilutive effect of stock options and warrants		—		3,886,071		—		—
Net loss									$	(4,314)	$	(2,459)
Dilutive weighted average common stock outstanding		15,220,948		15,724,103		13,686,686		11,528,371		1,054,933		645,950
Diluted loss per share	$	(0.09)	$	0.01	$	(0.63)	$	(0.21)	$	(4.09)	$	(3.81)

Basic net income (loss) per share is computed using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the treasury stock method to calculate the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential dilutive common shares include incremental common shares issuable upon the exercise of stock options, less shares from assumed proceeds. The assumed proceeds calculation includes actual proceeds to be received from the employee upon exercise and the average unrecognized stock compensation cost during the ~~period~~period.

Stock options to purchase ~~882,582~~44,900 and ~~227,893~~65,890 shares of common stock and warrants to purchase ~~3,940,006~~196,170 and ~~462,068~~197,000 shares of common stock were outstanding at ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ that were not included in the computation of diluted weighted average common stock outstanding because their effect would have been anti-dilutive.

8. COMMITMENTS AND CONTINGENCIES

Indemnifications

The Company is a party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify third parties with respect to certain matters. These obligations include, but are not limited to, contracts entered into with physicians where the Company agrees, under certain circumstances, to indemnify a third party, against losses arising from matters including but not limited to medical malpractice and other liability. The impact of any such future claims, if made, on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to final outcome of these potential claims.

As permitted under Nevada law, the Company has agreements whereby it indemnifies its officers and directors for certain events or occurrences while the officer or director is, or was, serving at the Company’s request in such capacity. The maximum potential amount

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ASSURE HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

of future payments the Company could be required to make under these indemnification agreements is unlimited; however, the Company believes, given the absence of any such payments in the Company’s history, and the estimated low probability of such payments in the future, that the estimated fair value of these indemnification agreements is immaterial. In addition, the Company has directors’ and officers’ liability insurance coverage that is intended to reduce its financial exposure and may enable the Company to recover any payments, should they occur.

In April 2022, the U.S. Department of Justice (“DOJ)” issued Civil Investigative Demands which seek information with respect to a civil investigation under the Anti-kickback Statute and the False Claims Act. WeThe Company voluntarily contacted the DOJ offering to provide any materials needed in the investigation and to answer any questions. While ~~our~~the Company’s policy during the relevant time was to not seek payments from federal health care programs, the third-party billing company ~~we used~~utilized at that time submitted some claims to Medicare Advantage plans administered by commercial insurance companies. ~~We have~~The Company has worked diligently to ensure that payments from Medicare Advantage

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~~ASSURE HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~(unaudited)~~

plans have been returned to the commercial insurance companies and ~~we believe we have~~believes it has returned substantially all such payments that ~~we have~~it has discovered to date, totaling approximately $450 thousand. The DOJ has not made any allegations in the investigation, and ~~we are~~the Company is currently unable to predict the eventual scope, ultimate timing, or outcome of this investigation. As a result, ~~we are~~the Company is unable to estimate the amount or range of any potential loss, if any, arising from this investigation.

9. SUBSEQUENT EVENT

On ~~October 11, 2022, Assure Holdings Corp. (the “Company”) received~~May 12, 2023, the Company announced the pricing of an underwritten public offering of 5,000,000 shares of its common stock (or prefunded warrants in lieu thereof) at an offering price to the public of $1.20 per share (or $1.199 per pre-funded warrant). The pre-funded warrants will be immediately exercisable at a ~~letter~~nominal exercise price of $0.001 or on a cashless basis and may be exercised at any time until all of the pre-funded warrants are exercised in full. The closing of the offering is expected to occur on or about May 16, 2023, subject to the satisfaction of customary closing conditions.

The gross proceeds to the Company from the ~~Listing Qualifications Staff of~~offering are expected to be approximately $6 million, before deducting the underwriters’ fees and other offering expenses payable by Assure. The ~~Nasdaq Stock Market LLC (“Nasdaq”) indicating that, based upon~~Company intends to use the ~~closing bid price~~net proceeds from the offering for general corporate purposes, including working capital, marketing, product development and capital expenditures.

The Company has granted the underwriters in the offering a 45-day option to purchase up to 750,000 additional shares of the Company’s common stock ~~par value $0.001 per share (“Common Stock”), for the last 30 consecutive business days,~~and/or pre-funded warrants, in any combination thereof, from the Company at the public offering price, less underwriting discounts and commissions, solely to cover over-allotments, if any.

The securities were offered pursuant to the Company’s registration statement on Form S-1 (File No. 333-269438), which was declared effective by the United States Securities and Exchange Commission (“SEC”) on May 11, 2023. The offering is ~~not currently in compliance~~being made only by means of a prospectus which is a part of the effective registration statement. A final prospectus relating to the offering will be filed with the ~~requirement to maintain a minimum bid price of $1.00 per share for continued listing on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Notice”).~~

~~The Notice has no immediate effect~~SEC and will be available on the ~~continued listing status~~SEC’s website at www.sec.gov. Electronic copies of the ~~Company's Common Stock on The Nasdaq Capital Market, and, therefore, the Company's listing remains fully effective.~~

The Company is provided a compliance period of 180 calendar days from the date of the Notice, or until April 10, 2023, to regain compliance with the minimum closing bid requirement, pursuant to Nasdaq Listing Rule 5810(c)(3)(A). If at any time before April 10, 2023, the closing bid price of the Company’s Common Stock closes at or above $1.00 per share for a minimum of 10 consecutive business days, subject to Nasdaq’s discretion to extend this period pursuant to Nasdaq Listing Rule 5810(c)(3)(G) to 20 consecutive business days, Nasdaq will provide written notification that the Company has achieved compliance with the minimum bid price requirement, and the matter would be resolved. If the Company does not regain compliance during the compliance period ending April 10, 2023, then Nasdaq may grant the Company a second 180 calendar day period to regain compliance, provided the Company meets the continued listing requirement for market value of publicly-held shares and all other initial listing standards for The Nasdaq Capital Market, other than the minimum closing bid price requirement, and notifies Nasdaq of its intent to cure the deficiency.

The Company will continue to monitor the closing bid price of its Common Stock and seek to regain compliance with all applicable Nasdaq requirements within the allotted compliance periods. If the Company does not regain compliance within the allotted compliance periods, including any extensions thatfinal prospectus may be ~~granted~~obtained, when available, from Joseph Gunnar & Co., LLC, 30 Broad Street, 11^th Floor, New York, NY 10004, Attn: Syndicate Department, by Nasdaq, Nasdaq will provide notice that the Company's Common Stock will be subject to delisting. The Company would then be entitled to appeal that determination to a Nasdaq hearings panel. There can be no assurance that the Company will regain compliance with the minimum bid price requirement during the 180-day compliance period, secure a second period of 180 days to regain compliance or maintain compliance with the other Nasdaq listing requirements.phone (212) 440-9600.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the attached unaudited condensed consolidated financial statements and notes thereto, and with our audited financial statements and notes thereto for the year ended December 31, ~~2021~~2022 found in the annual report on Form 10-K filed by Assure Holdings ~~Corporation~~Corp. on March ~~14, 2022~~31, 2023 (the “Form 10-K”).

This Quarterly Report contains forward-looking statements, ~~which are subject to~~within the ~~safe harbor provisions created by~~meaning of the Private Securities Litigation Reform Act of ~~1995. Words such as “expects,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “could,” “would,” “may,” “intends,” “targets”~~1995, Section 27A of the Securities Act of 1933, and ~~similar expressions or variations~~Section 21E of ~~such words are intended to identify forward-looking statements but are not~~ the ~~exclusive means~~Securities Exchange Act of identifying forward-looking statements in this Quarterly Report. The identification of certain statements as “forward-looking” is not intended to mean that other statements not specifically identified are not forward-looking.1934. All statements other than statements ~~about~~of historical ~~facts~~fact included in this Annual Report, including statements regarding the Company’s future financial condition, results of operations, plans, objectives, expectations, future performance, business operations and business prospects, are ~~statements that could be deemed~~ forward-looking statementsand may be identified by the use of words including, but not limited to the following; “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “continue,” or the negative thereof or other variations thereon or comparable terminology.

These forward-looking statements ~~that relate to~~are based on our ~~future revenue, growth rate, competitiveness, gross margins, expenditures, tax expenses, cash flows, our management's~~management’s current plans and ~~objectives for~~expectations and are subject to uncertainty and changes in circumstances. We cannot assure you that future developments affecting us will be those that we have anticipated or occur in the manner we expected. Actual results may differ materially from these expectations due to changes in expected future political, legal, economic, business, competition, market and regulatory conditions and other factors and assumptions of management in making such statements, many of which are beyond our current and future operations, general economic conditions, the impact of the COVID-19 pandemic and related events, the impact of acquisitions on our financial condition and results of operations, and the sufficiency of financial resources to support future operations and capital expenditures.control.

Although forward-looking statements in this Quarterly Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements are inherently subject to risks, uncertainties, and changes in condition, significance, value, and effect, including those discussed under the heading “Risk Factors” in our annual report on Form 10-K and other documents we file from time to time with the Securities and Exchange Commission ~~( “SEC”~~(“SEC”), such as our quarterly reports on Form 10-Q and our current reports on Form 8-K. Such risks, uncertainties and changes in condition, significance, value, and effect could cause our actual results to differ materially from those expressed herein and in ways not readily foreseeable. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Quarterly Report and are based on information currently and reasonably known to us. We undertake no obligation to revise or update any forward-looking statements to reflect any event or circumstance that may arise after the date of this Quarterly Report, other than as required by law. Readers are urged to carefully review and consider the various disclosures made in this Quarterly Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.

As used in this Quarterly Report, references to “Assure,” the “Company,” “we,” “our,” or “us” mean Assure Holdings Corp., and consolidated subsidiaries, or any one or more of them, as the context requires.

OVERVIEW

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

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

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Clinical leadership, surgeon support and patient care are Assure’s cornerstones. We make substantial ongoing investments in our training and development of clinical staff and have created a training program to rigorously train new INPs to cost-effectively join the Assure team. In addition, we have partnered with the internationally renowned Texas Back Institute on clinical research relating to IONM safety and efficacy.

Historically, the foundation of Assure’s business has been providing the Technical Component of IONM via our INP staff. We employ highly trained INPs, which provide a direct point of contact in the operating room during the surgeries to relay critical information to the surgical team. In ~~our~~this one-to-one business model, Assure pairs a ~~surgeon with a~~ team of INPs with third-party surgeons to promote a level of familiarity, comfort and efficiency between the surgeon and the INP. Each INP ~~has the ability to handle~~can support approximately 200 cases annually. Our INPs monitor the surgical procedure using state of the art, commercially available, diagnostic medical equipment. Assure INP’s are certified by a

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third-party accreditation ~~agency.~~board, ABRET Neurodiagnostic Credentialing and Accreditation (“ABRET”). The success of our service depends upon the timely recognition and successful interpretation of the data signals by ~~the monitoring team~~our INPs and remote supervisors to quickly determine if ~~there~~the patient is experiencing a deficiency and advise the surgeon to determine if surgical intervention is required to positively impact the patient and surgery. ~~Employing~~While, employing this model, Assure has rapidly expanded its ~~operational footprint from a home base in Colorado and increased its number of~~business, supporting approximately 1,600 managed cases ~~from approximately 1,600~~ in 2017 to approximately ~~17,400~~21,600 in ~~2021.~~2022. During the three months ended March 31, 2023, Assure supported approximately 5,200 managed cases.

Beginning in the second quarter of 2021, Assure began executing on its long-term vertical integration plan by expanding into ~~remote neurology~~tele-neurology services. ~~As a result, Assure began~~This includes delivering remote neurology services in support of the surgical team and ~~INPs rather than exclusively relying on third-party supervising~~INPs. Supervising practitioners ~~as it had previously. We currently have supervising practitioners employed and working with surgical teams and our INPs. They~~ are utilizing equipment and training to monitor ~~evoked potentials (“EPs”),~~ electroencephalographic (“EEG”) and electromyography (“EMG”) and several other complex modalities during surgical procedures to pre-emptively notify the surgeon of any nerve related issues ~~that~~as they are identified.Assure has utilized employee and third-party contractors, working from remote locations as supervising practitioners supporting surgical teams and our INPs.

~~Remote neurology~~The Professional Component of IONM is provided via tele-neurology services isunder a one-to-many business model, and as ~~one supervising practitioner is able to monitor multiple patients simultaneously. As~~ a result, ~~the Professional Component~~ has a different financial profile than the Technical Component. Supervising practitioners provide ~~remote neurology~~tele-neurology services from an off-site location and maintain the ability to ~~manage~~monitor multiple surgical cases simultaneously. As a result, each supervising practitioner has the ability to ~~handle~~monitor approximately ~~2,000~~2,500 or more cases annually. In ~~2021,~~2022, Assure performed approximately ~~17,400~~21,600 total managed cases including managing approximately ~~2,100~~2,500 remote neurology ~~cases with employed supervising practitioners. The number of remote neurology~~cases. During the three months ended March 31, 2023, Assure performed approximately 5,200 total managed ~~cases is expected to expand significantly as our supervising practitioners increase the volume of cases supervised and additional neurologists are added to the internal team.~~cases.

~~Bringing~~Expanding our role in the Professional Component of IONM ~~in-house~~ generates ~~a number of~~several positives for Assure. First, ~~we will be able~~the Company is better positioned to oversee quality of service for providing ~~remote neurology~~tele-neurology services. This commitment to quality supports our efforts to sign new in-network agreements with insurance payors and facility-wide agreements with hospitals. Second, ~~by bringing the remote neurology function in-house, we are~~Assure is able to significantly reduce cost of delivery, allowing the Company to improve ~~our~~ profitability on every case we perform. ~~Our~~Assure’s objective is to significantly ~~reduce~~cut the cost of delivery for ~~remote neurology~~tele-neurology services going forward. Additional scale will serve as a catalyst for margin expansion in the future. Third, for most ~~of the~~ cases ~~we perform, remote neurology~~performed, tele-neurology services represent the creation of a new revenue stream. Fourth, providing ~~remote neurology~~tele-neurology services for IONM creates opportunities in adjacent markets where similar ~~remote neurology~~tele-neurology services are utilized. ~~The~~Accelerating the Company’s shift to providing remote neurology ~~services ourselves~~ was ~~a natural progression of the business. We have established~~straightforward. Assure had already built the platform and maintained the patient ~~volume, insourcing remote neurology was simply a matter of replacing contractors with Assure supervising practitioners to service this~~ volume. ~~The long-term~~Management expects the result will be ~~increased~~higher margins, a new revenue stream and ~~improved~~turning cash ~~receipts from commercial payors.~~over more quickly.

Collectively, support from Assure’s high quality Technical and Professional IONM services results in decreased hospital and surgeon liability, abbreviated patient stays, fewer readmissions, reduced hospital costs, enhanced overall patient satisfaction and the efficient achievement of better clinical outcomes.in:


Patients	Hospitals / Surgeons
Efficient achievement of better clinical outcomes Abbreviated patient hospital stays	Decreased facility and surgeon liability Reduced hospital costs
Fewer patient readmissions	Enhanced overall patient satisfaction

Over the past three years, Assure has built a platform to support our future growth and development. The attributes of our platform include: maintaining exceptional clinical operations, automating our revenue cycle management function and collecting cash faster, boosting managed care through the signing of in-network agreements with insurance payors, minimizing operational bottlenecks, particularly around onboarding and credentialing, instituting an ongoing training and development program for clinical staff to ensure we maintain industry-leading skills and performance, and successful execution of a merger and acquisition (“M&A”) strategy in a highly

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fragmented market that has led to four accretive transactions over the past three years. This platform was built with the intent of having these key functional areas support IONM in our key surgical verticals including within IONM: spine, neurosurgery, vascular, ENT and orthopedic. As we transition to becoming a provider of ~~remote neurology~~tele-neurology services, we believe our expertise in IONM will assist us in entering adjacent markets ~~including EEG, epilepsy, sleep study and stroke~~ in which Assure supervising practitioners can also provide patient services. The Company plans to provide services in new verticals including EEG, epilepsy, sleep study and stroke by leveraging key competencies we have built over the past three years.

In ~~2022,~~2023, Assure provided IONM services for approximately ~~200~~140 surgeons in ~~approximately 124~~95 hospitals and surgery centers ~~in multiple states.~~(which we refer to as “Procedure Facilities”) across the Company’s operational footprint. Our continued organic geographic expansion initiatives, including facility-wide outsourcing agreements with medical facilities and hospital networks, ~~coupled with the surgical vertical expansion efforts, extending the Company’s reach into remote neurology services and~~potential for selective acquisitions, ~~are~~and the extension of our platform into tele-neurology services, is expected to generate substantial growth opportunities going ~~forward. In the future, it may be necessary for us to raise additional funds for the continuing development of our business plan.~~forward.

Clinical leadership, surgeon support and patient care are Assure’s cornerstones. We make substantial ongoing investments in our training and development of clinical staff and have created a fellowship program to rigorously train new INPs to cost-effectively join the Assure team. In addition, we have partnered with the internationally renowned Texas Back Institute on clinical research relating to IONM safety and efficacy. Isador Lieberman, M.D., director of the scoliosis and spine tumor program at the Texas Back Institute, is a member of Assure’s Medical Advisory Committee.

Our strategy is to build a telehealth ~~remote neurology~~tele-neurology services company with exceptional capabilities in IONM and numerous adjacent ~~markets~~markets.

Assure has a history of providing leading IONM services with an emphasis on clinical excellence and patient well-being, and are in the midst of a significant transformation to position for growth. With a focus on execution and providing a high level of patient care, the Company is transforming from being a provider of the Technical Component of IONM utilizing a one-to-one business model of INPs in the operating room to a business that also provides the Professional Component of IONM via off-site tele-neurology services in a far more scalable one-to-many business model. The next step in our development will relate to opportunities to expand into adjacent tele-neurology services while utilizing ~~the same~~Assure’s platform and employees. This will extend our reach and redefine ~~our~~Assure’s position in the industry. We are

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thoughtfully deploying capital and focusing our investment in high potential growth initiatives including: organically expanding within existing states and into new states, growing our ~~remote neurology~~tele-neurology platform, signing new IONM outsourcing agreements with hospitals and medical facilities, as well as opportunistic M&A. In addition, we are investing to make our revenue cycle management function more automated, improving the velocity of our cash collections. The data and analytics-driven Company we are building will play a bigger role in the success of our key stakeholder groups: surgeons, hospitals, insurance companies and patients, ~~and in turn~~as we seek to deliver attractive returns to our stockholders.

Assure has made substantial investments to make its revenue cycle management function more data-driven, analytical, and automated. This modernization facilitated successful state-level arbitrations in 2022. Success in arbitration supported improving cash flow. There is currently a backlog of claims awaiting federal arbitration that we anticipate will begin in earnest in 2023. Many IONM competitors, particularly smaller peers that remain reliant on third-party billing companies lack the analytics and transparency to similarly leverage opportunities presented by the arbitration process.

As we look forward, Assure is focused on aligning our costs with updated managed case revenue expectations. The Company expects to continue adding scale in favorable markets while fixing the cost of delivering for its services. Further, Assure wants to take advantage of an opportunistic M&A environment in IONM as the industry moves toward a near-term consolidation. Another catalyst for improving financials is moving away from Assure’s legacy Managed Service Agreement (“MSA”) model in order to keep all collections generated from services provided by the Professional Component of IONM. In addition, supported by a data-driven revenue cycle management function, the Company anticipates leveraging state and federal arbitration programs to maximize reimbursement per case. It is our expectation that consistent success in arbitrations will ultimately lead to new in-network contractual agreements with commercial insurance payors, which in turn will speed up cash flow and improve participation rates. Lastly, Assure remains entirely committed to maintaining its clinical leadership, providing surgeon partners and hospitals with clinical excellence and our patients with enhanced safety. Delivering industry-leading quality of service has long anchored the Company’s very strong surgeon retention rates and driven our referral network for winning new business.

The Company has financed its cash requirements primarily through revenues generated from its services, by utilizing debt facilities and from the sale of common stock.

Payment for services, revenue mix and seasonality

Over half of Assure’s patients commonly have commercial health insurance coverage (“Commercial Payor”) and we are compensated via their health insurance plan. Assure’s commercial insurance patients represent the significant majority of our revenue and profit margin. We produce separate bills for the Technical Component and the Professional Component of the IONM services we perform.

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The majority of our commercial payors are billed out-of-network and we negotiate payment for each claim. The remainder of commercial payors utilize a contracted rate. The majority of contracted rates are via indirect agreements with third-party organizations or related entities of the commercial payor with a smaller portion in direct agreements with contracted rates.

We bill, collect, and retain 100% of the revenue associated with the Technical Component of the services we provide. For the Professional Component, when the supervising practitioner is an Assure employee or where we own 100% of the entity managing the procedure, the Company bills, collects and retains 100% of the revenue. In instances in which the Professional Component is provided via ~~Managed Service Agreements (“MSAs”)~~MSAs with surgeons or through agreements with Professional Entities (“PEs”), we engage in a revenue share based on the percentage outlined in the underlying agreement. Assure is taking steps to reduce business associated with MSAs.

For the balance of the patients we serve, billing is made under individual facility service agreements with hospitals. In these cases, the hospital’s patient may be uninsured or have government insurance. Regardless, Assure provides the same high level of service and quality of care.

The surgical segment of the health care industry tends to be impacted by seasonality due to the nature of most benefit plans resetting on a calendar year basis. As patients utilize and reduce their remaining deductible throughout the year, Assure typically sees an increase in volume throughout the year with the biggest impact coming during the fourth quarter. As a result, historically our annual revenues are overweighted in the fourth quarter.

Seasonality impacts our revenue mix for similar reasons. As patients with commercial insurance utilize and reduce their remaining deductible throughout the year, we typically see an increase in volume with the biggest impact coming in the fourth quarter. Historically, our revenue mix is relatively overweighted to patients with commercial insurance in the second half of the year and to patients with government insurance in the first half of the year.

~~COVID-19~~

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

The situation surrounding COVID-19 remains fluid with continued uncertainty and a wide range of potential outcomes. We continue to actively manage our response and assess impacts to our financial position and operating results, as well as mitigate adverse developments in our business. Further discussion of the potential impacts on our business from the COVID-19 pandemic is provided under Part I, Item 1A – Risk Factors of the Form 10-K filed on March 14, 2022.

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RESULTS OF OPERATIONS

Three Months Ended ~~September 30, 2022~~March 31, 2023 Compared to the Three Months Ended ~~September 30, 2021~~March 31, 2022

The following table provides selected financial information from the condensed consolidated financial statements of income for the three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022. All dollar amounts set forth in the table below are expressed thousands of dollars, except share and per share amounts.


	Three Months Ended September 30,				Change		Change		Three Months Ended March 31,				Change		Change
	2022		2021		$		%		2023		2022		$		%
Revenue
Technical services	$	1,190	$	4,421	$	(3,231)	(73)	%	$	1,234	$	1,396	$	(162)	(12)	%
Professional services		4,278		2,738		1,540	56	%		1,874		2,473		(599)	(24)	%
Other		736		1,387		(651)	(47)	%		444		832		(388)	(47)	%
Total revenue		6,204		8,546		(2,342)	(27)	%		3,552		4,701		(1,149)	(24)	%
Cost of revenues		3,685		4,254		(569)	(13)	%
Cost of revenues, excluding depreciation and amortization										3,373		3,877		(504)	(13)	%
Gross margin		2,519		4,292		(1,773)	(41)	%		179		824		(645)	(78)	%
Operating expenses
General and administrative		3,340		3,180		160	5	%		3,211		4,241		(1,030)	(24)	%
Sales and marketing		198		247		(49)	(20)	%		128		252		(124)	(49)	%
Depreciation and amortization		243		293		(50)	(17)	%		184		258		(74)	(29)	%
Total operating expenses		3,781		3,720		61	2	%		3,523		4,751		(1,228)	(26)	%
Income (loss) from operations		(1,262)		572		(1,834)	(321)	%
Loss from operations										(3,344)		(3,927)		583	15	%
Other income (expenses)
Income (loss) from equity method investments		9		139		(130)	(94)	%
Other income (expense), net		(37)		(27)		(10)	37	%
Income from equity method investments										25		5		20	(400)	%
Gain on Paycheck Protection Program loan										—		1,665		(1,665)	100	%
Other expense, net										58		38		20	53	%
Accretion expense		(170)		(171)		1	(1)	%		(170)		(170)		—	—	%
Interest expense, net		(471)		(264)		(207)	78	%		(509)		(407)		(102)	25	%
Total other expense		(669)		(323)		(346)	107	%		(596)		1,131		(1,727)	(153)	%
Income (loss) before income taxes		(1,931)		249		(2,180)	(876)	%
Income tax benefit (expense)		498		(158)		656	(415)	%
Net income (loss)	$	(1,433)	$	91	$	(1,524)	(1,675)	%
Income (loss) per share
Loss before income taxes										(3,940)		(2,796)		(1,144)	(41)	%
Income tax (expense) benefit										(374)		337		(711)	(211)	%
Net loss									$	(4,314)	$	(2,459)	$	(1,855)	(75)	%
Loss per share
Basic	$	(0.09)	$	0.01	$	(0.10)	(1,325)	%	$	(4.09)	$	(3.81)	$	(0.28)	(7)	%
Diluted	$	(0.09)	$	0.01	$	(0.10)	(1,727)	%	$	(4.09)	$	(3.81)	$	(0.28)	(7)	%
Weighted average number shares – basic		15,220,948		11,838,032		3,382,916	29	%		1,054,933		645,950		408,983	63	%
Weighted average number shares – diluted		15,220,948		15,724,103		(503,155)	(3)	%		1,054,933		645,950		408,983	63	%

Revenue

Total revenues for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021~~ were ~~$6.2~~$3.6 million and ~~$8.5~~$4.7 million, respectively, net of implicit price concessions. For the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ we recorded an allowance for implicit price concessions of ~~$2.1~~$1.2 million and ~~$nil,~~$4.4 million, respectively. Gross revenue for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ prior to the application of implicit price concessions, totaled ~~$8.3~~$4.8 million and ~~$8.5 million. Gross~~$9.1 million, respectively. The decrease in gross revenue is primarily related to a decrease in the revenue accrual rate, partially offset by an increase in managed case volume of approximately ~~300~~100 from ~~nearly 5,000 in~~over 5,100 during the ~~third quarter 2021~~three months ended March 31, 2022 to approximately ~~5,300~~5,200 in the same period of ~~2022.~~2023. The increase in managed cases is primarily related to the Company’s expansion into remote neurology. These gains were partially counteracted by Assure’s decision to exit certain markets. The Company utilized market intelligence and data warehousing analytics it did not previously possess to inform our decision to exit certain lower performing markets that were dragging down the Company’s average revenue per case. Assure’s go-forward strategy is anchored on achieving the benefit of scale in geographies underpinned by above average reimbursement.

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Gross Revenue.Gross revenue for the three months ended ~~September 30, 2022,~~March 31, 2023 was negatively impacted by implicit price concessions related to aged claims. Based on the Company’s historical experience, claims generally become uncollectible once they are aged greater than 24 ~~months; as~~months. As such, ~~included in~~ the ~~Company’s $2.1 million allowance for implicit price concessions for~~Company estimated the ~~three months ended September 30, 2022, is an estimate of the likelihood that a~~ portion of the Company’s accounts receivable that may become uncollectible due to ~~age. In~~age, or the ~~fourth quarter of 2021, Assure formalized a new holistic~~implicit price concessions, is $1.2 million for the three months ended March 31, 2023. The Company reserves accounts receivable accrual and reserve strategy based on our historical collections experience. This process provides a clearer picture of the Company’s estimated collectible accounts receivable by taking a conservative approach and reserving claims earlierbeginning in the ~~process. The new process has led~~fifth quarter after date of service and continuing to increase the reserve percentage until the receivable is aged to 24 months and a ~~higher than anticipated reserve in 2022. The issue Assure has experienced in 2022~~day at which point it is not related to lower reimbursement negatively impacting accrual rates, which have remained stable in high volume markets. The Company chose to take a conservative approach on reserving accounts receivable given our visibility on the challenges associated with collecting certain receivables before they are automatically reserved at 24 months. The benefit of taking these reserves earlier is: 1) It provides clearer visibility into future accounts receivable write-down expenses, and 2) Assure’s anticipated go-forward exposure in 2023 is substantially reduced.fully reserved. Going forward, as ~~we continue~~the Company continues to accelerate ~~our~~its cash receipts there will be less accounts receivable at risk. Management has designated a tactical team to specifically pursue these reserved claims. We expect to begin seeing results from these efforts in the last quarter of the year as we continue collection efforts for claims aged past 24 months. As a result, we anticipate that there will also be a bad debt charge in the fourth quarter of 2022; similar to what we reported in the third quarter, but still a material impact.

Technical and professional service revenue is recognized in the period in which IONM services are rendered, at net realizable amounts due from third party payors when collections are reasonably assured and can be estimated. The majority of the Company’s services are rendered on an out-of-network basis and billed to third-party insurers. We estimate out-of-network technical and professional revenue per case based upon our historical cash collection rates from private health insurance carriers. Our revenue estimation process for out-of-network revenue is based on the collection experience from insurance cases that are between 13-24 months old as management believes the more recent collection experience is more indicative of future per case collection rates.

~~Other revenue consists of revenue from managed service arrangements on a contractual basis. Revenue from services rendered is recorded after services are rendered~~.

~~Cost of revenues, excluding depreciation and amortization~~

Cost of revenues, excluding depreciation and amortization, for the three months ended September 30, 2022, were $3.7 million compared to $4.3 million for the same period in 2021, a 13% decrease. Cost of revenues consist primarily of the cost of our internal billing and collection department, internal and external collection costs, technologist and supervising practitioner wages, third-party supervising practitioner fees, and medical supplies. Technologist and supervising practitioner wages and medical supplies vary with the number of neuromonitoring cases. The cost of our internal billing and collection department increased as we have increased headcount to align with expected growth in volume and the number of cases to invoice has increased. A primary focus for Assure during the remainder of 2022 and into 2023 will be on reducing the Company’s average cost of delivery in providing our services, both on the technologist and the remote neurology parts of the business.

~~General and administrative~~

~~General and administrative expenses were $3.3 million and $3.2 million for the three months ended September 30, 2022 and 2021, respectively.~~

~~Accretion expense~~

The Company recorded non-cash accretion expense of $170 thousand and $171 thousand for the three months ended September 30, 2022 and 2021, respectively. The Company accretes the difference between the fair value of the convertible debt and the debenture and the face value of the convertible debt and the debenture over the term of the convertible debt and the debenture. Specifically, accretion expense was $95 thousand for each period related to the convertible debt and $75 thousand for each period related to the Centurion debenture.

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~~Interest expense, net~~

Interest expense, net was $471 thousand for the three months ended September 30, 2022 compared to $264 thousand for the three months ended September 30, 2021. The increase year-over-year is primarily due to higher outstanding debt balances. Specifically, interest expense was $nil for each period related to the convertible debt and $324 thousand and $190 thousand for the three months ended September 30, 2022 and 2021, respectively, for the Centurion debenture.

~~Income tax benefit~~

For the three months ended September 30, 2022, income tax benefit was $0.5 million and compared income tax expense of $158 thousand for the three months ended September 30, 2021. The Company’s estimated annual tax rate is impacted primarily by the amount of taxable income earned in each jurisdiction the Company operates in and permanent differences between financial statement carrying amounts and the tax basis.

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~~Nine Months Ended September 30, 2022 Compared to the Nine Months Ended September 30, 2021~~

The following table provides selected financial information from the condensed consolidated financial statements of income for the nine months ended September 30, 2022 and 2021. All dollar amounts set forth in the table below are expressed thousands of dollars, except share and per share amounts.

Nine Months Ended September 30,

Change

Change

2022

2021

$

%

Revenue

Technical services

$
2,653

$
11,649

$
(8,996)

(77)
%
Professional services

7,605

3,704

3,901

105
%
Other

2,292

4,180

(1,888)

(45)
%
Total revenue

12,550

19,533

(6,983)

(36)
%
Cost of revenues, excluding depreciation and amortization

11,564

9,956

1,608

16
%
Gross margin

986

9,577

(8,591)

(90)
%
Operating expenses

General and administrative

11,177

10,275

902

9
%
Sales and marketing

688

748

(60)

(8)
%
Depreciation and amortization

761

965

(204)

(21)
%
Total operating expenses

12,626

11,988

638

5
%
Loss from operations

(11,640)

(2,411)

(9,229)

(383)
%
Other income (expenses)

Income (loss) from equity method investments

18

136

(118)

87
%
Gain on Paycheck Protection Program loan

1,665

—

1,665

—
%
Other income (expense), net

29

(29)

58

(200)
%
Accretion expense

(511)

(386)

(125)

(32)
%
Interest expense, net

(1,317)

(500)

(817)

163
%
Total other expense

(116)

(779)

663

(85)
%
Loss before income taxes

(11,756)

(3,190)

(8,566)

(269)
%
Income tax benefit

3,138

743

2,395

322
%
Net loss

$
(8,618)

$
(2,447)

$
(6,171)

(252)
%
Loss per share

Basic

$
(0.63)

$
(0.21)

$
(0.42)

(197)
%
Diluted

$
(0.63)

$
(0.21)

$
(0.42)

(197)
%
Weighted average number shares – basic

13,686,686

11,528,371

2,158,315

19
%
Weighted average number shares – diluted

13,686,686

11,528,371

2,158,315

19
%

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~~Revenue~~

Total revenues for the nine months ended September 30, 2022 and 2021 were $12.6 million and $19.5 million, respectively, net of implicit price concessions. For the nine months ended September 30, 2022 and 2021, we recorded an allowance for implicit price concessions of $14.1 million and $1.2 million, respectively. Gross revenue for the nine months ended September 30, 2022, and 2021, prior to the application of implicit price concessions, totaled $26.7 million and $20.7 million. The increase in gross revenue is primarily related to an increase in managed case volume of approximately 5,200 from nearly 11,000 in the nine months ended September 30, 2021 to nearly 16,200 in the same period of 2022. The increase in managed cases is primarily related to the acquisition of Sentry, completed during the second quarter of 2021, and expansion into remote neurology. These gains were partially counteracted by Assure’s decision to exit certain markets. The Company utilized market intelligence and data warehousing analytics it did not previously possess to inform our decision to exit certain lower performing markets that were dragging down the Company’s average revenue per case. Assure’s go-forward strategy is anchored on achieving the benefit of scale in geographies underpinned by above average reimbursement.

Gross revenue for the nine months ended September 30, 2022, was negatively impacted by implicit price concessions related to aged claims. Based on the Company’s historical experience, claims generally become uncollectible once they are aged greater than 24 months; as such, included in the Company’s $14.1 million allowance for implicit price concessions for the nine months ended September 30, 2022, is an estimate of the likelihood that a portion of the Company’s accounts receivable may become uncollectible due to age. In the fourth quarter of 2021, Assure formalized a new holistic accounts receivable accrual and reserve strategy based on our historical collections experience. This process provides a clearer picture of the Company’s estimated collectible accounts receivable by taking a conservative approach and reserving claims earlier in the process. The new process has led to a higher than anticipated reserve in 2022. The issue Assure has experienced in 2022 is not related to lower reimbursement negatively impacting accrual rates, which have remained stable in high volume markets. The Company chose to take a conservative approach on reserving accounts receivable given our visibility on the challenges associated with collecting certain receivables before they are automatically reserved at 24 months. The benefit of taking these reserves earlier is: 1) It provides clearer visibility into future accounts receivable write-down expenses, and 2) Assure’s anticipated go-forward exposure in 2023 is substantially reduced. Going forward, as we continue to accelerate our cash receipts there will be less accounts receivable at risk. Management has designated a tactical team to specifically pursue these reserved claims. We expect to begin seeing results from these efforts in the last quarter of the year as we continue collection efforts for claims aged past 24 months. As a result, we anticipate that there will also be a bad debt charge in the fourth quarter of 2022; similar to what we reported in the third quarter, but still a material impact.

Technical and professional service revenue is recognized in the period in which IONM services are rendered, at net realizable amounts due from third party payors when collections are reasonably assured and can be estimated. The majority of the Company’s services are rendered on an out-of-network basis and billed to third-party insurers. We estimate out-of-network technical and professional revenue per case based upon our historical cash collection rates from private health insurance carriers. Our revenue estimation process for out-of-network revenue is based on the collection experience from insurance cases that are between 1-24 months old as management believes the more recent collection experience is more indicative of future per case collection rates.

Other revenue consists of revenue from managed service arrangements on a contractual basis. Revenue from services rendered is recorded after services are ~~rendered~~.

rendered.

Cost of revenues, excluding depreciation and amortization

Cost of revenues, excluding depreciation and amortization, for the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, were ~~$11.6~~$3.4 million compared to ~~$10.0~~$3.9 million for the same period in ~~2021,~~2022, a 16% increase. During the nine months ended September 30, 2022, the number of neuromonitoring cases increased 47% compared to the nine months ended September 30, 2021 which drove the costs of revenues increase.13% decrease. Cost of revenues consist primarily of the cost of our internal billing and collection department, internal and external collection costs, technologist and supervising practitioner wages, third-party supervising practitioner fees, and medical supplies. Technologist and supervising practitioner wages and medical supplies vary with the number of neuromonitoring cases. The ~~cost~~decrease in costs of ~~our internal billing and collection department increased as we have increased headcount~~revenues is primarily related to ~~align with expected growth in volume and~~ the ~~number of cases to invoice has increased. A primary focus for Assure during the remainder of 2022 and into 2023 will be~~Company’s efforts focused on reducing the Company’s average cost of ~~the~~ delivery in providing our services, both on the technologist and the remote neurology parts of the business.

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General and administrative

General and administrative expenses were ~~$11.2~~$3.2 million and ~~$10.3~~$4.2 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. The ~~increase period-to-period was~~decrease is primarily related to ~~increased head count, via organic growth~~lower employee costs due to a decrease in headcount and ~~integrated acquisitions, partially offset by cost cutting efforts.~~ a decrease in stock based compensation due to the reversal of stock based compensation expense related to forfeitures and cancellations of stock options.

Gain on Paycheck Protection Program loan forgiveness

During March 2021, the Company received an unsecured loan under the United States Small Business Administration Paycheck Protection Program (“PPP”) pursuant to the recently adopted Coronavirus Aid, Relief, and Economic Security Act (the “PPP Loan”) in the amount of $1.7 million. During January 2022, the Company was granted forgiveness of the PPP Loan. As of ~~June 30,~~March 31, 2022, the Company recorded a gain on forgiveness of the PPP Loan of $1.7 million. There were no similar transactions during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2023.

Accretion expense

The Company recorded non-cash accretion expense of ~~$511 thousand and $386~~$170 thousand for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. The Company accretes the difference between the fair value of the convertible debt and the debenture and the face value of the convertible debt and the debenture over the term of the convertible debt and the debenture. Specifically, accretion expense was ~~$285~~$95 thousand for each period related to the convertible debt and ~~$226~~$75 thousand ~~and $101~~ for each period related to the ~~nine months ended September 30, 2022 and~~debenture issued to Centurion Financial Trust pursuant to a commitment letter dated March 8, 2021 ~~respectively, for the~~ (“Centurion ~~debenture.~~Debenture”).

Interest expense, net

Interest expense, net was ~~$1,317~~$509 thousand for the ~~nine~~three months ended ~~September 30, 2022~~Mach 31, 2023 compared to ~~$500~~$407 thousand for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. The increase year-over-year is primarily due to higher outstanding debt balances. Specifically, interest expense

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was ~~$220 thousand~~$77 and $77 for ~~each period~~the three months ended March 31, 2023 and 2022 related to the convertible debt, respectively, and ~~$873~~$376 thousand and ~~$236~~$263 thousand for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, for the Centurion ~~debenture.~~Debenture.

Income tax (expense) benefit

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, income tax expense was $0.4 million and compared income tax benefit ~~was $3.1 million compared $743~~of $337 thousand for the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. The Company’s estimated annual tax rate is impacted primarily by the amount of taxable income earned in each jurisdiction the Company operates in and permanent differences between financial statement carrying amounts and the tax basis.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Funding Requirements

Our cash position as of ~~September 30, 2022~~March 31, 2023 was ~~$3.8 million~~$505 thousand compared to the December 31, ~~2021~~2022 cash balance of ~~$4.0 million.~~$905 thousand. Working capital was ~~$28.0~~$11.4 million as of ~~September 30, 2022~~March 31, 2023 compared to ~~$34.3~~$16.4 million at December 31, ~~2021. We believe that our~~2022. Our working capital balance and our estimated cash flows from operations during ~~2022 is expected~~2023 will not support our operating activities and our obligations for the next 12 months. ~~However, if we pursue our plan of continued growth our existing working capital will not be sufficient and we may need~~We intend to seek equity or debt ~~financing.~~ financing and have implemented significant cost cutting measures to mitigate our going concern. Such financings may include the issuance of shares of common stock, warrants to purchase common stock, convertible debt or other instruments that may dilute our current stockholders. Financing may not be available to us on acceptable terms depending on market conditions at the time we seek financing. We plan to apply for a $3.2 million refund under the CARES Act Employee Retention Credit program, however there is no guarantee when, or if, these funds will be received during 2023. Furthermore, our independent registered public accountants have expressed that substantial doubt exists as to the Company’s ability to continue as a going concern. See Item 8. Report of Independent Registered Public Accountant in our Annual Report on Form 10-K as filed with the SEC on March 31, 2023 for further discussion.

On October 11, 2022, we received a notification letter from The Nasdaq Stock Market stating that we ~~are~~were not in compliance with the Minimum Bid Price Requirement, which requires our listed securities to maintain a minimum bid price of $1.00 per share. During March 2023, the Company effectuated a twenty-for-one reverse split in order to comply with the Minimum Bid Price Requirement. On March 24, 2023, received confirmation from The Nasdaq Stock Market that it has regained compliance with the minimum bid price requirement of $1.00 per share under Nasdaq Listing Rule 5550(a)(2) and currently meets all other applicable criteria for continued listing. However, there is no guarantee our common stock will not fall below the minimum bid price of $1.00 per share in the future. A delisting from The Nasdaq Stock Market would negatively impact our ability to raise additional capital through equity financings on acceptable terms in order to meet our plan of continued ~~growth.~~ growth.

We ~~rely~~are also dependent on ~~payments from multiple private insurers~~Centurion Financial Trust granting us certain add-backs and ~~hospital systems that have payment policies~~other one-time adjustments in the calculation of our financial covenants related to EBITDA related to the Centurion Debenture and ~~payment cycles that vary widely and are subject to change. Because~~if we are not granted such allowances we may not meet our financial covenants which could result in a default on our obligations and the lender could foreclose on our assets if we cannot otherwise payoff the debt. We currently owe approximately $11 million in face amount on the debentures with Centurion Financial Trust and an additional approximately $3.45 million in convertible debentures.

Our near-term cash requirements relate primarily ~~an out-of-network biller~~ to private insurance companies, the collection times for our claims can last in excess of 24 months. During the nine months ended September 30, 2022, we recorded an allowance for implicit price concessions of $14.1 million. Duringpayroll expenses, trade payables, debt payments, capital lease payments, and general corporate obligations.

Cash flows from operating activities

For the three months ended ~~September 30, 2022, we recorded an allowance for implicit price concessions of $2.1 million, we expect a similar allowance for the three months ended December~~March 31, ~~2022 for the reasons discussed.~~

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~~For the nine months ended September 30, 2022,~~2023, we collected approximately ~~$17.4~~$4.5 million of cash from operations compared to collecting approximately ~~$10.1~~$5.6 million in the same prior year period. As of ~~September 30, 2022,~~March 31, 2023, accounts receivable, which are recorded net of implicit price concessions, was ~~$20.9~~$13.0 million compared to ~~$27.8~~$15.1 million at December 31, ~~2021.~~ 2022. The decrease in our accounts receivable balance during ~~2022~~2023 is primarily related to the increased velocity of cash receipts and implicit price concession charges. ~~We received $69 thousand in cash distributions from the PE entities for the nine months ended September 30, 2022 compared to $312 thousand received for the same period in the prior year.~~

Historically, we have financed our operations primarily from revenues generated from services rendered and through equity and debt financings. Our cash balance and projected cash flows from operations are expected to fund our current obligations and planned operating activities for the next 12 months.

Cash used in operating activities for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023, was ~~$5.3 million~~$660 thousand compared to ~~$9.4~~$2.3 million for the same period in the preceding year. Cash was used to fund operations and to fund our growth strategy.

~~Cash used in investing activities~~23

Table of $161 thousand for the nine months ended September 30, 2022 was related the PE distributions of $69 thousand, offset by payments related to acquisition liabilities of $204 thousand and fixed asset purchases of $26 thousand. ~~Cash provided by investing activities of $108 thousand for the nine months ended September 30, 2021 was related the PE advances, offset by payments related to the Sentry acquisition~~Contents.

~~Cash provided by financing activities of $5.2 million for the nine months ended September 30, 2022 was due to equity financing.~~ Cash provided by financing activities of $5.8 million for the nine months ended September 30, 2021 was due to $7.4 million of net proceeds from the debenture, $1.7 million of proceeds from the Payroll Protection Program loan, and $832 thousand in proceeds from common stock issuances, offset by $4.1 million payments of bank debt.

We expect to see an increase in case volume during the fourth quarter of 2022, due to normal seasonality related to patient use of benefits before the end of the year. We also expect to see a higher proportion of patients utilizing commercial insurance relative to the proportion of patients utilizing government insurance. We expect these items to result in increased revenue for the fourth quarter of 2022.

In October 2022, we experienced a meaningful decrease in the Texas reimbursement benchmark, which has been utilized in state arbitration claims to great success through September of this year. Texas state arbitration reimbursement has realigned to a level much closer to the state average across our operational footprint based on our arbitration experience. Since Texas represents approximately 60% of our patient volume, we expect to remain focused on participation rates for state arbitrations in Texas.

~~Our near-term cash requirements relate primarily~~Cash flows used in investing activities

Cash used in investing activities of $40 thousand for the three months ended March 31, 2023, was related the PE distributions of $37 thousand, offset by payments related to ~~payroll expenses, trade payables, debt~~acquisition liabilities of $77 thousand. Cash used in investing activities of $42 thousand for the three months ended March 31, 2022 was related the PE distributions of $35 thousand, offset by payments ~~capital lease payments,~~related to acquisition liabilities of $51 thousand and ~~general corporate obligations.~~fixed asset purchases of $26 thousand.

We have receivables from equity investments in PEs and other entities that are due and payable upon those entities collecting on their own accounts receivable. To the extent that these entities are unable to collect on their accounts receivable or there is an impairment in the valuation of those accounts receivable, the Company will need to reduce its related party receivables and/or its equity investments in the PEs.

Cash flows from financing activities

Cash provided by financing activities of $300 thousand for the three months ended March 31, 2023 resulted from a private placement of 50,000 common shares at a price of $6.00 per common share. Cash provided by financing activities of $4 thousand for the three months ended March 31, 2022 was due to stock option exercises.

Off-Balance Sheet Arrangements

We have no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have, a current or future effect on our results of operations or financial condition.

CRITICAL ACCOUNTING POLICIES

We prepare our consolidated financial statements in conformity with GAAP. Application of GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes and within this ~~MD&A.~~Management’s Discussion and Analysis of Financial Condition and Results of Operations section. We consider our most important accounting policies that require significant estimates and management judgment to be those policies with respect to revenue, accounts receivable, stock based compensation, acquired intangible assets, goodwill, and income taxes, which are discussed below. Our other significant accounting policies are summarized in Note 2, “Basis of Presentation” and

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Note 3, “Summary of Significant Accounting Policies,” of the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 as filed with the Securities and Exchange Commission on March ~~14, 2022.~~31, 2023.

We continually evaluate the accounting policies and estimates used to prepare the consolidated financial statements. In general, our estimates are based on historical experience, evaluation of current trends, information from third-party professionals and various other assumptions that we believe to be reasonable under the known facts and circumstances. Estimates can require a significant amount of judgment and a different set of assumptions could result in material changes to our reported results.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

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ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, an evaluation was carried out under the supervision of, and with the participation of the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on that evaluation, the CEO and the CFO have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were ~~ineffective~~effective in ensuring that (i) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been changes in our internal control over financial reporting during the quarter ended ~~September 30, 2022~~March 31, 2023, that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ~~Changes in our internal control over financial reporting during the quarter ended September 30, 2022 are discussed below under “Remediation”.~~

~~Material Weaknesses~~

Previously, management noted that we had material weaknesses in our internal control over financial reporting related improper segregation of duties which management believes to be a material weakness.

~~Remediation Progress~~

In response to the identified material weakness, during the first quarter of 2022 and continuing through the third quarter of 2022, management began to restructure certain employee functions to allow for proper review of all transactions in order to remediate the segregation of duties control weakness. Management believes the segregation of duties material weakness will be remediated during the fourth quarter of 2022.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not aware of any material pending or threatened legal proceedings or of any proceedings known to be contemplated by governmental authorities that are, or would be, likely to have a material adverse effect upon us or our operations, taken as a whole.

In April 2022, the U.S. Department of Justice (“DOJ”) issued Civil Investigative Demands which seek information with respect to a civil investigation under the Anti-kickback Statute and the False Claims Act. We voluntarily contacted the DOJ offering to provide any materials needed in the investigation and to answer any questions. While our policy during the relevant time was to not seek payments

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from federal health care programs, the third-party billing company we used at that time submitted some claims to Medicare Advantage plans administered by commercial insurance companies. We have worked diligently to ensure that payments from Medicare Advantage plans have been returned to the commercial insurance companies and we believe we have returned substantially all such payments that we have discovered to date, totaling approximately $450,000. The DOJ has not made any allegations in the investigation, and we are currently unable to predict the eventual scope, ultimate timing, or outcome of this investigation. As a result, we are unable to estimate the amount or range of any potential loss, if any, arising from this investigation.

ITEM 1A. RISK FACTORS

~~Except as set forth below, during~~During the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 there were no material changes to the risk factors disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

~~If our common stock is delisted from Nasdaq, the liquidity and price of our common stock could decrease and our ability to obtain financing could be impaired.~~

On October 11, 2022, we received a notification letter from The Nasdaq Stock Market stating that we are not in compliance with the Minimum Bid Price Requirement, which requires our listed securities to maintain a minimum bid price of $1.00 per share. The notification stated that we have a compliance period of 180 calendar days, or until April 10, 2022, to regain compliance with the Minimum Bid Price Requirement. If at any time during this 180-day compliance period the closing bid price of our common stock is at least $1.00 per share for a minimum of ten consecutive business days, then the Nasdaq Stock Market will provide us with written confirmation of compliance and the matter will be closed.

If compliance cannot be demonstrated by April 10, 2022, we may be eligible for additional time. To qualify, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards on the Nasdaq Capital Market (except the bid price requirement). In addition, we would be required to provide written notice of our intention to cure the minimum bid price deficiency during this second 180-day compliance period by effecting a reverse stock split, if necessary. If we are not granted an additional 180-day compliance period, then Nasdaq will provide written notification that our securities will be subject to delisting. At that time, we may appeal the determination to delist our securities to a Nasdaq hearings panel. There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement or otherwise maintain compliance with the other listing requirements.

If we are unable to maintain our listing on The Nasdaq Stock Market, the liquidity and price of our stock could decrease. Further, our ability to raise capital through equity or convertible debt financings would be negatively impacted and result in us curtailing our plan of continued growth which could negatively impact our operating results and financial condition.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Items 2(b) and 2(c) are not applicable.

Item 2(a) – Stock Issuances - ~~Except as disclosed in our previously filed current reports on Form 8-K, the Company has not issued~~The table set forth below discloses equity securities of the Company that were issued on an unregistered basis during the quarter ended ~~September 30, 2022.~~March 31, 2023.

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ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS


Exhibit Number	Description
3.1	Certificate of Change of Assure Holdings Corp. (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on March 3, 2023)
3.2	Amended and Restated Bylaws of Assure Holdings Corp. (incorporated by reference to ~~Exhibit 3.8 to~~ the Company’s ~~Form 10-Q filed with the SEC on November 15, 2021)~~
~~3.2~~	~~Amended Articles of Incorporation of Assure Holdings Corp. (incorporated by reference to Exhibit 3.9 to the Company’s Form~~ 10-Q filed with the SEC on November 15, 2021)
31.1+	Certification of the Principal Executive Officer pursuant to Rule 13a-14 of the Exchange Act
31.2+	Certification of the Principal Financial Officer pursuant to Rule 13a-14 of the Exchange Act
32.1++	Certification of the Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2++	Certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS+	Inline XBRL Instance Document
101.SCH+	Inline XBRL Schema Document
101.CAL+	Inline XBRL Calculation Linkbase Document
101.DEF+	Inline XBRL Definition Linkbase Document
101.LAB+	Inline XBRL Label Linkbase Document
101.PRE+	Inline XBRL Presentation Linkbase Document
104+	The cover page of the Company’s Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2022,~~March 31, 2023, formatted in Inline XBRL (contained in Exhibit 101)

+	Filed herewith.

++	Furnished herewith.

*	~~Indicates a management contract or compensatory plan, contract or arrangement.~~

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ASSURE HOLDINGS CORP.


By:	/s/ John Farlinger	By	: /s/ John Price
	John Farlinger, Executive Chairman and Chief Executive Officer		John Price, Chief Financial Officer (Principal Financial Officer)
	(Principal Executive Officer)

	Date: ~~November 14, 2022~~May 15, 2023		Date: ~~November 14, 2022~~May 15, 2023

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Balance at December 31, 2021	$	25
Gain on revaluation		25
Balance at September 30, 2022	$	—

Date of Issuance

Title and Amount of Securities

Consideration Received

Exemption Claimed

March 3, 2023

50,000 shares of common stock

$300,000 cash from private investor

Exempt pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended, based on the representations of the private investor

February 2, 2023

5,000 shares of common stock

Financial advisory services from Benchmark Capital Partners

Exempt pursuant to Section 4(a)(2) of the Securities Act based on the representations of the investor