40-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13(A) OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017 Commission File Number 001-37542

CRH MEDICAL CORPORATION

(Exact name of Registrant as specified in its charter)

British Columbia

(Province or other jurisdiction of incorporation or organization)

3841

(Primary Standard Industrial Classification Code Number (if applicable))

Not Applicable

(I.R.S. Employer Identification Number (if applicable))

Suite 578 – 999 Canada Place, World Trade Center

Vancouver, British Columbia, Canada V6C 3E1

(604) 633-1440

(Address and telephone number of Registrant’s principal executive offices)

CT Corporation System

111 Eighth Avenue

New York, New York 10011

(212) 894-8940

(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Shares, no par value	NYSE American

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

For annual reports, indicate by check mark the information filed with this Form:

☒Annual Information Form ☒ Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:

The Registrant had 73,018,588 Common Shares outstanding as at December 31, 2017.

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).

Yes ☐                       No ☐

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.

Emerging growth company    ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, 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 Section 13(a) of the Exchange Act. ☐

*The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to the Accounting Standards Codification after April 5, 2012.

A. Disclosure Controls and Procedures

Disclosure controls and procedures are defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), by the Securities and Exchange Commission (the “Commission”) as those controls and other procedures that are designed to ensure that information required to be disclosed by the Registrant in reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the Registrant’s reports and filings is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

The Registrant’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Registrant’s disclosure controls and procedures and have concluded that such disclosure controls and procedures were effective as at December 31, 2017. See “Disclosure Controls and Procedures (DCP) and Internal Controls over Financial Reporting (ICFR)” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2017, filed as Exhibit No. 1.3 to this Annual Report on Form 40-F.

B. Management’s Annual Report on Internal Control over Financial Reporting

The Registrant’s management, including its Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and has designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards, as prepared by the International Accounting Standards Board. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

The Registrant’s management has evaluated the design and operation of its internal control over financial reporting as of December 31, 2017 and has concluded that such internal control over financial reporting was effective as of December 31, 2017. This assessment was based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. See “Disclosure Controls and Procedures (DCP) and Internal Controls over Financial Reporting (ICFR)” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2017, filed as Exhibit No. 1.3 to this Annual Report on Form 40-F.

C. Attestation Report of the Registered Public Accounting Firm

The Registrant will not be required to comply with the auditor attestation requirements of the U.S. Sarbanes-Oxley Act of 2002 for so long as the Registrant remains an “emerging growth company” under the Jumpstart Our Business & Startups Act.

D. Changes in Internal Control over Financial Reporting

There were no changes in the Registrant’s internal control over financial reporting that occurred during the period covered by this Annual Report on Form 40-F that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

E. Notice of Pension Fund Blackout Period

The Registrant was not required by Rule 104 of Regulation BTR to send any notice to any of its directors or executive officers during the fiscal year ended December 31, 2017.

F. Audit Committee Financial Expert

The Board has determined that Todd Patrick is an audit committee financial expert within the meaning of General Instruction B(8)(b) of Form 40-F under the Exchange Act. Todd Patrick is “independent” within the meaning of Rule 10A-3 under the Exchange Act and the listing standards of the NYSE American.

The Commission has indicated that the designation or identification of a person as an audit committee financial expert does not make such person an “expert” for any purpose, impose any duties, obligations or liability on such person that are greater than those imposed on members of the Audit Committee and the Board who do not carry this designation or identification, or affect the duties, obligations or liability of any other member of the Audit Committee or the Board.

G. Code of Ethics

The Registrant’s code of ethics, the “Code of Business Conduct and Ethics”, is applicable to all of its employees including the Chief Executive Officer, Chief Financial Officer, other senior officers and members of the Board. The Code of Business Conduct and Ethics can be viewed on the Registrant’s website at http://investors.crhsystem.com under “About Us – Corporate Governance – Code of Business Conduct and Ethics”.

H. Principal Accountant Fees and Services

(all amounts are in Canadian dollars unless otherwise indicated)

Audit Fees

The aggregate fees billed by KPMG LLP for professional services rendered for the audit of the Registrant’s annual financial statements, including services related thereto and services provided in connection with the statutory and regulatory filings for those fiscal years, were $354,250 for the fiscal year ended December 31, 2017 and $304,000 for the fiscal year ended December 31, 2016.

Audit-Related Fees

The aggregate fees billed by KPMG LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Registrant’s financial statements and are not reported as “Audit Fees” were $nil for the fiscal year ended December 31, 2017 and $nil for the fiscal year ended December 31, 2016.

Tax Fees

The aggregate fees billed by KPMG LLP for professional services rendered for tax compliance, tax advice and tax planning were $90,876 for the fiscal year ended December 31, 2017 and $69,831 for the fiscal year ended December 31, 2016. Tax services included all services performed by KPMG LLP in connection with tax planning, compliance and advice.

All Other Fees

The aggregate fees billed by KPMG LLP for services other than those reported in the preceding three paragraphs were $nil for the fiscal year ended December 31, 2017 and $nil for the fiscal year ended December 31, 2016.

Audit Committee Pre-Approval Policies and Procedures

All non-audit services performed by KPMG LLP for the fiscal year ended December 31, 2017 were pre-approved by the Audit Committee of the Registrant. It is the Registrant’s policy that all non-audit services performed by KPMG LLP will continue to be pre-approved by the Audit Committee.

I. Off-Balance Sheet Arrangements

The Registrant does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on its results of operations, financial condition, changes in financial condition, revenues or expenses, liquidity, capital expenditures or capital resources that is material to investors.

J. Tabular Disclosure of Contractual Obligations

See “Liquidity and Capital Resources” in Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2017 filed as Exhibit 1.3 to this Annual Report on Form 40-F.

K. Identification of Audit Committee

The Registrant has established a separately-designated standing Audit Committee established in accordance with section 3(a)(58)(A) of the Exchange Act. Each of the following directors serves on the audit committee: Dr. Anthony F. Holler, Todd Patrick and Ian Webb. The Board has determined that all of the members of the Audit Committee are “independent” within the meaning of Rule 10A-3 under the Exchange Act and the listing standards of the NYSE American. See “Directors and Officers” and “Audit Committee Information” in the Registrant’s Annual Information Form for the fiscal year ended December 31, 2017, which is filed as Exhibit 1.1 to this Annual Report on Form 40-F.

L. NYSE American Exemption

Section 123 of the NYSE American Company Guide requires a quorum of not less than 33 1/3% of a listed company’s shares issued and outstanding entitled to vote at a meeting of the shareholders. Under the Registrant’s articles, quorum for a meeting of the Registrant’s shareholders is two shareholders, or one or more proxyholders representing two shareholders, or one shareholder and a proxyholder representing another shareholder and in any such case, such shareholders or proxyholders in attendance at the meeting must hold or represent in the aggregate at least 25% of the eligible vote. As permitted under Section 110 of the NYSE American Company Guide, the Registrant intends to continue to follow this practice with respect to quorum requirements in lieu of those required by the NYSE American listing rules. The Registrant’s quorum requirements are not prohibited by the requirements of the Business Corporations Act (British Columbia). The rules of the Toronto Stock Exchange, upon which the common shares are also listed, do not contain specific quorum requirements.

M. Interactive Data File

The Registrant is submitting as Exhibit 101 to this annual report on Form 40-F, and posting to its corporate website at http://investors.crhsystem.com, its first Interactive Data File.

N. Mine Safety

The Registrant is not required to disclose the information required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

UNDERTAKING AND CONSENT TO SERVICE OF PROCESS

A. Undertaking

The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to the securities in relation to which the obligation to file an annual report on Form 40-F arises or transactions in said securities.

B. Consent to Service of Process

The Registrant has previously filed with the Commission a written irrevocable consent and power of attorney on Form F-X in connection with its common shares. Any change to the name or address of the agent for service of process shall be communicated promptly to the Commission by an amendment to the Form F-X.

EXHIBITS

The following exhibits are filed as part of this report:

Exhibit No.	Description
1.1	Annual Information Form for the fiscal year ended December 31, 2017.
1.2	Audited Consolidated Financial Statements for the fiscal years ended December 31, 2017 and 2016.
1.3	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2017.
23.1	Consent of KPMG LLP.
31.1	Certifications of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Exhibits 1.1, 1.2 and 1.3 are incorporated by reference into the Registrant’s Registration Statements on Form S-8 (File No. 333-206945, File No. 333-206946, File No. 333-218971, and File No. 333-218985) that have been filed with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

Date: March 29, 2018

CRH MEDICAL CORPORATION
By:	/s/ Edward Wright
	Name:	Edward Wright
	Title:	Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
1.1	Annual Information Form for the fiscal year ended December 31, 2017.
1.2	Audited Consolidated Financial Statements for the fiscal years ended December 31, 2017 and 2016.
1.3	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2017.
23.1	Consent of KPMG LLP.
31.1	Certifications of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer) pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

Exhibits 1.1, 1.2 and 1.3 are incorporated by reference into the Registrant’s Registration Statements on Form S-8 (File No. 333-206945, File No. 333-206946, File No. 333-218971, and File No. 333-218985) that have been filed with the Securities and Exchange Commission.

EX-1.1

Exhibit 1.1

CRH MEDICAL CORPORATION

ANNUAL INFORMATION FORM

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017

March 29, 2018

TABLE OF CONTENTS

GLOSSARY	3
TERMS OF REFERENCE	4
CAUTION REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS	4
CORPORATE STRUCTURE	7
Intercorporate Relationships	8
GENERAL DEVELOPMENT OF THE BUSINESS	9
Three Year History	9
DESCRIPTION OF BUSINESS	11
Overview	11
CRH O’Regan System	11
Hemorrhoid Treatment Procedures	12
The CRH O’Regan System	13
Gastroenterology Anesthesia Services	18
RISK FACTORS	21
Risks Related to Our Company	21
DIVIDEND POLICY	37
DESCRIPTION OF CAPITAL STRUCTURE AND MARKET FOR SECURITIES	37
PRIOR SALES	38
ESCROW SECURITIES	39
DIRECTORS AND OFFICERS	39

CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS	42
CONFLICTS OF INTEREST	42
AUDIT COMMITTEE INFORMATION	43
Audit Committee Oversight	43
Reliance on Certain Exemptions	43
Pre-Approval Policies and Procedures	43
External Auditor Service Fees	44
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	44
MATERIAL CONTRACTS	44
LEGAL PROCEEDINGS	45
NAMES AND INTEREST OF EXPERTS	45
TRANSFER AGENTS AND REGISTRARS	45
ADDITIONAL INFORMATION	45
EXECUTIVE COMPENSATION	45
ADDITIONAL FINANCIAL INFORMATION	46
AUDIT COMMITTEE MANDATE	A - 1

GLOSSARY

This glossary contains general terms used in the discussion of the colorectal healthcare industry, as well as specific technical terms used in the descriptions of our technology and business.

Affordable Care Act (“ACA”)	A US healthcare reform law that expands and improves access to care and curbs spending through regulations and taxes.
Ambulatory Surgical Centers (“ASCs”)	Healthcare facilities, also known as outpatient surgery centers or same-day surgery centers, where surgical procedures not requiring an overnight hospital stay are performed.
Anoscope	An anoscope is an instrument used to view the anus and lowest portion of the rectum. An anoscope is a rigid tube (4 in or 10 cm long) that can be inserted with a lubricant into the anal canal. When the tube is inserted, a light source shone through the tube allows the examiner to see the wall of the anus and lower rectum. An anoscope is used to identify abnormalities in the anus and lower rectum, such as hemorrhoids, inflammation, or tumors.
Blind Technique	Performing the hemorrhoid ligation without the use of the anoscope.
CMS	Centers for Medicaid and Medicare Services
Colonoscopy	Visual inspection of the interior of the colon with a flexible, lighted tube inserted through the rectum.
CRH O’Regan Ligator	A disposable, minimally invasive hemorrhoid banding system.
CRH O’Regan System®	This includes the CRH O’Regan Ligator as well as the CRH O’Regan Ligator with Anoscope.
Crown Facility	The senior and subordinated credit facility from affiliates of Crown Capital Partners Inc. for CAD$22,500,000 as partial financing for the acquisition of GAA.
Certified Registered Nurse Anesthetists (“CRNAs”)	Registered nurses who have become anesthesia specialists by taking a graduate curriculum which focuses on the development of clinical judgment and critical thinking.
Dentate Line	Where the anal canal meets the rectum there is a ring of folds called the dentate line. Among these folds are the anal crypts, small tube-like depressions opening into the anal canal. The dentate line delineates where nerve fibers end. Above this line, this area is relatively insensitive to pain. Below the dentate line, the anal canal and anus are extremely sensitive.
Direct-to-physician program	CRH has leveraged the success of its Centers for Colorectal Health (which it operated across the United States between 2005 and 2010) to create its direct-to-physician program. The program consists of training, technology, practice support and marketing.
Embolism	An obstruction in a blood vessel due to a blood clot or other foreign matter that gets trapped while travelling through the bloodstream.
Endoscopic Procedure	Endoscopy is a minimally invasive diagnostic medical procedure. It is used to examine the interior surfaces of an organ or tissue. The endoscope can also be used for enabling biopsies and retrieving foreign objects.
Gastroenterologists (“GIs”)	Doctors specializing in diseases affecting gastrointestinal tract (i.e. organs from mouth to anus).
Hemorrhoids	Normal blood vessels in the anal canal which when enlarged, can cause problems and can be considered abnormal or a disease. Hemorrhoids can

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	be either internal or external. Internal fall into four categories depending on the degree of severity, grade one being the least severe and grade four being the most severe. Hemorrhoids are commonly referred to as Hemorrhoidal Disease.
Hemorrhoid banding	A procedure where a small rubber band is placed around the base of the hemorrhoid inside the rectum, cutting off circulation, after which the hemorrhoid generally sloughs off within a few days.
Hemorrhoidectomy	Surgical removal of hemorrhoids.
Ligator	An instrument used for hemorrhoid banding or for placing and fastening a ligature.
Monitored Anesthesia Care (“MAC”)	Monitored anesthesia care (MAC) may include varying levels of sedation, anxiolysis, and analgesia. Based on the American Society of Anesthesiologists’ (ASA) standard for monitoring, MAC is to be provided by qualified anesthesia personnel who provide or medically direct a number of specific services such as administration of sedatives, analgesics, hypnotics, anesthetic agents or other medications as necessary.
Propofol	A prescription sedative-hypnotic drug (brand name Diprivan) that is administered intravenously. Propofol is commonly used in the induction of general anesthesia and can be used both for the induction and maintenance of general anesthesia. When administration of the drug is discontinued, it wears off rapidly, allowing the patient to awaken within a short time
MACRA	The Medicare Access and CHIP Reauthorization Act of 2015 repeals the sustainable growth rate – a series of Congressional fixes responsible for adjusting Medicare expenditures and provider reimbursement – and authorizes the Department of Health and Human Services to implement value-based initiatives aimed at improving care access for Medicare and CHIP beneficiaries.
RAP	Radiology, Anesthesiology, and Pathology. Refers to a provision that most insurance companies have in plans to limit the amount patients are responsible for when Radiology, Anesthesiology, and Pathology providers are not contracted
Sepsis	The presence of pus-forming bacteria or their toxins in the blood or tissues.
Sclerotherapy	A treatment for varicose veins involving injecting a solution directly into the vein.
Thrombosis	The formation or presence of a thrombus (a clot of coagulated blood attached at the site of its formation) in a blood vessel.

TERMS OF REFERENCE

The information set forth in this Annual Information Form is as of December 31, 2017, unless another date is indicated. All references to dollars ($) in this document are expressed in United States funds, unless otherwise indicated.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTORS

This Annual Information Form contains forward-looking statements within the meaning of applicable securities legislation concerning profitability; growth strategies; anticipated trends in our industry; our future financing plans; our anticipated needs for working capital and other events or conditions that may occur in the future. These forward-looking statements may include statements regarding perceived merit of our products and services, budgets, capital

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expenditures, operating costs, cash flow estimates and similar statements relating to our products, services, timelines, strategic plans, including our plans and expectations relating to the CRH O’Regan System, our anesthesiology operations, or other statements that are not statements of fact. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, identified by words or phrases such as “expects”, “is expected”, “anticipates”, “believes”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “potential”, “possible” or variations thereof or stating that certain actions, events, conditions or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.

Readers are cautioned regarding statements discussing profitability; growth strategies; anticipated trends in our industry; our future financing plans; our anticipated needs for working capital; and other events or conditions that may occur in the future. Actual events or results may differ materially from those discussed in forward-looking statements. There can be no assurance that the forward-looking statements currently contained in this report will in fact occur. The Company bases its forward-looking statements on information currently available to it, and assumes no obligation to update them. The Company disclaims any intent or obligations to update or revise publicly any forward-looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law.

Forward-looking statements are based on a number of assumptions and involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors and material assumptions include, among others:

• We may or may not successfully identify and complete corporate transactions on favorable terms or achieve anticipated synergies relating to any acquisitions or alliances, and such acquisitions could result in unforeseen operating difficulties and expenditures, or require significant management resources and significant charges.

• If we are unable to manage growth, we may be unable to achieve our expansion strategy.

• Changes to payment rates or methods of third-party payors, including United States government healthcare programs, changes to the United States laws and regulations that regulate payments for medical services, the failure of payment rates to increase as our costs increase, or changes to our payor mix, could adversely affect our operating margins and revenues.

• We are subject to decreases in our revenue and profit margin under our fee for service contracts and arrangements, where we bear the risk of changes in volume, payor mix, RAP benefits, and third-party reimbursement rates.

• ASCs or other customers may terminate or choose not to renew their agreements with us.

• We may need to raise additional capital to fund future operations.

• We are subject to various restrictive covenants and events of default under the Credit Facilities.

• Despite current indebtedness levels, we may still be able to incur substantially more debt, which could further exacerbate the risks associated with increased leverage.

• Our common shares may be subject to significant price and volume fluctuations.

• We may write-off intangible assets.

• If we are unable to maintain or increase anesthesia procedure volumes at our existing ASCs, the operating margins and profitability of our anesthesia segment could be adversely affected.

• We may not be able to successfully recruit and retain qualified anesthesiologists or other independent contractors.

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• Adverse events related to our product or our services may subject us to risks associated with product liability, medical malpractice or other legal claims, insurance claims, product recalls and other liabilities, which may adversely affect our operations.

• Our industry is subject to health and safety risks.

• ACA reform in the United States may have an adverse effect on our business, financial condition, results of operations and cash flows and the trading price of our securities.

• Failure to manage third-party service providers may adversely affect our ability to maintain the quality of service that we provide.

• Income tax audits and changes in our effective income tax rate could affect our results of operations.

• Our dependence on suppliers could have a material adverse effect on our business, financial condition and results of operations.

• Unfavorable economic conditions could have an adverse effect on our business.

• We may be subject to a variety of regulatory investigations, claims, lawsuits, and other proceedings.

• If we are unable to adequately protect or enforce our intellectual property, our competitive position could be impaired.

• The Company may not be successful in marketing its products and services.

• Our employees and third-party contractors may not appropriately record or document services that they provide.

• Failure to timely or accurately bill for services could have a negative impact on our net revenue, bad debt expense and cash flow.

• We may be unable to enforce the non-competition and other restrictive covenants in our agreements.

• Our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management.

• Our industry is already competitive and could become more competitive.

• If there is a change in federal or state laws, rules, regulations, or in interpretations of such federal or state laws, rules or regulations, we may be required to redeem our physician partners’ ownership interests in anesthesia companies under the savings clause in our joint venture operating agreements.

• Changes in the United States federal Anti-Kickback Statute and Stark Law and/or similar state laws, rules, and regulations could result in criminal offences and potential sanctions.

• Our employees and business partners may not appropriately secure and protect confidential information in their possession.

• We are dependent on complex information systems.

• We may be subject to criminal or civil sanctions if we fail to comply with privacy regulations regarding the protection, use and disclosure of patient information.

• We have a legal responsibility to the minority owners of the entities through which we own our anesthesia services business, which may conflict with our interests and prevent us from acting solely in our own best interests.

• A significant number of our affiliated physicians could leave our affiliated ASCs.

• If regulations or regulatory interpretations change, we may be obligated to re-negotiate agreements of our anesthesiologists or other contractors.

• The continuing development of our products and provision of our services depends upon us maintaining strong relationships with physicians.

• We operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations.

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• Unfavorable changes or conditions could occur in the states where our operations are concentrated.

• Government authorities or other parties may assert that our business practices violate antitrust laws.

• If we were to lose our foreign private issuer status under United States federal securities laws, we would likely incur additional expenses associated with compliance with United States securities laws applicable to United States domestic issuers.

• Significant shareholders of the Company could influence our business operations, and sales of our shares by such significant shareholders could influence our share price.

• Anti-takeover provisions could discourage a third party from making a takeover offer that could be beneficial to our shareholders.

• Changes in the medical industry and the economy may affect the Company’s business.

• Our industry is the subject of numerous governmental investigations into marketing and other business practices which could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our financial condition and results of operations.

• Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty.

• We may face exposure to adverse movements in foreign currency exchange rates.

This list is not exhaustive of the factors that may affect any of our forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and our actual achievements or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those referred to in this Annual Information Form under the heading “Risk Factors” and elsewhere.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The forward-looking statements contained in this Annual Information Form are based on the beliefs, expectations and opinions of management as of the date hereof. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers and investors should not place undue reliance on forward-looking statements. The Company does not intend to update forward-looking statements, except as required by law.

CORPORATE STRUCTURE

CRH Medical Corporation (“CRH” or the “Company”) was incorporated under the name Medsurge Medical Products Corp. on April 12, 2001 by registration of a Memorandum and Articles pursuant to the Company Act (British Columbia). The Company transitioned under the Business Corporations Act (British Columbia) on March 15, 2005 and changed its name to CRH Medical Corporation on April 28, 2006.

The registered and records offices of the Company are located at Suite 2600, 595 Burrard Street, Three Bentall Center, Vancouver, British Columbia, V7X 1L3, and its head office and principal place of business is located at Suite 578 – 999 Canada Place, World Trade Center, Vancouver, British Columbia, V6C 3E1, telephone (604) 633-1440, facsimile (604) 633-1443.

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Intercorporate Relationships

The Company has the following wholly owned subsidiaries:

Subsidiary	Interest	Date of Incorporation	Jurisdiction of Incorporation
CRH Medical Corporation	100%	May 20, 2005	Delaware, United States
CRH Anesthesia Management LLC (“CRH Anesthesia Management”)	100%	November 12, 2014	Delaware, United States
Gastroenterology Anesthesia Associates LLC(1) (“GAA”)	-	June 12, 2012	Georgia, United States
NC GAA, PC(1) (“NC GAA”)	-	March 18, 2015	North Carolina, United States
CRH GAA PLLC(1) (“CRH GAA”)	-	April 11, 2016	Texas, United States
CRH Anesthesia of Gainesville LLC	100%	October 31, 2014(2)	Florida, United States
CRH Anesthesia of Florida LLC	100%	April 7, 2014(2)	Florida, United States
CRH Anesthesia of Cape Coral LLC	100%	Jul 20, 2015	Florida, United States
CRH Anesthesia of Knoxville LLC	100%	August 14, 2015	Tennessee, United States
CRH Anesthesia of Colorado, LLC	100%	March 9, 2016(3)	Delaware, United States
Alamo Sedation Associates LLC	100%	August 17, 2017	Texas, United States

(1) The shares of GAA, NC GAA, and CRH GAA are owned by individual medical practitioners. The operations and corporate structure of these subsidiaries are governed by certain agreements, including loans by CRH Medical Corporation (Delaware) to the individual medical practitioners. These agreements, including the affirmative and negative covenants therein in favour of CRH, effectively provide CRH control of GAA, NC GAA and CRH GAA.

(2) On February 23, 2015, IPS of Gainesville, LLC changed its name to CRH Anesthesia of Gainesville LLC. On February 12, 2015, Coastal Anesthesia Providers, LLC changed its name to CRH Anesthesia of Sarasota LLC. Subsequently, its name was changed to CRH Anesthesia of Florida LLC.

(3) On June 23, 2017, CRH Anesthesia of Arapahoe LLC changed its name to CRH Anesthesia of Colorado, LLC

The Company also holds ownership interests in the following subsidiaries:

Subsidiary	Interest(1)	Date of Incorporation	Jurisdiction of Incorporation
Macon Gastroenterology Anesthesia Associates LLC (“MGAA”)	65%	November 30, 2015	Georgia, United States
Knoxville Gastroenterology Anesthesia Associates LLC (“KGAA”)	51%	July 29, 2015	Tennessee, United States
Austin Gastroenterology Anesthesia Associates PLLC (“AGAA”)	51%	April 11, 2016	Texas, United States
Community Anesthesia PLLC (“Community”)	65%	June 19, 2009	Massachusetts, United States
Arapahoe Gastroenterology Anesthesia LLC (“Arapahoe”)	51%	March 8, 2016	Delaware, United States
Osceola Gastroenterology Anesthesia Associates LLC (“Osceola”)	60%	January 12, 2017	Florida, United States
DDAB LLC (“DDAB”)	51%	November 4, 2015	Georgia, United States
West Florida Anesthesia Associates LLC (“West Florida”)	55%	June 14, 2017	Florida, United States
Central Colorado Anesthesia Associates LLC (“Central Colorado”)	51%	June 16, 2017	Colorado, United States
Raleigh Sedation Associates LLC (“Raleigh)	51%	August 29, 2017	North Carolina, United States

(1) As a result of the operating agreements for the above entities, the Company controls MGAA, KGAA, AGAA, Community, Arapahoe, Osceola, DDAB, West Florida, Central Colorado, and Raleigh.

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GENERAL DEVELOPMENT OF THE BUSINESS

Three Year History

Year Ended December 31, 2015

During the year ended December 31, 2015, the Company added to its anesthesia business, which it started with the GAA acquisition, with four accretive anesthesia transactions: John’s Creek Anesthesia LLC (“John’s Creek”), MGAA, KGAA and Associates in Digestive Health LLC (“ADH”). In combination, the Company acquired these businesses for an aggregate purchase consideration of $19,888,352, including $18,465,700 paid via cash and $1,422,652 paid via shares. In, 2015, these transactions contributed revenues of $4,678,558 and net earnings before tax of $383,993.

The Company expanded its program to sell the CRH O’Regan System directly to physicians. As of December 31, 2015, the Company had trained 2,175 physicians to use the CRH O’Regan System, representing 811 clinical practices. This compares to 1,916 physicians trained at 701 clinical practices as of December 31, 2014.

In November 2015, the Company entered into a credit facility with the Bank of Nova Scotia (“Scotiabank”, and the credit facility, the “Scotia Facility”). The Scotia Facility, which had a maturity date of April 30, 2018, initially provided financing of up to $33,000,000. The Scotia Facility was repayable in full at maturity, with scheduled principal repayments on a quarterly basis beginning March 31, 2016 based upon the outstanding balance of the Scotia Facility. The Scotia Facility is a revolving credit facility which the Company could terminate at any time without penalty. The Scotia Facility bore interest at a floating rate based on the U.S. prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin. The Scotia Facility was used to extinguish the Knight and Bloom Burton debt acquired in 2014.

In September 2015, the Company’s common shares were approved for listing on the NYSE MKT, LLC (the “NYSE MKT”) subject to continued satisfaction of listing requirements. The Company’s common shares began trading on the NYSE MKT under the ticker “CRHM” on September 3, 2015. The Company’s common stock is dual listed and trades on the TSX under its existing symbol “CRH.”

On March 25, 2015, the Company closed a bought deal equity offering and over-allotment option of 7,000,000 and 1,050,000 common shares, respectively, at a price of $2.72 (CAD$3.40) per common share for gross proceeds of $21,865,893 (CAD$27,370,000). In connection with the offering, the underwriters were paid a 6% commission totaling approximately $1,311,954 (CAD$1,642,200) and were issued 241,500 broker warrants with a total value of $249,149. The Company incurred additional share issuance costs of $299,230 (CAD$375,059) in relation to the offering.

Year Ended December 31, 2016

During the year ended December 31, 2016, the Company added to its anesthesia business with the acquisitions of Arapahoe, Community and AGAA. The Company spent a total aggregate consideration of $34.1 million for the purchase of these anesthesia businesses, which were financed by a combination of cash, deferred cash consideration, and an extension of the Scotia Facility. These transactions contributed a total of $18,567,366 in revenues and net earnings before tax of $6,266,973 in 2016.

In July of 2016, the Company hired Jay Kreger as President, CRH Anesthesia. Mr. Kreger is responsible for leveraging on CRH’s existing relationships within the GI community to drive expansion opportunities in the anesthesia services business across the United States.

As of December 31, 2016, CRH had trained a total of 2,414 physicians at 930 practices in the use of the CRH O’Regan System. This represents an increase of 239 physicians and 119 practices from December 31, 2015.

During the quarter ended June 30, 2016, the Company amended the subordinated note outstanding under the Crown Facility (the “Crown Note”) to accommodate an increase to the Scotia Facility.

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In June of 2016, the Company amended the Scotia Facility (the “Amended Scotia Facility”) to include a syndicate with US Bank and increase the principal amount available from $33,000,000 to $55,000,000. As of December 31, 2016, the interest rate on all debt outstanding under the amended Scotia Facility was LIBOR plus 2.75% and the Company had drawn $28,722,305.

In January of 2016, the Company entered into a cross currency swap with Scotiabank to lock in the Canadian dollar to U.S. dollar foreign exchange rate on its Canadian dollar denominated Crown Note at 1.448.

Year Ended December 31, 2017

During the year ended December 31, 2017, the Company added to its anesthesia business with the acquisitions of DDAB, Osceola Gastroenterology Anesthesia Associates, West Florida Anesthesia Associates, Central Colorado Anesthesia Associates, Raleigh Sedation Associates, and Alamo Sedation Associates. The total aggregate consideration paid for these businesses was $33,153,268 paid in cash and financed through a combination of internally generated cash and the Company’s existing credit facility. In 2017, these transactions contributed a total of $14,274,148 in revenues and $3,746,763 in net earnings before tax.

As of December 31, 2017, CRH had trained a total of 2,686 physicians at 1,034 clinical practices in the use of the CRH O’Regan System. This represented an increase of 272 physicians and 104 practices from December 31, 2016.

In March of 2017, the Company announced its first MAC Program with Puget Sound Gastroenterology in Washington State. Under the terms of the agreement, CRH will develop and manage the MAC program and has the option to acquire a 51% interest in the newly created anesthesia business at a future date, no sooner than 12 months from March 2017 and up to June 30, 2019. Until such time as the option to purchase is exercised, the Company will not recognize any material revenue or expense from this transaction.    

In June of 2017, the Company amended its existing Scotia Facility (the “Amended Scotia Facility”) to add JP Morgan to the syndicate of lenders and increase the principal amount available from $55,000,000 to $100,000,000. The Amended Scotia Facility has an accordion facility that would increase the amount of revolving credit facilities available to the Company by $25,000,000. As of December 31, 2017, the Company had drawn $61,700,000 and the interest rate on all debt outstanding under the Amended Scotia Facility was LIBOR + 2.50%. In conjunction with an increase to the Amended Scotia Facility, the Company repaid in full the principal owing on the Crown Facility of CAD$22,500,000 ($17,043,750), with related interest, prepayment penalties and other extinguishment costs of CAD$1,568,384 ($1,188,051).

In November of 2017 the final CMS 2018 Medicare Physician Fee Schedule was announced. The final CMS 2018 Medicare Physician Fee Schedule changes the billing structure for CRH’s primary billing code for anesthesia provided in conjunction with a lower endoscopy by eliminating the existing billing code and replacing it with two new billing codes. The new billing codes will have the net effect of decreasing the amount CRH will likely bill and collect for anesthesia services provided in conjunction with a lower endoscopy. The Company analyzed the impact of the new codes on its business and determined that when the new codes are implemented, based on our then current financial results, anesthesia revenue would decrease by approximately 12% and total revenue would decrease by approximately 10.5%. In addition, our total adjusted operating EBITDA⁽¹⁾ would decrease by approximately 20.0%.

(1) Adjusted operating EBITDA is a non-IFRS measure defined as operating income before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

In November of 2017, the Company announced a Normal Course Issuer Bid (the “Bid”), by virtue of which the Company may purchase for cancellation up to 7,120,185 of its common shares (the “Shares”) or approximately 10% of its issued and outstanding shares. The Company established an automatic purchase plan (the “Plan”), under which its broker of record, RBC Dominion Securities Inc., may purchase shares according to a prearranged set of criteria. Shares are purchased in the open market and are subject to a daily restriction of 103,902 shares, which is equal to 25% of the average trading volume for the preceding six months. The Bid commenced on November 9, 2017 and first purchases of the Plan started on November 20, 2017. The Bid will terminate on the earlier of (i) November 8, 2018,

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(ii) the date the Company completes its purchases, and (iii) the date of notice by the Company of termination of the Bid. As of December 31, 2017, the Company repurchased 1,339,800 of its shares for a total cost, including transaction fees, of $2,872,713. As at December 31, 2017, 1,267,400 shares have been cancelled with the remaining 72,400 shares cancelled in January 2018.

DESCRIPTION OF BUSINESS

Overview

CRH is a North American company focused on providing physicians throughout the United States with innovative products and services for the treatment of gastrointestinal diseases. The CRH O’Regan System is a single-use, disposable, hemorrhoid banding technology that is safe and highly effective in treating all grades of hemorrhoids. CRH distributes the CRH O’Regan System, treatment protocols, operational and marketing expertise as a complete, turnkey package directly to gastroenterology practices, creating meaningful relationships with the GIs it serves. The CRH O’Regan System is currently used in all 48 lower U.S. states.

In 2014, CRH acquired GAA, a full-service gastroenterology anesthesia company that provides anesthesia services for patients undergoing endoscopic procedures. Performing these procedures under anesthetic provides more comfort for patients and allows GIs to perform more procedures. CRH has continued to leverage the capabilities it acquired through GAA to consolidate the highly fragmented gastroenterology anesthesia provider business. The Company’s goal is to establish itself as the premier provider of innovative products and essential services to GIs throughout the United States. Each of the Company’s two primary lines of business is discussed below. As of December 31, 2017, CRH has a majority ownership interest in 15 GI anesthesia practices in seven US states and services approximately 235,000 patient cases annually.

CRH O’Regan System

What are Hemorrhoids?

Hemorrhoids are normal cushions of tissue and blood vessels in the lower rectum which normally play a role in maintaining continence. In a large number of people, these hemorrhoidal cushions undergo changes which typically lead to any number of perianal symptoms. It is at this point when patients typically seek treatment for their hemorrhoidal “disease”. Hemorrhoids are classified as either internal or external:

• External – swollen vascular and soft tissue which is present below the “Dentate Line” which can often be seen and felt under the skin outside the anal canal. They often appear as a small bulge and are the same color as the skin. These can become irritated, inflamed or thrombosed, are generally treated by over the counter remedies or in some cases, a surgical procedure. External hemorrhoids are often mistakenly “blamed” for patients’ symptoms that are actually caused by their internal hemorrhoids, explaining why so many patients with “external” symptoms respond to treating their internal hemorrhoids.

• Internal – swollen and prolapsing vascular tissue which are inside of the anal opening, and form above the “Dentate Line”. When internal hemorrhoids become abnormal, they may protrude out through the anus while straining or during defecation. A reference to “hemorrhoids” in a clinical setting is generally a reference to internal hemorrhoids.

Internal hemorrhoids fall into one of four “grades” depending on the degree of severity. Grade I hemorrhoids do not prolapse, and so very infrequently cause symptoms. These patients are usually treated with over the counter remedies and diet, and if any symptoms are present they are typically self-limited. Grades II through IV are typically in need of treatment and rubber band ligation is the most frequent type of treatment utilized on these patients, although many Grade IV patients require surgical intervention, which is quite costly and painful. Successful treatment of lesser grades of hemorrhoids may well prevent the development of Grade IV disease.

There are many presumed factors which may increase the likelihood of developing hemorrhoidal symptoms. These factors include: aging, chronic constipation or diarrhea, pregnancy, hereditary issues, chronic straining during bowel

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movements, and faulty bowel function due to overuse of laxatives or enemas. Hemorrhoid symptoms include: itching, bleeding, swelling, prolapse, leakage, and in patients with associated external hemorrhoids, lumps and pain.

According to the National Institute of Health, the prevalence rate of hemorrhoids in the United States is at least 4.4% of the population and approximately 50% of the United States population will develop hemorrhoids by age 50.

According to the American Society of Colon and Rectal Surgeons, hemorrhoids are one of the most common ailments, with the onset typically occurring usually after age 30. The peak prevalence occurs between 45 and 65 years of age. Most patients with milder cases appear to suffer in silence, or may seek over-the-counter remedies, rather than turning to a medical professional.

Hemorrhoid Treatment Procedures

Rubber Band Ligation

A small rubber band is placed around the base of the hemorrhoid inside the rectum. The band cuts off circulation, the banded tissue sloughs within a few days, and scar tissue forms, preventing the tissue from prolapsing or causing symptoms. Rubber band ligation may be utilized for the vast majority of hemorrhoid patients.

The banding technique is the most widely accepted form of treatment as it requires no anaesthesia, is simple to perform, can be done in a doctor’s office, and is relatively inexpensive and effective.

Coagulation by use of lasers, heat or direct current

Coagulation by use of lasers or heat causes the treated hemorrhoid tissue to coagulate, creating scar tissue that is intended to stop the prolapse, lessening the hemorrhoidal symptoms. Coagulation can also be performed with infrared light (photocoagulation). It is mostly used for small to medium sized hemorrhoids. Direct current can be used in order to generate peroxide at one of the electrodes, which also creates scar tissue in an attempt to prevent hemorrhoid prolapse. This last procedure is fairly time consuming, and is accompanied by pain in a number of patients.

Injection sclerotherapy with chemicals

With injection sclerotherapy, a doctor injects a chemical solution under the surface of the hemorrhoid. The solution causes inflammation and scarring of the tissue in an attempt to keep the hemorrhoidal tissue from causing symptoms. This technique is not widely used, and complications can occur if the solution is not injected precisely where it is needed.

Surgery

A hemorrhoidectomy is performed by a surgeon with local anesthetic plus sedation, or more typically a spinal anesthetic or a general anesthetic. It is sometimes performed on an outpatient basis, but an overnight or inpatient hospital stay can be required. It is a more expensive procedure than the other options as it is required to be performed in a hospital or ambulatory surgery center. Surgery is accompanied by greater cost, as well as post procedural pain and disability.

Stapling

A “PPH” or a “stapled hemorrhoidectomy” utilizes a specialized device which can cut and then staple together a portion of the rectal lining, causing scar tissue that typically keeps the hemorrhoid tissue in place, minimizing the patient’s symptoms. This procedure gained favor because it caused less pain and disability than the conventional surgical hemorrhoidectomy, but more recent experience has shown that this procedure is not without the potential for significant complications.

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Transanal Hemorrhoidal Dearterialization (“THD”)

A more recent development, this surgical procedure utilizes a specialized scope to help identify the arteries which supply blood to the hemorrhoidal tissues. This localization allows for the surgeon to suture those vessels, reducing blood flow to the hemorrhoids as well as to cause scarring which helps to minimize hemorrhoidal symptoms. This technique demonstrates promise, but it is still a surgical procedure, causing significantly more pain and disability than the non-surgical approaches outlined above.

The CRH O’Regan System

Invented in 1997 by laparoscopic surgeon Dr. Patrick J. O’Regan, and cleared by the United States Food and Drug Administration (“FDA”) in 2000, the CRH O’Regan System represents a significant advancement in rubber band ligation.

The CRH O’Regan System is an entirely disposable, single-use device for hemorrhoid treatment. Previous metal instruments were introduced in the 1950s and 1960s, before the advent of virulent, blood borne pathogens such as HIV and Hepatitis B and C. Today they pose reprocessing challenges and concerns about cross-patient infection.

The ligator is a plastic plunger suction device resembling a syringe, which is applied to each hemorrhoid in turn, two cm above the dentate line. Manual suction is induced to cause a portion of the hemorrhoid cushion to enter the nozzle, and the band is then released to strangulate the tissue. Only one band is used to facilitate the later adjustment and to reduce the risk of complications. This procedure can be performed under direct visualization with a specially designed anoscope or using a “blind” technique where the device is inserted to a mark through the anus and directed to one of the hemorrhoid cushions, which is then banded.

Evidence of Use

A large 2005 study of the CRH O’Regan System reported the lowest hemorrhoid treatment complication rate ever published at 16 out of 5,424 procedures, or 0.3%. Post-band bleed occurred in eight patients (0.4%), post-band pain in three patients (0.2%) and post-band thrombosis in five patients (0.3%). No other complications were observed. Compared to conventional rubber band ligation, these figures demonstrate a ten-fold reduction in complications. The results also showed the CRH O’Regan System to have lower recurrence (4.8%) at two years than previous banding techniques (12%) or even hemorrhoidectomy (5-8%). However, patient compliance with dietary changes and recommended bowel habits may have marked influence on recurrence rates and long-term studies to confirm whether this distinction exists at late follow-up have not been conducted.

A 2006 study was conducted to evaluate the effectiveness and complications associated with rubber band ligation using the CRH O’Regan System. The study included treatment for 60 patients and no major complications were noted. The study concluded that the CRH O’Regan System is associated with a good response and low complication rate. Minor early and late bleeding was reported in 10% and 6.7% respectively, but none was severe. Pain occurred in 6.7% but was not severe. In all cases clinical and endoscopic improvement was observed and patients of all ages, including the elderly, were found to be tolerant to the procedure. The study concluded the technique is a safe and reliable treatment option.

A 2008 study involving 113 patients and a total of 257 banding events concluded that the outpatient treatment of hemorrhoids by GIs using the CRH O’Regan System is safe and effective. Initial symptoms were resolved in 94% of patients, and rectal bleeding resolved in 90% of patients after at least one banding event. These results were sustained at three months. There were no cases of pelvic sepsis. Patient satisfaction with the System was high - overall, 81% were highly satisfied with their treatment and 75% said they would choose this therapy again over a surgical option and/or recommend it to a friend. Patients do not require time off from work after the procedure.

A 2010 study entitled The Long Term Results of Hemorrhoid Banding Using the O’Regan Disposable Suction Ligator, involved 20,286 ligations with the CRH O’Regan System on 6,690 patients. The results indicated an 8% recurrence of all three hemorrhoids over an average of 42 months and a 5% partial recurrence (one or two hemorrhoids). Complications were 0.2% per band or 0.6% per course of treatment. The study concluded that the use of the CRH

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O’Regan System was a significant improvement on Barron’s original RBL device that has performed well since its introduction. The recurrence and partial recurrence rate is low and the safety profile is exceptional.

Commercialization Strategies

In 2008, as a strategy to achieve rapid adoption of the CRH O’Regan System by a broader segment of the medical community, the Company began developing the capability to bring our CRH O’Regan System directly to physicians. This strategy, called the “direct-to-physician program” positions the Company to increase the number of physicians who utilize the Company’s products, capture market share and build brand awareness and value.

More than 14.2 million colonoscopies are performed annually in the United States of which 82.5% are performed by approximately 8,000 GIs. It is estimated that hemorrhoids requiring treatment are diagnosed in 15% – 20% of colonoscopies. The Company believes that most of these hemorrhoid sufferers have historically gone untreated. The CRH O’Regan System provides GIs with an effective modality to treat hemorrhoidal disease and increase their practice revenue.

CRH is actively expanding the direct-to-physician program by targeting the distribution of the CRH O’Regan System directly to the over 8,000 GIs practicing in the United States. More than 75% of the gastroenterology groups trained by the Company since June 2008 have adopted the CRH O’Regan System.

CRH utilizes many methods to create awareness and demand for the CRH O’Regan System. Awareness is created through a number of channels and tactics, including key opinion leader endorsement and GI word-of-mouth; articles and advertisements in professional journals and publications; “Grand Rounds”-type presentations at academic institutions and Gastroenterology Fellowship Training Programs; exhibits and product demonstrations at GI conferences; and targeted email and direct mail campaigns. The information on the CRH O’Regan System website, including procedure videos and published research, also serves as an educational tool and an important source of awareness to the GI community.

The Company is continuing to introduce the CRH O’Regan System into the curriculum of the approximately 188 academic and hospital-based Gastroenterology Fellowship Programs throughout the United States as perianal care is not traditionally a topic covered during training. The treatment of hemorrhoids is a natural extension of the GI practice. Hemorrhoid treatment with the CRH O’Regan System expands the continuum of care and provides a fast and painless solution to patients. Since many hemorrhoid patients also require colonoscopy and other endoscopic services, adoption of the CRH O’Regan System creates additional patient and procedural revenue for the GIs traditional practice.

The integration of the CRH O’Regan System into a GI practice can increase practice revenues. For example, the treatment of patients using the CRH O’Regan System generates an hourly procedural reimbursement approximately equal to or greater than that of colonoscopy procedures. Moreover, the reimbursement is typically generated without the need for any additional staff, capital expenditures, or facility requirements.

In contrast to other treatment modalities, the CRH O’Regan System procedure takes less than a minute to perform, does not require anaesthesia or bowel preparation, is well tolerated by patients, and can be performed in an office setting as well as in ASCs. The CRH O’Regan System is totally disposable and does not require any capital investment.

CRH provides a comprehensive support program for GI practices, including providing clinical training, operational training and marketing programs and materials.

CRH provides physician-to-physician training for GIs at their own practice setting with patients they identify and recruit for treatment. This enables the GI to see a variety of pathology and learn the procedure by treating patients in a “hands-on” manner, ultimately leading to a greater comfort level with the technology and the associated necessary treatment protocols. These initial patients are also then scheduled for subsequent bandings - contributing to the start-up and growth of hemorrhoid procedures within the practice.

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CRH also provides operational training and support to ensure that GI office staff are comfortable describing the procedure and are able to address the questions most frequently asked by hemorrhoid sufferers seeking our treatment. The training includes hemorrhoid education, technology facts, phone scripts, frequently-asked questions, optimal patient flow processes and scheduling methodologies, and a billing and coding overview. In addition, CRH provides hemorrhoid content that may be added to the GI practice website. The goal is to ensure that the GI practice can effectively convert treatment inquiries into patient appointments and bring new patients in.

CRH provides a comprehensive marketing support program to assist GIs with integrating the CRH O’Regan System into their practice. Marketing programs and materials are available at no charge and are designed to quickly and effectively educate new and existing patients about the procedure.

CRH also provides web-based marketing resources to GI practices by adding their practice profile to the CRH website. The CRH consumer website (www.crhsystem.com) directs hemorrhoid sufferers to trained physicians near them who offer our procedure. The creation of a direct link between the practice website and the CRH website has been one of the most beneficial tools for driving new patients to our GI partner practices.

Specialized Skill & Knowledge

The Company’s management team has developed specific skills and knowledge in the United States healthcare market from the Company’s prior operation of Centers for Colorectal Health. The degree to which the Company has operated within multiple states and the specific laws associated with healthcare services within each state provide it with a national scope of knowledge not easily acquired. There is a significant amount of fragmentation of legal requirements, medical service reimbursement levels and local healthcare contracting that the Company must evaluate prior to penetrating any particular market. Knowledge has been acquired by the Company in order to gather and process the critical information required to make quantifiable decisions to enter prospective markets. The Company continues to acquire this knowledge and processing skills by expanding the know-how of existing management and acquiring new personnel with the requisite skills sets required.

Competition

The majority of rubber band ligation procedures are performed using metal re-usable ligators and retractors. In the same way that disposable syringes have replaced re-usable syringes in most medical applications, it can be expected that disposable ligators will replace re-usable ligators. The table below, which compares the CRH O’Regan Ligator to the traditional device, as well as other hemorrhoid treatment devices, was prepared by the Company’s management.

	CRH O’Regan System	McGiveny Ligator	Other Diposable Ligators	Ultroid	IRC	HET	Endoscopic Banding
Assistance required	No	Often	Often	Sometimes	Often	Often	Yes
Length of procedure	Approximately 1 minute	Approximately 5 - 15 minutes	Approximately 5 - 10 minutes	Approximately 10 - 20 minutes	Approximately 5 - 10 minutes	Approximately 5 - 10 minutes	Approximately 10 - 30 minutes
Patient comfort	No Anoscope required,  greater patient comfort	Anoscope and technique increase patient discomfort	Technique and multiple site banding increases patient discomfort	Length of procedure and Probe used for procedure increase patient discomfort.	Anoscope and technique increases patient discomfort	Most patients receive anesthesia because of risk of discomfort	Requires bowel preparation and sedation
Ease of Use by Physician	Easy to learn one handed technique	2 handed techniques required, instrumentation is more difficult to utilize	2 handed technique required	2 handed technique required, length of procedure make instrumentation is more difficult to utilize	2 handed technique required	Requires specialized anoscope and grasping devices	Requires endoscope and multiple assistance
Cleaning	Disposable	Sterilization and maintenance required.	Disposable, significantly more waste with suction tubing canisters	Disposable probe, hand piece not disposable and cannot  be sterilized	Disposable	Disposable	Sterilization and maintenance required.

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	CRH O’Regan System	McGiveny Ligator	Other Diposable Ligators	Ultroid	IRC	HET	Endoscopic Banding
Additional Equipment/Capital  Investment required	None	Up front instrument purchase Cleaning and  sterilizing expense	Wall suction	Power generator	Console unit to produce infrared	Current generator some instrumentation	Endoscopic facility and associated equipment
Training	On-site physician training	None	Non physician onsite and video	Non-physician onsite and video	Video	Non-physician onsite and video	Training included in fellowship
Other Support	Marketing and operational	None	Very limited	Marketing and operational	Patient education at additional cost	None	None
Cost	$65 -75	Initial cost + cost of cleaning and maintenance	$30 – 75 (includes tubing and canisters)	$80	Initial investment plus cost per treatment of ~$60	Initial investment plus a per treatment cost >$600/procedure	$250 + cost of endoscopy, ASC, etc.

Intangible Properties

Pursuant to an agreement dated May 8, 2001 as amended, the Company acquired the patent and all other rights to the CRH O’Regan Ligator from Dr. Patrick J. O’Regan, a former director of the Company, in exchange for common shares of the Company. The patent regarding the CRH O’Regan Ligator was registered in the name of the Company in the patent office on August 27, 2002. The CRH O’Regan System consists of the CRH O’Regan Ligator and the slotted Anoscope. The CRH O’Regan Ligator is a disposable, minimally invasive hemorrhoid banding device. The CRH O’Regan Ligator was patented in the United States by Dr. Patrick O’Regan. A list of the patents covering the Company’s technology is listed below.

Patent Portfolio
Country	Application or Patent Number	Title
US	7,029,438	ANOSCOPE
CA	2,363,473	ANOSCOPE
US	5,741,273	ELASTIC BAND LIGATION DEVICE FOR THE TREATMENT OF HEMORRHOIDS
CA	2,240,850	ELASTIC BAND LIGATION DEVICE FOR THE TREATMENT OF HEMORRHOIDS
Japan	4465179	ELASTIC BAND LIGATION SYSTEM FOR TREATMENT OF HEMORRHOIDS
US	US 9101360	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD
US	US 9622750	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD
US	13/972,202 - pending	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD
International – Patent Cooperation Treaty	PCT/US2013/066390	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD
International – Patent Cooperation Treaty	PCT/US2013/066397	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD
International – Patent Cooperation Treaty	PCT/US2013/066407	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD
United States - (US)	14/807,304 - pending	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS
China P.R. - (CN)	PCT/US2013/066390	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS
European Patent Convention - (EP)	13891750.5	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS
China P.R. - (CN)	PCT/US2013/066397	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS

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Patent Portfolio
Country	Application or Patent Number	Title
European Patent Convention - (EP)	PCT/US2013/066397	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS
China P.R. - (CN)	PCT/US2013/066407	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD FOR TREATMENT OF HEMORRHOIDS
European Patent Convention - (EP)	13892001.2	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD FOR TREATMENT OF HEMORRHOIDS
India - (IN)	PCT/US2013/066390	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS
Japan - (JP)	PCT/US2013/066390	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS
India - (IN)	PCT/US2013/066397	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS
Japan - (JP)	PCT/US2013/066397	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS
India - (IN)	PCT/US2013/066407	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD FOR TREATMENT OF HEMORRHOIDS
Japan - (JP)	PCT/US2013/066407	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD FOR TREATMENT OF HEMORRHOIDS
Hong Kong - (EP)	13891750.5/16114633.6	ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS
Hong Kong – (EP)	13891710.9/16114583.6	ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS
Hong Kong – (EP)	13892001.2/16114634.5	ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE AND METHOD FOR TREATMENT OF HEMORRHOIDS

Foreign Operations

While the Company’s headquarters are in Vancouver, British Columbia, substantially all of the Company’s revenues from sales of the CRH O’Regan System are generated in the United States.

Regulatory Approval

The FDA, Health Canada, and comparable agencies in other foreign countries impose requirements upon the design, development, manufacturing, marketing and distribution of medical devices. The applicable regulations require clearance or approval before the devices can be sold. After the applicable approvals are granted the regulatory agencies require companies to comply with quality system requirements and maintain annual registrations.

The Company has FDA 510(k) clearance (K963166 and K020702) for the United States and Medical Device Licences (#65042 and #65043) for Health Canada. These registrations are legal prerequisites for the Company to market and sell the CRH O’Regan Ligator, Anoscope and CRH O’Regan System in the United States and Canada and many countries worldwide that accept these registrations. The Company sub-contracts the design and manufacture of its O’Regan products to a Canadian manufacturer that holds certification for CRH products to ISO13485:2003.

Operations and Manufacturing

The Company manages sub-contracted activities and Quality Management System activities to ensure compliance with the requirements of ISO 13485:2003 and cGMP and is committed to continuously improve the quality of our products and services to better satisfy the needs and expectations of our customers.

All subcontractors are monitored and evaluated on a regular basis to ensure the highest quality product. On a continuous bases we manage the activities of the supply chain. While the Company has outsourced design and manufacturing activities, we maintain direct control over customer service activities to ensure that we provide our best service to our customers. Through an established system of customer feedback we are able to monitor for signs of quality problems and customer issues.

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Customer and Technical Services

The Company has established a feedback system to provide early warning of quality problems and to determine whether it has met the customer’s requirements. Customer complaints, expressions of satisfaction and other unsolicited customer feedback are collected and processed by Customer Service.

Intellectual Property

A vital part of the Company’s business strategy is to protect its products and technologies through the use of patents, proprietary technologies and trademarks, to the extent available. Success will depend, in part, upon the ability to obtain and enforce strong patents, to maintain trade secret protection and to operate without infringing the proprietary rights of others. Current CRH policy is to seek patent protection for proprietary technology whenever and wherever commercially practical. It has acquired or received patents for marketing in the United States, Canada, Europe and in some parts of Asia. See “Risk Factors” regarding patent duration.

Employees

As at December 31, 2017, the Company had 11 full-time employees and a few part-time contractors supporting the CRH O’Regan System and related business operations. Additionally the Company has 7 full-time employees designated as corporate. We believe that our relationship with our employees is good and none of the employees is a member of a labor union or is covered by a collective bargaining agreement. All senior management, employees and consultants are required to sign confidentiality agreements, invention assignment, and non-competition provisions.

Cycles and Economic dependence

The provision of healthcare services in the United States has changed as a result of the shifts within the healthcare insurance market. Some of these shifts include a decline in overall Health Maintenance Organization (“HMO”) market-share due to patients demand to see “out of network” physicians. Other shifts are high deductible plans and health savings plans that are shifting the burden of healthcare expenditures directly to patients. These shifts have an effect on the frequency and the types of treatment that patients will seek and thus have an effect on treatments that may be considered elective. Although the treatment of hemorrhoids with ligation is a covered procedure by most insurance plans, some patients may still consider the treatment as elective due to the above factors.

Revenue from the sale of the CRH O’Regan System was $11,501,005 and $10,532,753 for the years ended December 31, 2017 and 2016 respectively. Many healthcare plans in the United States have deductibles and other patient related costs for the treatment of hemorrhoids. As a result of these plans, and other factors, the Company experiences fluctuations in quarterly revenue. Historically approximately 24% of the annual revenue is recorded in the first calendar quarter, 24% in the second calendar quarter, 25% in the third calendar quarter, and 27% of annual revenue from the sale of the CRH O’Regan System is recorded in the fourth calendar quarter.

Gastroenterology Anesthesia Services

The Company’s anesthesia services business specializes in providing anesthesia services during medical procedures performed by GIs in the United States. Most commonly this is propofol sedation for upper endoscopy and lower endoscopy procedures performed in ASCs. CRH Anesthesia enters into service agreements with facilities to become the exclusive provider of anesthesia services at that location. In return, CRH undertakes to staff the facility with the appropriately trained and experienced anesthetists and board certified anesthesiologists. In addition, CRH Anesthesia ensures its providers are credentialed to provide services at ASCs and that billing and payment for the rendered services is carried out. All payment for the delivered services is made by commercial or Government payors or by the patients themselves. The serviced GI group is not responsible for payment for the procedure. The Company has outsourced the billing, collection and certain management functions associated with providing the anesthesia services.

CRH Anesthesia currently provides anesthesia services in 35 GI-focused ASCs, to 235,000+ patients per year, using a team of more than 200 CRNAs and Physician Anesthesiologists.

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Evidence of use

Based upon Medicare claims data, more than 50% of the approximately 25 million GI endoscopy procedures are performed with monitored anesthesia care (“MAC”). The remaining procedures use moderate sedation, typically by combining an opioid and benzodiazepine e.g. the fentanyl-Versed regimen, which does not require the involvement of an anesthetist.

The Centers for Disease Control and Prevention (“CDC”) launched the Screen for Life: National Colorectal Cancer Action Campaign in 1999 with the goal of raising awareness about the importance of colorectal cancer screening. As of June 2016, the program found that only 66% of U.S. adults were up to date with their colorectal screening. The campaign’s current goal is to have 80% of the population between the ages of 50 and 75 up to date on their screening by 2018.

The United States Census Bureau projects that the number of Americans between the ages of 50 to 75, the group targeted for screening, will grow from 91 million in 2014 to 99 million in 2020. Assuming 80% of that population gets screened, as targeted by the CDC, an additional 6.4 million colonoscopies would have to be performed in that period.

The use of anesthesia for GI endoscopic procedures has shown a significant increase in use over the last decade. A Medicare cohort study showed an anesthesia utilization rate of 11% in 2000, rising to 23.4% in 2006, while a published survey of commercial payor data showed anesthesia was used in 13.6% of cases in 2003, increasing to 35.5% in 2009, and was forecasted to increase to 53.7% during 2015. We believe anesthesia for GI endoscopy is the de facto standard of care and that adoption will continue to increase.

Physician and patient preference

We believe many GIs prefer Propofol sedation due to its pharmacologic properties that include rapid onset, rapid recovery and fewer recovery-associated symptoms compared to moderate sedation. This is associated with increased patient compliance during the procedure and less utilization of resources during recovery, which can improve costs, procedure throughput, and scheduling efficiency.

We believe patients also strongly prefer the use of anesthesia, which allows for a more comfortable procedure and a reduced recovery time that is free from nausea, memory loss, and drowsiness associated with the moderate sedation regimen.

Commercialization strategies

The Company’s anesthesia business strategy is to establish itself as a high quality, reliable provider of anesthesia services to ASCs performing GI endoscopies. There are approximately 800-1,000 GI-centric ASCs in the United States. Through organic and acquisition-based growth the Company expects to further penetrate the market by increasing the number of facilities in which it provides anesthesia services.

Organic growth includes same-unit procedure volume growth, primarily driven by patient case growth of the referring GI group. Facility-based organic growth involves entering into new service agreements either to service GI groups that do not currently utilize anesthetist-supervised sedation for their procedures or by replacing existing anesthesia providers.

The Company will also seek to expand its operations by both acquiring established GI-focused anesthesia groups and forming de novo partnerships. GI anesthesia acquisitions consist of either a 100% acquisition or a joint venture model where the Company attains majority ownership. A joint venture model allows the physician group to monetize a portion of their anesthesia business while retaining an ongoing revenue stream and reducing risk from an operational, regulatory, and reimbursement standpoint. A de novo partnership is provided as an option to those GI groups seeking to benefit financially from providing anesthesia services to their patients. This arrangement both creates a new source of revenue for the physicians and eliminates the need for involvement in daily operations. These business arrangements include the initial development and ongoing management of the anesthesia program. Additionally, CRH is granted a

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future option to purchase at least 51% of the new anesthesia entity, securing future revenue and a long-term contract to provide services. In all models, the Company integrates the acquired professional service agreements into its established billing and staffing processes.

Moreover, CRH provides practices with a “turn-key” anesthesia solution so that the integration of CRH’s services is done quickly and without disruption. This also allows GIs to focus solely on their core business of upper and lower endoscopies. In addition to the daily management of the anesthesia business through billing, collections, staff recruitment, credentialing, and scheduling, those partnering with CRH take advantage of such things as our quality assurance/quality improvement program, data collection and reporting, and patient questionnaires which can be a burden for many GI practices. CRH has established itself as a long-standing, trusted partner in the GI community through the CRH O’Regan System due to its focus on the patient and by providing a level of service to both the GI and practice staff that is unparalleled in the industry. The Company will continue to leverage the relationships that have been established with 2,400+ GIs throughout the country in order to propel its growth in anesthesia services.

The Company will also focus on establishing its reputation in the anesthesia space as a high-quality provider of anesthesia services, thereby fostering maintenance and adoption of its services.

Specialized Skill and Knowledge

The Company prides itself on its patient focus and commitment to improving patient care by the use of evidence-based medicine. The Company has retained access to key opinion leaders in the GI community and experienced anesthesiologists, whose market insight is invaluable in guiding the formulation and subsequent success of growth strategies for the Company. The Company acquired the requisite capabilities and expertise to successfully operate the acquired businesses and will continue to invest in their development and improvement. Areas of expertise include payer contracting, staffing, anesthesia provider credentialing, data collection and reporting, procedure billing, and collections. The Company continues to acquire knowledge in this space through each transaction and by acquiring new staff with requisite skills and expertise.

Competition

Though there are several large multi-speciality anesthesia providers, the market is highly fragmented, consisting primarily of many small anesthesia provider groups that service between one to three ASCs. Competition in the business is driven by a number of factors that include reputation, experience and the level of patient care. As such, at times the Company competes with other anesthesia management and provider groups to secure new service agreements and to maintain service agreements that are due for renewal. The Company plans to continue to focus on the GI market and leverage its reputation for high-quality value-added service, established through its CRH O’Regan System business to consolidate the market and further establish itself as a trusted anesthesia provider.

Additionally, the Company competes with other medical service companies and private equity groups that are active in acquiring and consolidating medical services groups, including in GI anesthesia.

The procedural volume of the Company’s anesthesia professional services agreements is also dependent upon the ability of the referring GI groups to acquire patients through direct patient acquisition or referral from a primary care physician.

Intangible properties

The Company’s intangible properties pertaining to the anesthesia business include its exclusive professional service agreements with each of the serviced facilities. The majority of our agreements are multi-year and can be renewed if agreed upon by both parties.

Foreign Operations

While the Company’s headquarters are in Vancouver, British Columbia, the majority of the Company’s O’Regan revenues and all of the Company’s revenues for anesthesia services are generated in the United States.

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Economic Dependence

GI endoscopies are primarily elective procedures and are therefore susceptible to the dynamics of the general economy, which can influence the proportion of the population covered by private insurance and the number of patients willing to pay relevant copays and deductibles, thereby influencing overall procedure volumes.

Though the co-pay and deductible for anesthesia during screening colonoscopies was eliminated as a part of the ACA in 2015, many private healthcare plans in the United States have deductibles and other patient-related costs. As a result of these plans, payor mix, and other factors, the Company may experience fluctuations in quarterly revenue.

Revenue from Anesthesia services was $88,741,075 and $67,821,879 million for the years ended December 31, 2017 and 2016 respectively. Historically, approximately 24% of annual revenue generated from each ASC is recorded in the first calendar quarter, 24% in the second calendar quarter, 25% in the third calendar quarter, and 27% of annual anesthesia services revenue is recorded in the fourth calendar quarter.

In 2018, the Company expects revenue from anesthesia services for the acquisitions completed through December 31, 2017 to be negatively impacted by the November 2, 2017 CMS final rule coming into effect on January 1, 2018 and to be negatively impacted by changes in the per unit reimbursements received from our commercial payors. The CMS final rule will impact our revenue per case by an estimated 12.0% and the changes from our commercial payors is expected to impact our revenue per case by an additional 5%. We expect the negative impacts to anesthesia revenue to be offset through organic growth in patient cases and deployment of available capital for future acquisitions.

Employees

As is typical for operations of this nature, the service providers working with the Company are primarily independent contractors and as such the Company has only a minimal number of direct employees.

RISK FACTORS

This document contains forward-looking statements regarding our Company, business, prospects and results of operations that involve risks and uncertainties. Our actual results could differ materially from the results that may be anticipated by such forward-looking statements and discussed elsewhere in this Annual Information Form. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below, as well as those discussed elsewhere in this Annual Information Form. If any of the following risks occur, our business, financial condition or operating results could be harmed. In that case, the trading price of our common shares could decline.

Investment in the common shares of the Company is speculative and involves a high degree of risk, is subject to the following specific risks among others, and should be undertaken only by purchasers whose financial resources are sufficient to enable them to assume such risks. The common shares of the Company should not be purchased by persons who cannot afford the possibility of the loss of their entire investment. Prospective purchasers should review these risks as well as other matters disclosed elsewhere in this Annual Information Form with their professional advisors.

Risks Related to Our Company

We may or may not successfully identify and complete corporate transactions on favorable terms or achieve anticipated synergies relating to any acquisitions or alliances, and such acquisitions could result in unforeseen operating difficulties and expenditures, or require significant management resources and significant charges.

As a part of our growth strategy, we regularly explore potential acquisitions of complementary businesses, technologies, services or products as well as potential strategic alliances. We may be unable to find suitable acquisition candidates or appropriate partners with which to form alliances. Even if we identify appropriate acquisition or alliance candidates, we may be unable to complete the acquisitions or alliances on favorable terms, if at all, as a result of changes in tax laws, healthcare regulations, financial market, or other economic or market conditions. Acquisition activities can be thwarted by overtures from competitors for the targeted candidates, government regulation and

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replacement product developments in our industry. Competition may intensify due to the ongoing consolidation in the healthcare industry, which may increase our acquisition costs. In addition, the process of integrating an acquired business, technology, service or product into our existing operations could result in unforeseen difficulties and expenditures. Integrating completed acquisitions into our existing operations involves numerous short-term and long-term risks, including diversion of our management’s attention, failure to retain key personnel, long-term value of acquired intangible assets and acquisition expenses. In addition, we may be required to comply with laws, rules and regulations that may differ from those of the states in which our operations are currently conducted. Moreover, we may not realize the anticipated financial or other benefits of an acquisition or alliance.

Future acquisitions could also involve the issuance of equity securities, the incurrence of debt, contingent liabilities or amortization of expenses related to other intangible assets, any of which could adversely impact our financial condition or results of operations. The issuance of shares for an acquisition may result in dilution to our existing shareholders and, depending on the number of shares that we issue, the resale of such shares could affect the trading price of our common stock. In addition, equity or debt financing required for such acquisitions may not be available.

Any corporate transaction will be accompanied by certain risks including but not limited to:

• exposure to unknown liabilities of acquired companies and the unknown issues with any associated technologies or research. Such liabilities may include liabilities for failure to comply with applicable laws, or liabilities relating to medical malpractice claims. Generally, we obtain indemnification agreements from the sellers of businesses acquired with respect to pre-closing acts, omissions and other similar risks. It is possible that we may seek to enforce indemnification provisions in the future against sellers who may no longer have the financial wherewithal to satisfy their obligations to us. Accordingly, we may incur material liabilities for past activities of acquired businesses;

• certain acquired businesses may derive a greater portion of their revenue from government health programs than what we recognize on a consolidated basis, or may have business models with lower operating margins than ours, which could affect our overall payor mix or operating results in future periods;

• higher than anticipated acquisition costs and expenses;

• the difficulty and expense of integrating operations, systems, and personnel of acquired companies;

• disruption of our ongoing business;

• uncertainty that an acquired business will continue to maintain its pre-acquisition revenue and growth rates, or be profitable;

• inability to retain key customers, vendors, and other business partners of the acquired company;

• diversion of management’s time and attention;

• the realization of financial and operating risks not fully anticipated; and

• potential challenges under antitrust laws, either before or after an acquisition is consummated, which could involve substantial legal costs and result in the Company having to abandon the transaction or make a divestiture.

We may not be able to successfully overcome these risks and other problems associated with acquisitions and this may adversely affect our business, financial condition or results of operations.

If we are unable to manage growth, we may be unable to achieve our expansion strategy.

The success of our business strategy depends in part on our ability to expand our operations in the future. Our growth has placed, and will continue to place, increased demands on our management, operational and financial information systems, and other resources. Further expansion of our operations may require substantial financial resources and management attention.

To accommodate our past and anticipated future growth, and to compete effectively, we will need to continue to improve our management, to implement our operational and financial information systems, and to expand, train, manage, and motivate our workforce. Our personnel, systems, procedures, or controls may not be adequate to support our operations in the future. Further, focusing our financial resources and diverting management’s attention to the expansion of our operations may negatively impact our financial results. Any failure to improve our management, to

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implement our operational and financial information systems, or to expand, train, manage, or motivate our workforce may reduce or prevent our growth.

Changes to payment rates or methods of third-party payors, including United States government healthcare programs, changes to the United States laws and regulations that regulate payments for medical services, the failure of payment rates to increase as our costs increase, or changes to our payor mix, could adversely affect our operating margins and revenues.

We provide anesthesia services primarily through fee for service payor arrangements. Under these arrangements, we collect fees directly through the entities at which anesthesia services are provided. We assume financial risks related to changes in third-party reimbursement rates and changes in payor mix. Our revenue decreases if our volume or reimbursement decreases, but our expenses may not decrease proportionately.

We depend primarily on United States (“U.S”) government, third party commercial and private and governmental third-party sources of payment for the services provided to patients. The amount we receive for our services may be adversely affected by market and cost factors, as well as other factors over which we have no control, including changes to the Medicare and Medicaid payment systems. U.S. health reform efforts at the federal and state levels may increase the likelihood of significant changes affecting U.S. government healthcare programs and private insurance coverage. U.S. Government healthcare programs are subject to, among other things, statutory and regulatory changes, administrative rulings, interpretations and determinations concerning patient eligibility requirements, funding levels and the method of calculating payments or reimbursements, all of which could materially increase or decrease payments we receive from these government programs. Further, Medicare reimbursement rates are increasingly used by private payors as benchmarks to establish commercial reimbursement rates and any adjustment in Medicare reimbursement rates or formulas may impact our reimbursement rates from such private payors as well.

As the Medicare program transitions away from fee for service payment models and toward value-based payment methodologies, we may be required to make additional investments to receive maximum Medicare reimbursement. For example, the Medicare Physician Quality Reporting System provides additional Medicare compensation to physicians who implement and report certain quality measures. Further, MACRA requires the establishment of the Merit-Based Incentive Payment System under which, beginning in 2019, providers will receive payment incentives or reductions based on their performance with respect to clinical quality, resource use, clinical improvement activities, and meaningful use of electronic health records.

There are significant private and public sector pressures to reign in healthcare costs and to lower reimbursement rates for medical services, and we believe that such pressures will continue. Major payors of healthcare, including U.S. federal and state governments and private insurers, have taken steps in recent years to monitor and control costs, eligibility for, and use and delivery of healthcare services, and to revise payment methodologies. Further, the ability of commercial payors to control healthcare costs may be enhanced by the increasing consolidation of insurance and managed care companies, and the incursion of other private companies into the healthcare industry, all of which may reduce our ability to negotiate favorable contracts with such payors.

We expect efforts to impose greater discounts and more stringent cost controls by government and other payors to continue, thereby reducing the payments we receive for our services. The effect of cost containment trends will depend, in part, on our payor mix. We may not be able to offset reduced operating margins through cost reductions, increased volumes, the introduction of additional procedures or otherwise. In addition, future changes to reimbursement rates by government healthcare programs, cost containment measures by private third-party payors or other factors affecting payments for healthcare services may adversely affect our future revenues, operating margins, and profitability.

We are subject to decreases in our revenue and profit margin under our fee for service contracts and arrangements, where we bear the risk of changes in volume, payor mix, RAP benefits, and third-party reimbursement rates.

In our fee for service arrangements, which represent substantially all of our revenues, we collect the fees for services. Under these arrangements, we assume financial risks related to changes in the mix of patients covered by government-sponsored healthcare programs and third-party reimbursement rates. A substantial decrease in patient volumes, or an increase in the number of patients covered by government healthcare programs, as opposed to commercial plans that

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have higher reimbursement levels, or any potential shift in reimbursement mix could reduce our profitability and adversely impact future revenue growth. In some cases, our revenue decreases if our volume or reimbursement decreases, but our expenses may not decrease proportionately.

We operate a large number of anesthesia entities in many different markets. Each entity has a different mix of contracted and non-contracted relationships with commercial payors. In cases where are providers are not contracted, most payors have RAP provisions that limits the amount payable by patients when a non-contracted provider is utilized. .. In most cases, reimbursements we receive for anesthesia services are greater when we are non-contracted than they would be if we were contracted. As our anesthesia entities mature, we may choose or be required to enter into contracts with a majority of existing commercial payors which may result in decreased revenue, but our expenses may not decrease proportionately. Payors may also change the amount reimbursed for non-contracted providers which may also result in decreased revenue, but our expenses may not decrease proportionately

ASCs or other customers may terminate or choose not to renew their agreements with us.

Our professional service agreements with our partner ASCs currently range in duration from one year to 15 years and can be renewed if agreed upon by both parties. To date, with the exception of a contract in Sarasota, Florida, which was terminated as a result of an ASC closing and a NC GAA contract that the Company chose not to renew, all other professional service agreements have been renewed as required. Our contract with GAA-affiliated ASCs, currently our largest customer contributing 44% of our total revenue in 2016 and 26% of our total revenue in 2017, requires renewal by November 2021.

Our customers may cancel or choose not to renew their contracts with us. Changes in economic conditions, including decreased government and commercial reimbursement, hospital acquisition of ASCs for physician practices, or changes in the state or federal regulatory environment could influence future actions of our partners or other customers. To the extent that any significant agreement or agreements with our partners or other customers are canceled, or are not renewed or replaced with other arrangements having at least as favorable terms, our business, financial condition and results of operations could be materially adversely affected.

We may need to raise additional capital to fund future operations.

The Company became profitable in the first quarter of 2011, which was consistent with the Company’s new business development strategy introduced in the fourth quarter of 2010 to focus exclusively on selling its CRH O’Regan system directly to physicians. With the GAA Acquisition in the fourth quarter of 2014, the Company altered its business strategy further and now provides anesthesia services in addition to its existing medical product.

Based on our current cash resources, estimated capital requirements and anticipated revenues, we expect that we can maintain current operations. There can be no assurance that unforeseen developments or circumstances will not alter our requirements for capital. Any additional equity financing would be dilutive to our shareholders. If access to sufficient capital is not available as and when needed, our business may be impaired.

Advancing our product and current business operations, market expansion of our currently marketed product or growth of our anesthesia services, service of our debt, or acquisition and development of any new products, businesses or operations will require considerable resources and additional access to capital markets. In addition, our future cash requirements may vary materially from those now expected. For example, our future capital requirements may increase if:

• we experience more competition from other companies or in more markets than anticipated;

• we experience delays or unexpected increases in costs in connection with maintaining regulatory approvals for our product or services in the various markets where we sell our product and provide our services;

• we experience unexpected or increased costs relating to preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, or other lawsuits, brought by either us or our competition;

• we elect to raise additional capital in order to service or repay all or a portion of our outstanding debt;

• we elect to develop, acquire or license new technologies, products or businesses; or

• we are presented with suitable opportunities and elect to accelerate the pace of our continued growth strategy.

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We could potentially seek additional funding through public or private equity or debt financing, corporate collaborations or through other transactions. However, if revenues are slow to increase or if industry and capital market conditions in general, are unfavourable, our ability to obtain significant additional funding on acceptable terms, if at all, will be negatively affected. Additional financing that we may pursue may involve the sale of our common shares or financial instruments that are exchangeable for, or convertible into, our common shares, which could result in significant dilution to our shareholders.

If sufficient capital is not available, we may be required to delay or alter our current operations or our business expansion, either of which could have a material adverse effect on our business, financial condition, prospects, or results of operations.

We are subject to various restrictive covenants and events of default under the Credit Facilities.

Under the Credit Facilities, the Company has made various restrictive covenants to the lenders, including payment of interest and principal when due. The Credit Facilities are available for review on www.sedar.com.

If there is an event of default under either of these agreements, the principal amount owing under the Credit Facilities, plus accrued and unpaid interest, may be declared immediately due and payable. If such an event occurs, it could have a material negative impact on the Company financially. Any extended default under the Credit Facilities, could result in the loss of the Company’s entire business.

In addition, the Credit Facilities include various conditions and covenants that require CRH to obtain consents prior to carrying out certain activities and entering into certain transactions, such as incurring additional debt, repurchasing common shares of the Company, creating additional charges on the Company’s assets, and providing additional guarantees or disposing of certain assets. As a result of the restrictive covenants or other terms of any existing or new loan or other financing agreements, the Company may be significantly restricted in its ability to raise additional capital through bank borrowings and to engage in some transactions that CRH expects to be of benefit to the Company. The inability to meet these conditions and covenants or obtain lenders’ consent to carry out restricted activities could materially and adversely affect the business and results of operations of CRH.

We are exposed to market risk related to changes in interest rates. Our earnings are affected by changes in short-term interest rates as a result of borrowings under the Credit Facilities. As a result, if interest rates rise, our cost of borrowing will increase, negatively impacting our earnings.

Despite current indebtedness levels, we may still be able to incur substantially more debt, which could further exacerbate the risks associated with increased leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although our Credit Facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. If we incur additional debt above the levels currently in effect, the risks associated with our leverage, including those described above, would increase.

Our common shares may be subject to significant price and volume fluctuations.

The Company’s common shares trade on the Toronto Stock Exchange and on the NYSE MKT. Public markets, from time to time, experience significant price and volume fluctuations unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of the common shares of the Company. In addition, the market price of the common shares is likely to be highly volatile. Moreover, it is likely that during future quarterly periods, the Company’s results and operations may fluctuate significantly or may fail to meet the expectations of stock market analysts and investors and, in such event, the market price of the common shares could be materially adversely affected. In the past, securities class action litigation or shareholder activism has often been initiated following periods of volatility in the market price of a company’s securities. Such litigation or shareholder activism, if brought against the Company, could result in substantial costs and a diversion of

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management’s attention and resources, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

We may write-off intangible assets.

The carrying value of our intangible assets is subject to periodic impairment testing. Under current accounting standards, intangible assets are tested for impairment on an annual basis and we may be subject to impairment losses as circumstances change after an acquisition. If we record an impairment loss related to our intangible assets, which results from the anesthesia contracts that we acquire or other significant intangible assets, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

If we are unable to maintain or increase anesthesia procedure volumes at our existing ASCs, the operating margins and profitability of our anesthesia segment could be adversely affected.

Part of our growth strategy for our anesthesia services segment includes increasing our revenues and earnings through increasing the number of procedures performed at the ASCs we service. Procedure volume at the ASCs we serve may be adversely impacted by economic conditions, high unemployment rates, natural disasters, physicians who no longer utilize the ASCs we serve, and other factors that may cause patients to delay or cancel procedures. There are no assurances that we will be successful at increasing or maintaining procedure volumes, revenues, and operating margins at our ASCs.

We may not be able to successfully recruit and retain qualified anesthesiologists or other independent contractors.

The healthcare business is highly competitive. We compete with other healthcare providers, primarily hospitals and other surgery centers in recruiting and retaining a sufficient number of anesthesiologists to perform our services operations. We compete with many types of healthcare providers including teaching, research, and government institutions and other practice groups for the services of qualified anesthesiologists.

Some of our competitors may have greater resources than we do, including financial, marketing, staff, and capital resources. We may not be able to continue to recruit new anesthesiologists or renew contracts with existing contractors on acceptable terms. If we are not able to do so, our ability to provide anesthesia services and generate revenue and net income could be adversely affected.

Adverse events related to our product or our services may subject us to risks associated with product liability, medical malpractice or other legal claims, insurance claims, product recalls and other liabilities, which may adversely affect our operations.

There is an inherent risk in rubber band ligation of hemorrhoids, like other medical devices, and in the use of anesthesia services, like other medicines, of the occurrence of an adverse event. One example of such an event is that in rare cases rubber band ligation of hemorrhoids can lead to sepsis, which if left untreated, can result in serious medical consequences, including death. Examples of adverse events related to anesthesia include anaphylaxis, nerve damage, and embolism, which can result in serious medical consequences and in rare circumstances, can lead to death. Such adverse events could have material adverse consequences on our sales, business, operations and financial performance.

The occurrence of unanticipated serious adverse events or other safety problems could cause the governing agencies to impose significant restrictions on the indicated uses for which our product and services may be marketed, impose other restrictions on the distribution or sale of the product or provision of our services. In addition, post-market discovery of previously unknown safety problems or increased severity or significance of a pre-existing safety signal could result in withdrawal of the product from the market, product recalls or other material adverse effects on our operations.

We may be held liable or incur costs to settle liability claims if our product, services or contracted anesthesiologists cause injury. Although we currently maintain product liability and medical malpractice insurance, we cannot assure you that this insurance is adequate, and, at any time, it is possible that such insurance coverage may cease to be

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available on commercially reasonable terms, or at all. A product liability or medical malpractice claim, or a claim based in related legal theories of negligence or vicarious liability among others, could result in liability to us greater than our total assets or insurance coverage. Moreover, product liability, medical malpractice or other claims could have an adverse impact on our business even if we have adequate insurance coverage.

Our products and services have been approved by the applicable regulatory authorities. Our product and services may also fail to meet patient expectations or produce harmful side effects. Such unexpected quality, safety or efficacy issues may be caused by a number of factors, including manufacturing defects, failure to adhere to good clinical practices, failure to adhere to good manufacturing practices, non-compliance with clinical protocols or the presence of other inadequacies of product-related information conveyed to physicians or patients, or other factors or circumstances unique to the patient. Whether or not scientifically justified, such unexpected safety or efficacy concerns can arise and may lead to product recalls, loss of or delays in market acceptance, market withdrawals, or declining sales, as well as liability, consumer fraud and/or other claims.

It is impossible to predict the scope of injury or liability from such defects, adverse events or unexpected reactions, or the impact on the market for such products and services of any allegations of these claims, even if unsupported, or the measure of damages which might be imposed as a result of any claims or the cost of defending such claims. Substantial damage awards and/or settlements have been handed down – notably in the United States and other common law jurisdictions – against medical companies based on claims for injuries allegedly caused by the use of their products and services. Although our shareholders would not have personal liability for such damages, the expenses of litigation or settlements, or both, in connection with any such injuries or alleged injuries and the amount of any award imposed on us in excess of existing insurance coverage, if any, may have a material adverse impact on us and on the price of our common shares. In addition, we may not be able to avoid significant liability exposure even if we take appropriate precautions, including maintaining liability coverage (subject to deductibles and maximum payouts). Any liability that we may have as a result could have a material adverse effect on our business, financial condition and results of operations, to the extent insurance coverage for such liability is not available. Liability claims in the future, regardless of their ultimate outcome, could have a material adverse effect on our reputation and on our ability to attract and retain customers.

Our industry is subject to health and safety risks.

We produce products and provide services for human use. While we take substantial precautions such as quality control, assurance testing, controlled production methods and approved clinical procedures, the associated health and safety risks cannot be eliminated. Our products or services may be found to be harmful, or to contain substances that are harmful to the health of our patients and customers and which, in extreme cases, may cause serious health conditions or death. This sort of finding may expose us to substantial risk of sanctions, litigation, and liability.

Further, we could be forced to discontinue production of certain products or methodology of certain services, which would harm our profitability. The Company maintains liability insurance coverage; however, there is no guarantee that our current coverage will be sufficient, or that we can secure insurance coverage in the future at commercially viable rates or with the appropriate limits.

We are unable to predict the impact of health reform initiatives, including the Health Reform Law.

Healthcare is subject to changing political, regulatory and other influences, which have resulted, and may continue to result, in reform initiatives that significantly impact healthcare providers. In particular, the Health Reform Law, as currently structured, expands coverage of uninsured individuals through the expansion of public programs and private sector health insurance reforms, and increases coverage of certain preventive services, including colonoscopies. We believe the Health Reform Law has resulted in an increased volume for certain procedures and in patients seeking care from us. In addition, the Health Reform Law promotes efforts intended to transform Medicare from a passive volume-based payment system to an active purchaser of quality goods and services. ACOs, other coordinated care models and other efforts to promote value-based spending in Medicare and other programs may increase competition for patients and negatively impact our anesthesia services and product businesses.

The President and certain members of Congress have indicated their intent to modify or repeal the Health Reform Law. In 2017, Congress eliminated the financial penalty associated with the individual mandate effective 2019, which

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may result in fewer individuals electing to purchase health insurance. Any government efforts related to health reform may have a material and adverse effect on our business, results of operations, cash flow, capital resources and liquidity. Moreover, the general uncertainty of health reform efforts, the Health Reform Law will be changed, and what and when alternative provisions if any, will be enacted may have a material and adverse impact our business, strategies, prospects, operating results or financial condition.

Failure to manage third-party service providers may adversely affect our ability to maintain the quality of service that we provide.

We outsource a majority of our revenue cycle management functions to third-party service providers. If our outsourcing partners fail to perform their obligations in a timely manner or at satisfactory quality levels, or if they are unable to attract or retain sufficient personnel with the necessary skill sets to meet our needs, the quality of our services and operations could suffer. In addition, our reliance on a workforce of others exposes us to disruptions in their business. Our ability to manage any difficulties encountered could be largely outside of our control. Diminished service quality from outsourcing or our inability to utilize service providers could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

Income tax audits and changes in our effective income tax rate could affect our results of operations.

Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses arising from stock option compensation, the valuation of deferred tax assets and liabilities and changes in federal, state or provincial tax laws and accounting principles. Increases in our effective tax rate could materially affect our net results.

In addition, we are subject to income tax audits by many tax jurisdictions. Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material impact on the results of operations for that period.

Our dependence on suppliers could have a material adverse effect on our business, financial condition and results of operations.

The Company is economically dependent on one critical supplier for the CRH O’Regan System. The supplier, a clean room injection molding manufacturing company based in Ontario, Canada, performs contract manufacturing and assembly for the Company. Currently, the Company has one set of manufacturing molds for each product produced which are used for the injection molding and these molds are inventoried at the supplier’s facility.

Manufacturing operations are subject to numerous unanticipated technological problems and delays. Our manufacturers are, and will be, subject to regulations specified by the various regulatory bodies such as Health Canada and the FDA. There can be no assurance that we will be able to comply with all stated manufacturing regulations. Failure or delay by our manufacturers to comply with such regulations or to satisfy regulatory inspections could have an adverse effect on the Company’s business and operations.

The Company’s anesthesia services are dependent on maintaining a continual supply of Propofol. CRH currently sources Propofol through supply agreements with narcotics manufacturers and its physicians and medical practitioners. A breach of any of these agreements, or a deterioration of the relationships with the parties thereto, could result in an interruption of the Company’s Propofol supply. Any interruption in the Company’s Propofol supply could have a material adverse effect on the Company’s anesthesia business and operations.

As the Company is dependent on a minimal number of suppliers for all manufacturing services and procurement of Propofol, any interruption caused by a business shutdown by the supplier (e.g., bankruptcy, fire, or labour dispute) could be challenging for the Company. Although the Company mitigates these risks by maintaining open relationships with other suppliers that could perform similar services, maintaining an appropriate level of inventory, and performing quality and business audits of its suppliers on a regular basis, we cannot guarantee that we will be able to enter into

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new supply contracts, advantageous to us or at all, in the event of a shutdown. Any such shutdown may have a material adverse effect on our business, financial condition or results of operations.

Unfavorable economic conditions could have an adverse effect on our business.

Global economic conditions continue to be unpredictable and may result in slow economic growth and impact the number of unemployed and under-employed workers. We could experience additional shifts in the nature of patient reimbursement if economic conditions change. This may result in lower patient volumes.

Unfavorable economic conditions could also lead to additional increases in the number of unemployed and under-employed workers and decline in the number of private employers that offer healthcare insurance coverage to their employees. Employers that do offer healthcare coverage may increase the required contributions from employees to pay for their coverage and increase patient responsibility amounts. As a consequence the number of patients who participate in government-sponsored programs or are uninsured could increase. Payments received from government sponsored programs are substantially less than payments received from commercial and other third-party payors. A payor mix shift from commercial and other third-party payors to government payors may result in a decrease in our net revenue per patient case.

We may be subject to a variety of regulatory investigations, claims, lawsuits, and other proceedings.

Due to the nature of the Company’s business, including without limitation the Company’s public listing, operations in the medical industry, product and anesthesia services, we may be subject to a variety of regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of the Company’s business. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. There can be no assurances that these matters will not have a material adverse effect on our business.

If we are unable to adequately protect or enforce our intellectual property, our competitive position could be impaired.

Our success and competitive position with the CRH O’Regan System are dependent in part upon our proprietary intellectual property. Our primary patents in the United States and Canada expired on March 8, 2016. Although we will continue to protect our proprietary rights through a variety of means including the filing of three additional patents in September 2013, one of which was issued in 2015 and a second one was issued in 2016, we cannot guarantee that the protective steps we have taken are adequate to protect these rights. Patents issued to or licensed by us in the past or in the future may be challenged and held invalid. The scope of our patent claims also may vary between countries, as individual countries have distinctive patent laws. In addition, as our patents expire, we may be unsuccessful in extending their protection through patent term extensions. The expiration of, or the failure to maintain or extend our patents, could have a material adverse effect on us.

Our commercial success depends in part on our ability to:

• obtain patents and maintain their validity;

• protect our trade secrets; and

• effectively enforce our proprietary rights or patents against infringers.

Patent applications may not result in patents being issued. Until a patent is issued, the claims covered by the patent may be narrowed or removed entirely and therefore we may not obtain adequate patent protection. As a result, we may face unanticipated competition, or conclude that, without patent rights, the risk of bringing products to the market is too great. Any patents that we own may be challenged, invalidated or circumvented and may not provide us with protection against competitors. We may be forced to engage in costly and time-consuming litigation in order to protect our intellectual property rights. Patent rights may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products or technologies. Patent rights are limited in time and have expiration dates. Our patent rights may expire without replacement by further rights, which could increase our risk

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from competition. The laws of certain foreign countries do not protect our intellectual property rights to the same extent as do the laws of the United States.

In addition to patents, we rely on trade secrets and proprietary know-how. We seek protection, in part, through confidentiality and non-disclosure agreements. These agreements may not provide meaningful protection of our technology and operations model or adequate remedies in the event of unauthorized use or disclosure of confidential and proprietary information and, in any event, others may develop independently, or obtain access to, the same or similar information. Our failure or inability to protect our trade secrets and proprietary know-how could impair our competitive position.

We may spend significant resources to enforce our intellectual property rights and such enforcement could result in litigation. Intellectual property litigation is complex and can be expensive and time-consuming. However, our efforts in this regard may not be successful. We also may not be able to detect infringement. In addition, competitors may design around our technology or develop competing technologies. Patent litigation can result in substantial cost and diversion of effort. Intellectual property protection may also be unavailable or limited in some foreign countries, enabling our competitors to capture increased market position. The invalidation of key intellectual property rights or an unsuccessful outcome in lawsuits filed to protect our intellectual property could have a material adverse effect on our financial condition, results of operations or prospects.

The success of our business depends in part on our ability to obtain and maintain intellectual property protection for our technology and know-how, and operate without infringing the intellectual property rights of others. It is possible that as a result of future litigation our products currently marketed may be found to infringe or otherwise violate third party intellectual property rights.

The Company may not be successful in marketing its products and services.

In order to sustain and increase revenues, the Company’s products and services must achieve a significant degree of market acceptance. If the Company is unable to promote, market and sell its products and services or secure relationships with physicians and ambulatory surgery centers, the Company’s business, financial condition and results of operations would be materially adversely affected.

Levels of market acceptance for our products and services could be impacted by several factors, many of which are not within our control, including but not limited to:

• safety, efficacy, convenience and cost-effectiveness of our products and services;

• scope of approved uses and marketing approval;

• difficulty in, or excessive costs to, manufacturing;

• infringement or alleged infringement of the patents or intellectual property rights of others;

• maintenance of business arrangements with healthcare providers;

• availability of alternative products or services from our competitors; and

• acceptance of the price of our products and services.

If our competitors are able to develop and market products that are preferred over the CRH O’Regan System, are able to grow service businesses that are preferred over CRH’s anesthesia services or other businesses preferred over other products and services that we may develop, we may not be able to generate sufficient revenues to continue our operations.

We may not be able to contend successfully with competitors. The medical industry is highly competitive and subject to significant and rapid technological change as researchers learn more about diseases and develop new technologies, services and treatments. Certain of our competitors, either alone or together with their collaborators, have substantially greater resources than we do. The existence of other products, services or treatments of which we are not aware, or products, services or treatments that may be developed in the future may reduce the marketability of the CRH O’Regan System, CRH’s anesthesia services, and any future operations, particularly to the extent such products or services:

• are more effective;

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• have fewer or less severe adverse side effects;

• have better patient compliance;

• receive better reimbursement terms;

• are accepted by more physicians;

• have better distribution channels;

• are easier to administer; or

• are less expensive.

Our employees and third-party contractors may not appropriately record or document services that they provide.

Our employees are responsible for appropriately recording and documenting the services they provide. We use this information to seek reimbursement for their services from third-party payors. In addition, we utilize third-party contractors to perform certain revenue cycle management functions for medical providers and payors, including medical coding and data reporting. If our employees and third-party contractors do not appropriately document, or where applicable, code for their services or our customers’ services, we could be subjected to administrative, regulatory, civil, or criminal investigations or sanctions and our business, financial condition, results of operations and cash flows could be materially adversely affected.

Failure to timely or accurately bill for services could have a negative impact on our net revenue, bad debt expense and cash flow.

Billing for healthcare services is an important and complex aspect of our business. We bill numerous and varied payors, such as managed care payors and Medicare Medicaid, and self-pay patients. These different payors typically have different billing requirements that must be satisfied prior to receiving payment for services rendered. Reimbursement is typically conditioned on our documenting medical necessity, the appropriate level of service and correctly applying diagnosis codes. Incorrect or incomplete documentation and billing information could result in non-payment for services rendered.

Additional factors that could complicate our ability to timely or accurately bill payors include:

• disputes between payors as to which party is responsible for payment;

• failure of information systems and processes to submit and collect claims in a timely manner;

• variation in coverage for similar services among various payors;

• our reliance on third-parties to provide billing services;

• the difficulty of adherence to specific compliance requirements, diagnosis coding and other procedures mandated by various payors;

• failure to obtain proper provider credentialing and documentation in order to bill various payors; and

• failure to collect patient balances due to economic conditions or other unknown reasons.

To the extent that the complexity associated with billing for healthcare services we provide causes delays in our cash collections, we may experience increased carrying costs associated with the aging of our accounts receivable, as well as increased potential for bad debt expense.

We may be unable to enforce the non-competition and other restrictive covenants in our agreements.

As a material term and condition of each anesthesia medical practice acquisition, the sellers and owners enter into a restrictive covenant in favor of our purchasing entity, whereby the sellers and owners agree not compete in a specific restricted territory (the “Restrictive Covenants”). The restricted territory varies based upon the jurisdiction where the anesthesia medical practice is located. The length of the restricted period also varies based upon the jurisdiction where the anesthesia medical practice is located. If the sellers and owners, individually or collectively, breach the Restrictive Covenants, the definitive purchase agreements provide us with the remedies of injunctive relief and liquidated damages based upon a negotiated, predetermined estimate of damages. Additionally, we have negotiated additional special covenants, which vary from transaction to transaction, that provide us with the remedy of liquidated damages based upon a negotiated, predetermined estimate of damages. If a court determines that such liquidated damages are

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unenforceable as a penalty, as a result of such determination our business, financial condition, and results of operations could be adversely affected.

The law governing non-competition agreements and other forms of restrictive covenants varies from jurisdiction to jurisdiction. Although we believe that the Restrictive Covenants applicable to our anesthesiologists, contractors, and other business partners are reasonable in scope and duration and therefore enforceable under applicable law, courts and arbitrators in some jurisdictions are reluctant to strictly enforce non-competition agreements and restrictive covenants. If we are unable to enforce the Restrictive Covenants in these agreements, our business, financial condition, results of operations, and cash flows could be materially adversely affected. We cannot predict whether a court or arbitration panel would enforce these Restrictive Covenants.

Our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management.

The Company is dependent on its senior management. Consequently, our ability to retain these individuals and attract other qualified individuals is critical to our success. In addition, because of a relative scarcity of individuals with the high degree of education and business experience required for our business, competition among companies for qualified employees is intense and, as a result, we may not be able to attract and retain such individuals on acceptable terms, or at all. The loss of key management personnel or our inability to attract, retain, and motivate sufficient numbers of qualified management personnel could have a material adverse effect on the Company.

Incentive provisions for our key executives include the granting of equity-based compensation that vest over time or are based on performance and are designed to encourage such individuals to stay with us. However, a low share price, whether as a result of disappointing growth, revenues, income, or as a result of market conditions generally, could render such agreements of little value to our key executives. In such event, our key executives could be susceptible to being hired away by our competitors or other businesses who could offer a better compensation package. If we are unable to attract and retain key personnel, our business, financial condition, and results of operations may be adversely affected.

Our industry is already competitive and could become more competitive.

The healthcare industry is highly competitive and subject to continual changes in the methods by which services are provided and the manner in which healthcare providers are selected and compensated.

Because some of our operations consist primarily of anesthesia services provided within ASCs, we compete with other healthcare services companies and physician groups for contracts with ASCs to provide our services to patients. Our anesthesia services are provided under exclusive professional service agreements of varying duration which we may need to renew, renegotiate or replace. Our ability to renew, renegotiate or replace significant agreements will be critical to our success. We also face competition from hospitals to provide our services.

Companies in other healthcare industry segments, some of which have greater financial and other resources than ours, may become competitors in providing gastroenterology services or anesthesia care. Additionally we face competition from healthcare-focused and other private equity firms. We may not be able to continue to compete effectively in this industry and additional competitors may enter metropolitan areas where we operate. This increased competition may have a material adverse effect on our business, financial condition, results of operations and cash flows.

If there is a change in federal or state laws, rules, regulations, or in interpretations of such federal or state laws, rules or regulations, we may be required to redeem our physician partners’ ownership interests in anesthesia companies under the savings clause in our joint venture operating agreements.

The operating agreements with our physician partners contain a savings clause that is triggered upon an adverse governmental action, including a change in federal or state laws, rules or regulations or an interpretation of such federal or state laws, rules or regulations (each an “Adverse Governmental Action”). Upon the occurrence of an Adverse Governmental Action the savings clause will require divestiture of the physicians’ ownership in the anesthesia company and we would be required to redeem the physicians’ ownership interest. If an Adverse Governmental Action

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occurs under a particular state’s law, we would be required to redeem the ownership interests of each physician partner in such state. If an Adverse Governmental Action occurs under federal law, we would be required to redeem the ownership interest of each physician partner in the United States. The redemption price of each anesthesia company is based upon a predetermined multiple of such anesthesia company’s EBITDA, which reflects the fair market value of the redeemed interests. This could impact our cash flow during the redemption period. The redemption occurs over a period of four or five years depending on each applicable operating agreement.

Changes in the United States federal Anti-Kickback Statute and Stark Law and/or similar state laws, rules, and regulations could result in criminal offences and potential sanctions.

The United States federal Anti-Kickback Statute (the “Anti-Kickback Statute”) prohibits the offer, payment, solicitation, or receipt of any form of remuneration in return for referring items or services payable by Medicare, Medicaid, or any other federally-funded healthcare program. Additionally, the Anti-Kickback Statute prohibits any form of remuneration in return for purchasing, leasing, ordering or arranging for, or recommending the purchasing, leasing, or ordering of items or services payable by Medicare, Medicaid, or any other federally-funded healthcare program. The Anti-Kickback Statute is very broad in scope, and existing case law and regulations have not uniformly or definitively interpreted many of its provisions. Violations of the Anti-Kickback Statute may result in substantial civil or criminal penalties, including imprisonment of up to five years, criminal fines of up to $25,000, civil monetary penalties of up to $50,000 for each violation, plus three times the remuneration involved or the amount claimed, and exclusion from participation in the Medicare and Medicaid programs.

The United States federal physician self-referral law (the “Stark Law”), prohibits, subject to certain exceptions, physicians from making referrals of a Medicare or Medicaid beneficiary for a “designated health service” to an entity if the physician or an immediate family member has a financial relationship with the entity. Some of the services our affiliated physicians and professional groups provide include designated health services. A violation of the Stark Law could result in repayment of amounts collected for services furnished pursuant to an unlawful referral, the imposition of civil monetary penalties, and exclusion from participation in the Medicare and Medicaid programs.

Many states have enacted laws similar to the Anti-Kickback Statute and, to a lesser degree, the Stark Law. These laws generally apply to both government and non-government health programs. These laws vary from state to state and have infrequently been the subject of judicial or regulatory interpretation.

Other federal healthcare fraud and abuse laws prohibit healthcare-related fraud, theft or embezzlement, false statements, obstruction of criminal investigations, and money laundering. These laws apply to all healthcare programs regardless of whether such programs are funded in whole or in part with federal funds. Violations of these provisions constitute felony criminal offenses, and potential sanctions for such violations include imprisonment and/or substantial fines.

Although our operations and arrangements with our affiliated physicians and professional groups have been structured in an attempt to comply with the Anti-Kickback Statute and the Stark Law and similar state laws, a government agency or a private party could assert a contrary position. Additionally, new federal or state laws may be enacted that would cause our arrangements with our affiliated physicians and professional groups to be illegal or result in the imposition of fines and penalties against us.

Our employees and business partners may not appropriately secure and protect confidential information in their possession.

Each of our employees and business partners is responsible for the security of the information in our systems and to ensure that private and financial information is kept confidential. Should an employee or business partner not follow appropriate security measures, including those related to cyber threats or attacks, such non-compliance may result in the release of private or confidential financial information. The release of such information could have material adverse effect on our business, financial condition, results of operations and cash flows.

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We are dependent on complex information systems.

Our business depends on standardized procedures for operational, financial and billing operations and numerous complex, integrated information systems, some of which are licensed from third parties, and any failure to successfully maintain these systems, or implement new systems, or any disruptions in our information systems could materially harm our operations.

We may be subject to criminal or civil sanctions if we fail to comply with privacy regulations regarding the protection, use and disclosure of patient information.

The Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule (the “Privacy Rule”) restricts the use and disclosure of patient information and requires entities to safeguard that information and to provide certain rights to individuals with respect to that information. The HIPAA Security Rule (the “Security Rule”) establishes elaborate requirements for safeguarding patient health information transmitted or stored electronically.

The Privacy Rule and Security Rule require the development and implementation of detailed policies, procedures, contracts and forms to assure compliance. We have implemented such compliance measures, but we may be required to make additional costly system purchases and modifications to comply with evolving HIPAA rules, and our failure to comply may result in liability and adversely affect our business.

New health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant effect on the manner in which we must handle healthcare related data, and the cost of complying with standards could be significant. If we do not properly comply with existing or new laws and regulations related to patient health information, we could be subject to criminal or civil sanctions.

We have a legal responsibility to the minority owners of the entities through which we own our anesthesia services business, which may conflict with our interests and prevent us from acting solely in our own best interests.

As the owner of majority interests in the limited partnerships and limited liability companies that own our anesthesia service businesses, we owe a fiduciary duty to the non-controlling interest holders in these entities and may encounter conflicts between our interests and those of the minority holders. In these cases, our representatives on the governing board of each partnership or joint venture are obligated to exercise reasonable, good faith judgment to resolve the conflicts and may not be free to act solely in our own best interests. In our role as manager of the limited partnership or limited liability companies, we generally exercise our discretion in managing the business of our anesthesia practices. Disputes may arise between us and our physician partners regarding a particular business decision, or the interpretation of the provisions of the limited partnership agreement or limited liability company operating agreement. These agreements provide for arbitration as a dispute resolution process in some circumstances. There is no assurance that any possible dispute will be resolved amicably, or that any dispute resolution will be on terms satisfactory to us.

A significant number of our affiliated physicians could leave our affiliated ASCs.

Our affiliated physicians may leave our affiliated ASCs for a variety of reasons, including retirement, death and to provide services for other types of healthcare providers, such as teaching, research and government institutions, hospitals and health systems and other practice groups. If a substantial number of our affiliated physicians leave our affiliated ASCs, our business, financial condition, results of operations and cash flows could be materially adversely affected.

If regulations or regulatory interpretations change, we may be obligated to re-negotiate agreements of our anesthesiologists or other contractors.

Due to regulations prohibiting the corporate practice of medicine, the shares of GAA, CRH GAA PLLC and NC GAA, PC are owned by an individual medical practitioner. GAA, CRH GAA PLLC and NC GAA, PC operations and corporate structures are governed by certain agreements, including a loan by CRH Medical Corporation to the individual medical practitioner. These agreements, including the affirmative and negative covenants therein in favour of CRH, effectively provide CRH control of GAA, CRH GAA PLLC and NC GAA, PC.

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If certain regulations or regulatory interpretations change, particularly in relation to the medical practice and physician ownership, we will be obligated to adapt or re-negotiate our operating agreements to comply with such regulations. The cost of adapting or re-negotiating these agreements could be substantial. There can be no assurance, however, that our existing capital resources would be sufficient for us to meet any future obligations to adapt or re-negotiate our operating agreements, if they arise.

The re-negotiating of these agreements could have a material adverse effect on our financial condition and results of operations. While we believe physician ownership and our operating strategy is in compliance with applicable law, we can give no assurances that legislative or regulatory changes would not have an adverse impact on us. From time to time, these issues are considered by some state legislatures and federal and state regulatory agencies.

The continuing development of our products and provision of our services depends upon us maintaining strong relationships with physicians.

The marketing and sales of our products and services is dependent upon our maintaining working relationships with physicians. If we are unable to maintain our strong relationships with these professionals, the development and marketing of our products and services could suffer, which could have a material adverse effect on our consolidated earnings, financial condition, and/or cash flows.

We operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations.

The healthcare industry in the United States is subject to extensive federal, state, and local laws, rules, and regulations relating to, among other things:

• payment for services;

• corporate practice of medicine;

• conduct of operations, including fraud and abuse, anti-kickback, physician self-referral, and false claims prohibitions;

• reporting of quality measures;

• protection of patient information; and

• medical waste disposal and environmental protection.

Unfavorable changes or conditions could occur in the states where our operations are concentrated.

A majority of our anesthesia services revenue in 2017 was generated by our operations in seven states. In particular, Georgia, Tennessee, Colorado and Texas accounted for approximately 81% of our anesthesia revenue in 2017. Adverse changes or conditions affecting these particular states, such as healthcare reforms, changes in laws and regulations, reduced reimbursements and government investigations, economic conditions, extreme weather conditions, and natural disasters may have a material adverse effect on our business, financial condition, results of operations, cash flows, and the trading price of our securities.

Government authorities or other parties may assert that our business practices violate antitrust laws.

The healthcare industry is subject to close antitrust scrutiny. In recent years, United States regulatory authorities have taken increasing steps to review and in some cases take enforcement action against business conduct and acquisitions in the healthcare industry. Violations of antitrust laws may be punishable by substantial penalties including significant monetary fines, civil penalties, criminal sanctions, and consent decrees and injunctions prohibiting certain activities or requiring divestiture or discontinuance of business operations. Any of these penalties could have material adverse effects on our business’ financial condition and results of operations.

If we were to lose our foreign private issuer status under United States federal securities laws, we would likely incur additional expenses associated with compliance with United States securities laws applicable to United States domestic issuers.

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As a foreign private issuer, as defined in Rule 3b-4 under the United States Securities Exchange Act of 1934, as amended, we are exempt from certain of the provisions of United States federal securities laws. For example, the United States proxy rules and the Section 16 reporting and “short swing” profit rules do not apply to foreign private issuers. However, if we were to lose our status as a foreign private issuer, these regulations would immediately apply and we would also be required to commence reporting on forms required of United States companies, such as Forms 10-K, 10-Q and 8-K, rather than the forms currently available to us, such as Forms 40-F and 6-K. Compliance with these additional disclosure and timing requirements under these securities laws would likely result in increased expenses and would require our management to devote substantial time and resources to comply with new regulatory requirements. Further, to the extent that we were to offer or sell our securities outside of the United States, we would have to comply with the more restrictive Regulation S requirements that apply to United States companies under the United States Securities Act of 1933, as amended, and we would no longer be able to utilize the multijurisdictional disclosure system forms for registered offerings by Canadian companies in the United States, which could limit our ability to access the capital markets in the future.

Significant shareholders of the Company could influence our business operations, and sales of our shares by such significant shareholders could influence our share price.

The exercise of voting rights associated with shares held by any significant shareholder of the Company at meetings of shareholders may have significant influences on our business, and operations. If such a shareholder holds those shares for the purpose of investment, and if it were to sell those shares in the market in the future, it could have significant influences on our share price, depending on the market environment at the time of such sale.

Anti-takeover provisions could discourage a third party from making a takeover offer that could be beneficial to our shareholders.

Some of the provisions in our articles of incorporation and by-laws could delay or prevent a third party from acquiring us or replacing members of our Board of Directors, even if the acquisition or the replacements would be beneficial to our shareholders. These provisions could also reduce the price that certain investors might be willing to pay for our securities and result in the market price for our securities, including the market price for our common shares, being lower than it would be without these provisions.

Changes in the medical industry and the economy may affect the Company’s business.

The Company’s business may be affected by factors beyond its control, such as an economic recession or the aggressive pricing policies of competitors. Future technological advances in the continually-changing medical industry can be expected to result in the availability of new products and services that will compete with the products and services that the Company may develop, or render the Company’s current product and anesthesia services obsolete. We expect that market demand, governmental regulation, government and third-party reimbursement policies and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances, which may exert further downward pressure on the prices of our products and services and could adversely impact our business, financial condition, and results of operations.

Our industry is the subject of numerous governmental investigations into marketing and other business practices which could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our financial condition and results of operations.

Our industry is the subject of numerous governmental investigations into marketing and other business practices. This has included increased regulation, enforcement, inspections, and governmental investigations of the medical device industry and disclosure of financial relationships with healthcare professionals. These investigations could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our financial condition and results of operations. We anticipate that the government will continue to scrutinize our industry closely, and that additional regulation by governmental authorities, both foreign and domestic, may increase compliance costs, exposure to litigation and other adverse effects to our operations.

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Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including those of Canadian securities regulators, the United States Securities and Exchange Commission, the Toronto Stock Exchange and the NYSE MKT are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and we may be harmed.

Future changes in financial accounting standards may cause adverse, unexpected revenue fluctuations and affect our financial position or results of operations. New pronouncements and varying interpretations of pronouncements have occurred with greater frequency and are expected to occur in the future. Compliance with changing regulations of corporate governance and public disclosure may result in additional expenses. All of these uncertainties are leading generally toward increasing insurance costs, which may adversely affect our business, results of operations and our ability to purchase any such insurance, at acceptable rates or at all, in the future.

We may face exposure to adverse movements in foreign currency exchange rates.

Our business is primarily based in the United States with a significant portion of our revenues, expenses, current assets and current liabilities denominated in United States dollars. Our financial statements are also expressed in United States dollars. An increase or decrease in the value of foreign currencies relative to the United States dollar could result in increased expenses and losses from currency exchange rate fluctuations.

DIVIDEND POLICY

We have not declared or paid any dividends on our outstanding common shares since our inception and we do not anticipate that we will do so in the foreseeable future. The declaration of dividends on our common shares is within the discretion of the Board of Directors and will depend on the assessment of, among other factors, earnings, capital requirements and our operating and financial condition. At the present time, anticipated capital requirements are such that we intend to follow a policy of retaining earnings in order to finance the further development of the business.

DESCRIPTION OF CAPITAL STRUCTURE AND MARKET FOR SECURITIES

The Company is authorized to issue 100,000,000 common shares without par value of which 73,018,588 were issued and outstanding as of December 31, 2017. There is one class of shares only. Our common shares, which have no par value, are issued in registered form. The common shares are not subject to any future call or assessment and all have equal voting rights. There are no special rights or restrictions of any nature attached to any of the common shares and they all rank pari passu, each with the other as to all benefits which might accrue to the holders of such common shares. The holders of common shares have the right to receive, subject to the rights, privileges, restrictions and conditions attaching to any other class of shares of the Company, any dividends declared by the Company.

All registered shareholders are entitled to receive a notice of any general meetings to be convened by the Company. At any general meeting, subject to the restrictions on joint registered owners of common shares, on a show of hands, every member who is present in person and entitled to vote thereat and every proxyholder duly appointed by a holder of a common share who would have been entitled to vote shall have one vote and on a poll every member shall have one vote for each common share of which he is the registered holder and may exercise such vote either in person or by proxy. The common shares do not have any pre-emptive rights, conversion rights or redemption rights.

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Our common shares trade on the Toronto Stock Exchange under the symbol “CRH”. Our common shares are also listed on the NYSE MKT under the symbol “CRHM” in the United States.

The following table sets forth the high, low and ending sales prices of our common shares on the Toronto Stock Exchange for each of the months of the last completed financial year ended December 31, 2017.

2017	Max	Min	End	Total Volume
January	CAD$8.17	CAD$7.06	CAD$8.07	3,720,702
February	CAD$9.34	CAD$8.04	CAD$9.19	5,255,084
March	CAD$11.50	CAD$9.24	CAD$10.87	13,314,087
April	CAD$12.35	CAD$7.56	CAD$8.03	16,660,215
May	CAD$8.76	CAD$6.72	CAD$8.24	9,998,747
June	CAD$8.24	CAD$6.83	CAD$7.38	3,998,574
July	CAD$7.50	CAD$3.97	CAD$4.09	12,738,380
August	CAD$4.67	CAD$2.67	CAD$3.09	13,655,851
September	CAD$3.88	CAD$2.63	CAD$3.25	7,456,711
October	CAD$3.40	CAD$2.91	CAD$3.03	4,933,985
November	CAD$3.09	CAD$1.86	CAD$2.45	11,089,422
December	CAD$3.44	CAD$2.41	CAD$3.31	8,415,392

The following table sets forth the high, low and ending sales prices of our common shares on the NYSE MKT for each of the months of the last completed financial year ended December 31, 2017.

2017	Max	Min	End	Total Volume
January	$6.25	$5.25	$6.25	1,468,587
February	$7.13	$6.15	$6.93	1,542,930
March	$8.70	$6.95	$8.20	4,526,514
April	$9.25	$5.80	$5.90	6,608,480
May	$6.35	$4.95	$6.05	3,827,681
June	$6.15	$5.15	$5.70	1,367,181
July	$5.75	$3.20	$3.25	4,603,060
August	$3.73	$2.15	$2.48	4,794,372
September	$3.15	$2.20	$2.60	1,556,341
October	$2.70	$2.25	$2.30	1,954,924
November	$2.40	$1.50	$1.90	2,969,999
December	$2.70	$1.90	$2.65	4,045,960

PRIOR SALES

The following table sets forth information in respect of our common shares that we issued upon the exercise of options granted under our incentive stock option plan during the 2017 financial year:

Exercise Date	Number of Shares	Exercise Price
March 2, 2017	50,000	CAD$0.275
March 21, 2017	10,000	CAD$0.275
May 1, 2017	60,937	CAD$0.2775
May 1, 2017	12,500	CAD$0.60
May 30, 2017	20,313	CAD$0.60
June 1, 2017	25,000	CAD$0.275
December 6, 2017	12,500	CAD$0.275
December 8, 2017	56,250	CAD$0.275
Total	247,500

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The following table sets forth information in respect of our common shares that we issued upon the vesting of share units granted under our share unit plan during the 2017 financial year.

Vesting Date	Number of Shares
February 27, 2017	113,549
March 20, 2017	1,000,000
June 9, 2017	64,000
August 17, 2017	12,500
September 17, 2017	12,500
December 8, 2017	60,000
December 10, 2017	30,000
Total	1,292,549

The following table sets forth information in respect of share units that we granted under our restricted share unit plan during the 2017 financial year.

Grant Date	Number of Share Units
June 8, 2017	84,000
December 7, 2017	240,000
Total	324,000

No other common shares, debt securities or warrants, or securities exchangeable or convertible into common shares, debt securities or warrants have been issued during the 2017 financial year.

ESCROW SECURITIES

The Company does not have any escrowed securities or securities subject to contractual restrictions on transfer.

DIRECTORS AND OFFICERS

All directors hold office until the next annual general meeting of our shareholders or until they resign or are removed from office in accordance with our articles and the Business Corporations Act (British Columbia).

Each director has formally consented to serve as a director with us.

Our current directors and officers, their business background and principal occupations during the five preceding years and the periods during which each has served in their positions as directors or officers are as follows:

Dr. Anthony F. Holler – Director, Chairman of the Board

Vancouver, British Columbia, Canada

Dr. Holler has served as one of our directors since December 2005. Dr. Holler was one of the original founders of ID Biomedical Corporation in 1991 and was a member of its Board of Directors since inception. He held a number of executive positions with ID Biomedical, including Chief Executive Officer, until the company was acquired by GlaxoSmithKline in December 2005. Prior to founding ID Biomedical, Dr. Holler served as an emergency physician at University Hospital at the University of British Columbia. Mr. Holler is the founder of Sunniva Inc., where he currently serves as Chairman and CEO. He is a member of the British Columbia College of Physicians and Surgeons. Dr. Holler holds a Bachelor of Science degree and a medical degree from the University of British Columbia.

Member of: Audit Committee, Corporate Governance & Nominating Committee, Compensation Committee

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Dr. David Johnson, – Director

Norfolk, Virginia, USA

Dr. Johnson has been a director of the Company since June of 2010 and is a partner of Gastrointestinal and Liver Specialists of Tidewater PLLC in Norfolk, VA since 1989. Dr. Johnson was one of the founding members of CRH’s Scientific Advisory Board. He is Board-certified in Internal Medicine and Gastroenterology and is a past President, as well as a Master of the American College of Gastroenterology. Dr. Johnson currently serves as Professor of Medicine, Chief of Gastroenterology, in Eastern Virginia Medical School. He has authored more than 600 papers in the field of gastroenterology.

Todd Patrick – Director

Yarrow Point, Washington, United States

Mr. Patrick is the President and Chief Executive Officer of C3J Therapeutics, Inc., a clinical stage biotechnology company based in Los Angeles, California. Prior to joining C3J, Mr. Patrick was the President and Chief Operating Officer of ID Biomedical Corporation. Mr. Patrick was with ID Biomedical from 1994 until 2005 when the company was acquired by GlaxoSmithKline. Prior to ID Biomedical, Mr. Patrick was the Director of the Office of Intellectual Property Administration at the University of California, Los Angeles (UCLA), where he was responsible for the patenting and licensing of intellectual property arising out of UCLA. Mr. Patrick holds a B.A. (Economics) from the University of Washington and a Master’s in Business Administration from Washington State University. Mr. Patrick has been a director of the Company since May 2006. In addition, Mr. Patrick currently serves on the board of directors of Sunniva Inc.

Member of: Audit Committee, Corporate Governance & Nominating Committee, Compensation Committee

Ian Webb – Director

Vancouver, British Columbia, Canada

Mr. Webb has been a director of the Company since May 2006. He was admitted to the British Columbia bar in 1982 after graduating from Osgoode Hall Law School at York University with a Bachelor of Laws in 1981. Prior to that, Mr. Webb received a Master of Science in Theoretical Physics from the University of Saskatchewan in 1976. Mr. Webb practiced in the areas of corporate and securities law with an emphasis on the legal requirements of public companies. He is a retired partner of the law firm Borden Ladner Gervais LLP. Mr. Webb currently serves on the board of directors of Sunniva Inc.

Member of: Audit Committee, Corporate Governance & Nominating Committee, Compensation Committee

Edward Wright – Director and Officer

Vancouver, British Columbia, Canada

Mr. Wright became CEO and director of the Company in September of 2006. Prior to joining CRH he gained extensive management experience in global luxury brands at Richemont, the holding company for some of the world’s leading luxury goods. As President of Baume & Mercier first, and then as Executive Vice-President of North America Retail for Cartier, Mr. Wright developed an ability for building solid relationships with customers and business partners alike. Upon arriving at CRH, Mr. Wright was tasked with maximizing the value of the CRH O’Regan System. He quickly determined that CRH needed to transition from a retail model to a wholesale model and by introducing it to the GI community in the United States, he created a paradigm shift for GIs by extending their continuum of care for patients. To maximize the value of CRH, Mr. Wright leveraged our relationships with the GI community leading to the launch of CRH Anesthesia Management, a business focused on providing GI anesthesia services to ASCs across the United States. CRH Anesthesia Management is now the primary driver of the Company’s revenue. Under Mr.

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Wright’s management CRH has become a profitable company with strong cash flow generation and access to North American capital markets to fund the Company’s long-term growth strategy.

Richard Bear – Officer

Yarrow Point, Washington, United States

Mr. Bear has been an officer of the Company since March of 2006. Prior to CRH, he worked at ID Biomedical Corporation, first as Vice President of Finance and then as Chief Financial Officer. Since joining CRH, Mr. Bear has planned and executed all of our financial transactions including capital private placement, debt issuance and restructuring, establishment and extension of our existing credit facility with U.S. and Canadian financial institutions, and listing of our common shares on the NYSE MKT. Since December of 2014, Mr. Bear has also been in charge of the negotiation and financing, as well as the accounting and financial integration of CRH Anesthesia Management’s acquisitions into our organization. Mr. Bear has a degree in Business Administration from the University of Washington and has received a Certified Public Accountant (CPA) designation.

Jay Kreger – President, CRH Anesthesia

Atlanta, Georgia, United States

Mr. Kreger has over 25 years of diversified experience, focusing on business development and operations. Prior to joining CRH, he held the role of Vice President of Development for the Ambulatory Surgery Division at Hospital Corporation of America. Mr. Kreger received a BA in Finance at Michigan State University and a MBA at Wayne State University.

The following table sets out details of our shares, options and warrants that are directly or indirectly held by directors and executive officers as at December 31, 2017 based on 73,018,588 common shares issued and outstanding on such date:

Name	Number of Common     Shares	Percentage of Outstanding     Common Shares	Number of Common Shares held     under Options or Share Units
Anthony F. Holler	1,066,000	1.46%	41,000
Todd R. Patrick	1,039,563	1.42%	20,687
Ian A. Webb	195,920	0.27%	41,000
Edward Wright	150,000	0.21%	1,370,000
Dave Johnson	221,900	0.30%	141,000
Richard Bear	320,000	0.44%	1,020,000
James Kreger	1,000	0.00%	400,000
TOTAL	2,994,383	4.1%	3,033,687

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CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS

Except as disclosed below, no director or executive officer of the Company:

(a) is, or has been within the 10 years prior to the date of this Annual Information Form, a director, chief executive officer or chief financial officer of any company that, while that person was acting in that capacity, (i) was the subject of a cease trade or similar order or an order that denied the company access to any exemptions under securities legislation for a period of more than 30 consecutive days, (ii) was subject to a cease trade order or similar order or an order that denied the relevant company an exemption under securities legislation that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

(b) nor, to the knowledge of the Company, a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company is, or has been, within the last ten years, a director of executive officer of a company that, while the that person was acting in that capacity, or within a year of ceasing to act in that capacity, declared bankrupt or made a proposal under any legislation relating to bankruptcy or insolvency or has been subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that company.

(c) nor, to the knowledge of the Company, a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company has, within the ten years prior to the date of this Annual Information Form become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold his or her assets.

(d) nor, to the knowledge of the Company, a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has (i) been subject to any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or have entered into a settlement agreement with a securities regulatory authority; or (ii) been subject to any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Dr. Anthony Holler and Todd Patrick are former directors of Inviro Medical Inc. (“Inviro”). Inviro is a company incorporated under the laws of Canada which owns certain intangible assets including goodwill and customer relationships, and all of the issued and outstanding shares of Inviro Medical Devices, Inc. (the “U.S. Subsidiary”). The U.S. Subsidiary owns inventory manufactured in accordance with licences issued by the Department of Health of the Government of Canada and the FDA. On October 29, 2010, Inviro declared that it was no longer a going concern, and on or about that date, Inviro ceased to carry on business and all of its directors and officers, including Dr. Holler and Mr. Patrick, resigned. On February 7, 2011, Dr. Holler, on behalf of a committee of debentureholders of Inviro, filed a Notice of Civil Claim seeking, among other things, an order for the appointment of a receiver of all of the assets and undertakings of Inviro. On April 9, 2013, the receiver was discharged. After payment of the receiver’s fees and costs, the balance of the receivership proceeds were paid over to Anthony Holler and that money was distributed to the debenture holders of Inviro in accordance with the priorities of their debentures, pro rata.

CONFLICTS OF INTEREST

Some of our directors and officers are also directors and officers of other reporting companies. It is possible, therefore, that a conflict may arise between their duties as a director or officer of our Company and their duties as a director or officer of such other companies. All such conflicts are disclosed by them in accordance with the Business Corporations Act (British Columbia) and they govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law.

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In the event that any of our directors or officers has a material interest in any material contract or proposed contract involving our Company, they are required to disclose their interest to the Board of Directors either in writing or in person at a meeting of the directors. Any such contract is then considered and approved by a majority of the disinterested directors. Additionally, any non-arm’s length or related party transaction that requires the approval of the Toronto Stock Exchange will be subject to more restricted filing and disclosure requirements. Related party transactions are required to be disclosed in our financial statements.

AUDIT COMMITTEE INFORMATION

Pursuant to National Instrument 52-110, we are required to have an Audit Committee and make the following disclosure.

1. The Audit Committee’s Charter

See Schedule “A”

2. Composition of the Audit Committee

Name	Independent/non- independent	Financially literate or not financially literate	Relevant Education and Experience
Dr. Anthony Holler	Independent (1)	Financially literate(2)	Previously CEO and Director of ID Biomedical
Todd Patrick	Independent (1)	Financially literate(2)	Previously President and Director of ID Biomedical, Masters of Business Administration – emphasis in finance.
Ian Webb	Independent (1)	Financially literate(2)	Retired Solicitor practicing corporate law and previously Director of ID Biomedical

(1) A member of an audit committee is independent if the member has no direct or indirect material relationship with the Company, which could, in the view of the Board of Directors, reasonably interfere with the exercise of a member’s independent judgment.

(2) An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements.

Audit Committee Oversight

At no time since the commencement of the Company’s most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board of Directors.

Reliance on Certain Exemptions

At no time since the commencement of the Company’s most recently completed financial year has the Company relied on the exemption in Section 2.4 of NI 52-110 (De Minimis Non-audit Services), or an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.

Pre-Approval Policies and Procedures

The Audit Committee is authorized by the Board of Directors to review the performance of the Company’s external auditors and approve in advance provision of services other than auditing and to consider the independence of the external auditors, including reviewing the range of services provided in the context of all consulting services bought by the Company. The Audit Committee is authorized to approve any non-audit services or additional work which the Chairman of the Audit Committee deems as necessary who will notify the other member of the Audit Committee of such non-audit or additional work.

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External Auditor Service Fees

All fees billed by KPMG, LLP, the Company’s external auditors during the two most recently completed financial years are as follows:

	Year ended December 31, 2017	Year ended December 31, 2016
Audit Fees	CAD$354,250	CAD$304,000
Audit-Related Fees	CAD$nil	CAD$nil
Tax Fees	CAD$90,876	CAD$69,831
All Other Fees	CAD$nil	CAD$nil
Total	CAD$445,126	CAD$373,831

Audit fees: All services performed by KPMG, LLP in connection with the review of annual consolidated financial statements of the Company including services performed to comply with generally accepted auditing standards. These services include the review of quarterly financial statements in accordance with generally accepted standards for a review, equity due diligence required by underwriters, regulators and other parties in connection with raising capital for the Company and internal control reviews.

Audit Related Fees: All services performed by the KPMG, LLP in connection with statutory audits, employee benefit plan audits and special audit procedures unrelated to the annual audit.

Tax Fees: All services performed by the KPMG, LLP in connection with tax planning, compliance and advice.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Other than as set forth herein and other than transactions carried out in the ordinary course of business of the Company or any of its subsidiaries, none of the directors or executive officers of the Company, any shareholder directly or indirectly beneficially owning, or exercising control or direction over, shares carrying more than 10% of the voting rights attached to the shares of the Company, nor an associate or affiliate of any of the foregoing persons has during the three most recently completed financial years, or during the current financial year, had any material interest, direct or indirect, in any transactions that materially affected or is reasonably expected to materially affect the Company or any of its subsidiaries.

MATERIAL CONTRACTS

In connection with the GAA Acquisition, on December 2, 2014, the Company entered into a definitive acquisition agreement with GAA and also acquired the business interest contained in a management services agreement held by another private entity. Copies of both definitive agreements pertaining to the GAA Acquisition have been filed on SEDAR and are available at the Company’s public profile page at www.sedar.com. The Company paid $58,623,000 at closing with up to an additional $14,655,000 payable within 4.5 years based on the acquired business satisfying certain financial performance requirements.

On June 26, 2017, the Company amended the Amended Scotia Facility to provide financing up to $100,000,000 via the Amended Scotia Facility. The Amended Scotia Facility has a maturity date of June 26, 2020. In conjunction with this amendment, the Company paid and accrued fees of $501,565. The amendment was determined to be a substantial modification and the Company extinguished the previous Scotia facility and wrote off deferred financing costs related to the previous facility of $173,511. As at December 31, 2017, the Company had drawn $61,700,000 under the Scotia Credit Facility. The Facility is repayable in full at maturity, with scheduled principal repayments on a quarterly basis beginning September 30, 2017 based on the initial principal issued under the term Facility. The Facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin. At December 31, 2017, the interest rate on the Facility was 4.07%. The Facility is secured by the assets of the Company.

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The Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

A copy of the credit agreement has been filed on SEDAR and is available at the Company’s public profile page at www.sedar.com.

In conjunction with the increase of the Scotia Facility, the Company repaid in full the principal owing on the Crown Note of CAD$22,500,000 ($17,043,750) with related interest prepayment penalties and other extinguishment costs of CAD$1,568,384 ($1,188,051). AS a result of the extinguishment of the Crown Note, the Company recorded a finance expense of $1,789,882, representing the difference between the carrying value of the loan at extinguishment and the consideration transferred to extinguish its financial obligations under the Note.

Other than as set forth herein, there are no contracts that are material to our Company that were entered into other than in the ordinary course of business and not excepted from disclosure and filing requirements, and that were entered into within the financial year ended December 31, 2017.

LEGAL PROCEEDINGS

There are no material outstanding legal proceedings or regulatory actions to which we are party, nor, to our knowledge, are there any such proceedings or actions contemplated.

NAMES AND INTEREST OF EXPERTS

No person or company, whose profession or business gives authority to the statement, report, valuation or opinion, who is named as having prepared or certified a statement, report, valuation or opinion described or included in a filing, or referred to in a filing, made under National Instrument 51-102 by the Company during, or relating to, the Company’s most recently completed financial year holds any beneficial interest, direct or indirect, in any securities or property of the Company or of an associate or affiliate of the Company and no such person is expected to be elected, appointed or employed as a director, officer or employee of the Company or of an associate or affiliate of the Company and no such person is a promoter of the Company or an associate or affiliate of the Company. In particular, the current auditors of our Company are KPMG, LLP, Chartered Professional Accountants, 777, Dunsmuir Street Vancouver, British Columbia V7Y 1K3. KPMG, LLP has reported on our fiscal 2016 audited consolidated financial statements, which have been filed with the securities regulatory authorities. KPMG LLP have confirmed with respect to CRH, that they are independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations.

TRANSFER AGENTS AND REGISTRARS

Our transfer agent and registrar is Computershare Investor Services Inc., 100 University Avenue 9th Floor, North Tower, Toronto, Ontario, M5J 2Y1.

ADDITIONAL INFORMATION

Additional information relating to our Company is available under our Company’s profile on the SEDAR website at www.sedar.com.

EXECUTIVE COMPENSATION

Additional information, including directors’ and officers’ remuneration and indebtedness, principal holders of our securities, options to purchase securities and interests of insiders in material transactions, if applicable, is contained in the Company’s information circular for its most recent annual general meeting of security holders that involved the election of directors.

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ADDITIONAL FINANCIAL INFORMATION

Additional financial information relating to our Company is provided in our comparative financial statements and management’s discussion and analysis for the year ended December 31, 2017.

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SCHEDULE “A”

CRH Medical Corporation

(the “Company”)

AUDIT COMMITTEE MANDATE

Purpose

The audit committee (the “Audit Committee”) of CRH Medical Corporation (the “Corporation”) is responsible for ensuring accounting integrity and solvency. The Audit Committee is also responsible for ensuring the appropriateness of insurance and investment of liquid funds. The Audit Committee will assist the board of directors of the Corporation (the “Board”) in fulfilling its oversight responsibilities by:

• reviewing the integrity of the consolidated financial statements of the Corporation;

• appointing (subject to shareholder ratification if required), determining funding for, and overseeing the external auditor and reviewing the external auditor’s qualifications and independence;

• reviewing the performance of the Corporation’s external auditors;

• reviewing the timely compliance by the Corporation with all legal and regulatory requirements for audit and related financial functions of the Corporation;

• reviewing, and if applicable, approving, financial information contained in public filings of the Corporation prior to filing;

• reviewing earnings announcements of the Corporation prior to release to the public;

• reviewing the Corporation’s systems of and compliance with internal financial controls;

• reviewing the Corporation’s auditing, accounting and financial reporting processes;

• dealing with all complaints regarding accounting, internal accounting controls and auditing matters; and

• dealing with any issues that result from the reviews set forth above.

Membership

1. The Audit Committee will have a minimum of three members.

2. Each member of the Audit Committee must be independent. “Independent” shall have the meaning, given to it in National Instrument 52-110 - Audit Committees, as may be amended from time to time, and within the meaning of Section 301 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”), the rules promulgated thereunder by the Securities and Exchange Commission (the “SEC”) and the rules of the NYSE MKT, and, as such, shall be free from any relationship that may interfere with the exercise of his or her independent judgment as a member of the Audit Committee.

3. At the time of his or her appointment to the Audit Committee, each member of the Audit Committee shall be financially literate. “Financial literacy” shall be determined by the Board in the exercise of its business judgment, and shall include the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Corporation’s financial statements.

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4. At least one member of the Audit Committee shall be an “audit committee financial expert” within the meaning of Section 407 of Sarbanes-Oxley and the rules promulgated thereunder by the SEC.

5. Appointments and replacements to the Audit Committee will be made by the Board and will be reviewed on an annual basis. The Board will provide for continuity of membership, while at the same time allowing fresh perspectives to be added. Each member of the Audit Committee will automatically cease to be a member if he or she ceases to be an independent director.

6. The Chair of the Audit Committee will be appointed by a vote of the Board on an annual basis.

Meetings

1. The Audit Committee may meet as many times per year as necessary to carry out its responsibilities, but must meet at least once every quarter. No business may be transacted at a meeting unless a quorum of the Audit Committee is present. Two members of the Audit Committee shall constitute a quorum.

2. The Audit Committee shall maintain minutes or other forms of records of the meetings and activities of the Audit Committee in sufficient detail to convey the substance of all discussions held, and shall report to the Board, within a reasonable time period, the proceedings of the Audit Committee and any recommendations made by the Audit Committee.

3. Meetings of the Audit Committee will be held at the request of any member of the Audit Committee or at the request of the Corporation’s external auditors. The Corporation’s external auditor is entitled to receive notice of every meeting of the Audit Committee and to attend and be heard at every meeting, at the expense of the Corporation and, if so requested by a member of the Audit Committee, shall attend every meeting of the committee held during the term of office of the auditor.

4. The Audit Committee may invite to a meeting any officers or employees of the Corporation, legal counsel, advisors and other persons whose attendance it considers necessary or desirable in order to carry out its responsibilities. Provision will be made to meet privately with external auditors.

Financial Review

1. The Audit Committee will review the Corporation’s financial statements, management discussion and analysis (“MD&A”) and the related press releases before such documents are presented to the Board or disclosed publicly, as the case may be.

2. The Audit Committee will review the interim financial statements of the Corporation, the related MD&A, and the press release thereon. If advisable, the Audit Committee shall approve, on behalf of the Board, the interim financial statements and related MD&A for public disclosure.

3. The Audit Committee will review the annual audited financial statements of the Corporation, the auditor’s report thereon, the related MD&A, and the press release thereon. If advisable, the Audit Committee shall approve and recommend for Board approval the annual financial statements and related MD&A.

4. The Audit Committee will review other financial information and financial documents that require the approval of the Board. These will include statements in prospectuses and other offering memoranda and statements required by regulatory authorities. After completing its review, if advisable, the Audit Committee shall approve and recommend for Board approval such financial information.

5. The Audit Committee will issue any necessary reports required of the Audit Committee to be included in the Corporation’s annual proxy materials.

6. The Audit Committee will review and discuss with management and the external auditor any major issue as to the adequacy and effectiveness of internal controls over the accounting and financial reporting systems of the

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Corporation, either directly, or through the external auditors or other advisors and obtain and review a report from the external auditor, at least annually, regarding the same; and the Audit Committee will review and discuss with management and the external auditor any special steps adopted in light of material internal control deficiencies and the adequacy of disclosures about changes in internal controls over financial reporting.

7. The Audit Committee will review, with the external auditors, the results of the external audit and any changes in accounting practices or policies, or in the financial statements as a result thereof. In addition, the Audit Committee will review any accruals, provisions, or estimates that have a significant effect upon the financial statements, as well as other sensitive matters such as disclosure of related party transactions.

8. The Audit Committee will discuss with management and the external auditor any correspondence with regulators or governmental agencies and any published reports that raise material issues regarding the Corporation’s financial statements or accounting policies.

Auditors

1. The Audit Committee is responsible for overseeing the work of the external auditor and will communicate directly with the external auditors as required. The external auditor of the Corporation must report directly to the Audit Committee.

2. The Audit Committee shall review and, if advisable, select and recommend for Board approval the external auditors to be nominated and the compensation of such external auditor. The Audit Committee shall have ultimate authority to approve all audit engagement terms and fees.

3. The Audit Committee will evaluate the qualifications, performance and independence of the external auditor and the senior audit partners having primary responsibility for the audit, including considering whether the auditor’s quality controls are adequate.

4. The Audit Committee will receive from the external auditor a formal written statement delineating all relationships between the external auditor and the Corporation and will actively engage in a dialogue with the external auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the external auditors.

5. The Audit Committee must pre-approve all non-audit services to be provided to the Corporation by the external auditor. Notwithstanding the foregoing, the Audit Committee: (a) may delegate to one or more members the authority to pre-approve any non-audit service to be provided by the external auditor, to the extent permitted by applicable law, provided that any pre-approvals granted pursuant to such delegation will be reported to the full Audit Committee at its next scheduled meeting; and (b) establish policies and procedures, from time to time, pre-approving certain non-audit services to be provided by the external auditor, provided (i) such pre-approval policies and procedures are detailed as to the particular service, (ii) the Audit Committee is informed of each non-audit service, and (iii) the procedures do not include delegation of the Audit Committee’s responsibilities to management.

6. The Audit Committee will review and approve the Corporation’s hiring of partners, employees, former partners and former employees of the present and former external auditor of the Corporation.

7. The Audit Committee has the authority, to the extent it deems necessary or appropriate, to retain independent legal, accounting or other advisors. The Corporation will provide appropriate funding, as determined by the Audit Committee, for payment of compensation to the external auditor for the purpose of rendering or issuing an audit report or performing other audit, review or attest services and to any advisors employed by the Audit Committee.

Miscellaneous

1. The Audit Committee will establish procedures for the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters and for the confidential,

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anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.

2. The Audit Committee will review the policies and practices of the Corporation regarding the regular examination of officers’ expenses and perquisites, including the use of the assets of the Corporation.

3. The Corporation must provide appropriate funding, as determined by the Audit Committee, for payment of ordinary administrative expenses of the Audit Committee that are necessary or appropriate in carrying out its duties.

4. The Audit Committee will review and, if advisable, approve all related party transactions.

5. The Audit Committee will review and reassess the adequacy of this mandate as it deems appropriate but no less than annually.

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EX-1.2

Exhibit 1.2

Consolidated Financial Statements

(Expressed in United States dollars)

CRH MEDICAL CORPORATION

Years ended December 31, 2017 and 2016

MANAGEMENT’S REPORT

The accompanying consolidated financial statements of CRH Medical Corporation are the responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been prepared by management in accordance with International Financial Reporting Standards, as issued by the International Accounting Standards Board, and where appropriate, reflect management’s best estimates and assumptions based upon information available at the time that these estimates and assumptions were made.

Management is responsible for establishing and maintaining a system of internal controls over financial reporting designed to provide reasonable assurance as to the reliability of financial information and the safeguarding of assets.

The Board of Directors is responsible for ensuring that management fulfills its responsibility for financial reporting and internal control. The Board of Directors exercises this responsibility principally through the Audit Committee. The Audit Committee consists of directors not involved in the daily operations of the Company. The Audit Committee is responsible for engaging the external auditor, and meets with management and the external auditors to satisfy itself that management’s responsibilities are properly discharged and to review the financial statements prior to their presentation to the Board of Directors for approval.

The Company’s external auditors, who are appointed by the shareholders, conducted an independent audit in accordance with Canadian generally accepted auditing standards and express their opinion thereon.

Chief Executive Officer	Chief Financial Officer
(signed) “Edward Wright”	(signed) “Richard Bear”
March 2, 2018	March 2, 2018

	KPMG LLP Chartered Professional Accountants PO Box 10426 777 Dunsmuir Street Vancouver BC V7Y 1K3 Canada	Telephone Fax Internet	(604) 691-3000 (604) 691-3031 www.kpmg.ca

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of CRH Medical Corporation

We have audited the accompanying consolidated financial statements of CRH Medical Corporation, which comprise the consolidated balance sheets as at December 31, 2017 and December 31, 2016, the consolidated statements of operations and comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of CRH Medical Corporation as at December 31, 2017 and December 31, 2016, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Chartered Professional Accountants

March 2, 2018

Vancouver, Canada

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of

independent member firms affiliated with KPMG International Cooperative (“KPMG International”),

a Swiss entity.

KPMG Canada provides services to KPMG LLP.

 CRH MEDICAL CORPORATION

  Consolidated Balance Sheets

  (Expressed in United States dollars)

  As at December 31, 2017 and 2016

		Notes		2017		2016
Assets
Current assets:
	Cash and cash equivalents			$	12,486,884	$	9,507,004
	Trade and other receivables		8		15,486,312		9,836,739
	Current tax assets				-		1,551,140
	Prepaid expenses and deposits				889,882		550,811
	Inventories				423,445		300,760
					29,286,523		21,746,454
Non-current assets:
	Property and equipment		10		364,366		324,198
	Intangible assets		11		163,092,606		133,667,311
	Derivative asset		12		-		1,261,298
	Deferred tax assets		16		5,707,383		6,539,621
					169,164,355		141,792,428
Total assets				$	198,450,878	$	163,538,882
Liabilities
Current liabilities:
	Trade and other payables		9	$	5,661,844	$	3,229,685
	Employee benefits				500,754		226,874
	Current tax liabilities				577,553		2,067,671
	Notes payable and bank indebtedness		13		1,101,468		5,791,787
	Deferred consideration		4		906,956		773,134
	Loan				435,000		-
					9,183,575		12,089,151
Non-current liabilities:
	Deferred consideration		4		2,226,737		3,133,694
	Notes payable and bank indebtedness		13		60,228,851		38,138,774
	Earn-out obligation		19		1,875,427		13,149,130
	Deferred tax liabilities		16		-		101,846
					64,331,015		54,523,444
Equity
	Share capital		15		53,925,537		52,706,484
	Contributed surplus				8,390,026		7,142,964
	Accumulated other comprehensive income loss				(66,772)		(66,772)
	Retained earnings				5,410,181		733,155
Total equity attributable to shareholders of the Company					67,658,972		60,515,831
	Non-controlling interest				57,277,316		36,410,456
Total equity					124,936,288		96,926,287
Total liabilities and equity				$	198,450,878	$	163,538,882

See accompanying notes to consolidated financial statements.

Approved on behalf of the Board:

(signed) “Edward Wright”	Director	(signed) “Anthony Holler”	Director
Edward Wright		Anthony Holler

1

CRH MEDICAL CORPORATION

Consolidated Statements of Operations and Comprehensive Income

(Expressed in United States dollars, except for number of shares)

Years ended December 31, 2017 and 2016

		Notes		2017		2016
Revenue:
	Anesthesia services		22	$	88,741,075	$	67,821,879
	Product sales		22		11,501,005		10,532,753
					100,242,080		78,354,632
Expenses:
	Anesthesia services expense		5		74,315,424		45,229,986
	Product sales expense		6		4,997,550		4,503,110
	Corporate expense		7		6,375,110		3,866,696
					85,688,084		53,599,792
Operating income					14,553,996		24,754,840
	Finance income		18		(11,747,441)		(1,007,673)
	Finance expense		18		6,330,812		5,431,035
					(5,416,629)		4,423,362
Income before tax					19,970,625		20,331,478
	Income tax expense		16		6,302,507		4,255,150
Net and comprehensive income				$	13,668,118	$	16,076,328
Attributable to:
	Shareholders of the Company			$	6,558,966	$	10,564,233
	Non-controlling interest				7,109,152		5,512,095
				$	13,668,118	$	16,076,328
Earnings per share attributable to shareholders
	Basic		15(f)	$	0.089	$	0.147
	Diluted		15(f)	$	0.087	$	0.142
Weighted average shares outstanding:
	Basic				73,712,670		71,826,884
	Diluted				75,486,210		74,203,830

See accompanying notes to consolidated financial statements.

2

 CRH MEDICAL CORPORATION

  Consolidated Statements of Changes in Equity

  (Expressed in United States dollars, except for number of shares)

  For the years ended December 31, 2017 and 2016

	Number of shares		Share capital		Contributed surplus		Accumulated other comprehensive loss		Retained earnings (deficit)		Non- controlling interest		Total equity
Balance as at January 1, 2016		71,206,547	$	51,066,044	$	6,556,951	$	(66,772)	$	(9,831,078)	$	9,249,220	$	56,974,365
Total net and comprehensive income for the year		-		-		-		-		10,564,233		5,512,095		16,076,328
Transactions with owners, recorded directly in equity:
Stock-based compensation expense		-		-		1,376,674		-		-		-		1,376,674
Common shares purchased on exercise of options		1,358,687		1,044,077		(457,389)		-		-		-		586,688
Common shares issued on vesting of share units		80,000		229,378		(229,378)		-		-		-		-
Exercise of broker warrants (note 15)		100,705		366,985		(103,894)		-		-		-		263,091
Distributions to members		-		-		-		-		-		(5,685,181)		(5,685,181)
Acquisition of non-controlling interest (note 4)		-		-		-		-		-		27,334,322		27,334,322
Balance as at December 31, 2016		72,745,939	$	52,706,484	$	7,142,964	$	(66,772)	$	733,155	$	36,410,456	$	96,926,287
Total net and comprehensive income for the year		-		-		-		-		6,558,966		7,109,152		13,668,118
Transactions with owners, recorded directly in equity:
Stock based compensation expense		-		-		3,454,011		-		-		-		3,454,011
Common shares purchased on exercise of options		247,500		208,125		(147,730)		-		-		-		60,395
Common shares issued on vesting of share units		1,292,549		1,992,198		(2,059,219)		-		-		-		(67,021)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 15(e))		(1,267,400)		(928,244)		-		-		(1,780,244)		-		(2,708,488)
Common shares repurchased in connection with normal course issuer bid and held as treasury shares (72,400 treasury shares) (note 15(e))		-		(53,026)		-		-		(101,696)		-		(154,722)
Distributions to members		-		-		-		-		-		(12,899,353)		(12,899,353)
Acquisition of non-controlling interest (note 4)		-		-		-		-		-		26,657,061		26,657,061
Balance as at December 31, 2017		73,018,588	$	53,925,537	$	8,390,026	$	(66,772)	$	5,410,181	$	57,277,316	$	124,936,288

  See accompanying notes to consolidated financial statements.

3

 CRH MEDICAL CORPORATION

  Consolidated Statements of Cash Flows

  (Expressed in United States dollars)

  For the years ended December 31, 2017 and 2016

		Notes		2017		2016
Cash provided by (used in)
Operating activities:
	Net income			$	13,668,118	$	16,076,328
	Adjustments for:
	Depreciation of property, equipment and intangibles				23,805,145		14,932,118
	Impairment of intangible asset		11		6,653,015		-
	Stock-based compensation		15		3,454,011		1,376,674
	Unrealized foreign exchange				73,735		(1,104,700)
	Finance (income) expense		18		(5,504,713)		5,431,035
	Income tax expense		16		6,302,507		4,255,150
	Operating activity before changes in operating assets and liabilities				48,451,818		40,966,605
	Taxes paid				(5,509,915)		(5,466,601)
	Change in trade and other receivables				(5,649,573)		(2,745,190)
	Change in prepaid expenses				(339,071)		(66,016)
	Change in inventories				(122,685)		(45,836)
	Change in trade and other payables				2,432,159		195,322
	Change in employee benefits				273,880		84,298
	Cash provided by operating activities				39,536,613		32,922,582
Financing activities
	Proceeds from loans		4		566,819		-
	Repayment of loans		4		(131,819)		(266,994)
	Payment of interest on notes payable and bank indebtedness		13		(3,563,837)		(3,135,765)
	Repayment of notes payable and bank indebtedness		13		(52,543,750)		(14,000,000)
	Payment of financing fees		13		(445,598)		(579,460)
	Proceeds on bank indebtedness		13		68,200,000		26,000,000
	Payment of deferred consideration				(900,000)		-
	Distributions to non-controlling interest				(12,899,353)		(5,685,180)
	Proceeds on settlement of derivative asset				1,313,874		-
	Proceeds from the exercise of broker warrants				-		263,091
	Proceeds from the issuance of shares relating to stock-based compensation				(6,626)		586,688
	Repurchase of shares for cancellation		15(e)		(2,863,210)		-
	Cash (used in) provided by financing activities				(3,273,500)		3,182,380
Investing activities
	Acquisition of property and equipment				(125,285)		(113,196)
	Acquisition of anesthesia services providers		4		(33,153,268)		(30,062,239)
	Cash used in investing activities				(33,278,553)		(30,175,435)
Effects of foreign exchange on cash and cash equivalents					(4,680)		5,133
Increase in cash and cash equivalents					2,979,880		5,934,660
Cash and cash equivalents, beginning of year					9,507,004		3,572,344
Cash and cash equivalents, end of year				$	12,486,884	$	9,507,004

See accompanying notes to consolidated financial statements.

4

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

1. Reporting entity:

CRH Medical Corporation (“CRH” or “the Company”) was incorporated on April 21, 2001 and is incorporated under the Business Corporations Act (British Columbia). The Company provides anesthesiology services to gastroenterologists in the United States through its subsidiaries and also specializes in the treatment of hemorrhoids utilizing its treatment protocol and patented proprietary technology.

CRH principally operates in the United States and is headquartered from its registered offices located at Unit 578, 999 Canada Place, Vancouver, British Columbia, Canada.

2. Basis of preparation:

(a) Statement of compliance:

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorized for issue by the Board of Directors on March 2, 2018.

(b) Basis of measurement:

The Company’s consolidated financial statements have been prepared on a going concern and historical cost basis except for certain financial instruments which are recorded at fair value.

(c) Functional and presentation currency:

These consolidated financial statements are presented in United States dollars, which is the Company’s presentation currency. The functional currency of the Company’s parent company and subsidiaries is the United States dollar.

5

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

2. Basis of preparation (continued):

(d) Use of estimates, assumptions and judgments:

The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ from those estimates.

(i) Use of estimates and assumptions:

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant areas requiring the use of management estimates relate to the assessment for impairment and useful lives of intangible assets, determining the fair value of share units, estimates supporting reported anesthesia revenues, the recoverability of trade receivables, the valuation of certain long term liabilities and other assets, including liabilities relating to contingent consideration, the vesting term for share units with market and non-market based performance targets, the valuation of acquired intangibles, the valuation of deferred tax assets and the allocation of purchase consideration to the fair value of assets acquired and liabilities assumed.

Information relating to these estimates and how they are determined may be found in notes 4, 12, 13, 15 and 19.

(ii) Judgments:

Significant judgments made by management in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements includes the determination of functional currency and the accounting classification of financial instruments. In conjunction with the Company’s business acquisitions, these judgments also include the Company’s determination of control for the purposes of consolidation and the Company’s definition of a business.

Information relating to significant judgment areas may be found in notes 2, 4 and 12.

6

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies:

The accounting policies have been applied consistently by the subsidiaries of the Company.

(a) Basis of consolidation:

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has power over an investee, when the Company is exposed, or has rights, to variable returns from the investee and when the Company has the ability to affect those returns through its power over the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control.

(b) Cash equivalents:

The Company considers all highly liquid investments with an original maturity of 90 days or less, when acquired, to be cash equivalents, which are carried at amortized cost and are classified as loans and receivables.

(c) Foreign currency:

Transactions in foreign currencies are translated to the respective functional currencies of the subsidiaries of the Company at exchange rates at the dates of the transactions.

Period end balances of monetary assets and liabilities in foreign currency are translated to the respective functional currencies using period end foreign currency rates. Foreign currency gains and losses arising from settlement of foreign currency transactions are recognized in earnings. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

(d) Revenue recognition:

Revenue from product sales and anesthesia services in the normal course of activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and contractual adjustments. The Company recognizes revenue from product sales at the time the product is shipped, which is when title passes to the customer, and when all significant contractual obligations have been satisfied, collection is probable and the amount of revenue can be estimated reliably. Revenue from the performance of anesthesia services is measured at the fair value of the consideration received or receivable, net of contractual allowances and other discounts. The Company recognizes net patient revenue at the time the anesthesia services are performed; this aligns with when all significant contractual obligations related to the anesthesia services have been satisfied, collection is probable and the amount of revenue can be estimated reliably. Provisions for contractual allowances and discounts are recognized on an accrual basis. These amounts are deducted from gross service revenue to determine net service revenue.

7

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(e) Employee benefits:

Salaries and short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under cash bonus plans if the Company has a legal or constructive obligation to pay an amount as a result of services rendered by an employee and the obligation can be estimated reliably.

(f) Inventories:

Inventories are measured at the lower of cost, determined using the first-in first-out method, and net realizable value. Inventory costs include the purchase price and other costs directly related to the acquisition of inventory, and bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the Company’s ordinary course of business, less the estimated costs of completion and selling expenses.

(g) Property and equipment:

Property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Where the costs of certain components of an item of property and equipment are significant in relation to the total cost of the item and have different useful lives, they are accounted for and depreciated separately.

The estimated useful lives and the methods of depreciation for the current and comparative periods are as follows:

Asset	Basis	Rate
Computer equipment	Declining balance	30%
Computer software	Declining balance	100%
Furniture and equipment	Declining balance	20%
Leasehold improvements	Straight-line	Shorter of initial lease
		term or useful life
Injection mold	Straight-line	5 years

These depreciation methods most closely reflect the expected pattern of consumption of the future economic benefits embodied in the asset.

Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting period-end and adjusted if appropriate.

8

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(h) Intangible assets:

Intangible assets, consisting of acquired exclusive professional service agreements to provide anesthesia services and the cost of acquiring patents, are recorded at historical cost. For patents, costs also include legal costs involved in expanding the countries in which the patents are recognized to the extent expected cash flows from those countries exceed these costs over the amortization period and costs related to new patents. The amortization term for professional services agreements are based on the contractual terms of the agreements. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are measured at cost less accumulated amortization and accumulated impairment losses. Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line		15 years
Intellectual property new technology	Straight-line		20 years
Exclusive professional services agreements	Straight-line		2.5 to 15 years

(i) Financial instruments:

Financial assets and financial liabilities are initially measured at fair value and are subsequently measured based on their classification as described below. Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or liability, other than financial assets and liabilities classified at fair value through earnings, are added or deducted from the fair value of the respective financial asset or financial liability on initial recognition. Transaction costs that are directly attributable to the acquisition of a financial asset or financial liability classified at fair value through earnings are recognized immediately in earnings.

Financing fees related to debt are recorded as a reduction to the debt balance and amortized to finance expense using the effective interest rate method.

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

The Company’s financial instruments are classified into the following categories: at fair value through earnings, loans and receivables, available-for-sale financial assets and other financial liabilities. The classification depends on the nature and purpose of the financial instrument and is determined at the time of initial recognition.

The Company has classified cash and cash equivalents, trade and other receivables as loans and receivables. Loans and receivables are initially measured at fair value and are subsequently re-measured at amortized cost using the effective interest method, less any impairment losses.

9

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(i) Financial instruments (continued):

Financial assets at fair value through earnings are financial assets that are held for trading and include derivative instruments that are not included in a qualifying hedging relationship. Financial assets classified as financial assets at fair value through earnings are initially measured at fair value with any gains or losses arising on re-measurement recognized in earnings.

Financial liabilities classified at fair value through earnings are financial liabilities that are held for trading or designated into this category at inception. Financial liabilities classified as financial liabilities at fair value through earnings include contingent consideration and are initially measured at fair value with any gains or losses arising on re-measurement recognized through earnings. The Company has classified its earn-out obligation as financial liabilities at fair value through earnings.

Other financial liabilities includes trade payables, other payables, note payables and bank indebtedness and are initially measured at fair value and are subsequently measured at amortized cost using the effective interest method.

The Company has classified trade and other payables, employee benefit obligations, short term advances, loans, notes payable and bank indebtedness as other financial liabilities.

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in any of the other categories. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented within equity. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to earnings. The Company has no instruments classified as available-for-sale.

Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all of the risks and rewards of ownership.

10

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(j) Impairment:

Financial assets:

Financial assets not carried at fair value through earnings are assessed at each reporting date to determine whether there is objective evidence that they are impaired. The Company considers that a financial asset is impaired if objective evidence indicates that a loss event which negatively affected the estimated future cash flows has occurred after initial recognition of the asset.

An impairment test is performed, on an individual basis, for each material financial asset. Other individually non-material financial assets are tested as groups of financial assets with similar risk characteristics. Impairment losses are recognized in earnings.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in earnings and reflected in an allowance account against the respective financial asset. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through earnings.

A permanent impairment loss for an available-for-sale investment is recognized by transferring the cumulative loss previously recognized in other comprehensive income to earnings.

Non-financial assets:

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the recoverable amount is estimated.

The recoverable amount of an asset or a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows from other assets or groups of assets (cash-generating unit). Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An asset’s carrying amount, increased through reversal of an impairment loss, must not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

11

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(k) Income taxes:

Income tax expense is comprised of current and deferred tax. Current tax and deferred tax are recognized into earnings except to the extent that it relates to a business combination, or items recognized directly in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable earnings, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but are intended to be settled on a net basis or the tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(l) Share-based compensation:

The Company records share-based compensation related to stock options and share units granted using the fair value based method estimated using either the Black-Scholes model or Binomial method. Under this method, compensation cost is measured at fair value at the date of grant and expensed as employee benefits over the period in which employees unconditionally become entitled to the award. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date.

(m) Share capital:

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares, stock options and share options are recognized as a deduction from equity, net of any tax effects.

12

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(n) Earnings per share:

The Company presents basic and diluted earnings per share (EPS) data for its common shares. Basic EPS is calculated by dividing the net income or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held, if applicable. Diluted EPS is determined by adjusting the income or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held if applicable, for the effects of all dilutive potential common shares.

(o) Provisions:

Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are determined by discounting expected future cash outflows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Management uses judgment to estimate the amount, timing and probability of the liability based on facts known at the reporting date. The unwinding of the discount is recognized as a finance expense.

(p) Segment reporting:

The Company’s operating segments consist of the sale of medical products and the provision of anesthesia services.

(q) Finance costs:

Finance cost is primarily comprised of interest on the Company’s notes payable and bank indebtedness and also includes the amortization of costs incurred to obtain loan financing and any fees in respect of arranging loan financing. Deferred finance costs are amortized using the effective interest method over the term of the related loan financing. Deferred finance costs are presented as a reduction to the related liability.

Foreign exchange gains and losses are reported on a net basis as either finance income or finance expense as the finance costs relate to Canadian dollar denominated debt.

13

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(r) Business combinations:

Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. On an acquisition-by-acquisition basis, any non-controlling interest is measured either at fair value of the non-controlling interest or at the fair value of the proportionate share of the net assets acquired.

Contingent consideration is measured at fair value on acquisition date and is included as part of the consideration transferred. The fair value of the contingent consideration liability is re-measured at each reporting date with the corresponding gain or loss being recognized in earnings.

(s) Adoption of new accounting standards:

The Company has not early adopted any amendment, standard or interpretation that has been issued by the IASB but is not yet effective. The Company has adopted the disclosure requirements in Disclosure Initiative (Amendments to IAS 7), which came into effect on January 1, 2017. Consequently, the Company has provided additional disclosure in relation to the changes in borrowings arising from financing activities for the year ended December 31, 2017 (see note 9). Adoption of this standard had no significant impact on the Company’s consolidated financial statements. Amendments, standards and interpretations that are issued but not yet effective are described in note 3(t).

(t) New standards and interpretations not yet applied:

(i) IFRS 9 - Financial Instruments:

On July 24, 2014 the IASB issued the complete IFRS 9 (IFRS 9 (2014)). IFRS 9 (2014) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2014), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. The standard also introduces additional changes relating to financial liabilities and amends the impairment model by introducing a new ‘expected credit loss’ model for calculating impairment.

14

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(t) New standards and interpretations not yet applied:

(i) IFRS 9 - Financial Instruments:

IFRS 9 (2014) aligns hedge accounting more closely with risk management. This does not fundamentally change the types of hedging relationships or the requirement to measure and recognize ineffectiveness, however it will provide more hedging strategies that are used for risk management to qualify for hedge accounting and introduce more judgment to assess the effectiveness of a hedging relationship. Special transitional requirements have been set for the application of the new general hedging model.

The Company will adopt IFRS 9 (2014) in its financial statements for the annual period beginning on January 1, 2018. The Company has evaluated the impact of IFRS 9 and has determined that IFRS 9 will not have a significant impact on the Company. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

(iv) IFRS 15 - Revenue Recognition:

On May 28, 2014 the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 15 will replace IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers, and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced which may affect the amount and/or timing of revenue recognized.

The new standard applies to contracts with customers. It does not apply to insurance contracts, financial instruments or lease contracts, which fall in the scope of other standards. The Company will adopt IFRS 15 in its financial statements for the annual period beginning on January 1, 2018. The Company has evaluated the impact of IFRS 15 and has determined that IFRS 15 will not have a significant impact on the Company other than additional required disclosures. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

15

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

3. Significant accounting policies (continued):

(t) New standards and interpretations not yet applied:

(v) IFRS 16 – Leases:

In January 2016, the IASB issued IFRS 16 – Leases, which supersedes IAS 17 – Leases. IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases. The standard establishes a single model for lessees to bring leases on-balance sheet while lessor accounting remains largely unchanged and retains the finance and operating lease distinctions. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted, but only if also applying IFRS 15 – Revenue from contracts with Customers. The Company is currently evaluating the impact on IFRS 16 on its financial statements.

16

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations:

During the year ended December 31, 2017, the Company completed six business combinations. All business combinations completed during the period have been included in the anesthesia segment of the Company and include the following:

Acquired Operation	Date Acquired	Consideration
DDAB, LLC (“DDAB”)	February 2017		$5,273,570
Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”)	March 2017		$3,401,819
West Florida Anesthesia Associates, LLC (“WFAA”)	August 2017		$5,840,000
Central Colorado Anesthesia Associates, LLC (“CCAA”)	September 2017		$7,888,919
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC (“RSA”)	September 2017		$7,248,960
Alamo Sedation Associates, LLC (“ASA”)	September 2017		$3,500,000

The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from the date of acquisition.

The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the assets and liabilities acquired at the acquisition date. Certain of the estimates of fair value, most notably the professional services agreements, are preliminary and may be subject to further adjustments.

	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Cash	$	4,089,791	$	3,401,819	$	5,840,000	$	7,888,919	$	7,248,960	$	3,500,000	$	31,969,489
Contingent consideration		1,183,779		-		-		-		-		-		1,183,779
Purchase consideration	$	5,273,570	$	3,401,819	$	5,840,000	$	7,888,919	$	7,248,960	$	3,500,000		33,153,268
Non-controlling interest		5,066,763		2,267,879		4,778,182		7,579,550		6,964,687		-		26,657,061
	$	10,340,333	$	5,669,698	$	10,618,182	$	15,468,469	$	14,213,647	$	3,500,000	$	59,810,329
Assets and liabilities acquired:
Exclusive professional services agreements		10,340,333	$	5,669,698	$	10,606,192	$	15,468,469	$	14,213,648	$	3,500,000	$	59,798,340
Pre-close trade receivables		525,000		-		-		-		-		-		525,000
Pre-close trade payables		(525,000)		-		-		-		-		-		(525,000)
Prepaid expenses and deposits		-		-		11,889		-		-		-		11,889
Fair value of net identifiable assets and liabilities acquired	$	10,340,333	$	5,669,698	$	10,618,081	$	15,468,469	$	14,213,648	$	3,500,000	$	59,810,229
Exclusive professional services agreements – amortization term		4.5 years		5 years		15 years		7 years		5 years		7 years
Acquisition costs expensed													$	570,900

The value of the acquired intangible assets, being exclusive professional services agreements, have been determined on a provisional basis and relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements and professional services agreements.

17

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

DDAB

In February 2017, a subsidiary of the Company entered into a membership interest purchase agreement to acquire 51% of the ownership interest in DDAB, LLC (“DDAB”), an anesthesia services provider in Georgia. The estimated purchase price under the agreement was $4,089,791 and was paid via cash. The purchase price was adjusted seven months following the acquisition date for actual cash collections in the months up to purchase. Contingent consideration of $1,183,779 was paid in the third quarter of 2017 with respect to the purchase price adjustment. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of DDAB which governs the operation of the acquired business. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of DDAB and, as a result, 100% of the financial results of DDAB have been included in the Company’s consolidated financial statements from the date of acquisition, being February 1, 2017. The non-controlling interest of $5,066,763 was determined based on 49% of the fair value of DDAB’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, the non-controlling interest shareholder of DDAB provided a working capital advance to DDAB totaling $71,819 at March 31, 2017. The working capital advance was repaid as of December 31, 2017.

OGAA

In March 2017, a subsidiary of the Company entered into a membership interest purchase agreement to acquire 60% of the ownership interest in Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”), an anesthesia services provider in Florida. The total purchase price under the agreement was $3,401,819 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of OGAA which governs the operation of the acquired entity. As a result of the 60% ownership interest acquired and the operating agreement, the Company has acquired control of OGAA and, as a result, 100% of the financial results of OGAA have been included in the Company’s consolidated financial statements from the date of acquisition, being March 15, 2017. The non-controlling interest of $2,267,879 was determined based on 40% of the fair value of OGAA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $90,000 and $60,000, respectively. The loans were repaid as of December 31, 2017.

18

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

WFAA

In August 2017, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 55% of the ownership interest in West Florida Anesthesia Associates, LLC (“WFAA”), an anesthesia services provider in Florida. The total purchase price under the agreement was $5,840,000 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of WFAA which governs the operation of the acquired entity. As a result of the 55% ownership interest acquired and the operating agreement, the Company has acquired control of WFAA and, as a result, 100% of the financial results of WFAA have been included in the Company’s consolidated financial statements from the date of acquisition, being August 1, 2017. The non-controlling interest of $4,778,182 was determined based on 45% of the fair value of WFAA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $82,500 and $67,500, respectively. The terms of the loans are such that they will be repaid first, prior to any future distributions and are non-interest bearing.

CCAA

In September 2017, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 51% of the ownership interest in Central Colorado Anesthesia Associates, LLC (“CCAA”), an anesthesia services provider in Colorado. The total purchase price under the agreement was $7,888,919 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of CCAA which governs the operation of the acquired entity. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of CCAA and, as a result, 100% of the financial results of CCAA have been included in the Company’s consolidated financial statements from the date of acquisition, being September 11, 2017. The non-controlling interest of $7,579,550 was determined based on 49% of the fair value of CCAA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $178,500 and $171,500, respectively. The terms of the loans are such that they will be repaid first, prior to any future distributions and are non-interest bearing.

19

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

RSA

In September 2017, a subsidiary of the Company entered into an agreement of contribution, merger and sale which resulted in the acquisition of a 51% ownership interest in Raleigh Sedation Associates, LLC (“RSA”) and Blue Ridge Anesthesia Associates, LLC (“BRSA”). Combined, these entities provide anesthesia services in North Carolina. The total purchase price under the agreement was $7,248,960 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of RSA and BRSA which governs the operation of the acquired entities. As a result of the 51% ownership interest acquired and the operating agreements, the Company has acquired control of RSA and BRSA, and, as a result, 100% of the financial results of these entities have been included in the Company’s consolidated financial statements from the date of acquisition, being September 21, 2017. The non-controlling interest of $6,964,687 was determined based on 49% of the fair value of RSA and BRSA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $204,000 and $196,000, respectively. The terms of the loans are such that they will be repaid first, prior to any future distributions and are non-interest bearing.

ASA

In September 2017, a subsidiary of the Company entered into an asset purchase agreement to purchase 100% of certain assets of an anesthesia services provider in the Texas. The total purchase price under the asset purchase agreement was $3,500,000 and was paid via cash. The Company has obtained control over the business through its contractual ability to direct the relevant activities of the assets acquired. The results of the operation of these assets has been included in the Company’s consolidated financial statements from the date of acquisition, being September 28, 2017.

In the year ended December 31, 2017, the above noted acquisitions contributed revenue and net earnings before tax as follows:

	Year ended December 31, 2017
	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Revenue	$	3,244,190	$	1,829,591	$	1,315,951	$	3,963,932	$	3,196,268	$	724,216	$	14,274,148
Net earnings (loss) before tax	$	(414,599)	$	(92,803)	$	504,231	$	2,101,049	$	1,358,055	$	290,830	$	3,746,763
Amortization	$	2,106,364	$	897,702	$	294,616	$	669,780	$	781,751	$	127,778	$	4,877,991

20

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

The following unaudited supplemental pro forma financial information presents information as if the acquisitions had been completed on January 1, 2017. The pro forma financial information presented below (unaudited) is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2017. The pro forma financial information (unaudited) presented includes amortization charges for acquired intangible assets based on the values assigned in the purchase price allocation.    Were the acquisitions completed on January 1, 2017, revenue for the Company would have been approximately $120.6 million and net income before tax would have been approximately $29.1 million.

	Year ended December 31, 2017
Pro Forma Information (unaudited)
	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Revenue	$	3,539,116	$	2,311,062	$	3,158,282	$	12,178,353	$	10,801,852	$	2,605,406	$	34,594,071
Net earnings (loss) before tax	$	(452,290)	$	(117,225)	$	1,210,154	$	6,670,023	$	4,589,574	$	1,046,277	$	12,946,513
Amortization	$	2,297,852	$	1,133,940	$	707,079	$	2,209,781	$	2,842,729	$	500,000	$	9,691,381

During the year ended December 31, 2016, the Company completed three business combinations. All business combinations completed during the year have been included in the anesthesia segment of the Company and include the following:

Acquired Operation	Date Acquired	Consideration
Austin Gastroenterology Anesthesia Associates, PLLC (“AGAA”)	May 2016		$16,821,896
Community Anesthesia, PLLC (“Community”)	June 2016		$13,636,639
Arapahoe Gastroenterology Anesthesia Associates, LLC (“Arapahoe”)	June 2016		$  3,700,000

The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from the date of acquisition.

21

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the assets and liabilities acquired at the acquisition date. Certain of the estimates of fair value, most notably the professional services agreements, are preliminary and may be subject to further adjustments.

	Austin		Community		Arapahoe		Total
Cash	$	13,000,000	$	13,636,639	$	3,700,000	$	30,336,639
Deferred consideration		3,821,895		-		-		3,821,895
Purchase consideration		16,821,895		13,636,639		3,700,000		34,158,534
Non-controlling interest		16,162,214		7,342,806		3,554,902		27,059,922
	$	32,984,109	$	20,979,445	$	7,254,902	$	61,218,456
Assets and liabilities acquired:
Exclusive professional services agreements		32,984,109		20,979,445	$	7,254,902	$	61,218,456
Pre-close trade receivables		-		917,998		-		917,998
Pre-close trade payables		-		(917,998)		-		(917,998)
Fair value of net identifiable assets and liabilities acquired	$	32,984,109	$	20,979,445	$	7,254,902	$	61,218,456
Exclusive professional services agreements – amortization term		10 years		5 years		5 years
Acquisition costs expensed in relation to above acquisitions							$	348,251

The value of the acquired intangible assets, being exclusive professional services agreements, have been determined on a provisional basis and relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. As at the acquisition dates, the exclusive professional services agreements had various terms and after the initial term renew annually unless notice of termination is received. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements.

22

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

AGAA

In May 2016, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 51% of the ownership interest in Austin Gastroenterology Anesthesia Associates, PLLC (“AGAA”), an anesthesia services provider in Texas. The total purchase price under the asset contribution and exchange agreement was $17,200,000 and was paid via a combination of cash ($13,000,000) and deferred cash consideration ($4,200,000). The deferred consideration is payable annually over a period of four years. At the date of acquisition, the deferred consideration was discounted to its fair value ($3,821,895) using a discount rate consistent with the Company’s underlying credit risk at the time of the transaction. This resulted in total consideration of $16,821,895 for this transaction. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of AGAA which governs the operation of AGAA. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of AGAA and, as a result, 100% of the financial results of AGAA have been included in the Company’s consolidated financial statements from the date of acquisition, being May 31, 2016. The non-controlling interest of $16,162,214 was determined based on 49% of the fair value of AGAA’s net identifiable assets as estimated by the Company. The deferred consideration has been presented as $773,134 as a current liability and $3,133,693 as a long-term liability in the balance sheet.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed additional member contributions of $285,600 and $274,400, respectively.

Community

In June 2016, a subsidiary of the Company entered into an membership interest purchase agreement to acquire 65% of the ownership interest in Community Anesthesia, PLLC (“Community”), an anesthesia services provider in Massachusetts. The total purchase price under the asset contribution and exchange agreement was $13,636,639 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of Community which governs the operation of the acquired business. As a result of the 65% ownership interest acquired and the operating agreement, the Company has acquired control of Community and, as a result, 100% of the financial results of Community have been included in the Company’s consolidated financial statements from the date of acquisition, being June 15, 2016. The non-controlling interest of $7,342,806 was determined based on 35% of the fair value of Community’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, the non-controlling interest shareholder of Community provided a working capital advance to Community totaling $100,000 at September 30, 2016. This working capital advance was repaid at December 31, 2016.

23

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

4. Business combinations (continued):

Arapahoe

In June 2016, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 51% of the ownership interest in Arapahoe Gastroenterology Anesthesia Associates, LLC (“Arapahoe”), an anesthesia services provider in Colorado. The total purchase price under the asset contribution and exchange agreement was $3,700,000 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of Arapahoe which governs the operation of the acquired entity. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of Arapahoe and, as a result, 100% of the financial results of Arapahoe have been included in the Company’s consolidated financial statements from the date of acquisition, being June 30, 2016. The non-controlling interest of $3,554,902 was determined based on 49% of the fair value of Arapahoe’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $107,100 and $102,900, respectively. These loans were repaid as at December 31, 2016.

In the year ended December 31, 2016, the above noted acquisitions contributed revenue and net earnings before tax as follows:

	Year ended December 31, 2016
	AGAA		Community		Arapahoe		Total
Revenue	$	11,593,180	$	4,482,059	$	2,492,127	$	18,567,366
Net earnings (loss) before tax	$	5,643,814	$	(348,740)	$	971,899	$	6,266,973
Amortization	$	1,924,073	$	2,272,773	$	725,490	$	4,922,336

The following unaudited supplemental pro forma financial information presents information as if the acquisitions had been completed on January 1, 2016. The pro forma financial information presented below (unaudited) is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2016. The pro forma financial information (unaudited) presented includes amortization charges for acquired intangible assets based on the values assigned in the purchase price allocation. Were the acquisitions completed on January 1, 2016, revenue for the Company would have been approximately $90.8 million and net income before tax would have been approximately $24.3 million.

	Year ended December 31, 2016
Pro Forma Information (unaudited)
	AGAA		Community		Arapahoe		Total
Revenue	$	18,573,853	$	7,733,243	$	4,658,181	$	30,965,277
Net earnings before tax	$	9,042,159	$	(601,708)	$	1,816,634	$	10,257,085
Amortization	$	3,298,411	$	4,195,889	$	1,450,980	$	8,945,280

24

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

5. Anesthesia services expense:

For the years ended December 31:

	2017		2016
Employee related	$	29,032,414	$	19,092,648
Depreciation and amortization		23,732,757		14,834,481
Bad debt expense		5,235,934		3,932,374
Office related		6,778,232		5,344,226
Impairment of professional services contract (note 11)		6,653,015		-
Acquisition expense		668,317		426,694
Medical supplies		677,905		690,551
Stock based compensation		426,416		201,538
Travel and entertainment		318,787		154,778
Professional fees		503,485		443,234
Insurance		288,162		108,637
Corporate		-		825
	$	74,315,424	$	45,229,986

6. Product sales expense:

For the years ended December 31:

	2017		2016
Employee related	$	1,629,851	$	1,427,602
Product cost and support		2,207,057		2,031,707
Professional fees		418,385		279,013
Office related		298,672		253,672
Stock based compensation		372,223		398,388
Insurance		14,749		54,326
Depreciation and amortization		56,907		44,863
Foreign exchange		(294)		13,539
	$	4,997,550	$	4,503,110

25

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

7. Corporate expense:

For the years ended December 31:

	2017		2016
Employee related	$	1,439,041	$	1,376,208
Professional fees		947,572		533,467
Corporate		493,918		437,563
Stock based compensation		2,655,372		776,748
Travel and entertainment		224,074		248,719
Office related		233,053		180,737
Insurance		310,736		244,610
Depreciation		15,481		52,772
Foreign exchange		55,863		15,872
	$	6,375,110	$	3,866,696

8. Trade and other receivables:

	2017		2016
Trade receivables (note 19(a))	$	15,225,553	$	9,804,920
Other receivables		260,759		31,819
	$	15,486,312	$	9,836,739

9. Trade and other payables:

	2017		2016
Trade payables	$	2,042,487	$	372,612
Payments due to former owners of business combinations		76,403		58,667
Accruals and other payables		3,542,954		2,798,406
	$	5,661,844	$	3,229,685

26

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

10. Property and equipment:

	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Cost
Balance as at January 1, 2016	$	43,312	$	116,195	$	4,727	$	311,273	$	475,507
Additions		16,016		1,805		-		95,375		113,196
Dispositions		(3,629)		-		-		-		(3,629)
Balance as at December 31, 2016		55,699		118,000		4,727		406,648		585,074
Additions		26,356		97,021		1,057		1,414		125,848
Dispositions		-		-		-		-		-
Balance as at December 31, 2017	$	82,055	$	215,021	$	5,784	$	408,062	$	710,922
	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Accumulated depreciation
Balance as at January 1, 2016	$	22,162	$	39,130	$	2,594	$	126,915	$	190,801
Depreciation expense		7,950		19,893		426		42,369		70,638
Dispositions		(563)		-		-		-		(563)
Balance as at December 31, 2016		29,549		59,023		3,020		169,284		260,876
Depreciation expense		13,408		24,074		465		47,732		85,680
Dispositions		-		-		-		-		-
Balance as at December 31, 2017	$	42,957	$	83,097	$	3,485	$	217,016	$	346,556
	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Net book value
December 31, 2017	$	39,098	$	131,924	$	2,299	$	191,046	$	364,366
December 31, 2016	$	26,150	$	58,977	$	1,707	$	237,364	$	324,198

27

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

11. Intangible assets:

	Professional Services Agreements		Patents		Total
Cost
Balance as at January 1, 2016	$	94,416,692	$	532,598	$	94,949,290
Additions through business combinations (note 4)		61,218,456		-		61,218,456
Balance as at December 31, 2016		155,635,148		532,598		156,167,746
Additions through business combinations (note 4)		59,798,340		-		59,798,340
Impairment		(6,653,015)		-		(6,653,015)
Balance as at December 31, 2017	$	208,780,473	$	532,598	$	209,313,071
	Professional Services Agreements		Patents		Total
Accumulated depreciation
Balance as at January 1, 2016	$	7,175,823	$	466,200	$	7,642,023
Amortization expense		14,823,948		34,464		14,858,412
Balance as at December 31, 2016		21,999,771		500,664		22,500,435
Amortization expense		23,723,277		(3,247)		23,720,030
Balance as at December 31, 2017	$	45,723,048	$	497,417	$	46,220,465
	Professional Services Agreements		Patents		Total
Net book value
December 31, 2017	$	163,057,425	$	35,181	$	163,092,606
December 31, 2016	$	133,635,377	$	31,934	$	133,667,311

At each reporting period, the company evaluates cash generating units for impairment of the related professional services agreements. At December 31, 2017, the Company identified impairment triggers in the Gastroenterology Anesthesia Associates LLC (“GAA”) and Community Anesthesia LLC (“Community”) cash generating units.

The aggregate carrying amounts of intangible assets allocated to each entity, prior to impairment charges, are as follows:

	2017		2016
GAA	$	49,013,454	$	54,510,290
Community		14,510,783		18,706,671
	$	63,524,237	$	73,216,961

The impairment tests performed for the above entities were based on their value in use and were determined by discounting the estimated future cash flows generated from the continuing use of these units.

28

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

11. Intangible assets (continued):

The calculation of value in use was made on the following key assumptions:

• Cash flows were projected based on past experience, using actual operating results and planned results for the near term. Terminal value calculations for each cash generating unit were extrapolated using a constant growth rate equal to the long-term average growth rate in the United States;

• Management applied internally determined discount rates in determining the recoverable amount for these cash generating units. Risk free discount rates were used and risks specific to the assets were factored into the cash flows.

The key assumptions used in performing the impairment tests in 2017 were:

Cash generating unit	Valuation method	Discount rate	Perpetual growth rate
GAA	Value in use	18.0%	1.4%
Community	Value in use	20.50%	1.3%

The net present value of the expected cash flows was compared to the carrying value of the professional services agreements relating to the cash generating units at year end. Based on management’s analysis, the Company recorded an impairment of the professional services agreement relating to the GAA cash generating unit of $6,653,015. No impairment of the professional services agreement relating to the Community cash generating unit was identified.

At December 31, 2016, there were no indications of impairment identified in respect of these entities and therefore, an estimate of recoverable amount was not completed.

12. Derivative asset:

On January 21, 2016, the Company entered into a cross currency swap with the Bank of Nova Scotia (“Scotia”) to lock in the Canadian dollar to U.S. dollar foreign exchange rate on its Canadian dollar denominated Crown Note (note 13) at 1.448. Under the cross currency swap, Scotia was committed to payments on the principal amount of the Crown Note of CAD$22,500,000 at a rate of 12% while the Company was committed to payments on the principal amount of the Crown Note of $15,538,674 at 13.17%.

The Company accounted for the cross currency swap as a derivative financial instrument at fair value through profit or loss and recorded the fair value of the instrument on the balance sheet with changes in the fair value of the instrument recorded through earnings in the period (note 19). In conjunction with the extinguishment of the Crown Note (note 13), the cross currency swap was settled. The Company received a payment of $1,313,874 as a result of settlement of the cross currency swap on June 26, 2017.

29

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

13. Notes payable:

December 31, 2017	Crown Note		Scotia Facility		Total
Current portion	$	-		1,101,468	$	1,101,468
Non-current portion		-		60,228,851		60,228,851
Total loans and borrowings	$	-		61,330,319	$	61,330,319
December 31, 2016	Crown Note		Scotia Facility		Total
Current portion	$	-		5,791,787	$	5,791,787
Non-current portion		15,208,256		22,930,518		38,138,774
Total loans and borrowings	$	15,208,256		28,722,305	$	43,930,561

Crown Capital Fund III Management Inc. (“Crown Note”)

On December 1, 2014, the Company entered into an agreement to borrow funds in the form of a subordinated note payable from Crown Capital Fund III Management Inc. At inception, the original amount of the note payable was CAD$22,500,000 (USD$19,863,000). The note bore interest at 12% per annum with a decrease to 10% upon repayment and performance in full of the Company’s obligations under its senior credit agreement (see Scotia Facility). Interest on the note was payable on a quarterly basis beginning March 31, 2015, with the payment of the principal scheduled for June 1, 2018. In compensation for its services, the Company paid Crown a combination of cash CAD$1,350,000 (USD$1,191,780) and shares (2,000,000 common shares) in addition to reimbursement of legal costs in relation to issuance of the note. The Crown note was subordinate to the Scotia Facility. The note was classified as an other financial liability and recorded at amortized cost.

In conjunction with an increase to the Scotia Facility in June 2017, noted below, the Company repaid in full the principal owing on the Crown Note of CAD$22,500,000 ($17,043,750), with related interest, prepayment penalties and other extinguishment costs of CAD$1,568,384 ($1,188,051). As a result of the extinguishment of the Crown Note, the Company recorded finance expense of $1,789,882 representing the difference between the carrying value of the loan at extinguishment and the consideration transferred to extinguish its financial obligations under the Crown Note.

The reconciliation of movements in borrowings to cash flows arising from financing activities are as follows:

	2017		2016
Drawings at January 1	$	16,758,000	$	16,256,250
Additions to note		-		-
Repayments of note		(17,043,750)		-
Effects of changes in foreign exchange rates		285,750		501,750
Drawings at December 31	$	-	$	16,758,000

30

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

13. Notes payable (continued):

The Bank of Nova Scotia (“Scotia Facility”)

On November 24, 2015, the Company entered into a credit facility with the Bank of Nova Scotia. The facility, which had a maturity date of April 30, 2018, provided financing of up to $55,000,000, after amendment on June 15, 2016. In conjunction with the 2016 amendment, the Company paid $390,400 in fees to the Bank of Nova Scotia and legal counsel.

On June 26, 2017, the Company amended the Scotia Facility to provide financing of up to $100,000,000 via a revolving and term facility. The amended facility has a maturity date of June 26, 2020. In conjunction with this amendment, the Company incurred fees of $445,598 As at December 31, 2017, the Company had drawn $61,700,000 on the amended facility (2016 - $29,000,000). The amendment was determined to be a substantial modification and the Company extinguished the previous Scotia facility and wrote off deferred financing costs related to the previous facility of $173,511. The Facility is repayable in full at maturity, with scheduled principal repayments on a quarterly basis beginning September 30, 2017 based on the initial principal issued under the term facility. The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin. At December 31, 2017, interest on the facility is calculated at LIBOR plus 2.50% on the revolving portion and term portion of the facility. The Facility is secured by the assets of the Company. As at December 31, 2017 the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

The Company is in compliance with all covenants at December 31, 2017.

The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows:

	Minimum Principal
At December 31, 2017
Not later than one year	$	1,250,000
Between one to three years	$	60,450,000
Between four to five years	$	-
Thereafter	$	-
	$	61,700,000

The reconciliation of movements in borrowings to cash flows arising from financing activities are as follows:

	2017		2016
Drawings at January 1	$	29,000,000	$	17,000,000
Additions to long term debt		68,200,000		26,000,000
Repayments of long-term debt		(35,500,000)		(14,000,000)
Drawings at December 31	$	61,700,000	$	29,000,000

31

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

14. Subsidiary undertakings:

(a) Material subsidiary undertakings

The list below sets out the principal material operating subsidiaries of the Company. These subsidiaries engage in intercompany transactions, all of which are eliminated on consolidation within these financial statements.

Subsidiary	Jurisdiction of Incorporation
CRH Medical Corporation	British Columbia, Canada
CRH Medical Corporation	Delaware, United States
CRH Anesthesia Management LLC	Delaware, United States
Gastroenterology Anesthesia Associates LLC	Georgia, United States
Macon Gastroenterology Anesthesia Associates LLC	Georgia, United States
CRH Anesthesia of Cape Coral LLC	Florida, United States
CRH Anesthesia of Knoxville LLC	Tennessee, United States
Knoxville Gastroenterology Anesthesia Associates LLC	Tennessee, United States
Austin Gastroenterology Anesthesia Associates PLLC	Texas, United States
Community Anesthesia PLLC	Massachusetts, United States
Arapahoe Gastroenterology Anesthesia Associates LLC	Delaware, United States
DDAB LLC	Georgia, United States
Osceola Gastroenterology Anesthesia Associates LLC	Florida, United States
West Florida Anesthesia Associates LLC	Florida, United States
Central Colorado Anesthesia Associates LLC	Colorado, United States
Raleigh Sedation Associates LLC	North Carolina, United States
Blue Ridge Sedation Associates LLC	North Carolina, United States
Alamo Sedation Associates LLC	Texas, United States

32

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

14. Subsidiary undertakings (continued):

(b) Material non-wholly owned subsidiary undertakings

The company defines material non-wholly owned subsidiary undertakings as those non-wholly owned subsidiaries which comprise greater than 10% of the revenue and earnings before tax of the consolidated Company. The Company holds controlling interests in Knoxville Gastroenterology Anesthesia Associates LLC (“KGAA”) and Austin Gastroenterology Anesthesia Associates LLC (“AGAA”). These controlling interests comprise the material non-wholly owned subsidiary undertakings of the Company as at December 31, 2017. As a result of the operating agreements with these entities, the Company controls KGAA and AGAA and 100% of the financial results of this subsidiary are included in the Company’s consolidated financial results.

The following tables summarize the financial information of these entities, including fair value adjustments at acquisition but excluding intercompany eliminations, as at December 31, 2017 and 2016.

	KGAA				AGAA
Ownership %	51%				51%
	2017		2016		2017		2016
Cash and cash equivalents	$	1,049,265	$	1,333,289	$	1,552,981	$	2,866,916
Trade and other receivables		665,601		750,393		1,412,034		1,403,277
Prepaids		23,494		-		37,283		10,635
Current taxes receivable		92,427		-
Intangible assets		8,912,880		10,822,783		27,761,626		31,060,037
		10,743,667		12,906,465		30,763,924		35,340,865
Accounts payable and accrued liabilities		428,358		315,542		709,905		453,759
Current taxes payable		-		133,862		-		-
		428,358		449,404		709,905		453,759
Member contributions		7,106,555		8,149,450		23,037,106		29,244,110
Current period earnings		3,208,754		4,307,611		7,016,913		5,642,996
		10,315,309		12,457,061		30,054,019		34,887,106
Total liabilities and equity	$	10,743,667	$	12,906,465	$	30,763,924	$	35,340,865
	KGAA				AGAA
	2017		2016		2017		2016
Anesthesia revenue	$	10,194,489	$	10,307,361	$	15,938,161	$	11,593,180
Anesthesia services expense		6,577,415		5,573,305		8,926,966		5,949,366
Net income before tax		3,617,074		4,734,056		7,011,195		5,643,814
Tax expense		408,319		426,445		(5,717)		-
Net income	$	3,208,755	$	4,307,611	$	7,016,912	$	5,643,814
Net income attributable to non-controlling interest	$	1,589,007	$	2,123,964	$	3,438,287	$	2,765,469
Non-controlling interest	$	4,981,492	$	6,216,255	$	14,726,051	$	17,094,265

33

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

14. Subsidiary undertakings (continued):

(c) The Company also holds the following interests:

Entity	Interest
Community Anesthesia PLLC		65%
Macon Gastroenterology Anesthesia Associates LLC		65%
Arapahoe Gastroenterology Anesthesia Associates LLC		51%
DDAB LLC		51%
Osceola Gastroenterology Anesthesia Associates LLC		60%
West Florida Anesthesia Associates LLC		55%
Central Colorado Anesthesia Associates LLC		51%
Raleigh Sedation Associates LLC		51%

As a result of the operating agreements with each of the above entities, the Company has control over these entities and thus 100% of the financial results of these subsidiaries are included in the Company’s consolidated financial results.

The following tables summarize the aggregate financial information for the above entities, including fair value adjustments at acquisition but excluding tax and intercompany eliminations, as at December 31, 2017 and 2016.

	2017		2016
Cash and cash equivalents	$	5,022,739	$	1,742,274
Trade and other receivables		7,369,420		2,359,873
Prepaids		118,960		13,821
Intangible assets		75,348,680		30,877,177
		87,859,799		34,993,145
Accounts payable and accrued liabilities		2,657,257		659,482
Loans		900,000		-
		3,557,257		659,482
Member contributions		80,561,493		33,308,961
Current period earnings		3,741,049		1,024,702
		84,302,542		34,333,663
Total liabilities and equity	$	87,859,799	$	34,993,145
	2017		2016
Anesthesia revenue	$	30,503,731	$	11,044,835
Anesthesia services expense		26,762,683		9,994,210
Net income before tax	$	3,741,048	$	1,050,625
Tax expense		-		-
Net income	$	3,741,048	$	1,050,625
Net income attributable to non-controlling interest	$	2,123,477	$	503,784
Non-controlling interest	$	37,569,771	$	13,099,934

34

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

15. Share capital:

(a) Authorized:

100,000,000 common shares without par value.

(b) Issued and outstanding – common shares:

Other than in connection with shares issued in respect of the Company’s share unit and share option plans and in connection with the Company’s normal course issuer bid (note 15(e)), there were no share transactions in the year ended December 31, 2017.

On March 29, 2016, the Company issued 46,851 common shares on the exercise of 46,851 broker warrants issued in connection with the Company’s bought deal equity offering on March 25, 2015. Gross proceeds on exercise were $121,095 (CAD$159,293) and the fair value of the instruments exercised was $48,332.

On September 7, 2016, the Company issued 53,854 common shares on the exercise of 53,854 broker warrants issued in connection with the Company’s bought deal equity offering on March 25, 2015. Gross proceeds on exercise were $141,996 (CAD$183,104) and the fair value of the instruments exercised was $55,562.

35

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

15. Share capital (continued):

(c) Stock option plan:

Under the Company’s Stock Option Plan, the Company may grant options to its directors, officers, consultants and eligible employees. The plan provides for the granting of stock options at the fair market value of the Company’s stock at the date of grant, and the term of options range from two to ten years. The Board of Directors may, in its sole discretion, determine the time during which options shall vest and the method of vesting. All options under the Plan will be subject to vesting provisions determined by the Board of Directors, over a period of not less than 18 months, in equal portions on a quarterly basis. Options granted to consultants providing investor relations activities will vest at the end of 12 months or longer from the date of issuance.

A summary of the status of the plan as of December 31, 2017 and 2016 is as follows (options are granted in CAD and USD amounts are calculated using prevailing exchange rates):

	Number of options		Weighted average exercise price
				CAD		USD
Outstanding, January 1, 2016		2,974,311	$	0.60	$	0.43
Issued		-		-		-
Exercised		(1,358,687)		0.57		0.42
Forfeited		(12,500)		0.52		0.39
Expired		-		-		-
Outstanding, December 31, 2016		1,603,124		0.63		0.47
Issued		-		-		-
Exercised		(247,500)		0.32		0.25
Forfeited		(10,937)		0.60		0.48
Expired		-		-		-
Outstanding, December 31, 2017		1,344,687	$	0.69	$	0.55

The following table summarizes information about the stock options outstanding at December 31, 2017:

Options outstanding

Options exercisable

Exercise price

Weighted

Weighted

Weighted

Weighted

Weighted

$CAD

$USD

Number     of options

average remaining contractual life (years)

average exercise price ($CAD)

average exercise price ($USD)

Number     of options

average exercise price ($CAD)

average exercise price ($USD)

0.60 – 0.70

0.48 – 0.56

1,344,687

6.05

0.69

0.55

1,272,812

0.68

0.54

As at December 31, 2016:

			Options outstanding								Options exercisable
Exercise price					Weighted		Weighted		Weighted				Weighted		Weighted
$CAD	$USD		Number     of options		average remaining contractual life (years)		average exercise price ($CAD)		average exercise price ($USD)		Number     of options		average exercise price ($CAD)		average exercise price ($USD)
0.28 – 0.58		0.20 – 0.43		214,687		0.93		0.28		0.20		214,687		0.28		0.20
0.59 – 0.70		0.44 – 0.52		1,388,437		7.04		0.68		0.51		962,812		0.68		0.51
				1,603,124		6.23		0.63		0.47		1,177,499		0.61		0.45

36

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

15. Share capital (continued):

(c) Stock option plan (continued):

For the year ended December 31, 2017, the Company recognized $22,179 (2016 - $97,486), in compensation expense as a result of stock options awarded and vested. Compensation expense is recorded in the consolidated statement of operations and comprehensive income and is allocated to product sales expenses (note 6), corporate expenses (note 7) and anesthesia expenses (note 5) on the same basis as the allocations of cash compensation.

During the years ended December 31, 2017 and 2016, no additional stock options were granted.

(d) Share unit plan:

In June 2017, the shareholders of the Company approved a Share Unit Plan. Employees, directors and eligible consultants of the Company and its designated subsidiaries are eligible to participate in the Share Unit Plan. In accordance with the terms of the plan, the Company will approve those employees, directors and eligible consultants who are entitled to receive share units and the number of share units to be awarded to each participant. Each share unit awarded conditionally entitles the participant to receive one common share of the Company upon attainment of the share unit vesting criteria. The vesting of share units is conditional upon the expiry of time-based vesting conditions or performance-based vesting conditions. Once the share units vest, the participant is entitled to receive the equivalent number of underlying common shares.

37

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

15. Share capital (continued):

(d) Share unit plan (continued):

A summary of the status of the plan as of December 31, 2017 and 2016 is as follows:

	Time based   share units		Performance   based share   units
Outstanding, January 1, 2016		509,000		1,000,000
Issued		704,000		1,350,000
Exercised		(80,000)		-
Forfeited		(65,000)		-
Expired		-		-
Outstanding, December 31, 2016		1,068,000		2,350,000
Issued		324,000		-
Exercised		(302,000)		(1,000,000)
Forfeited		(53,500)		-
Expired		-		-
Outstanding, December 31, 2017		1,036,500		1,350,000

During the year ended December 31, 2017, the Company issued 324,000 share units (“Time based share units”). The weighted average fair value per unit was $3.31 (CAD$4.16) based on the market value of the underlying shares at the date of issuance.

During the year ended December 31, 2017, 1,000,000 of those Performance based share units which vest upon the Company meeting certain market based performance targets vested. Upon vesting, the Company issued 1,000,000 common shares. The Company also issued net shares of 292,549 in respect of 302,000 time based share units which vested during the year.

During the year ended December 31, 2016, the Company issued 704,000 share units (“Time based share units”). The weighted average fair value per unit was $5.01 (CAD$6.74) based on the market value of the underlying shares at the date of issuance.

During the year ended December 31, 2016, the Company also issued 250,000 share units (“Performance based share units”). These share units vest upon the Company meeting certain performance targets and expire 10 years after grant. The weighted average fair value of these units at the date of grant was $3.73 (CAD$5.01) per unit. The fair value of these share units was calculated as of the grant date based on the market value of the underlying shares at the date of issuance.

38

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

15. Share capital (continued):

(d) Share unit plan (continued):

In addition to the above share units issued in 2016, the Company also issued 1,100,000 share units (“Performance based share units”) which vest upon the Company meeting certain market based performance targets and expire ten years after grant. The weighted average fair value of these units at the date of grant was $4.93 (CAD$6.62) per unit. The fair value of these share units was calculated as of the grant date using a binomial pricing model with the following weighted average assumptions:

	2016
Risk-free interest rate	1.04%
Expected volatility	62.0%
Pre-vest forfeiture rate	0%
Weighted average share price	CAD$7.26

During the year ended December 31, 2017, the Company recognized $3,431,832 (2016 - $1,279,188), in compensation expense in relation to the granting and vesting of share units.

(e) Normal Course Issuer Bid:

On November 6, 2017, the Board of Directors of the Company approved a normal course issuer bid to purchase outstanding shares of the Company. The Company may purchase up to 7,120,185 shares pursuant to the bid, representing no more than 10.0% of the Company’s shares outstanding on October 31, 2017. All purchases of shares under the bid are made pursuant to an Automated Share Purchase Plan. Subject to any block purchases made in accordance with the rules of the TSX, the bid is subject to a daily repurchase maximum of 103,902 shares. Shares are purchased at the market price of the shares at the time of purchase and are purchased on behalf of the Company by a registered investment dealer through the facilities of the TSX or alternative Canadian and US marketplaces.

As of December 31, 2017, the Company repurchased 1,339,800 of its shares for a total cost, including transaction fees, of $2,872,713 (CAD$3,669,120). As at December 31, 2017, 1,267,400 of these shares have been cancelled with the remaining 72,400 shares cancelled on January 5, 2018.

39

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

15. Share capital (continued):

(f) Earnings per share:

The calculation of basic earnings per share for the years ended December 31, 2017 and 2016 is as follows:

	2017						2016
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share   amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	6,558,966		73,712,670	$	0.089	$	10,564,233		71,826,884	$	0.147
Share options				1,306,309						2,113,563
Share units				467,231						263,383
Diluted	$	6,558,966		75,486,210	$	0.087	$	10,564,233		74,203,830	$	0.142

For the year ended December 31, 2017, 157,952 options (2016 – 315,251) and 2,047,200 share units (2016 – 1,179,073) were excluded from the diluted weighted average number of common shares calculation.

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. The treasury method is used to determine the calculation of dilutive shares.

40

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

16. Income taxes:

(a) Income tax expense is comprised of the following:

	2017		2016
Current tax expense	$	5,527,161	$	5,310,454
Deferred tax expense (recovery):
Origination and reversal of temporary differences		(1,559,332)		(830,584)
Change in enacted tax rates and other		2,334,678		(224,720)
Total tax expense (recovery)	$	6,302,507	$	4,255,150

The reconciliation of income tax computed at statutory tax rates to income tax expense, using a 23% (2016 – 26%) statutory rate, is:

	2017		2016
Tax expense at statutory income tax rates	$	4,593,244	$	5,286,493
Permanent differences		557,406		159,800
Income attributable to non-controlling interest		(1,571,060)		(1,306,217)
Foreign income taxed at different rates		344,742		243,256
Impact of change in tax rates		2,585,691		-
Other		(207,516)		(128,182)
Total tax expense (recovery)	$	6,302,507	$	4,255,150

The Company’s statutory tax rate in Canada in 2017 is reduced from 26% to 23% due to the expected benefits to be derived from the IBA patent program in Canada. In 2018, the Canadian statutory tax rate will increase from 26% to 27%. The Company has recorded the impact of the change in tax rate in 2017. As a result of tax legislation enacted in the U.S. at the end of 2017, the federal corporate tax rate applicable to years after 2017 was substantially reduced. As a result, the Company recorded a deferred income tax expense in respect of its U.S. operations in 2017 at a combined federal and state income tax rate of 26.6% (2016 – 39%).

(b) Recognized deferred tax assets and liabilities:

The Company had the following deferred tax assets and liabilities resulting from temporary differences recognized for financial statement and income tax purposes.

	2017		2016
Deferred tax assets:
Property and equipment	$	8,916		141
Intangible assets		4,291,655		-
Finance related costs		374,721		527,462
Reserves		-		74,105
Share transaction costs		196,508		273,332
Stock-based compensation		387,943		426,051
Deferred consideration		-		1,523,663
Earn-out obligation		499,052		5,128,162
Deferred tax liabilities:
Intangible assets		-		(1,006,371)
Deferred consideration		(44,255)		-
Reserves		(7,157)		-
Unrealized foreign exchange		-		(508,770)
Net deferred tax asset	$	5,707,383	$	6,437,775

41

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

16. Income taxes (continued):

(b) Recognized deferred tax assets and liabilities (continued):

Deferred tax assets by jurisdiction	2017		2016
Canada:
Deferred tax asset	$	201,555	$	405,108
Deferred tax liability		(99,254)		(506,954)
Net deferred tax asset (liability)	$	102,301	$	(101,846)
United States:
Deferred tax asset	$	5,690,541	$	7,559,797
Deferred tax liability		(85,459)		(1,020,176)
Net deferred tax asset (liability)	$	5,605,082	$	6,539,621

(c) Unrecognized deferred tax assets and liabilities:

As at December 31, 2017 and 2016, the Company had tax losses of $nil from both its Canadian and US operations.

Realization of the deferred tax assets is dependent on several factors, including a presumption of future profitability, which is subject to uncertainty. The Company has assessed that it is probable that its deferred tax assets will be realized.

17. Capital disclosures:

The Company’s objective in managing capital is to safeguard its ability to continue as a going concern and to sustain future development of the business. In the management of capital, the Company includes shareholders’ equity, excluding accumulated other comprehensive loss. The Company’s objective is met by retaining adequate equity to provide for the possibility that cash flows from assets will not be sufficient to meet future cash flow requirements. In order to maintain or adjust its capital structure, the Company may issue new shares. The Board of Directors does not establish quantitative return on capital criteria for management. The Company is not subject to any externally imposed capital requirements, but is subject to debt covenants in respect of its notes payable and bank indebtedness (note 13). The Company’s overall strategy with respect to capital management remains unchanged from the year ended December 31, 2016.

	2017		2016
Shareholders’ equity attributable to shareholders, excluding other comprehensive income	$	67,725,744	$	60,582,603

42

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

18. Net finance expense

Recognized in earnings in the years ended December 31:

	2017		2016
Finance income:
Foreign exchange gain	$	-	$	(1,007,673)
Net change in fair value of financial liabilities at fair value through earnings (note 19)		(11,747,441)		-
Total finance income	$	(11,747,441)	$	(1,007,673)
Finance expense:
Interest and accretion expense on borrowings	$	3,322,321	$	4,024,240
Accretion expense on earn-out obligation and deferred consideration		600,602		560,150
Amortization of deferred financing fees		224,463		614,472
Net change in fair value of financial liabilities at fair value through earnings		-		204,958
Foreign exchange loss		88,084		-
Extinguishment of notes payable and bank indebtedness		2,044,867		-
Other		50,475		27,215
Total finance expense	$	6,330,812	$	5,431,035
Net finance (income) expense	$	(5,416,629)	$	4,423,362

43

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

19. Financial instruments:

The Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, derivative assets, trade and other payables, employee benefit obligations, short term advances, loans, notes payable and bank indebtedness, deferred consideration and the Company’s earn-out obligation. The fair values of these financial instruments, except the derivative asset, certain of the notes payable balances, the deferred consideration and the earn-out obligation, approximate carrying value because of their short-term nature. The earn-out obligation and derivate asset are classified as financial instruments recorded at fair value through earnings. For all other balances, the fair value of these financial instruments approximates carrying value; the Scotia Facility is a floating rate instrument and due to the subordinate nature of the Crown Note, management has assessed that the carrying value of this fixed rate instrument reflects fair value.

An established fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company’s derivative asset was carried at fair value as disclosed in note 12. The fair value of the derivative asset was determined using models to estimate the present value of expected future cash flows. The derivative asset was considered a Level 2 instrument because, while observable inputs are available, they were not quoted in an active market.

The Company’s earn-out obligation is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The Earn-Out Obligation relates to the GAA acquisition in 2014. The total purchase price under the acquisition included an additional $14,655,000 payable within 4.5 years after closing based on the achievement of certain financial performance targets of GAA. This valuation technique included inputs relating to estimated cash outflows under the arrangement and the use of a discount rate appropriate to the Company. During the year ended December 31, 2017, the Company revised its assumptions underlying the discount rate used in the calculation of the fair value of the earn-out obligation to account for changes in the underlying credit risk of the Company and also adjusted the model based on current expectations of the financial performance of GAA for the remainder of the earn-out period. This was performed in conjunction with the impairment analysis performed on the GAA cash generating unit.

44

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

19. Financial instruments (continued):

The downward adjustment of the discount rate from 3.80% at December 31, 2016 to 3.59% at December 31, 2017, in conjunction with adjustments to certain of the cash flow probabilities in the model, resulted in a decrease of $11,747,441 to the fair value of the earn-out obligation. The impact of this adjustment was recorded as finance income.

The fair value measurements are sensitive to the discount rate used in calculating the fair values as well as the probability assessments used. A 1% increase in the discount rate would reduce the fair value of the earn-out obligation by $26,819.    During the year ended December 31, 2017, the Company recorded accretion expense of $473,738 in relation to this liability, reflecting the change in fair value of the liabilities that is attributable to credit risk.

Reconciliation of level 3 fair values:

	Earn-out Obligation
Balance as at January 1, 2017		$13,149,130
Recorded in finance expense:
Accretion expense		473,738
Fair value adjustment		(11,747,441)
Balance as at December 31, 2017		$1,875,427

The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and market risk.

(a) Credit risk:

Credit risk is the risk of financial loss to the Company if counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash and cash equivalents, and trade receivables. The carrying amount of the financial assets represents the maximum credit exposure.

The Company limits its exposure to credit risk on cash and cash equivalents by placing these financial instruments with high-credit quality financial institutions and only investing in liquid, investment grade securities.

The Company has a number of individual customers and no one customer represents a concentration of credit risk.

The carrying amount of trade receivables is reduced through the use of an allowance account and the amount of the loss is recognized in the income statement within anesthesia services expense and product sales expense. When a receivable balance is considered uncollectible it is written off against the allowance. Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement.

45

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

19. Financial instruments (continued):

(a) Credit risk (continued):

No one customer accounts for more than 10% of the Company’s consolidated revenue. The Company establishes a provision for losses on accounts receivable if it is determined that all or part of the outstanding balance is uncollectable. Collectability is reviewed regularly and an allowance is established or adjusted, as necessary, using a combination of the specific identification method and historic collection patterns. The following table sets forth details of the age of receivables that are not overdue as well as an analysis of overdue amounts and related allowance for the doubtful accounts.

	2017		2016
Total trade receivables	$	20,589,210	$	13,934,290
Less: allowance for doubtful accounts		(5,363,657)		(4,129,370)
Total trade receivables, net	$	15,225,553	$	9,804,920
Of which:
Current	$	10,065,389	$	7,781,818
31 to 60 days		3,251,297		1,674,626
61 to 90 days		2,359,768		1,147,918
91 days or greater		4,912,756		3,329,928
Total trade receivables	$	20,589,210	$	13,934,290

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	2017		2016
Cash and cash equivalents	$	12,486,884	$	9,507,004
Trade receivables		15,225,553		9,804,920
	$     27,712,437		$     19,311,924
Continuity of allowance for bad debts:
Beginning balance	$	4,129,370	$	2,344,684
Write-offs		(4,065,645)		(2,180,257)
Provision		5,302,732		3,964,943
Other		(2,800)		-
Total allowance for bad debts	$	5,363,657	$	4,129,370

46

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

19. Financial instruments (continued):

(b) Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company ensures that there is sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash. The relative maturity in respect of contractual and legal obligations are summarized as follows:

At December 31, 2017	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	5,661,844	$	5,661,844	$	-	$	-	$	-
Employee benefits		500,754		500,754		-		-		-
Notes payable and bank indebtedness		68,502,574		4,018,179		64,484,395		-		-
Earn-out obligation		1,977,334		-		1,977,334		-		-
Deferred consideration		3,300,000		1,000,000		2,300,000		-		-
	$	79,942,506	$	11,180,777	$	68,761,729	$	-	$	-

The Company also has financial obligations in respect of its normal course issuer bid. Refer to note 15(e).

At December 31, 2016	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	3,229,685	$	3,229,685	$	-	$	-	$	-
Employee benefits		226,874		226,874		-		-		-
Notes payable and bank indebtedness		48,495,668		8,970,825		39,524,843		-		-
Earn-out obligation		14,120,227		-		14,120,227		-		-
Deferred consideration		4,200,000		900,000		3,300,000		-		-
	$	70,272,454	$	13,327,384	$	56,945,070	$	-	$	-

47

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

19. Financial instruments (continued):

(c) Market risk:

Market risk is the risk that changes in market prices, such as foreign currency exchange rates and interest rates, will affect the Company’s income or the value of the financial instruments held.

(i) Foreign currency risk:

The majority of the Company’s sales and purchases are made in U.S. dollars. However, certain of the Company’s revenues and expenses are denominated in Canadian dollars. Foreign currency risk reflects the risk that the Company’s earnings will be impacted by fluctuations in exchange rates. The objective of the Company’s foreign exchange risk management activities is to minimize transaction exposures and the resulting volatility of the Company’s earnings. The Company manages this risk by pricing sales in U.S. dollars or the currency of the expenses being incurred. The Company has not entered into any forward foreign exchange contracts as at December 31, 2017. Due to the immaterial nature of the Company’s Canadian dollar revenues and expenses, foreign currency risk in this area is considered low. Similarly, foreign currency risk in respect of foreign currency denominated working capital balances is also low due to its limited value and exposure.

At December 31, 2016, the Company had a Canadian dollar denominated loan. The Company had entered into a cross currency swap to mitigate foreign currency risk in respect of the loan (note 12). Foreign exchange gains and losses arising from the revaluation of the loan were included in earnings, but offset by gains and losses arising on the cross currency swap derivative contract. As a result, with all other variables held constant, a 10% point increase in the value of the Canadian dollar relative to the U.S. dollar would not have had a material impact on net income.

(ii) Interest rate risk:

As at December 31, 2017, the Company’s only interest bearing liability is its Scotia Facility. With respect to the Company’s Scotia Facility, with all other variables held constant, a 10% point increase in the interest rate would have reduced net income by approximately $164,000 (2016 - $92,000) for the year ended December 31, 2017. There would be an equal and opposite impact on the net income with a 10% point decrease.

48

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

20. Commitments and contingencies:

(a) The following are the minimum payments required for the lease of premises:

Less than one year	$	237,299
One to three years		249,677
Four to five years		-
Thereafter		-
Total	$	486,976

Rent expense for the year ended December 31, 2017 was $236,455 (2016 - $132,596).

(b) 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 product 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.

21. Related party transactions:

Balances and transactions between the Company and its wholly owned and controlled subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of the transactions between the Company and other related parties are disclosed below:

(a) Related party transactions:

The Company paid or accrued fees of $194,750 (2016 - $210,100) to Directors of the Company. Additionally, the Company made product sales totaling $39,485 (2016 - $37,277) to one company (2016 - four companies) owned or controlled by one of the Company’s Directors (2016 – two of the Company’s Directors). The transaction terms with related parties may not be on the same price as those that would result from transactions among non-related parties.

Until June 16, 2016, one of the directors of the Company was an indirect shareholder of KGAA.

(b) Key management personnel compensation, including directors, is as follows:

	2017		2016
Salaries, directors’ fees and other benefits		$    1,307,233		$    1,369,329
Share-based payments		2,807,306		801,311
		$    4,114,539		$    2,170,640

(i) Share-based payments represent the amount expensed during the year for options granted.

(ii) There were no post-employment, termination or other long-term benefits paid during the years ended December 31, 2017 and 2016.

49

CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

22. Segmented information:

The Company operates in two industry segments: the sale of medical products and the provision of anesthesia services. The revenues relating to geographic segments based on customer location, in United States dollars, for the years ended December 31, 2017 and 2016 are as follows:

	2017		2016
Revenue:
Canada and other	$	238,342	$	238,049
United States		100,003,738		78,116,583
Total	$	100,242,080	$	78,354,632

The Company’s property and equipment, intangibles and other assets are located in the following geographic regions as at December 31, 2017 and 2016:

	2017		2016
Property and equipment:
Canada	$	347,676	$	316,145
United States		16,690		8,053
Total	$	364,366	$	324,198
Intangible assets:
Canada	$	35,181	$	31,934
United States		163,057,425		133,635,377
Total	$	163,092,606	$	133,667,311
Other assets:
Canada	$	-	$	1,261,298
United States		-		-
Total	$	-	$	1,261,298

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CRH MEDICAL CORPORATION

Notes to Consolidated Financial Statements

(Expressed in United States dollars)

Years ended December 31, 2017 and 2016

22. Segmented information (continued):

The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the years ended December 31, 2017 and 2016. The Company does not allocate expenses related to corporate activities. These expenses are presented within “Other” to allow for reconciliation to reported measures.

	2017
	Anesthesia services		Product sales		Other		Total
Revenue	$	88,741,075	$	11,501,005	$	-	$	100,242,080
Operating costs		74,315,424		4,997,550		6,375,110		85,688,084
Operating income (loss)	$	14,425,651	$	6,503,455	$	(6,375,110)	$	14,553,996
	2016
	Anesthesia services		Product sales		Other		Total
Revenue	$	67,821,879	$	10,532,753	$	-	$	78,354,632
Operating costs		45,229,986		4,503,110		3,866,696		53,599,792
Operating income (loss)	$	22,591,893	$	6,029,643	$	(3,866,696)	$	24,754,840

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EX-1.3

Exhibit 1.3

CRH MEDICAL CORPORATION

MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2017

The following management discussion and analysis (“MD&A”) should be read in conjunction with CRH Medical Corporation’s (the “Company” or “CRH”) audited consolidated financial statements for the years ended December 31, 2017 and 2016 and the annual consolidated financial statements and the corresponding notes thereto for the year ended December 31, 2017. The audited consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Unless otherwise specified, all financial data is presented in United States dollars. This MD&A is as of March 2, 2018.

Additional information related to the Company, including the Company’s Annual Information Form is available on SEDAR at www.sedar.com.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Information included or incorporated by reference in this report may contain forward-looking statements. This information may involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies, and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “plan,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. Certain risks underlying our assumptions are highlighted below; if risks materialize, or if assumptions prove otherwise to be untrue, our results will differ from those suggested by our forward looking statements and our results and operations may be negatively affected. Forward looking statements in this report include statements regarding profitability, additional acquisitions, increasing revenue and Operating EBITDA, continued growth of our business in line with historical growth rates, trends in our industry, financing plans, our anticipated needs for working capital and leveraging our capabilities. Actual events or results may differ materially from those discussed in forward-looking statements. There can be no assurance that the forward-looking statements currently contained in this report will in fact occur. The Company bases its forward-looking statements on information currently available to it. The Company disclaims any intent or obligations to update or revise publicly any forward-looking statements whether as a result of new information, estimates or options, future events or results or otherwise, unless required to do so by law. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this document. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in forward-looking information, including, without limitation: our ability to identify and complete corporate transactions on favorable terms or achieve anticipated synergies relating to any acquisitions or alliances; our ability to manage growth and achieve our expansion strategy; changes to payment rates or methods of third-party payors, including United States government healthcare programs, changes to the United States laws and regulations that regulate payments for medical services, the failure of payment rates to increase as our costs increase, or changes to our payor mix; decreases in our revenue and profit margin under our fee for service contracts

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and arrangements, where we bear the risk of changes in volume, payor mix, Radiology, Anesthesiology and Pathology benefits, and third-party reimbursement rates; Ambulatory Surgical Centers or other customers may terminate or choose not to renew their agreements with us; our need to raise additional capital to fund future operations; the effect of various restrictive covenants and events of default under the Credit Facilities; we may still be able to incur substantially more debt, which could further exacerbate the risks associated with increased leverage; significant price and volume fluctuation of our share prices; the risk that we may write-off intangible assets; the operating margins and profitability of our anesthesia segment could be adversely affected if we are unable to maintain or increase anesthesia procedure volumes at our existing Ambulatory Surgical Centers; we may not be able to successfully recruit and retain qualified anesthesiologists or other independent contractors; adverse events related to our product or our services may subject us to risks associated with product liability, medical malpractice or other legal claims, insurance claims, product recalls and other liabilities, which may adversely affect our operations; our industry’s health and safety risks; Affordable Care Act reform in the United States may have an adverse effect on our business, financial condition, results of operations and cash flows and the trading price of our securities, financial condition, results of operations and cash flows and the trading price of our securities; failure to manage third-party service providers may adversely affect our ability to maintain the quality of service that we provide; income tax audits and changes in our effective income tax rate could affect our results of operations; our dependence on suppliers could have a material adverse effect on our business, financial condition and results of operations; unfavorable economic conditions could have an adverse effect on our business; we may be subject to a variety of regulatory investigations, claims, lawsuits, and other proceedings; if we are unable to adequately protect or enforce our intellectual property, our competitive position could be impaired; we may not be successful in marketing our products and services; our employees and third-party contractors may not appropriately record or document services that they provide; failure to timely or accurately bill for services could have a negative impact on our net revenue, bad debt expense and cash flow; we may be unable to enforce the non-competition and other restrictive covenants in our agreements; our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management; our industry is already competitive and could become more competitive; if there is a change in federal or state laws, rules, regulations, or in interpretations of such federal or state laws, rules or regulations, we may be required to redeem our physician partners’ ownership interests in anesthesia companies under the savings clause in our joint venture operating agreements; changes in the United States federal Anti-Kickback Statute and Stark Law and/or similar state laws, rules, and regulations could result in criminal offences and potential sanctions; our employees and business partners may not appropriately secure and protect confidential information in their possession; we are dependent on complex information systems; we may be subject to criminal or civil sanctions if we fail to comply with privacy regulations regarding the protection, use and disclosure of patient information; we have a legal responsibility to the minority owners of the entities through which we own our anesthesia services business, which may conflict with our interests and prevent us from acting solely in our own best interests; a significant number of our affiliated physicians could leave our affiliated Ambulatory Surgical Centers; if regulations or regulatory interpretations change, we may be obligated to re-negotiate agreements of our anesthesiologists or other contractors; the continuing development of our products and provision of our services depends upon us maintaining strong relationships with physicians; we operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations; unfavorable changes or conditions could occur in the states where our operations are concentrated; government authorities or other parties may assert that our business practices violate antitrust laws; if we were to lose our foreign private issuer status under United States federal securities laws, we would likely incur additional expenses associated with compliance with United States securities laws applicable to United States domestic issuers; significant shareholders of the Company could influence our business

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operations, and sales of our shares by such significant shareholders could influence our share price; anti-takeover provisions could discourage a third party from making a takeover offer that could be beneficial to our shareholders; changes in the medical industry and the economy may affect the Company’s business; our industry is the subject of numerous governmental investigations into marketing and other business practices which could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our financial condition and results of operations; evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty; we may face exposure to adverse movements in foreign currency exchange rates.

For a complete discussion of the Company’s business including the assumptions and risks set out above, see the Company’s annual information form which is available on SEDAR at www.sedar.com.

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OVERVIEW

CRH Medical Corporation (“CRH”) is a North American company focused on providing gastroenterologists (“GI’s”) with innovative services and products for the treatment of gastrointestinal (“GI”) diseases. In 2014, CRH acquired a full service gastroenterology anesthesia company, Gastroenterology Anesthesia Associates, LLC (“GAA”), which provides anesthesia services for patients undergoing endoscopic procedures. CRH has complemented this transaction with fourteen additional acquisitions of GI anesthesia companies since GAA.

According to the Centers for Disease Control and Prevention (“CDS”), colorectal cancer is the second leading cause of cancer-related deaths in the United States and recent research indicates that the incidence of colon cancer in young adults is on the rise. The CDS has implemented campaigns to raise awareness of GI health and drive colorectal cancer screening rates among at risk populations. Colon cancer is treatable if detected early and screening colonoscopies are the most effective way to detect colon cancer in its early stages. Anesthesia-assisted endoscopies are the standard of care for colonoscopies and upper endoscopies.

CRH’s goal is to establish itself as the premier provider of innovative products and essential services to GI’s throughout the United States. The Company’s CRH O’Regan System distribution strategy focuses on physician education, patient outcomes, and patient awareness. The O’Regan System is a single use, disposable, hemorrhoid banding technology that is safe and highly effective in treating hemorrhoid grades I – IV. CRH distributes the CRH O’Regan System, treatment protocols, operational and marketing expertise as a complete, turnkey package directly to physicians, allowing CRH to create meaningful relationships with the physicians it serves.

The Company has financed its cash requirements primarily from revenues generated from the sale of its product directly to physicians, GI anesthesia revenue, equity financings, debt financings and a revolving and term credit facility. The Company’s ability to maintain the carrying value of its assets is dependent on successfully marketing its products and services, obtaining reasonable rates for anesthesia services and maintaining future profitable operations, the outcome of which cannot be predicted at this time. The Company has also stated its intention to acquire or develop additional GI anesthesia businesses. In the future, it may be necessary for the Company to raise additional funds for the continuing development of its business plan, including additional acquisitions.

For further information about CRH Medical Corporation, including the Company’s Annual Information Form, please visit the Company website at www.crhmedcorp.com or www.sedar.com, or email us at ir@crhmedcorp.com.

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SELECTED IFRS FINANCIAL INFORMATION

	2017		2016		2015
Anesthesia services revenue	$	88,741,075	$	67,821,879	$	34,496,035
Product sales revenue		11,501,005		10,532,753		9,552,445
Total revenue		100,242,080		78,354,632		46,048,480
Total operating expenses, including:		85,688,084		53,599,792		32,617,294
Depreciation and amortization expense		23,805,145		14,932,118		6,859,393
Stock based compensation expense		3,454,011		1,376,674		2,749,452
Impairment of professional services agreement		6,653,015		-		389,693
Operating income		14,553,996		24,754,840		13,431,186
Net and comprehensive income	$	13,668,118	$	16,076,328	$	3,259,828
Attributable to:
Shareholders of the Company		6,558,966		10,564,233		3,076,191
Non-controlling interest1		7,109,152		5,512,095		183,637
Earnings per share attributable to shareholders:
Basic	$	0.089	$	0.147	$	0.045
Diluted	$	0.087	$	0.142	$	0.043
Total assets	$	198,450,878	$	163,538,882	$	104,495,278
Total non-current liabilities	$	64,331,015	$	54,523,444	$	39,389,376
Total liabilities	$	73,514,590	$	66,612,595	$	47,520,913

NON-IFRS FINANCIAL MEASURES

In addition to results reported in accordance with IFRS, the Company uses certain non-IFRS financial measures as supplemental indicators of its financial and operating performance. These non-IFRS financial measures include Adjusted operating EBITDA and Adjusted operating expenses. The Company believes these supplementary financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

SELECTED FINANCIAL INFORMATION – NON-IFRS MEASURES

	2017		2016		2015
Total Adjusted operating expenses2	$	51,107,595	$	36,864,304	$	22,016,845
Adjusted operating EBITDA3 – non-controlling interest1		14,798,542		9,119,211		607,289
Adjusted operating EBITDA3 - shareholders of the Company		34,335,942		32,371,117		23,424,346
Adjusted operating EBITDA3 - total	$	49,134,485	$	41,490,328	$	24,031,635

¹  Non-controlling interest reflects the ownership interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company.

²  Adjusted operating expenses: This is a non-IFRS measure defined as operating expenses before acquisition related expenses, stock based compensation, depreciation, amortization and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

³  Adjusted operating EBITDA: This is a non-IFRS measure defined as operating income before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

5

RECENT EVENTS

In June 2017, the Company amended its Scotia Facility to provide financing of up to $100,000,000, from $55,000,000, via a revolving and term facility. In conjunction with the amendment to the Scotia Facility, the company repaid and extinguished its Crown note, consolidating all of the Company’s debt facilities into one.

The increase in the Scotia Facility has aided in facilitating the Company’s goal of consolidating the highly fragmented gastroenterology anesthesia provider business by enabling the Company to complete an additional four acquisitions in the third quarter of 2017 on top of the two acquisitions completed earlier in the year. Acquisitions completed in 2017 are highlighted below, along with recent events impacting the Company:

Normal Course Issuer Bid (“NCIB”) – November 2017

In November 2017, the Company received approval from the Toronto Stock Exchange of its intention to make a Normal Course Issuer Bid. Pursuant to the bid, the Company may purchase for cancellation up to 7,120,185 of its common shares (“Common Shares”), or approximately 10% of the Common Shares outstanding as of the date of this announcement (representing 10% of the public float). As of October 31, 2017, there were 74,127,238 Common Shares of the Company issued and outstanding, and the public float consisted of 71,201,855 Common Shares.

The Bid is being adopted in addition to, and not as a substitute for, other investments in growth opportunities historically undertaken and contemplated by the Company. The Bid will be funded through the Company’s internally generated cash flow from operations. As of December 31, 2017, the Company repurchased 1,339,800 of its shares for a total cost, including transaction fees, of $2,872,713 (CAD$3,669,120). As at December 31, 2017, 1,267,400 of these shares have been cancelled with the remaining 72,400 shares cancelled on January 5, 2018.

CMS 2018 Medicare Final Physician Fee Schedule – November 2017

The final CMS 2018 Medicare Physician Fee Schedule was announced on November 2, 2017 and updates payment policies, payment rates, and other provisions for services furnished under the Medicare Physician Fee Schedule on or after January 1, 2018.

The Proposed Rule changes the billing structure for CRH’s primary billing code for anesthesia provided in conjunction with a lower endoscopy by eliminating the existing billing code and replacing it with two new billing codes. The new billing codes will have the net effect of decreasing the amount CRH will likely bill and collect for anesthesia services provided in conjunction with a lower endoscopy. At this point, the Company expects that the new billing codes will be adopted by all commercial and federal payors effective January 1, 2018.

When announced, the Company analyzed the impact of the new codes on its business and determined that if the new codes were implemented as proposed based on our then current financial results, anesthesia revenue would decrease by approximately 12% and total revenue would decrease by approximately 10.5%. In addition, our total adjusted operating EBITDA¹ would decrease by approximately 20.0%.

As a result of the potential decrease in revenues and adjusted operating EBITDA¹, the Company has reviewed the exclusive professional services agreements for impairment triggers, and performed impairment testing accordingly on certain agreements. As a result of this analysis, an impairment of the GAA professional services agreement was identified and an impairment charge of $6,653,015 was taken in

¹ Adjusted operating EBITDA: This is a non-IFRS measure defined as operating income before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

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the fourth quarter of 2017. The value of the company’s exclusive professional services agreements are sensitive to assumptions underlying revenue growth. Future declines in revenue may require additional impairment analysis. In conjunction with the impairment of the GAA professional services agreement, the Company re-evaluated its earn-out obligation in respect of the GAA acquisition for the CMS changes. As a result of this review, the Company reduced its earn-out obligation to $1,875,427 at December 31, 2017 and recorded $11,747,441 as a finance recovery in the year ended December 31, 2017.

Alamo Sedation Associates, LLC (“ASA”) – September 2017

On September 28, 2017, a subsidiary of the Company entered into an asset purchase agreement to acquire 100% of certain assets of an anesthesia services provider in Texas. The purchase consideration, paid via cash, for the acquisition was $3,500,000. The fair value of the exclusive professional service agreement which was acquired as part of this acquisition is $3,500,000.

Raleigh Sedation Associates, LLC (“RSA”) – September 2017

On September 21, 2017, a subsidiary of the Company entered into an agreement of contribution, merger and sale to acquire a 51% interest in Raleigh Sedation Associates, LLC (“RSA”) and Blue Ridge Sedation Associates, PLLC (“BRSA”). In combination, these entities provide gastroenterology anesthesia services in North Carolina. The purchase consideration, paid via cash, for the acquisition of the Company’s 51% interest was $7,248,960. The fair value of the exclusive professional service agreement which was acquired as part of this acquisition is $14,213,647.

Central Colorado Anesthesia Associates, LLC (“CCAA”) – September 2017

On September 11, 2017, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire a 51% interest in Central Colorado Anesthesia Associates, LLC (“CCAA”), a gastroenterology anesthesia services provider in Colorado. The purchase consideration, paid via cash, for the acquisition of the Company’s 51% interest was $7,888,919. The fair value of the exclusive professional service agreement which was acquired as part of this acquisition is $15,468,469.

West Florida Anesthesia Associates, LLC (“WFAA”) – August 2017

On August 1, 2017, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire a 55% interest in West Florida Anesthesia Associates, LLC (“WFAA”), a gastroenterology anesthesia services provider in Ft Meyers, Florida. The purchase consideration, paid via cash, for the acquisition of the Company’s 55% interest was $5,840,000. The fair value of the exclusive professional service agreement which was acquired as part of this acquisition is $10,606,192.

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Scotia Facility – June 2017

On June 26, 2017, the Company amended the Scotia Facility to provide financing of up to $100,000,000 via a revolving and term facility. The amended facility has a maturity date of June 26, 2020. In conjunction with this amendment, the Company incurred fees of $445,598. As at December 31, 2017, the Company had drawn $61,700,000 on the amended facility (2016 - $29,000,000).

Crown Extinguishment – June 2017

In conjunction with an increase to the Scotia Facility, the Company repaid in full the principal owing on the Crown Note of CAD$22,500,000 ($17,043,750), with related interest, prepayment penalties and other extinguishment costs of CAD$1,568,384 ($1,188,051). As a result of the extinguishment of the Crown Note, the Company recorded finance expense of $1,789,882 during the quarter ended June 30, 2017.

Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”) – March 2017

In March 2017, a subsidiary of the Company entered into a membership interest purchase agreement to acquire a 60% interest in Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”), a gastroenterology anesthesia services provider in Kissimmee, Florida. The purchase consideration, paid via cash, for the acquisition of the Company’s 60% interest was $3,401,819. The fair value of the exclusive professional service agreement which was acquired as part of this acquisition is $5,669,698.

Puget Sound Gastroenterology – March 2017

In March 2017, the Company entered into an exclusive agreement to develop and manage a monitored anesthesia care program with Puget Sound Gastroenterology, located in Washington State. Under the terms of the agreement, CRH has the option to acquire a 51% interest in the newly created anesthesia business at a future date, but no sooner than 12 months from March 2017 and up to June 30, 2019. Until such time as the option to purchase is exercised, the Company will not recognize any material revenue or expense from this transaction.

DDAB, LLC (“DDAB”) – February 2017

In February 2017, a subsidiary of the Company entered into a membership purchase interest purchase agreement to acquire a 51% interest in DDAB, LLC (“DDAB”), a gastroenterology anesthesia services provider in Decatur, Georgia. The purchase consideration, paid via cash, for the acquisition of the Company’s 51% interest was $4,089,791 plus contingent consideration of $1,183,779, which was paid in the third quarter of 2017. The fair value of the exclusive professional service agreement which was acquired as part of this acquisition is $10,340,333.

8

NON-IFRS FINANCIAL MEASURES

In addition to results reported in accordance with IFRS, the Company uses certain non-IFRS financial measures as supplemental indicators of its financial and operating performance. These non-IFRS financial measures include Adjusted operating EBITDA and Adjusted operating expenses. The Company believes these supplementary financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

The Company defines Adjusted operating EBITDA as operating earnings before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses and asset impairment charges. Adjusted operating EBITDA is presented on a basis consistent with the Company’s internal management reports. The Company discloses Adjusted operating EBITDA to capture the profitability of its business before the impact of items not considered in management’s evaluation of operating unit performance.

The Company defines Adjusted operating expenses as operating expenses before expenses related to acquisitions, stock based compensation, depreciation, amortization and asset impairment charges. Adjusted operating expenses is presented on a basis consistent with the Company’s internal management reports. The Company discloses Adjusted operating expenses to capture the non-operational expenses of the business before the impact of items not considered by management to impact operating decisions. The Company also discloses Adjusted operating expenses by segment.

Adjusted operating EBITDA and Adjusted operating expenses do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other companies. The Company cautions readers to consider these non-IFRS financial measures in addition to, and not as an alternative for, measures calculated in accordance with IFRS.

Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

9

SELECTED FINANCIAL INFORMATION – IFRS and NON-IFRS MEASURES

	2017		2016		2015
Anesthesia services revenue	$	88,741,075	$	67,821,879	$	36,496,035
Product sales revenue		11,501,005		10,532,753		9,552,445
Total revenue		100,242,080		78,354,632		46,048,480
Adjusted operating expenses1
Anesthesia services		42,834,918		29,767,269		15,528,409
Product sales		4,568,422		4,059,858		3,723,633
Corporate		3,704,255		3,037,177		2,764,803
Total Adjusted operating expenses1	$	51,107,595	$	36,864,304	$	22,016,845
Adjusted operating EBITDA2 – non-controlling interest3		14,798,542		9,119,211		607,289
Adjusted operating EBITDA2 - shareholders of the Company		34,335,943		32,371,117		23,424,346
Adjusted operating EBITDA2 – total	$	49,134,485	$	41,490,238	$	24,031,635
Adjusted Operating EBITDA2 per share attributable to shareholders:
Basic	$	0.466	$	0.451	$	0.345
Diluted	$	0.455	$	0.436	$	0.331

¹  Adjusted operating expenses: This is a non-IFRS measure defined as operating expenses before acquisition related expenses, stock based compensation, depreciation, amortization and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

²  Adjusted operating EBITDA: This is a non-IFRS measure defined as operating income before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

³  Non-controlling interest reflects the ownership interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company.

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RESULTS OF OPERATIONS – three months and year ended December 31, 2017

Except where otherwise indicated, all financial information discussed below is 100% of the consolidated results of the Company and includes both the Company’s interest in subsidiaries, as well as the interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company.

Revenue

Revenues for the year ended December 31, 2017 were $100,242,080 compared to $78,354,632 for the year ended December 31, 2016. The increase is mainly attributable to revenue contributions from the anesthesia businesses acquired by the Company in 2017, along with acquisitions completed mid-year in fiscal 2016. Revenues for the three months ended December 31, 2017 reflect the revenue contributions from anesthesia businesses acquired earlier in the year and were $32,302,854, an increase of $6,480,751 when compared to the three months ended December 31, 2016.

Revenues from anesthesia services for the year ended December 31, 2017 were $88,741,075 compared to $67,821,879 for the year ended December 31, 2016. As above, the increase was primarily due to the Company’s anesthesia acquisitions throughout 2017 and 2016; however, there were a number of factors which impacted the change in revenue between fiscal 2017 and fiscal 2016. The $20.9 million increase in revenue from the prior period is reflective of the following:

• growth through acquisitions contributed $23.4 million of the increase when comparing the two periods. This is comprised of growth from acquisitions completed in 2017 ($14.3 million) and growth from acquisitions completed in 2016 ($9.2 million);

• a change in our commercial payor mix and rates within our commercial payors contributed a decrease in revenue of $4.6 million when compared to revenues from 2016. This is largely isolated to acquisitions completed within 2014 and 2015;

• a positive adjustment as a result of the change in the impact of revenue estimates of $1.4 million, when compared to 2016; and

• revenue growth from our exclusive agreement to develop and manage a monitored anesthesia care program with Puget Sound Gastroenterology of approximately $0.7 million (see recent events).

Anesthesia revenues for the three months ended December 31, 2017 were $29,230,584 compared to $23,008,147 for the three months ended December 31, 2016. The $6.2 million increase in revenue from the prior period is reflective of the following:

• increased revenue from acquisitions completed in 2017, of $9.6 million

• a change in our commercial payor mix and rates within our commercial payors contributed a decrease in revenue of $3.4 million when compared to revenues from 2016;

• a negative adjustment as a result of the change in the impact of revenue estimates of $0.2 million, when compared to the 2016 year to date period; and

• revenue growth from our exclusive agreement with Puget Sound Gastroenterology of approximately $0.3 million (see recent events).

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During the three months and year ended December 31, 2017, revenue was affected by changes in the percentage of patient cases covered by commercial insurance versus federal insurance. Revenue was also affected by commercial payor mix changes that result from the annual process that insured individuals and companies go through when renewing their health insurance policies and from changes in rates from commercial payors as the Company executes contracts with payors. Changes in payor mix could have a positive or negative impact on revenues. The commercial payor mix changes described above primarily relate to one payor at GAA. As adjusted operating expenses are largely fixed in nature, changes in revenue primary drive changes in operating income and adjusted operating EBITDA.

In the year ended December 31, 2017, the anesthesia services segment serviced 201,578 patient cases compared to 141,020 patient cases during the year ended December 31, 2016. Patient cases serviced in the fourth quarter of 2017 were 64,684 compared to 45,041 patient cases in the fourth quarter of 2016.

The tables below summarizes our approximate payor mix as a percentage of all patient cases for the years ended December 31, 2017 and 2016 and for the fourth quarters of 2017 and 2016.

	Three months ended			Years ended
Payor	December   31, 2017	December   31, 2016	Change	December   31, 2017	December   31, 2016	Change
Federal	34.5%	34.1%	1.0%	37.3%	38.0%	(1.8%)
Commercial	65.5%	65.9%	(0.6%)	62.7%	62.0%	1.1%
Total	100.0%	100.0%		100.0%	100.0%

The payor mix for the three months and year ended December 31, 2017 includes acquisitions completed during 2017 and as a result is not directly comparable to the three months and year ended December 31, 2016. As we acquire anesthesia providers, these providers may have different payor mix profiles and impact our overall payor mix above.

The table below summarizes our approximate payor mix as a percentage of all patient cases for the year and three months ended December 31, 2017 and 2016, but exclude patient cases related to acquisitions completed in 2017.

	Three months ended			Years ended
Payor	December   31, 2017	December   31, 2016	Change	December   31, 2017	December   31, 2016	Change
Federal	33.2%	34.1%	(2.6%)	36.4%	38.0%	(4.2%)
Commercial	66.8%	65.9%	1.4%	63.6%	62.0%	2.6%
Total	100.0%	100.0%		100.0%	100.0%

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The table below summarizes our approximate payor mix as a percentage of all patient cases for the year ended December 31, 2017, by quarter, and excludes patient cases related to acquisitions completed in 2017.

Payor	Q4 2017	Q3 2017	Q2 2017	Q1 2017
Federal	33.2%	37.0%	38.1%	37.7%
Commercial	66.8%	63.0%	61.9%	62.3%
Total	100.0%	100.0%	100.0%	100.0%

In 2018, the Company expects revenue from anesthesia services for the acquisitions completed through December 31, 2017 to be negatively impacted by the November 2, 2017 CMS final rule coming into effect on January 1, 2018 and to be negatively impacted by changes in the per unit reimbursements received from our commercial payors. The CMS final rule will impact our revenue per case by an estimated 12.5% and the changes from our commercial payors is expected to impact our revenue per case by an additional 5%. We expect the negative impacts to anesthesia revenue to be offset through organic growth in patient cases and deployment of available capital for future acquisitions.

Seasonality is driven by both patient cases and seasonal payor mix. As a result, revenue per patient will fluctuate quarterly. The seasonality of patient cases for fiscal 2017 is provided below for organic patient cases; it excludes patient cases relating to acquisitions completed in 2017.

Seasonality	Q4	Q3	Q2	Q1
Patient cases	26.9%	24.9%	24.4%	23.8%

Revenues from product sales for the year ended December 31, 2017 were $11,501,005 compared to $10,532,753 for 2016. The increase in product sales is the result of the continuing successful execution of the Company’s direct to physician program that allows physicians to purchase our hemorrhoid banding technology, treatment protocols, marketing and operational experience. Revenues from product sales for the three months ended December 31, 2017 were $3,072,270 compared to $2,813,956 for the three months ended December 31, 2016. As of December 31, 2017, the Company has trained 2,686 physicians to use the O’Regan System, representing 1,034 clinical practices. This compares to 2,414 physicians trained, representing 930 clinical practices, as of December 31, 2016.

In the future, the Company expects revenue from product sales to continue to increase, as it has historically, as we expand our physician network and increase physician use of our technology. Potentially offsetting these increases would be competitive pressures that could impact our market share or pricing power.

Total adjusted operating expenses

For the year ended December 31, 2017, total adjusted operating expenses were $51,107,595 compared to $36,864,304 for the year ended December 31, 2016. For the three months ended December 31, 2017, total adjusted operating expenses were $15,340,310 compared to $11,321,510 for the three months ended December 31, 2016. Increases in adjusted operating expenses are primarily related to adjusted operating expenses in the anesthesia services business. Factors impacting the fluctuation of total adjusted operating expenses are consistent with those impacting operating expenses.

Anesthesia services adjusted operating expenses for the year ended December 31, 2017 were $42,834,918, compared to $29,767,269 for the year ended December 31, 2016. Anesthesia services adjusted operating expenses primarily include labor related costs for Certified Registered Nurse Anesthetists and MD anesthesiologists, medical drugs and supplies, and billing and management related

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expenses. The Company’s first anesthesia acquisition was in the fourth quarter of 2014, with fourteen further acquisitions completed in 2015, 2016 and 2017. As a result, fiscal 2017 is not directly comparable to 2016, with the majority of the increase relating to operating expenses for acquired companies and as a result of infrastructure investments made by the Company throughout 2017. As the Company works toward its acquisition strategy, it has invested in resources and infrastructure to support its initiatives. The investment in resources and infrastructure contributed approximately $1.0 million in anesthesia adjusted operating expenses in the year. Anesthesia services adjusted operating expenses for the three months ended December 31, 2017 were $13,162,989 compared to $9,492,140 for the three months ended December 31, 2016. Similar to the year ended December 31, 2017, the last quarter of 2017 is not comparable to the same period in 2016 due to the timing of acquisitions. Investments in infrastructure and resources contributed approximately $0.1 million to anesthesia services adjusted operating expenses in the quarter. Though quarterly revenue may fluctuate significantly, quarterly adjusted operating expenses, which are primarily employee related costs, due to their fixed nature, are not expected to fluctuate materially. These expenses are primarily impacted by the Company’s acquisition strategy

Product sales adjusted operating expenses for the year ended December 31, 2017 were $4,568,422 compared to $4,059,858 for the year ended December 31, 2016. The increase in product sales adjusted operating expenses compared to 2016 is a reflection of higher employee related costs as a result of increased sales activity as well as an increase in professional fees related to continuing efforts to distribute our product in China. Product sales expenses primarily include employee wages, product cost and support, marketing programs, office expenses, professional fees, and insurance. In the future, the Company expects adjusted operating expenses to increase as the Company continues to invest in activities aimed at increasing demand for training and use of the CRH O’Regan System. Product sales adjusted operating expenses for the three months ended December 31, 2017 were $1,295,163 compared to $1,083,481 for the three months ended December 31, 2016.

Corporate adjusted operating expenses for the year ended December 31, 2017 were $3,704,255 compared to $3,037,177 for the year ended December 31, 2016. The increase in corporate adjusted operating expense is a reflection of higher professional fees and employee related costs, and, in general, is reflective of the increasing complexity of our business which is also increasing our compliance costs. Corporate adjusted operating expenses for the three months ended December 31, 2017 were $882,158 compared to $745,889 for the three months ended December 31, 2016.

Operating Income

Operating income for the year ended December 31, 2017 was $14,553,996 compared to $24,754,840 for the same period in 2016. Contributing to the decrease in operating income for the year is an increase in total adjusted operating EBITDA of $7,647,170, offset by the following:

• the impairment charge taken in the fourth quarter of 2017 of $6,653,015 in relation to the GAA professional services agreements;

• incremental costs related to the amortization of acquired professional service agreements relating to acquisitions completed in 2016 and 2017 of $8,873,027; and

• an increase in stock based compensation expense of $2,077,337 and an increase in acquisition expenses of $241,624. The increase in stock based compensation expense relates primarily to restricted share units which are market based and which were granted to senior management.

Fluctuations in revenue will not necessarily result in correlating fluctuations in operating expenses due to the fixed nature of these costs and as such will impact operating income.

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Operating income for the three months ended December 31, 2017 was $2,218,667 compared to income of $9,173,148 for the three months ended December 31, 2016. Contributing to the decrease in operating income for the three months is an increase in total adjusted operating EBITDA of $2,461,951, offset by the following:

• the impairment charge taken in the fourth quarter of 2017 of $6,653,015 in relation to the GAA professional services agreements;

• incremental costs related to the amortization of acquired professional service agreements relating to acquisitions completed in 2016 and 2017 of $2,450,269; and

• an increase in stock based compensation expense of $273,452 and an increase in acquisition expenses of $39,696.

Anesthesia operating income for the year ended December 31, 2017 was $14,425,651 a decrease of $8,166,242 from the same period in 2016. This decrease is primarily reflective of the impairment charge taken in the fourth quarter, as well as the incremental costs related to the amortization of acquired professional service agreements relating to acquisitions completed in 2016 and 2017, offset by the increase in operating EBITDA in the year. Anesthesia operating income for the three months ended December 31, 2017 was $2,074,900 compared to income of $8,622,390 for the three months ended December 31, 2016.

Product operating income for the year ended December 31, 2017 was $6,503,455, an increase of $473,812 from the same period in 2016. The increase is primarily a result of the increased revenue in the year ended December 31, 2017, offset by increases in employee related expenses and professional fees. Product operating income for the three months ended December 31, 2017 was $1,664,559 compared to $1,590,453 for the three months ended December 31, 2016.

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Adjusted operating EBITDA

Adjusted operating EBITDA attributable to shareholders of the Company for the year ended December 31, 2017 was $34,335,942, an increase of $1,964,826 from the year ended December 31, 2016. The increase in adjusted operating EBITDA attributable to shareholders is primarily a reflection of the contributions from acquisitions completed in 2017, offset by the negative revenue rate and payor mix variances recorded in the year in respect of the Company’s anesthesia providers acquired prior to 2016. Adjusted operating EBITDA attributable to shareholders of the Company for the three months ended December 31, 2017 was $11,489,153 an increase of $1,207,771 from the same period in 2016.

Adjusted operating EBITDA attributable to non-controlling interest was $14,798,542 for the year ended December 31, 2017. This comprises the non-controlling interests’ share of revenues of $25,906,688 and adjusted operating expenses of $11,108,146. Adjusted operating EBITDA attributable to non-controlling interest was $5,473,391 for the three months ended December 31, 2017. This comprises the non-controlling interests’ share of revenues of $9,394,392 and adjusted operating expenses of $3,921,001.

Total adjusted operating EBITDA was $49,134,485 for the year ended December 31, 2017, an increase of $7,644,156 from the same period in 2016. Total adjusted operating EBITDA was $16,962,544 for the three months ended December 31, 2017, an increase of $2,461,951 from the same period in 2016.

Net finance (income) / expense

As a result of the Company’s debt facilities and long-term finance obligations, the Company has recorded a net finance recovery of $5,416,629 for the year ended December 31, 2017, compared to finance expense of $4,423,362 for the year ended December 31, 2016. The Company recorded a net finance recovery of $9,834,227 for the three months ended December 31, 2017, compared to net finance expense of $1,175,492 for the three months ended December 31, 2016. Net finance expense is comprised of both interest and other debt related expenses, including fair value adjustments, as well as foreign exchange gains and losses on the Crown debt which was denominated in Canadian dollars and the related cross currency swap the Company entered into on the Crown debt on January 21, 2016. The cross currency swap locked in the repayment of the Crown debt principal and interest at a Canadian dollar to U.S. dollar rate of 1.448. On June 26, 2017, the Company paid off and extinguished its Crown debt and settled the related cross currency swap. As a result of the extinguishment of the Crown debt and the amendment of the Scotia facility, the Company recorded finance expense of $2,044,867 related to these activities during the year ended December 31, 2017.

During the year ended December 31, 2017, the Company recognized a fair value adjustment (recovery of $11,747,441) in respect of its earn-out obligation. The fair value adjustment resulted from changes in estimates underlying the Company’s earn-out obligation. The changes in estimates underlying the Company’s earn-out obligation were driven by the changes in commercial and payor mix experienced in GAA, as well as the impact of the CMS changes described in the recent events section of this document. At the same time these estimates were updated, the Company also recorded an impairment charge relating to its GAA professional services agreements for the same reasons. In the fourth quarter of 2017, the Company recorded an impairment charge of $6,653,015 in respect of the GAA professional services agreements.

Cash interest paid in the year ended December 31, 2017 was $2,863,284 compared to $3,135,765 in the year ended December 31, 2016. Cash interest paid in the three months ended December 31, 2017 was $889,999, compared to cash interest of $709,239. Additionally, during 2017 the Company paid prepayment penalties and other cash extinguishment costs of $700,553; these costs are related to the extinguishment of the Crown debt in the second quarter of 2017. At December 31, 2017, the Company owed $61.7 million

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under the amended Scotia Facility as compared to $29.0 million owed at December 31, 2016. The Company anticipates that, in future, cash interest will increase in comparison to 2017 cash interest paid as the Company draws on its Facility.

In the year ended December 31, 2017, after excluding the impact of foreign exchange and the finance expense recorded as a result of extinguishing the Crown debt and modifying the Scotia facility, the finance recovery was $7,549,580 compared to a finance expense of $5,431,035 recorded in the same period in 2016. Finance expense, excluding fair value adjustments, the impact of foreign exchange and extinguishment losses, was $4,197,861, compared to $5,226,077 for the year ended December 31, 2016.

The Company did not record any exchange gains or losses within finance income during the quarter as the Company did not hold any Canadian denominated debt in the period. In the quarter ended December 31, 2016, the Company recorded an exchange loss of $18,756 in relation to the Crown note and the cross currency swap. Finance expense, excluding fair value adjustments and foreign exchange was $1,098,649, compared to $1,293,504 for the quarter ended December 31, 2016. The fair value adjustment recorded in the quarter (recovery of $10,932,876) resulted from changes in estimates underlying the Company’s earn-out obligation.

	Three months ended				Years ended
	December 31, 2017		December 31, 2016		December 31, 2017		December 31, 2016
Finance income:
Foreign exchange (gain)	$	-	$	-	$	-	$	(1,007,673)
Net change in fair value of financial liabilities at fair value through earnings		(10,932,876)		(136,767)		(11,747,441)
Total finance income	$	(10,932,876)	$	(136,767)	$	(11,747,441)	$	(1,007,673)
Finance expense:
Interest and accretion expense on borrowings	$	903,026	$	1,075,429	$	3,322,321	$	4,042,240
Accretion expense on earn-out obligation and deferred consideration		138,361		143,801		600,602		560,150
Amortization of deferred financing fees		32,262		74,273		224,463		614,472
Net change in fair value of financial liabilities at fair value through earnings		-		-		-		204,958
Foreign exchange loss		-		18,756		88,084		-
Extinguishment of notes payable and bank indebtedness		-		-		2,044,867		-
Other		25,000		-		50,475		27,215
Total finance expense	$	1,098,649	$	1,312,259	$	6,330,812	$	5,431,035
Net finance (income) expense	$	(9,834,227)	$	1,175,492	$	(5,416,629)	$	4,423,362

Income tax expense

For the year ended December 31, 2017, the Company recorded an income tax expense of $6,302,507 compared to income tax expense of $4,255,150 for the year ended December 31, 2016. Income tax expense relates only to income attributable to the Company’s shareholders. The Company recorded an income tax expense of $5,754,656 in the three months ended December 31, 2017 compared to $1,643,474 recorded in the three months ended December 31, 2016. The effective tax rate experienced in 2017 is not reflective of future expectations of the Company’s effective tax rate as fiscal 2017 tax expense includes the impact of the downward change in the US tax rate on the Company’s deferred tax items.

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Net and comprehensive income

For the year ended December 31, 2017, the Company recorded net and comprehensive income attributable to shareholders of the Company of $6,558,966 compared to net and comprehensive income attributable to shareholders of $10,564,233 for the year ended December 31, 2016. The decrease year over year is largely a reflection of the decreased operating income in the year, offset by finance cost recoveries in the year. Finance expense is 100% allocable to shareholders.

For the three months ended December 31, 2017, the Company recorded net and comprehensive income attributable to shareholders of the Company of $3,282,256 compared to $3,469,948 for the same period in 2016.

Net and comprehensive income attributable to non-controlling interest was $7,109,152 for the year ended December 31, 2017. This is an increase of $1,597,057 from 2016 and reflects the business model adopted by CRH whereby recent acquisitions, though controlled by CRH, attribute a portion of income earned to non-controlling interests. Net and comprehensive income attributable to non-controlling interests was $3,015,981 for the three months ended December 31, 2017.

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SUMMARY OF QUARTERLY RESULTS (Unaudited)

The following table sets forth certain unaudited consolidated statements of operations data for each of the eight most recent quarters that, in management’s opinion, have been prepared on a basis consistent with the audited consolidated financial statements for the year ended December 31, 2017.

Seasonality impacts quarterly anesthesia and product revenues. With our expenses primarily fixed, adjusted operating EBITDA margins will fluctuate quarterly with operating EBITDA margins being greater during the fourth quarter of each year and operating EBITDA margins being less during the first quarter of each year. Seasonality also impacts net income as net income will fluctuate with fluctuations in adjusted operating EBITDA.

(in 000’s of US$, except EPS)	Q4 ‘17		Q3 ‘17		Q2 ‘17		Q1 ‘17		Q4 ‘16		Q3 ‘16		Q2 ‘16		Q1 ‘16
Anesthesia services revenue		29,231		20,480		19,268		19,763		23,008		19,447		13,930		11,437
Product sales revenue		3,072		2,865		2,788		2,776		2,814		2,661		2,657		2,400
Total revenue		32,303		23,345		22,055		22,539		25,822		22,108		16,587		13,837
Total operating expense		30,084		19,693		18,317		17,593		16,649		15,514		11,546		9,891
Adjusted operating expenses1
Anesthesia services1		13,163		10,363		9,840		9,469		9,492		8,794		6,158		5,323
Product sales1		1,295		1,094		1,142		1,037		1,083		974		1,004		998
Corporate1		882		994		844		985		746		685		853		754
Product sales – adjusted margin5		58%		62%		59%		63%		61%		63%		62%		58%
Anesthesia services – adjusted margin5		55%		49%		49%		52%		59%		55%		56%		53%
Total adjusted operating expenses1		15,340		12,451		11,825		11,491		11,321		10,453		8,015		7,075
Operating income		2,219		3,652		3,738		4,946		9,173		6,595		5,041		3,946
Adjusted operating EBITDA2 - non-controlling interest4		5,473		3,119		2,878		3,329		4,219		2,533		1,518		848
Adjusted operating EBITDA2 - shareholders of the Company		11,490		7,775		7,352		7,719		10,281		9,122		7,054		5,914
Adjusted operating EBITDA2 - total		16,963		10,894		10,230		11,048		14,500		11,655		8,572		6,762
Net finance (income) expense		(9,834)		(400)		3,571		1,246		1,175		1,381		2,156		(289)
Income tax expense (recovery)3		5,755		603		(453)		397		1,643		188		1,219		1,204
Net income		6,298		3,448		620		3,302		6,354		5,026		1,666		3,031
Attributable to:
Shareholders of the Company		3,282		2,228		(494)		1,542		3,470		2,870		1,269		2,956
Non-controlling interest4		3,016		1,219		1,114		1,760		2,884		2,156		397		75
Adjusted Operating EBITDA2 per share attributable to shareholders
Basic		0.156		0.105		0.099		0.106		0.142		0.127		0.099		0.083
Diluted		0.153		0.103		0.097		0.102		0.138		0.123		0.095		0.080
Earnings (loss) per share attributable to shareholders
Basic		0.044		0.030		(0.007)		0.021		0.048		0.040		0.018		0.041
Diluted		0.044		0.030		(0.007)		0.020		0.047		0.039		0.017		0.040

¹ Adjusted operating expenses: This is a non-IFRS measure defined as operating expenses before acquisition related expenses, stock based compensation, depreciation, amortization and asset impairment charges. Refer to the end of this document for the reconciliation of reported financial results to non-IFRS measures.

² Adjusted operating EBITDA: This is a non-IFRS measure defined as operating earnings before interest, taxes, depreciation, amortization, stock based compensation, acquisition related corporate expenses and asset impairment charges. Refer to the end of this document for the reconciliation of reporting financial results to non-IFRS measures.

³ Income tax expense for the three months ended September 30, 2016 includes an immaterial adjustment related to the prior quarters in 2016 associated with the non-controlling interests’ share of income tax expense.

⁴ Gross margin calculated with reference to sales less adjusted operating expenses

⁵ Non-controlling interest reflects the ownership interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company.

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LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2017, the Company had $12,486,884 in cash and cash equivalents compared to $9,507,004 at the end of 2016. The increase in cash and equivalents is primarily a reflection of cash generated from operations and debt financing activities, less cash used to finance normal course issuer bid repurchases and acquisitions during the first nine months of 2017, less repayment of debt in the period.

Working capital was $20,102,948 compared to working capital of $9,657,303 at December 31, 2016. The Company expects to meet its short-term obligations, including short-term obligations in respect of its notes payable and deferred consideration through cash earned through operating activities. The average number of days receivables outstanding at December 31, 2017 was 42 days. At December 31, 2016, the average number of days receivables outstanding was 34 days.

The Company has financed its operations primarily from revenues generated from product sales and anesthesia services and through equity and debt financings and a revolving credit facility. As of December 31, 2017, the Company has raised approximately $51 million from the sale and issuance of equity securities. The Company also obtained debt financing of $52 million via senior and subordinated credit facilities with Crown, Bloom Burton and Knight in 2014 and entered into a revolving credit facility with the Bank of Nova Scotia for $33 million in 2015, which was subsequently increased to $55 million in 2016. Most recently, the Company amended its debt facility with the Bank of Nova Scotia, increasing its facility to $100 million on June 26, 2017. As at December 31, 2017, the Company owed $61.7 million under the facility.

The Company’s credit facilities are described as follows:

Crown Capital Fund III Management Inc. (“Crown Note”)

On December 1, 2014, the Company entered into an agreement to borrow funds in the form of a subordinated note payable from Crown Capital Fund III Management Inc. At inception, the original amount of the note payable was CAD$22,500,000 (USD$19,863,000). The note bore interest at 12% per annum with a decrease to 10% upon repayment and performance in full of the Company’s obligations under its senior credit agreement (see Scotia Facility). Interest on the note was payable on a quarterly basis beginning March 31, 2015, with the payment of the principal scheduled for June 1, 2018. In compensation for its services, the Company paid Crown a combination of cash CAD$1,350,000 (USD$1,191,780) and shares (2,000,000 common shares) in addition to reimbursement of legal costs in relation to issuance of the note. The Crown note was subordinate to the Scotia Facility. The note was classified as an other financial liability and recorded at amortized cost.

In conjunction with an increase to the Scotia Facility in June 2017, noted below, the Company repaid in full the principal owing on the Crown Note of CAD$22,500,000 ($17,043,750), with related interest, prepayment penalties and other extinguishment costs of CAD$1,568,384 ($1,188,051). As a result of the extinguishment of the Crown Note, the Company recorded finance expense of $1,789,882 representing the difference between the carrying value of the loan at extinguishment and the consideration transferred to extinguish its financial obligations under the Crown Note.

The Bank of Nova Scotia (“Scotia Facility”)

On November 24, 2015, the Company entered into a credit facility with the Bank of Nova Scotia. The facility, which had a maturity date of April 30, 2018, provided financing of up to $55,000,000, after amendment on June 15, 2016. In conjunction with the 2016 amendment, the Company paid $390,400 in fees to the Bank of Nova Scotia and legal counsel.

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On June 26, 2017, the Company amended the Scotia Facility to provide financing of up to $100,000,000 via a revolving and term facility. The amended facility has a maturity date of June 26, 2020. In conjunction with this amendment, the Company incurred fees of $445,598. As at December 31, 2017, the Company had drawn $61,700,000 on the amended facility (2016 - $29,000,000). The amendment was determined to be a substantial modification and the Company extinguished the previous Scotia facility and wrote off deferred financing costs related to the previous facility of $173,511. The Facility is repayable in full at maturity, with scheduled principal repayments on a quarterly basis beginning September 30, 2017 based on the initial principal issued under the term facility. The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin. At December 31, 2017, interest on the facility is calculated at LIBOR plus 2.50% on the revolving portion and term portion of the facility. The Facility is secured by the assets of the Company. The Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

The Company is in compliance with all covenants at December 31, 2017.

Cash provided by operating activities for the year ended December 31, 2017 was $39,536,613 compared to $32,922,582 in the same period in fiscal 2016. Cash provided by operating activities for the quarter ended December 31, 2017 was $11,689,966 compared to $10,669,732 for the same period in fiscal 2016.

The Company’s near-term cash requirements relate primarily to interest payments, quarterly principal payments in respect of the Scotia Facility, annual payments in respect of the deferred consideration in relation to the Austin acquisition, purchases under the Company’s normal course issuer bid, operations, working capital and general corporate purposes, including further acquisitions. Based on the current business plan, the Company believes cash and cash equivalents and the availability of its revolving credit facility will be sufficient to fund the Company’s operating, debt repayment and capital requirements for at least the next 12 months. The Company updates its forecasts on a regular basis and will consider additional financing sources as appropriate.    

The following table summarizes the relative maturities of the financial liabilities of the Company at December 31, 2017:

At December 31, 2017	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	5,661,844	$	5,661,844	$	-	$	-	$	-
Employee benefits		500,754		500,754		-		-		-
Notes payable and bank indebtedness		68,502,574		4,018,179		64,484,395		-		-
Earn-out obligation		1,977,334		-		1,977,334		-		-
Deferred consideration		3,300,000		1,000,000		2,300,000		-		-
	$	79,942,506	$	11,180,777	$	68,761,729	$	-	$	-

As at December 31, 2017, the Company has no material contractual obligations, other than those obligations relating to its leases of premises and those obligations under its debt agreements, deferred consideration agreements, normal course issuer bid agreements, and earn-out obligations as described above. The minimum lease payments in respect of the Company’s leases will be $237,299 in fiscal 2018.

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OUTSTANDING SHARE CAPITAL

As at December 31, 2017, there were 73,018,588 common shares issued and outstanding for a total of $53,925,537 in share capital.

As at December 31, 2017, there were 1,344,687 options outstanding at a weighted-average exercise price of $0.55 per share, of which 1,272,812 were exercisable into common shares at a weighted-average exercise price of $0.54 per share. As at December 31, 2017, there were 2,386,500 share units issued and outstanding.

As at March 2, 2018 there were 72,849,888 common shares issued and outstanding for a total of $53,801,901 in share capital. There are 1,344,687 options outstanding at a weighted-average exercise price of $0.53 per share, of which 1,344,687 are exercisable into common shares at a weighted average price of $0.53 per share. As at March 2, 2018, there are 2,386,500 share units issued and outstanding.

OFF BALANCE SHEET ARRANGEMENTS

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

PROPOSED TRANSACTIONS

As at December 31, 2017, the Board of Directors had not committed to proceed with any proposed asset or business acquisitions or dispositions that are not disclosed herein.

TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its wholly owned subsidiaries and entities over which the Company has control have been eliminated on consolidation. Details of the transactions between the Companies and other related parties are disclosed below:

(a) Related party transactions:

The Company paid or accrued fees of $194,750 (2016 - $210,100) to Directors of the Company. Additionally, the Company made product sales totaling $39,485 (2016 - $37,277) to one company (2016 - four companies) owned or controlled by one of the Company’s Directors (2016 – two of the Company’s Directors). The transaction terms with related parties may not be on the same price as those that would result from transactions among non-related parties.

Until June 16, 2016, one of the directors of the Company was an indirect shareholder of KGAA:

(b) Key management personnel compensation, including directors, is as follows:

	2017		2016
Salaries, directors’ fees and other benefits	$	1,307,233	$	1,369,329
Share-based payments		2,807,306		801,311
	$	4,114,539	$	2,170,640

(i) Share-based payments represent the amount expensed during the year for options granted.

(ii) There were no post-employment, termination or other long-term benefits paid during the years ended December 31, 2017 and 2016.

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DISCLOSURE CONTROLS AND PROCEDURES (DCP) AND INTERNAL CONTROLS OVER FINANCIAL REPORTING (ICFR)

The Company’s disclosure controls and procedures are designed to provide reasonable assurance that material information required to be disclosed in the prescribed filings and reports filed with the Canadian securities regulatory authorities is recorded, processed, summarized and reported on a timely basis. The Company’s controls are also designed to provide reasonable assurance that information required to be disclosed is assimilated and communicated to senior management in a timely manner so that appropriate decisions can be made regarding public disclosure. The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the Company’s disclosure controls and procedures and concluded that they provide reasonable assurance that material information relating to the Company was made known to them and reported as required.

Management has also designed internal controls over financial reporting to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements in accordance with International Financial Reporting Standards. Management, including the Company’s Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate ICFR, which has been developed based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO (2013)). The Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting based on the COSO (2013) framework and concluded that the Company’s internal control over financial reporting was effective as of December 31, 2017.

Regardless of how well an internal control system is designed and operated, it can provide only reasonable, not absolute, assurance that all misstatements due to error or fraud will be detected or prevented from occurring in the financial statements due to the inherent limitations of any internal control system.

During 2017, there were no significant changes in the Company’s internal controls over financial reporting that have materially affected or are reasonably likely to affect the Company’s internal controls over financial reporting.

As permitted by National Instrument 52-109, the evaluation of the design of disclosure controls and procedures and internal controls over financial reporting does not include controls, policies and procedures covering the Company’s acquisitions completed in the first quarter and third quarter of 2017. Prior to its acquisition by the Company, DDAB, OGAA, WFAA, CCAA, RSA and ASA were privately held companies. Revenues totaling $14,274,148 and net earnings before tax of $3,746,763 from these acquisitions were included in our consolidated financial statements for the year ended December 31, 2017.

CRITICAL ACCOUNTING ESTIMATES

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant areas requiring the use of management estimates relate to the assessment for impairment and useful lives of intangible assets, determining the fair value of share units, estimates supporting reported anesthesia revenues, the recoverability of trade receivables, the valuation of certain long term liabilities and other assets, including liabilities relating to contingent consideration, the vesting term for share units with market and non-market based performance targets, the valuation of acquired intangibles, the valuation of deferred tax assets and the allocation of purchase consideration to the fair value of assets acquired and liabilities assumed.

23

Significant judgments made by management in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements includes the determination of functional currency and the accounting classification of financial instruments. In conjunction with the Company’s business acquisitions, these judgments also include the Company’s determination of control for the purposes of consolidation and the Company’s definition of a business.

We consider the estimates and assumptions described in this section to be an important part in understanding the financial statements. These estimates and assumptions are subject to change, as they rely heaving on management’s judgment and are based on factors that are inherently uncertain.

(a) Impairment and useful lives of long-lived assets:

The Company’s intangible assets are comprised of purchased technology, purchased professional service agreements, and patents. The cost of the Company’s intangible assets is amortized on a straight-line basis over the estimated useful life ranging from 2.5 to 20 years. Factors considered in estimating the useful life of intangible assets include the expected use of the asset by the Company, legal, regulatory and contractual provisions that may limit the useful life, and the effects of competition. Costs incurred to establish and maintain patents for intellectual property developed internally are expensed in the period incurred.

The carrying amounts of the Company’s intangible assets are reviewed at each balance sheet date to determine whether there is any indication of impairment as required by IAS 36. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of the intangible assets or their cash-generating unit exceeds their recoverable amount. Impairment losses are recognized in the statements of operations.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

In accordance with IFRS if, subsequent to impairment, an asset’s discounted future net cash flows exceeds its book value, the impairment previously recognized can be reversed. However, the asset’s book value cannot exceed what its amortized book value would have been had the impairment not been recognized.

During the year ended December 31, 2017, the Company recorded an impairment charge of $6,653,015 in relation to the GAA professional services agreements acquired as part of the GAA acquisition. The impairment resulted from an identified decrease in EBITDA expectations as a result of changes in commercial payor mix experienced in 2017 as well as expectations of the impact of the CMS changes, effective January 1, 2018, and its impact on forecasted EBITDA.

(b) Revenue recognition – Anesthesia services:

Anesthesia services revenue consists primarily of patient revenues and is recognized as services are rendered. Patient service revenue is reported net of provisions for contractual allowances and other discounts from third party payors and patients. The Company has agreements with third-party payors that provide for payments to the Company at amounts different from its established billing rates. The differences between the estimated program reimbursement rates and the standard billing rates are accounted for as contractual adjustments, which are deducted from gross revenues to arrive at net operating revenues. Retroactive adjustments, if any, are accrued on an estimated basis in the period the related services are rendered and adjusted in future periods as final settlements are determined. Accounts receivable resulting from such payment arrangements are recorded net of contractual

24

allowances. The provision for contractual allowances and discounts are recognized on an accrual basis. These amounts are deducted from gross service revenue to determine net service revenue.

(c) Accounts receivable and allowance for doubtful accounts:

The Company’s accounts receivable are related to providing healthcare services to patients and the sale of product directly to physicians. Collection of these accounts receivable is the Company’s primary source of cash and is critical to its operating performance. The Company’s primary collection risks relate to patient deductibles, co-payments and self-insured amounts owed by the patient. The Company’s estimate for the allowance for doubtful accounts is calculated based on historical experiences and collection experience. The Company believes that it collects substantially all of its receivables related to providing healthcare to patients, net of contractual allowances and from the sale of product directly to physicians. To date, the Company believes there has not been a material difference between bad debt allowances and the ultimate historical collection rates on accounts receivables. The Company reviews its overall bad debts reserve for adequacy by monitoring historical cash collections as a percentage of net revenue. Uncollected accounts are written off when management determines that the balance is uncollectible.

(d) Stock-based compensation:

The Company uses the fair-value based method of accounting for share-based compensation for all awards of shares units and stock options granted. Under the fair value based method, share-based awards to employees are measured at the fair value of the equity instrument issued as of the grant date using either the Black-Scholes or Binomial model and estimated forfeitures. The application of this pricing model requires management to estimate several variables, including the period for which the instrument is expected to be outstanding, price volatility of the Company’s stock over the relevant timeframe, the determination of a relevant risk free interest rate, assumption regarding the Company’s future dividend rate policy and estimate of the number of awards that will vest. Changes in one or more assumptions could materially impact the value derived for these equity instruments.

(e) Income taxes:

Income tax expense is comprised of current and deferred tax. Current tax and deferred tax are recognized into earnings except to the extent that it relates to a business combination, or items recognized directly in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable earnings, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same

25

taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

FUTURE CHANGES IN ACCOUNTING POLICIES

New standards and interpretations not yet applied:

IFRS 9 - Financial Instruments:

On July 24, 2014 the IASB issued the complete IFRS 9 (IFRS 9 (2014)). IFRS 9 (2014) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2014), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. The standard also introduces additional changes relating to financial liabilities and amends the impairment model by introducing a new ‘expected credit loss’ model for calculating impairment.

IFRS 9 (2014) also includes a new general hedge accounting standard which aligns hedge accounting more closely with risk management. This new standard does not fundamentally change the types of hedging relationships or the requirement to measure and recognize ineffectiveness, however it will provide more hedging strategies that are used for risk management to qualify for hedge accounting and introduce more judgment to assess the effectiveness of a hedging relationship. Special transitional requirements have been set for the application of the new general hedging model.

The Company will adopt IFRS 9 (2014) in its financial statements for the annual period beginning on January 1, 2018. The Company has determined that the adoption of IFRS 9 will have no material impact on the Company. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

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IFRS 15 - Revenue Recognition:

On May 28, 2014 the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 15 will replace IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers, and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced, which may affect the amount and/or timing of revenue recognized.

The new standard applies to contracts with customers. It does not apply to insurance contracts, financial instruments or lease contracts, which fall in the scope of other IFRSs.

The Company will adopt IFRS 15 in its financial statements for the annual period beginning on January 1, 2018. The Company has determined that the adoption of IFRS 15 will have no material impact on the Company. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

IFRS 16 – Leases:

In January 2016, the IASB issued IFRS 16 – Leases, which supersedes IAS 17 – Leases. IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases. The standard establishes a single model for lessees to bring leases on-balance sheet while lessor accounting remains largely unchanged and retains the finance and operating lease distinctions. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted, but only if also applying IFRS 15 – Revenue from contracts with Customers. The Company is currently evaluating the impact on IFRS 16 on its financial statements.

FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, derivative assets, trade and other payables, employee benefit obligations, short term advances, loans, notes payable, deferred consideration, contingent consideration and the Company’s earn-out obligation. The fair values of these financial instruments, except the derivative asset, notes payable balances, deferred consideration, and the earn-out obligation, approximate carrying value because of their short-term nature. The earn-out obligation and derivative asset are classified as financial instruments recorded at fair value through earnings. The fair value of the Scotia Facility approximates carrying value as it is a floating rate instrument. The carrying value of the deferred consideration approximates fair value as the discount rate used is reflective of the underlying credit risk of the Company.

Cash and cash equivalents and trade and other receivables are classified as loans and receivables, which are measured at amortized cost. Trade and other payables, employee benefit obligations and short term advances are classified as other financial liabilities, which are measured at amortized cost. Notes payable balances and deferred consideration are also measured at amortized cost. The Company’s derivative asset, contingent consideration and earn-out obligation are measured at fair value.

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The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and market risk.

Credit risk

Credit risk is the risk of financial loss to the Company if counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash and cash equivalents, and trade receivables. The carrying amount of the financial assets represents the maximum credit exposure.

The Company limits its exposure to credit risk on cash and cash equivalents by placing these financial instruments with high-credit quality financial institutions and only investing in liquid, investment grade securities.

The Company has a number of individual customers and no one customer represents a concentration of credit risk.

The carrying amount of trade receivables is reduced through the use of an allowance account and the amount of the loss is recognized in the income statement within operating expenses. When a receivable balance is considered uncollectible it is written off against the allowance. Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement.

No one customer accounts for more than 10% of the Company’s consolidated revenue. Credit risk associated with the collection of receivables is considered low. The Company establishes a provision for losses on accounts receivable if it is determined that all or part of the outstanding balance is uncollectable. Collectability is reviewed regularly and an allowance is established or adjusted, as necessary, using a combination of the specific identification method and historic collection patterns.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	2017		2016
Cash and cash equivalents	$	12,486,884	$	9,507,004
Trade receivables		15,225,553		9,804,920
	$	27,712,437	$	19,311,924

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company ensures that there is sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash as well as unused credit facilities.

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Market risk

Market risk is the risk that changes in market prices, such as foreign currency exchange rates and interest rates, will affect the Company’s income or the value of the financial instruments held.

(i) Foreign currency risk:

The majority of the Company’s sales and purchases are made in U.S. dollars. However, certain of the Company’s revenues and expenses are denominated in Canadian dollars. Foreign currency risk reflects the risk that the Company’s earnings will be impacted by fluctuations in exchange rates. The objective of the Company’s foreign exchange risk management activities is to minimize transaction exposures and the resulting volatility of the Company’s earnings. The Company manages this risk by pricing sales in U.S. dollars or the currency of the expenses being incurred. The Company has not entered into any forward foreign exchange contracts as at December 31, 2017. Due to the immaterial nature of the Company’s Canadian dollar revenues and expenses, foreign currency risk in this area is considered low. Similarly, foreign currency risk in respect of foreign currency denominated working capital balances is also low due to its limited value and exposure.

Interest rate risk

As at December 31, 2017, the Company’s only interest bearing liability is its Scotia Facility. With respect to the Company’s Scotia Facility, with all other variables held constant, a 10% point increase in the interest rate would have reduced net income by approximately $164,000 (2016 - $92,000) for the year ended December 31, 2017. There would be an equal and opposite impact on the net income with a 10% point decrease.

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LEGAL PROCEEDINGS

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 product 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

NON-IFRS MEASUREMENTS

The following are non-IFRS measures and investors are cautioned not to place undue reliance on them and are urged to read all IFRS accounting disclosures present in the consolidated financial statements and accompanying notes for the consolidated financial statements for the year ended December 31, 2017.

The Company uses certain non-IFRS financial measures as supplemental indicators of its financial and operating performance. These non-IFRS financial measures include adjusted operating EBITDA and adjusted operating expenses. The Company believes these supplementary financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business. These non-IFRS measures do not have any standardized meaning prescribed under IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

The Company defines adjusted operating EBITDA as operating earnings before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses and asset impairment charges. Adjusted operating EBITDA is presented on a basis consistent with the Company’s internal management reports. The Company discloses adjusted operating EBITDA to capture the profitability of its business before the impact of items not considered in management’s evaluation of operating unit performance.

The Company defines adjusted operating expenses as operating expenses before acquisition related expenses, stock based compensation, depreciation, amortization and asset impairment charges. Adjusted operating expenses are presented on a basis consistent with the Company’s internal management reports.

The non-IFRS measures are reconciled to reported IFRS figures in the tables below:

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 Adjusted operating EBITDA

For the three months ended	2017								2016								2015
(USD in thousands)	Dec		Sep		Jun		Mar		Dec		Sep		Jun		Mar		Dec
Adjusted operating EBITDA attributable to:
Shareholders of the Company		11,489		7,775		7,352		7,719		10,281		9,122		7,054		5,914		6,797
Non-controlling interest		5,473		3,119		2,878		3,328		4,219		2,533		1,518		848		465
Total adjusted operating EBITDA		16,963		10,894		10,230		11,047		14,500		11,655		8,572		6,762		7,263
Amortization expense		(7,169)		(5,897)		(5,603)		(5,059)		(4,715)		(4,711)		(2,925)		(2,475)		(2,188)
Depreciation and related expense		(25)		(22)		(20)		(13)		(30)		(31)		(30)		(15)		(18)
Stock based compensation		(799)		(968)		(781)		(906)		(525)		(297)		(290)		(264)		(261)
Acquisition expenses		(97)		(355)		(88)		(127)		(58)		(21)		(286)		(62)		(123)
Impairment of inventory		-		-		-		-		-		-		-		-		-
Impairment of intangible assets		(6,653)		-		-		-		-		-		-		-		-
Operating income		2,219		3,652		3,738		4,946		9,172		6,595		5,041		3,946		4,673
Net finance income (expense)		9,834		400		(3,571)		(1,246)		(1,175)		(1,381)		(2,156)		289		(5,914)
Income tax (expense) recovery		(5,755)		(604)		453		(397)		(1,643)		(188)		(1,219)		(1,205)		1,541
Net and comprehensive income		6,298		3,448		620		3,302		6,354		5,026		1,666		3,030		300
Adjusted operating expenses
For the three months ended	2017								2016								2015
(USD in thousands)	Dec		Sep		Jun		Mar		Dec		Sep		Jun		Mar		Dec
Anesthesia services - adjusted operating expense		13,162		10,362		9,840		9,469		9,492		8,794		6,158		5,323		5,061
Amortization expense		7,169		5,897		5,603		5,056		4,715		4,711		2,925		2,475		2,188
Depreciation and related expense		3		2		3		2		1		3		2		2		4
Stock based compensation		71		100		106		149		120		38		27		17		12
Acquisition expenses		97		356		87		127		58		21		286		62		123
Impairment of intangible assets		6,653		-		-		-		-		-		-		-		-
Anesthesia services expense		27,156		16,718		15,639		14,803		14,386		13,567		9,398		7,879		7,389
Product sales - adjusted operating expense		1,295		1,094		1,142		1,037		1,083		974		1,004		998		950
Amortization expense		1		1		1		5		-		-		-		-		-
Depreciation and related expense		16		14		12		8		15		15		15		1		1
Stock based compensation		95		90		76		110		125		90		99		84		81
Impairment of inventory		-		-		-		-		-		-		-		-		-
Product sales expense		1,408		1,199		1,231		1,160		1,223		1,079		1,118		1,083		1,031
Corporate - adjusted operating expenses		882		994		844		985		746		684		853		754		664
Amortization expense		-		-		-		(4)		-		-		-		-		-
Depreciation and related expense		6		6		5		3		14		14		13		13		14
Stock based compensation		633		777		599		647		280		169		164		162		167
Corporate expense		1,521		1,776		1,448		1,630		1,040		867		1,030		929		845
Total adjusted operating expense		15,340		12,451		11,825		11,491		11,321		10,453		8,015		7,075		6,675
Total operating expense		30,084		19,693		18,317		17,593		16,649		15,514		11,546		9,891		9,265

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EX-23.1

Exhibit 23.1

KPMG LLP

PO Box 10426 777 Dunsmuir Street

Vancouver BC V7Y 1K3

Canada

Telephone (604) 691-3000

Fax (604) 691-3031

Consent of Independent

Registered Public Accounting Firm

The Board of Directors

CRH Medical Corporation

We consent to the use of our report, dated March 2, 2018, with respect to the consolidated financial statements of CRH Medical Corporation included in this annual report on Form 40-F.

We also consent to the incorporation by reference of such report in the Registration Statements (File No. 333-206945, File No. 333-206946, File No. 333-218971 and File No. 333-218985) on Form S-8 of CRH Medical Corporation.

/s/ KPMG LLP

Chartered Professional Accountants

March 29, 2018

Vancouver, Canada

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG Canada provides services to KPMG LLP.

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward Wright, certify that:

1. I have reviewed this annual report on Form 40-F of CRH Medical Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: March 29, 2018

/s/ Edward Wright
Name:	Edward Wright
Title:	Chief Executive Officer

CERTIFICATION

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard Bear, certify that:

1. I have reviewed this annual report on Form 40-F of CRH Medical Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

4. The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the issuer’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the issuer’s internal control over financial reporting; and

5. The issuer’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the issuer’s auditors and the audit committee of the issuer’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the issuer’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal control over financial reporting.

Date: March 29, 2018

/s/ Richard Bear
Name:	Richard Bear
Title:	Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CEO AND CFO

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of CRH Medical Corporation (the “Registrant”) filed under cover of Form 40-F for the period ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Edward Wright, as Chief Executive Officer of the Registrant, and Richard Bear, as Chief Financial Officer of the Registrant, each hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of his knowledge that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

/s/ Edward Wright
Name:	Edward Wright
Title:	Chief Executive Officer
Date:	Date: March 29, 2018

/s/ Richard Bear
Name:	Richard Bear
Title:	Chief Financial Officer
Date:	Date: March 29, 2018

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Registrant for purposes of §18 of the Securities Exchange Act of 1934, as amended.

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Document and Entity Information	12 Months Ended
	Dec. 31, 2017 shares
Document - Document and Entity Information [Abstract]
Document Type	40-F
Amendment Flag	false
Document Period End Date	Dec. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY
Trading Symbol	CRHM
Entity Registrant Name	CRH MEDICAL CORPORATION
Entity Central Index Key	0001461119
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding	73,018,588

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Consolidated Balance Sheets - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 12,486,884	$ 9,507,004
Trade and other receivables	15,486,312	9,836,739
Current tax assets		1,551,140
Prepaid expenses and deposits	889,882	550,811
Inventories	423,445	300,760
Total current assets	29,286,523	21,746,454
Non-current assets:
Property and equipment	364,366	324,198
Intangible assets	163,092,606	133,667,311
Derivative asset		1,261,298
Deferred tax assets	5,707,383	6,539,621
Total non-current assets	169,164,355	141,792,428
Assets	198,450,878	163,538,882
Current liabilities:
Trade and other payables	5,661,844	3,229,685
Employee benefits	500,754	226,874
Current tax liabilities	577,553	2,067,671
Notes payable and bank indebtedness	1,101,468	5,791,787
Deferred consideration	906,956	773,134
Loan	435,000
Total current liabilities	9,183,575	12,089,151
Non-current liabilities:
Deferred consideration	2,226,737	3,133,694
Notes payable and bank indebtedness	60,228,851	38,138,774
Earn-out obligation	1,875,427	13,149,130
Deferred tax liabilities		101,846
Total non-current liabilities	64,331,015	54,523,444
Equity
Share capital	53,925,537	52,706,484
Contributed surplus	8,390,026	7,142,964
Accumulated other comprehensive income loss	(66,772)	(66,772)
Retained earnings	5,410,181	733,155
Total equity attributable to shareholders of the Company	67,658,972	60,515,831
Non-controlling interest	57,277,316	36,410,456
Equity	124,936,288	96,926,287
Total liabilities and equity	$ 198,450,878	$ 163,538,882

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Consolidated Statements of Operations and Comprehensive Income - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue:
Anesthesia services	$ 88,741,075	$ 67,821,879
Product sales	11,501,005	10,532,753
Total revenues	100,242,080	78,354,632
Expenses:
Anesthesia services expense	74,315,424	45,229,986
Product sales expense	4,997,550	4,503,110
Corporate expense	6,375,110	3,866,696
Operating costs	85,688,084	53,599,792
Operating income	14,553,996	24,754,840
Finance income	(11,747,441)	(1,007,673)
Finance expense	6,330,812	5,431,035
Net finance expense	(5,416,629)	4,423,362
Income before tax	19,970,625	20,331,478
Income tax expense	6,302,507	4,255,150
Net and comprehensive income	13,668,118	16,076,328
Attributable to:
Shareholders of the Company	6,558,966	10,564,233
Non-controlling interest	7,109,152	5,512,095
Net and comprehensive income	$ 13,668,118	$ 16,076,328
Earnings per share attributable to shareholders
Basic	$ 0.089	$ 0.147
Diluted	$ 0.087	$ 0.142
Weighted average shares outstanding:
Basic	73,712,670	71,826,884
Diluted	75,486,210	74,203,830

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Consolidated Statements of Changes in Equity - USD ($)	Total	Share capital [member]	Contributed surplus [member]	Accumulated other comprehensive loss [member]	Retained earnings (deficit) [member]	Non-controlling interests [member]
Beginning balance at Dec. 31, 2015	$ 56,974,365	$ 51,066,044	$ 6,556,951	$ (66,772)	$ (9,831,078)	$ 9,249,220
Beginning balance, shares at Dec. 31, 2015	71,206,547
Total net and comprehensive income for the year	$ 16,076,328				10,564,233	5,512,095
Stock based compensation expense	1,376,674		1,376,674
Common shares purchased on exercise of options	$ 586,688	1,044,077	(457,389)
Common shares purchased on exercise of options, shares	1,358,687
Common shares issued on vesting of share units		229,378	(229,378)
Common shares issued on vesting of share units, shares	80,000
Exercise of broker warrants	$ 263,091	366,985	(103,894)
Exercise of broker warrants, shares	100,705
Distributions to members	$ (5,685,181)					(5,685,181)
Acquisition of non-controlling interest	27,334,322					27,334,322
Ending balance at Dec. 31, 2016	$ 96,926,287	52,706,484	7,142,964	(66,772)	733,155	36,410,456
Ending balance, shares at Dec. 31, 2016	72,745,939
Total net and comprehensive income for the year	$ 13,668,118				6,558,966	7,109,152
Stock based compensation expense	3,454,011		3,454,011
Common shares purchased on exercise of options	$ 60,395	208,125	(147,730)
Common shares purchased on exercise of options, shares	247,500
Common shares issued on vesting of share units	$ (67,021)	1,992,198	(2,059,219)
Common shares issued on vesting of share units, shares	1,292,549
Common shares repurchased in connection with normal course issuer bid and cancelled	$ (2,708,488)	$ (928,244)			$ (1,780,244)
Common shares repurchased in connection with normal course issuer bid and cancelled, shares	(1,267,400)
Common shares repurchased in connection with normal course issuer bid and held as treasury shares	(154,722)	(53,026)			(101,696)
Distributions to members	$ (12,899,353)					(12,899,353)
Acquisition of non-controlling interest	26,657,061					26,657,061
Ending balance at Dec. 31, 2017	$ 124,936,288	$ 53,925,537	$ 8,390,026	$ (66,772)	$ 5,410,181	$ 57,277,316
Ending balance, shares at Dec. 31, 2017	73,018,588

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Consolidated Statements of Changes in Equity (Parenthetical)	Dec. 31, 2017 shares
Statement of changes in equity [abstract]
Treasury shares	72,400

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Consolidated Statements of Cash Flows	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Operating activities:
Net income	$ 13,668,118	$ 16,076,328
Adjustments for:
Depreciation of property, equipment and intangibles	23,805,145	14,932,118
Impairment of intangible asset	6,653,015
Stock-based compensation	3,454,011	1,376,674
Unrealized foreign exchange	73,735	(1,104,700)
Finance (income) expense	(5,504,713)	5,431,035
Income tax expense	6,302,507	4,255,150
Operating activity before changes in operating assets and liabilities	48,451,818	40,966,605
Taxes paid	(5,509,915)	(5,466,601)
Change in trade and other receivables	(5,649,573)	(2,745,190)
Change in prepaid expenses	(339,071)	(66,016)
Change in inventories	(122,685)	(45,836)
Change in trade and other payables	2,432,159	195,322
Change in employee benefits	273,880	84,298
Cash provided by operating activities	39,536,613	32,922,582
Financing activities
Proceeds from loans	566,819
Repayment of loans	(131,819)	(266,994)
Payment of interest on notes payable and bank indebtedness	(3,563,837)	(3,135,765)
Repayment of notes payable and bank indebtedness	(52,543,750)	(14,000,000)
Payment of financing fees	(445,598)	(579,460)
Proceeds on bank indebtedness	68,200,000	26,000,000
Payment of deferred consideration	(900,000)
Distributions to non-controlling interest	(12,899,353)	(5,685,180)
Proceeds on settlement of derivative asset	1,313,874
Proceeds from the exercise of broker warrants		263,091
Proceeds from the issuance of shares relating to stock-based compensation	(6,626)	586,688
Repurchase of shares for cancellation	(2,863,210)
Cash (used in) provided by financing activities	(3,273,500)	3,182,380
Investing activities
Acquisition of property and equipment	(125,285)	(113,196)
Acquisition of anesthesia services providers	(33,153,268)	(30,062,239)
Cash used in investing activities	(33,278,553)	(30,175,435)
Effects of foreign exchange on cash and cash equivalents	(4,680)	5,133
Increase in cash and cash equivalents	2,979,880	5,934,660
Cash and cash equivalents, beginning of year	9,507,004	3,572,344
Cash and cash equivalents, end of year	$ 12,486,884	$ 9,507,004

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Reporting entity

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Reporting entity

1. Reporting entity:

CRH Medical Corporation (“CRH” or “the Company”) was incorporated on April 21, 2001 and is incorporated under the Business Corporations Act (British Columbia). The Company provides anesthesiology services to gastroenterologists in the United States through its subsidiaries and also specializes in the treatment of hemorrhoids utilizing its treatment protocol and patented proprietary technology.

CRH principally operates in the United States and is headquartered from its registered offices located at Unit 578, 999 Canada Place, Vancouver, British Columbia, Canada.

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Basis of preparation

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Basis of preparation

2. Basis of preparation:

(a) Statement of compliance:

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorized for issue by the Board of Directors on March 2, 2018.

(b) Basis of measurement:

The Company’s consolidated financial statements have been prepared on a going concern and historical cost basis except for certain financial instruments which are recorded at fair value.

(c) Functional and presentation currency:

These consolidated financial statements are presented in United States dollars, which is the Company’s presentation currency. The functional currency of the Company’s parent company and subsidiaries is the United States dollar.

(d) Use of estimates, assumptions and judgments:

The preparation of the Company’s consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ from those estimates.

(i) Use of estimates and assumptions:

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Significant areas requiring the use of management estimates relate to the assessment for impairment and useful lives of intangible assets, determining the fair value of share units, estimates supporting reported anesthesia revenues, the recoverability of trade receivables, the valuation of certain long term liabilities and other assets, including liabilities relating to contingent consideration, the vesting term for share units with market and non-market based performance targets, the valuation of acquired intangibles, the valuation of deferred tax assets and the allocation of purchase consideration to the fair value of assets acquired and liabilities assumed.

Information relating to these estimates and how they are determined may be found in notes 4, 12, 13, 15 and 19.

(ii) Judgments:

Significant judgments made by management in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements includes the determination of functional currency and the accounting classification of financial instruments. In conjunction with the Company’s business acquisitions, these judgments also include the Company’s determination of control for the purposes of consolidation and the Company’s definition of a business.

Information relating to significant judgment areas may be found in notes 2, 4 and 12.

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Significant accounting policies

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Significant accounting policies

3. Significant accounting policies:

The accounting policies have been applied consistently by the subsidiaries of the Company.

(a) Basis of consolidation:

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has power over an investee, when the Company is exposed, or has rights, to variable returns from the investee and when the Company has the ability to affect those returns through its power over the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control.

(b) Cash equivalents:

The Company considers all highly liquid investments with an original maturity of 90 days or less, when acquired, to be cash equivalents, which are carried at amortized cost and are classified as loans and receivables.

(c) Foreign currency:

Transactions in foreign currencies are translated to the respective functional currencies of the subsidiaries of the Company at exchange rates at the dates of the transactions.

Period end balances of monetary assets and liabilities in foreign currency are translated to the respective functional currencies using period end foreign currency rates. Foreign currency gains and losses arising from settlement of foreign currency transactions are recognized in earnings. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

(d) Revenue recognition:

Revenue from product sales and anesthesia services in the normal course of activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and contractual adjustments. The Company recognizes revenue from product sales at the time the product is shipped, which is when title passes to the customer, and when all significant contractual obligations have been satisfied, collection is probable and the amount of revenue can be estimated reliably. Revenue from the performance of anesthesia services is measured at the fair value of the consideration received or receivable, net of contractual allowances and other discounts. The Company recognizes net patient revenue at the time the anesthesia services are performed; this aligns with when all significant contractual obligations related to the anesthesia services have been satisfied, collection is probable and the amount of revenue can be estimated reliably. Provisions for contractual allowances and discounts are recognized on an accrual basis. These amounts are deducted from gross service revenue to determine net service revenue.

(e) Employee benefits:

Salaries and short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under cash bonus plans if the Company has a legal or constructive obligation to pay an amount as a result of services rendered by an employee and the obligation can be estimated reliably.

(f) Inventories:

Inventories are measured at the lower of cost, determined using the first-in first-out method, and net realizable value. Inventory costs include the purchase price and other costs directly related to the acquisition of inventory, and bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the Company’s ordinary course of business, less the estimated costs of completion and selling expenses.

(g) Property and equipment:

Property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Where the costs of certain components of an item of property and equipment are significant in relation to the total cost of the item and have different useful lives, they are accounted for and depreciated separately.

The estimated useful lives and the methods of depreciation for the current and comparative periods are as follows:

Asset	Basis	Rate
Computer equipment	Declining balance	30%
Computer software	Declining balance	100%
Furniture and equipment	Declining balance	20%
Leasehold improvements	Straight-line	Shorter of initial lease
		term or useful life
Injection mold	Straight-line	5 years

These depreciation methods most closely reflect the expected pattern of consumption of the future economic benefits embodied in the asset.

Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting period-end and adjusted if appropriate.

(h) Intangible assets:

Intangible assets, consisting of acquired exclusive professional service agreements to provide anesthesia services and the cost of acquiring patents, are recorded at historical cost. For patents, costs also include legal costs involved in expanding the countries in which the patents are recognized to the extent expected cash flows from those countries exceed these costs over the amortization period and costs related to new patents. The amortization term for professional services agreements are based on the contractual terms of the agreements. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are measured at cost less accumulated amortization and accumulated impairment losses. Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line		15 years
Intellectual property new technology	Straight-line		20 years
Exclusive professional services agreements	Straight-line		2.5 to 15 years

(i) Financial instruments:

Financial assets and financial liabilities are initially measured at fair value and are subsequently measured based on their classification as described below. Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or liability, other than financial assets and liabilities classified at fair value through earnings, are added or deducted from the fair value of the respective financial asset or financial liability on initial recognition. Transaction costs that are directly attributable to the acquisition of a financial asset or financial liability classified at fair value through earnings are recognized immediately in earnings.

Financing fees related to debt are recorded as a reduction to the debt balance and amortized to finance expense using the effective interest rate method.

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

The Company’s financial instruments are classified into the following categories: at fair value through earnings, loans and receivables, available-for-sale financial assets and other financial liabilities. The classification depends on the nature and purpose of the financial instrument and is determined at the time of initial recognition.

The Company has classified cash and cash equivalents, trade and other receivables as loans and receivables. Loans and receivables are initially measured at fair value and are subsequently re-measured at amortized cost using the effective interest method, less any impairment losses.

Financial assets at fair value through earnings are financial assets that are held for trading and include derivative instruments that are not included in a qualifying hedging relationship. Financial assets classified as financial assets at fair value through earnings are initially measured at fair value with any gains or losses arising on re-measurement recognized in earnings.

Financial liabilities classified at fair value through earnings are financial liabilities that are held for trading or designated into this category at inception. Financial liabilities classified as financial liabilities at fair value through earnings include contingent consideration and are initially measured at fair value with any gains or losses arising on re-measurement recognized through earnings. The Company has classified its earn-out obligation as financial liabilities at fair value through earnings.

Other financial liabilities includes trade payables, other payables, note payables and bank indebtedness and are initially measured at fair value and are subsequently measured at amortized cost using the effective interest method.

The Company has classified trade and other payables, employee benefit obligations, short term advances, loans, notes payable and bank indebtedness as other financial liabilities.

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in any of the other categories. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented within equity. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to earnings. The Company has no instruments classified as available-for-sale.

Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all of the risks and rewards of ownership.

(j) Impairment:

Financial assets:

Financial assets not carried at fair value through earnings are assessed at each reporting date to determine whether there is objective evidence that they are impaired. The Company considers that a financial asset is impaired if objective evidence indicates that a loss event which negatively affected the estimated future cash flows has occurred after initial recognition of the asset.

An impairment test is performed, on an individual basis, for each material financial asset. Other individually non-material financial assets are tested as groups of financial assets with similar risk characteristics. Impairment losses are recognized in earnings.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in earnings and reflected in an allowance account against the respective financial asset. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through earnings.

A permanent impairment loss for an available-for-sale investment is recognized by transferring the cumulative loss previously recognized in other comprehensive income to earnings.

Non-financial assets:

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the recoverable amount is estimated.

The recoverable amount of an asset or a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows from other assets or groups of assets (cash-generating unit). Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An asset’s carrying amount, increased through reversal of an impairment loss, must not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(k) Income taxes:

Income tax expense is comprised of current and deferred tax. Current tax and deferred tax are recognized into earnings except to the extent that it relates to a business combination, or items recognized directly in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable earnings, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but are intended to be settled on a net basis or the tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(l) Share-based compensation:

The Company records share-based compensation related to stock options and share units granted using the fair value based method estimated using either the Black-Scholes model or Binomial method. Under this method, compensation cost is measured at fair value at the date of grant and expensed as employee benefits over the period in which employees unconditionally become entitled to the award. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date.

(m) Share capital:

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares, stock options and share options are recognized as a deduction from equity, net of any tax effects.

(n) Earnings per share:

The Company presents basic and diluted earnings per share (EPS) data for its common shares. Basic EPS is calculated by dividing the net income or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held, if applicable. Diluted EPS is determined by adjusting the income or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held if applicable, for the effects of all dilutive potential common shares.

(o) Provisions:

Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are determined by discounting expected future cash outflows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Management uses judgment to estimate the amount, timing and probability of the liability based on facts known at the reporting date. The unwinding of the discount is recognized as a finance expense.

(p) Segment reporting:

The Company’s operating segments consist of the sale of medical products and the provision of anesthesia services.

(q) Finance costs:

Finance cost is primarily comprised of interest on the Company’s notes payable and bank indebtedness and also includes the amortization of costs incurred to obtain loan financing and any fees in respect of arranging loan financing. Deferred finance costs are amortized using the effective interest method over the term of the related loan financing. Deferred finance costs are presented as a reduction to the related liability.

Foreign exchange gains and losses are reported on a net basis as either finance income or finance expense as the finance costs relate to Canadian dollar denominated debt.

(r) Business combinations:

Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. On an acquisition-by-acquisition basis, any non-controlling interest is measured either at fair value of the non-controlling interest or at the fair value of the proportionate share of the net assets acquired.

Contingent consideration is measured at fair value on acquisition date and is included as part of the consideration transferred. The fair value of the contingent consideration liability is re-measured at each reporting date with the corresponding gain or loss being recognized in earnings.

(s) Adoption of new accounting standards:

The Company has not early adopted any amendment, standard or interpretation that has been issued by the IASB but is not yet effective. The Company has adopted the disclosure requirements in Disclosure Initiative (Amendments to IAS 7), which came into effect on January 1, 2017. Consequently, the Company has provided additional disclosure in relation to the changes in borrowings arising from financing activities for the year ended December 31, 2017 (see note 9). Adoption of this standard had no significant impact on the Company’s consolidated financial statements. Amendments, standards and interpretations that are issued but not yet effective are described in note 3(t).

(t) New standards and interpretations not yet applied:

(i) IFRS 9 - Financial Instruments:

On July 24, 2014 the IASB issued the complete IFRS 9 (IFRS 9 (2014)). IFRS 9 (2014) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2014), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. The standard also introduces additional changes relating to financial liabilities and amends the impairment model by introducing a new ‘expected credit loss’ model for calculating impairment.

(t) New standards and interpretations not yet applied:

(i) IFRS 9 - Financial Instruments:

IFRS 9 (2014) aligns hedge accounting more closely with risk management. This does not fundamentally change the types of hedging relationships or the requirement to measure and recognize ineffectiveness, however it will provide more hedging strategies that are used for risk management to qualify for hedge accounting and introduce more judgment to assess the effectiveness of a hedging relationship. Special transitional requirements have been set for the application of the new general hedging model.

The Company will adopt IFRS 9 (2014) in its financial statements for the annual period beginning on January 1, 2018. The Company has evaluated the impact of IFRS 9 and has determined that IFRS 9 will not have a significant impact on the Company. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

(iv) IFRS 15 - Revenue Recognition:

On May 28, 2014 the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 15 will replace IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers, and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced which may affect the amount and/or timing of revenue recognized.

The new standard applies to contracts with customers. It does not apply to insurance contracts, financial instruments or lease contracts, which fall in the scope of other standards. The Company will adopt IFRS 15 in its financial statements for the annual period beginning on January 1, 2018. The Company has evaluated the impact of IFRS 15 and has determined that IFRS 15 will not have a significant impact on the Company other than additional required disclosures. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

(t) New standards and interpretations not yet applied:

(v) IFRS 16 – Leases:

In January 2016, the IASB issued IFRS 16 – Leases, which supersedes IAS 17 – Leases. IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases. The standard establishes a single model for lessees to bring leases on-balance sheet while lessor accounting remains largely unchanged and retains the finance and operating lease distinctions. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted, but only if also applying IFRS 15 – Revenue from contracts with Customers. The Company is currently evaluating the impact on IFRS 16 on its financial statements.

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Business combinations

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Business combinations

4. Business combinations:

During the year ended December 31, 2017, the Company completed six business combinations. All business combinations completed during the period have been included in the anesthesia segment of the Company and include the following:

Acquired Operation	Date Acquired	Consideration
DDAB, LLC (“DDAB”)	February 2017		$5,273,570
Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”)	March 2017		$3,401,819
West Florida Anesthesia Associates, LLC (“WFAA”)	August 2017		$5,840,000
Central Colorado Anesthesia Associates, LLC (“CCAA”)	September 2017		$7,888,919
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC (“RSA”)	September 2017		$7,248,960
Alamo Sedation Associates, LLC (“ASA”)	September 2017		$3,500,000

The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from the date of acquisition.

The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the assets and liabilities acquired at the acquisition date. Certain of the estimates of fair value, most notably the professional services agreements, are preliminary and may be subject to further adjustments.

	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Cash	$	4,089,791	$	3,401,819	$	5,840,000	$	7,888,919	$	7,248,960	$	3,500,000	$	31,969,489
Contingent consideration		1,183,779		-		-		-		-		-		1,183,779
Purchase consideration	$	5,273,570	$	3,401,819	$	5,840,000	$	7,888,919	$	7,248,960	$	3,500,000		33,153,268
Non-controlling interest		5,066,763		2,267,879		4,778,182		7,579,550		6,964,687		-		26,657,061
	$	10,340,333	$	5,669,698	$	10,618,182	$	15,468,469	$	14,213,647	$	3,500,000	$	59,810,329
Assets and liabilities acquired:
Exclusive professional services agreements		10,340,333	$	5,669,698	$	10,606,192	$	15,468,469	$	14,213,648	$	3,500,000	$	59,798,340
Pre-close trade receivables		525,000		-		-		-		-		-		525,000
Pre-close trade payables		(525,000)		-		-		-		-		-		(525,000)
Prepaid expenses and deposits		-		-		11,889		-		-		-		11,889
Fair value of net identifiable assets and liabilities acquired	$	10,340,333	$	5,669,698	$	10,618,081	$	15,468,469	$	14,213,648	$	3,500,000	$	59,810,229
Exclusive professional services agreements – amortization term		4.5 years		5 years		15 years		7 years		5 years		7 years
Acquisition costs expensed													$	570,900

The value of the acquired intangible assets, being exclusive professional services agreements, have been determined on a provisional basis and relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements and professional services agreements.

DDAB

In February 2017, a subsidiary of the Company entered into a membership interest purchase agreement to acquire 51% of the ownership interest in DDAB, LLC (“DDAB”), an anesthesia services provider in Georgia. The estimated purchase price under the agreement was $4,089,791 and was paid via cash. The purchase price was adjusted seven months following the acquisition date for actual cash collections in the months up to purchase. Contingent consideration of $1,183,779 was paid in the third quarter of 2017 with respect to the purchase price adjustment. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of DDAB which governs the operation of the acquired business. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of DDAB and, as a result, 100% of the financial results of DDAB have been included in the Company’s consolidated financial statements from the date of acquisition, being February 1, 2017. The non-controlling interest of $5,066,763 was determined based on 49% of the fair value of DDAB’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, the non-controlling interest shareholder of DDAB provided a working capital advance to DDAB totaling $71,819 at March 31, 2017. The working capital advance was repaid as of December 31, 2017.

OGAA

In March 2017, a subsidiary of the Company entered into a membership interest purchase agreement to acquire 60% of the ownership interest in Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”), an anesthesia services provider in Florida. The total purchase price under the agreement was $3,401,819 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of OGAA which governs the operation of the acquired entity. As a result of the 60% ownership interest acquired and the operating agreement, the Company has acquired control of OGAA and, as a result, 100% of the financial results of OGAA have been included in the Company’s consolidated financial statements from the date of acquisition, being March 15, 2017. The non-controlling interest of $2,267,879 was determined based on 40% of the fair value of OGAA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $90,000 and $60,000, respectively. The loans were repaid as of December 31, 2017.

WFAA

In August 2017, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 55% of the ownership interest in West Florida Anesthesia Associates, LLC (“WFAA”), an anesthesia services provider in Florida. The total purchase price under the agreement was $5,840,000 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of WFAA which governs the operation of the acquired entity. As a result of the 55% ownership interest acquired and the operating agreement, the Company has acquired control of WFAA and, as a result, 100% of the financial results of WFAA have been included in the Company’s consolidated financial statements from the date of acquisition, being August 1, 2017. The non-controlling interest of $4,778,182 was determined based on 45% of the fair value of WFAA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $82,500 and $67,500, respectively. The terms of the loans are such that they will be repaid first, prior to any future distributions and are non-interest bearing.

CCAA

In September 2017, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 51% of the ownership interest in Central Colorado Anesthesia Associates, LLC (“CCAA”), an anesthesia services provider in Colorado. The total purchase price under the agreement was $7,888,919 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of CCAA which governs the operation of the acquired entity. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of CCAA and, as a result, 100% of the financial results of CCAA have been included in the Company’s consolidated financial statements from the date of acquisition, being September 11, 2017. The non-controlling interest of $7,579,550 was determined based on 49% of the fair value of CCAA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $178,500 and $171,500, respectively. The terms of the loans are such that they will be repaid first, prior to any future distributions and are non-interest bearing.

RSA

In September 2017, a subsidiary of the Company entered into an agreement of contribution, merger and sale which resulted in the acquisition of a 51% ownership interest in Raleigh Sedation Associates, LLC (“RSA”) and Blue Ridge Anesthesia Associates, LLC (“BRSA”). Combined, these entities provide anesthesia services in North Carolina. The total purchase price under the agreement was $7,248,960 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of RSA and BRSA which governs the operation of the acquired entities. As a result of the 51% ownership interest acquired and the operating agreements, the Company has acquired control of RSA and BRSA, and, as a result, 100% of the financial results of these entities have been included in the Company’s consolidated financial statements from the date of acquisition, being September 21, 2017. The non-controlling interest of $6,964,687 was determined based on 49% of the fair value of RSA and BRSA’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $204,000 and $196,000, respectively. The terms of the loans are such that they will be repaid first, prior to any future distributions and are non-interest bearing.

ASA

In September 2017, a subsidiary of the Company entered into an asset purchase agreement to purchase 100% of certain assets of an anesthesia services provider in the Texas. The total purchase price under the asset purchase agreement was $3,500,000 and was paid via cash. The Company has obtained control over the business through its contractual ability to direct the relevant activities of the assets acquired. The results of the operation of these assets has been included in the Company’s consolidated financial statements from the date of acquisition, being September 28, 2017.

In the year ended December 31, 2017, the above noted acquisitions contributed revenue and net earnings before tax as follows:

	Year ended December 31, 2017
	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Revenue	$	3,244,190	$	1,829,591	$	1,315,951	$	3,963,932	$	3,196,268	$	724,216	$	14,274,148
Net earnings (loss) before tax	$	(414,599)	$	(92,803)	$	504,231	$	2,101,049	$	1,358,055	$	290,830	$	3,746,763
Amortization	$	2,106,364	$	897,702	$	294,616	$	669,780	$	781,751	$	127,778	$	4,877,991

The following unaudited supplemental pro forma financial information presents information as if the acquisitions had been completed on January 1, 2017. The pro forma financial information presented below (unaudited) is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2017. The pro forma financial information (unaudited) presented includes amortization charges for acquired intangible assets based on the values assigned in the purchase price allocation.    Were the acquisitions completed on January 1, 2017, revenue for the Company would have been approximately $120.6 million and net income before tax would have been approximately $29.1 million.

	Year ended December 31, 2017
Pro Forma Information (unaudited)
	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Revenue	$	3,539,116	$	2,311,062	$	3,158,282	$	12,178,353	$	10,801,852	$	2,605,406	$	34,594,071
Net earnings (loss) before tax	$	(452,290)	$	(117,225)	$	1,210,154	$	6,670,023	$	4,589,574	$	1,046,277	$	12,946,513
Amortization	$	2,297,852	$	1,133,940	$	707,079	$	2,209,781	$	2,842,729	$	500,000	$	9,691,381

During the year ended December 31, 2016, the Company completed three business combinations. All business combinations completed during the year have been included in the anesthesia segment of the Company and include the following:

Acquired Operation	Date Acquired	Consideration
Austin Gastroenterology Anesthesia Associates, PLLC (“AGAA”)	May 2016		$16,821,896
Community Anesthesia, PLLC (“Community”)	June 2016		$13,636,639
Arapahoe Gastroenterology Anesthesia Associates, LLC (“Arapahoe”)	June 2016		$  3,700,000

The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements from the date of acquisition.

The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the assets and liabilities acquired at the acquisition date. Certain of the estimates of fair value, most notably the professional services agreements, are preliminary and may be subject to further adjustments.

	Austin		Community		Arapahoe		Total
Cash	$	13,000,000	$	13,636,639	$	3,700,000	$	30,336,639
Deferred consideration		3,821,895		-		-		3,821,895
Purchase consideration		16,821,895		13,636,639		3,700,000		34,158,534
Non-controlling interest		16,162,214		7,342,806		3,554,902		27,059,922
	$	32,984,109	$	20,979,445	$	7,254,902	$	61,218,456
Assets and liabilities acquired:
Exclusive professional services agreements		32,984,109		20,979,445	$	7,254,902	$	61,218,456
Pre-close trade receivables		-		917,998		-		917,998
Pre-close trade payables		-		(917,998)		-		(917,998)
Fair value of net identifiable assets and liabilities acquired	$	32,984,109	$	20,979,445	$	7,254,902	$	61,218,456
Exclusive professional services agreements – amortization term		10 years		5 years		5 years
Acquisition costs expensed in relation to above acquisitions							$	348,251

The value of the acquired intangible assets, being exclusive professional services agreements, have been determined on a provisional basis and relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. As at the acquisition dates, the exclusive professional services agreements had various terms and after the initial term renew annually unless notice of termination is received. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements.

AGAA

In May 2016, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 51% of the ownership interest in Austin Gastroenterology Anesthesia Associates, PLLC (“AGAA”), an anesthesia services provider in Texas. The total purchase price under the asset contribution and exchange agreement was $17,200,000 and was paid via a combination of cash ($13,000,000) and deferred cash consideration ($4,200,000). The deferred consideration is payable annually over a period of four years. At the date of acquisition, the deferred consideration was discounted to its fair value ($3,821,895) using a discount rate consistent with the Company’s underlying credit risk at the time of the transaction. This resulted in total consideration of $16,821,895 for this transaction. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of AGAA which governs the operation of AGAA. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of AGAA and, as a result, 100% of the financial results of AGAA have been included in the Company’s consolidated financial statements from the date of acquisition, being May 31, 2016. The non-controlling interest of $16,162,214 was determined based on 49% of the fair value of AGAA’s net identifiable assets as estimated by the Company. The deferred consideration has been presented as $773,134 as a current liability and $3,133,693 as a long-term liability in the balance sheet.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed additional member contributions of $285,600 and $274,400, respectively.

Community

In June 2016, a subsidiary of the Company entered into an membership interest purchase agreement to acquire 65% of the ownership interest in Community Anesthesia, PLLC (“Community”), an anesthesia services provider in Massachusetts. The total purchase price under the asset contribution and exchange agreement was $13,636,639 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of Community which governs the operation of the acquired business. As a result of the 65% ownership interest acquired and the operating agreement, the Company has acquired control of Community and, as a result, 100% of the financial results of Community have been included in the Company’s consolidated financial statements from the date of acquisition, being June 15, 2016. The non-controlling interest of $7,342,806 was determined based on 35% of the fair value of Community’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, the non-controlling interest shareholder of Community provided a working capital advance to Community totaling $100,000 at September 30, 2016. This working capital advance was repaid at December 31, 2016.

Arapahoe

In June 2016, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire 51% of the ownership interest in Arapahoe Gastroenterology Anesthesia Associates, LLC (“Arapahoe”), an anesthesia services provider in Colorado. The total purchase price under the asset contribution and exchange agreement was $3,700,000 and was paid via cash. As part of the transaction, the Company also entered into an operating agreement between it and the non-controlling interest shareholders of Arapahoe which governs the operation of the acquired entity. As a result of the 51% ownership interest acquired and the operating agreement, the Company has acquired control of Arapahoe and, as a result, 100% of the financial results of Arapahoe have been included in the Company’s consolidated financial statements from the date of acquisition, being June 30, 2016. The non-controlling interest of $3,554,902 was determined based on 49% of the fair value of Arapahoe’s net identifiable assets as estimated by the Company.

In conjunction with the acquisition, both the Company and the non-controlling interest shareholder contributed loans of $107,100 and $102,900, respectively. These loans were repaid as at December 31, 2016.

In the year ended December 31, 2016, the above noted acquisitions contributed revenue and net earnings before tax as follows:

	Year ended December 31, 2016
	AGAA		Community		Arapahoe		Total
Revenue	$	11,593,180	$	4,482,059	$	2,492,127	$	18,567,366
Net earnings (loss) before tax	$	5,643,814	$	(348,740)	$	971,899	$	6,266,973
Amortization	$	1,924,073	$	2,272,773	$	725,490	$	4,922,336

The following unaudited supplemental pro forma financial information presents information as if the acquisitions had been completed on January 1, 2016. The pro forma financial information presented below (unaudited) is for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisitions had taken place at the beginning of fiscal 2016. The pro forma financial information (unaudited) presented includes amortization charges for acquired intangible assets based on the values assigned in the purchase price allocation. Were the acquisitions completed on January 1, 2016, revenue for the Company would have been approximately $90.8 million and net income before tax would have been approximately $24.3 million.

	Year ended December 31, 2016
Pro Forma Information (unaudited)
	AGAA		Community		Arapahoe		Total
Revenue	$	18,573,853	$	7,733,243	$	4,658,181	$	30,965,277
Net earnings before tax	$	9,042,159	$	(601,708)	$	1,816,634	$	10,257,085
Amortization	$	3,298,411	$	4,195,889	$	1,450,980	$	8,945,280

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Anesthesia services expense

12 Months Ended

Dec. 31, 2017

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Anesthesia services expense

5. Anesthesia services expense:

For the years ended December 31:

	2017		2016
Employee related	$	29,032,414	$	19,092,648
Depreciation and amortization		23,732,757		14,834,481
Bad debt expense		5,235,934		3,932,374
Office related		6,778,232		5,344,226
Impairment of professional services contract (note 11)		6,653,015		-
Acquisition expense		668,317		426,694
Medical supplies		677,905		690,551
Stock based compensation		426,416		201,538
Travel and entertainment		318,787		154,778
Professional fees		503,485		443,234
Insurance		288,162		108,637
Corporate		-		825
	$	74,315,424	$	45,229,986

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Product sales expense

12 Months Ended

Dec. 31, 2017

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Product sales expense

6. Product sales expense:

For the years ended December 31:

	2017		2016
Employee related	$	1,629,851	$	1,427,602
Product cost and support		2,207,057		2,031,707
Professional fees		418,385		279,013
Office related		298,672		253,672
Stock based compensation		372,223		398,388
Insurance		14,749		54,326
Depreciation and amortization		56,907		44,863
Foreign exchange		(294)		13,539
	$	4,997,550	$	4,503,110

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Corporate expense

12 Months Ended

Dec. 31, 2017

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Corporate expense

7. Corporate expense:

For the years ended December 31:

	2017		2016
Employee related	$	1,439,041	$	1,376,208
Professional fees		947,572		533,467
Corporate		493,918		437,563
Stock based compensation		2,655,372		776,748
Travel and entertainment		224,074		248,719
Office related		233,053		180,737
Insurance		310,736		244,610
Depreciation		15,481		52,772
Foreign exchange		55,863		15,872
	$	6,375,110	$	3,866,696

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Trade and other receivables

12 Months Ended

Dec. 31, 2017

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Trade and other receivables

8. Trade and other receivables:

	2017		2016
Trade receivables (note 19(a))	$	15,225,553	$	9,804,920
Other receivables		260,759		31,819
	$	15,486,312	$	9,836,739

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Trade and other payables

12 Months Ended

Dec. 31, 2017

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Trade and other payables

9. Trade and other payables:

	2017		2016
Trade payables	$	2,042,487	$	372,612
Payments due to former owners of business combinations		76,403		58,667
Accruals and other payables		3,542,954		2,798,406
	$	5,661,844	$	3,229,685

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Property and equipment

12 Months Ended

Dec. 31, 2017

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Property and equipment

10. Property and equipment:

	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Cost
Balance as at January 1, 2016	$	43,312	$	116,195	$	4,727	$	311,273	$	475,507
Additions		16,016		1,805		-		95,375		113,196
Dispositions		(3,629)		-		-		-		(3,629)
Balance as at December 31, 2016		55,699		118,000		4,727		406,648		585,074
Additions		26,356		97,021		1,057		1,414		125,848
Dispositions		-		-		-		-		-
Balance as at December 31, 2017	$	82,055	$	215,021	$	5,784	$	408,062	$	710,922
	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Accumulated depreciation
Balance as at January 1, 2016	$	22,162	$	39,130	$	2,594	$	126,915	$	190,801
Depreciation expense		7,950		19,893		426		42,369		70,638
Dispositions		(563)		-		-		-		(563)
Balance as at December 31, 2016		29,549		59,023		3,020		169,284		260,876
Depreciation expense		13,408		24,074		465		47,732		85,680
Dispositions		-		-		-		-		-
Balance as at December 31, 2017	$	42,957	$	83,097	$	3,485	$	217,016	$	346,556
	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Net book value
December 31, 2017	$	39,098	$	131,924	$	2,299	$	191,046	$	364,366
December 31, 2016	$	26,150	$	58,977	$	1,707	$	237,364	$	324,198

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Intangible assets

12 Months Ended

Dec. 31, 2017

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Intangible assets

11. Intangible assets:

	Professional Services Agreements		Patents		Total
Cost
Balance as at January 1, 2016	$	94,416,692	$	532,598	$	94,949,290
Additions through business combinations (note 4)		61,218,456		-		61,218,456
Balance as at December 31, 2016		155,635,148		532,598		156,167,746
Additions through business combinations (note 4)		59,798,340		-		59,798,340
Impairment		(6,653,015)		-		(6,653,015)
Balance as at December 31, 2017	$	208,780,473	$	532,598	$	209,313,071
	Professional Services Agreements		Patents		Total
Accumulated depreciation
Balance as at January 1, 2016	$	7,175,823	$	466,200	$	7,642,023
Amortization expense		14,823,948		34,464		14,858,412
Balance as at December 31, 2016		21,999,771		500,664		22,500,435
Amortization expense		23,723,277		(3,247)		23,720,030
Balance as at December 31, 2017	$	45,723,048	$	497,417	$	46,220,465
	Professional Services Agreements		Patents		Total
Net book value
December 31, 2017	$	163,057,425	$	35,181	$	163,092,606
December 31, 2016	$	133,635,377	$	31,934	$	133,667,311

At each reporting period, the company evaluates cash generating units for impairment of the related professional services agreements. At December 31, 2017, the Company identified impairment triggers in the Gastroenterology Anesthesia Associates LLC (“GAA”) and Community Anesthesia LLC (“Community”) cash generating units.

The aggregate carrying amounts of intangible assets allocated to each entity, prior to impairment charges, are as follows:

	2017		2016
GAA	$	49,013,454	$	54,510,290
Community		14,510,783		18,706,671
	$	63,524,237	$	73,216,961

The impairment tests performed for the above entities were based on their value in use and were determined by discounting the estimated future cash flows generated from the continuing use of these units.

The calculation of value in use was made on the following key assumptions:

• Cash flows were projected based on past experience, using actual operating results and planned results for the near term. Terminal value calculations for each cash generating unit were extrapolated using a constant growth rate equal to the long-term average growth rate in the United States;

• Management applied internally determined discount rates in determining the recoverable amount for these cash generating units. Risk free discount rates were used and risks specific to the assets were factored into the cash flows.

The key assumptions used in performing the impairment tests in 2017 were:

Cash generating unit	Valuation method	Discount rate	Perpetual growth rate
GAA	Value in use	18.0%	1.4%
Community	Value in use	20.50%	1.3%

The net present value of the expected cash flows was compared to the carrying value of the professional services agreements relating to the cash generating units at year end. Based on management’s analysis, the Company recorded an impairment of the professional services agreement relating to the GAA cash generating unit of $6,653,015. No impairment of the professional services agreement relating to the Community cash generating unit was identified.

At December 31, 2016, there were no indications of impairment identified in respect of these entities and therefore, an estimate of recoverable amount was not completed.

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Derivative asset

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Derivative asset

12. Derivative asset:

On January 21, 2016, the Company entered into a cross currency swap with the Bank of Nova Scotia (“Scotia”) to lock in the Canadian dollar to U.S. dollar foreign exchange rate on its Canadian dollar denominated Crown Note (note 13) at 1.448. Under the cross currency swap, Scotia was committed to payments on the principal amount of the Crown Note of CAD$22,500,000 at a rate of 12% while the Company was committed to payments on the principal amount of the Crown Note of $15,538,674 at 13.17%.

The Company accounted for the cross currency swap as a derivative financial instrument at fair value through profit or loss and recorded the fair value of the instrument on the balance sheet with changes in the fair value of the instrument recorded through earnings in the period (note 19). In conjunction with the extinguishment of the Crown Note (note 13), the cross currency swap was settled. The Company received a payment of $1,313,874 as a result of settlement of the cross currency swap on June 26, 2017.

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Notes payable

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Notes payable

13. Notes payable:

December 31, 2017	Crown Note		Scotia Facility		Total
Current portion	$	-		1,101,468	$	1,101,468
Non-current portion		-		60,228,851		60,228,851
Total loans and borrowings	$	-		61,330,319	$	61,330,319
December 31, 2016	Crown Note		Scotia Facility		Total
Current portion	$	-		5,791,787	$	5,791,787
Non-current portion		15,208,256		22,930,518		38,138,774
Total loans and borrowings	$	15,208,256		28,722,305	$	43,930,561

Crown Capital Fund III Management Inc. (“Crown Note”)

On December 1, 2014, the Company entered into an agreement to borrow funds in the form of a subordinated note payable from Crown Capital Fund III Management Inc. At inception, the original amount of the note payable was CAD$22,500,000 (USD$19,863,000). The note bore interest at 12% per annum with a decrease to 10% upon repayment and performance in full of the Company’s obligations under its senior credit agreement (see Scotia Facility). Interest on the note was payable on a quarterly basis beginning March 31, 2015, with the payment of the principal scheduled for June 1, 2018. In compensation for its services, the Company paid Crown a combination of cash CAD$1,350,000 (USD$1,191,780) and shares (2,000,000 common shares) in addition to reimbursement of legal costs in relation to issuance of the note. The Crown note was subordinate to the Scotia Facility. The note was classified as an other financial liability and recorded at amortized cost.

In conjunction with an increase to the Scotia Facility in June 2017, noted below, the Company repaid in full the principal owing on the Crown Note of CAD$22,500,000 ($17,043,750), with related interest, prepayment penalties and other extinguishment costs of CAD$1,568,384 ($1,188,051). As a result of the extinguishment of the Crown Note, the Company recorded finance expense of $1,789,882 representing the difference between the carrying value of the loan at extinguishment and the consideration transferred to extinguish its financial obligations under the Crown Note.

The reconciliation of movements in borrowings to cash flows arising from financing activities are as follows:

	2017		2016
Drawings at January 1	$	16,758,000	$	16,256,250
Additions to note		-		-
Repayments of note		(17,043,750)		-
Effects of changes in foreign exchange rates		285,750		501,750
Drawings at December 31	$	-	$	16,758,000

The Bank of Nova Scotia (“Scotia Facility”)

On November 24, 2015, the Company entered into a credit facility with the Bank of Nova Scotia. The facility, which had a maturity date of April 30, 2018, provided financing of up to $55,000,000, after amendment on June 15, 2016. In conjunction with the 2016 amendment, the Company paid $390,400 in fees to the Bank of Nova Scotia and legal counsel.

On June 26, 2017, the Company amended the Scotia Facility to provide financing of up to $100,000,000 via a revolving and term facility. The amended facility has a maturity date of June 26, 2020. In conjunction with this amendment, the Company incurred fees of $445,598 As at December 31, 2017, the Company had drawn $61,700,000 on the amended facility (2016 - $29,000,000). The amendment was determined to be a substantial modification and the Company extinguished the previous Scotia facility and wrote off deferred financing costs related to the previous facility of $173,511. The Facility is repayable in full at maturity, with scheduled principal repayments on a quarterly basis beginning September 30, 2017 based on the initial principal issued under the term facility. The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin. At December 31, 2017, interest on the facility is calculated at LIBOR plus 2.50% on the revolving portion and term portion of the facility. The Facility is secured by the assets of the Company. As at December 31, 2017 the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

The Company is in compliance with all covenants at December 31, 2017.

The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows:

	Minimum Principal
At December 31, 2017
Not later than one year	$	1,250,000
Between one to three years	$	60,450,000
Between four to five years	$	-
Thereafter	$	-
	$	61,700,000

The reconciliation of movements in borrowings to cash flows arising from financing activities are as follows:

	2017		2016
Drawings at January 1	$	29,000,000	$	17,000,000
Additions to long term debt		68,200,000		26,000,000
Repayments of long-term debt		(35,500,000)		(14,000,000)
Drawings at December 31	$	61,700,000	$	29,000,000

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Subsidiary undertakings

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Subsidiary undertakings

14. Subsidiary undertakings:

(a) Material subsidiary undertakings

The list below sets out the principal material operating subsidiaries of the Company. These subsidiaries engage in intercompany transactions, all of which are eliminated on consolidation within these financial statements.

Subsidiary	Jurisdiction of Incorporation
CRH Medical Corporation	British Columbia, Canada
CRH Medical Corporation	Delaware, United States
CRH Anesthesia Management LLC	Delaware, United States
Gastroenterology Anesthesia Associates LLC	Georgia, United States
Macon Gastroenterology Anesthesia Associates LLC	Georgia, United States
CRH Anesthesia of Cape Coral LLC	Florida, United States
CRH Anesthesia of Knoxville LLC	Tennessee, United States
Knoxville Gastroenterology Anesthesia Associates LLC	Tennessee, United States
Austin Gastroenterology Anesthesia Associates PLLC	Texas, United States
Community Anesthesia PLLC	Massachusetts, United States
Arapahoe Gastroenterology Anesthesia Associates LLC	Delaware, United States
DDAB LLC	Georgia, United States
Osceola Gastroenterology Anesthesia Associates LLC	Florida, United States
West Florida Anesthesia Associates LLC	Florida, United States
Central Colorado Anesthesia Associates LLC	Colorado, United States
Raleigh Sedation Associates LLC	North Carolina, United States
Blue Ridge Sedation Associates LLC	North Carolina, United States
Alamo Sedation Associates LLC	Texas, United States

(b) Material non-wholly owned subsidiary undertakings

The company defines material non-wholly owned subsidiary undertakings as those non-wholly owned subsidiaries which comprise greater than 10% of the revenue and earnings before tax of the consolidated Company. The Company holds controlling interests in Knoxville Gastroenterology Anesthesia Associates LLC (“KGAA”) and Austin Gastroenterology Anesthesia Associates LLC (“AGAA”). These controlling interests comprise the material non-wholly owned subsidiary undertakings of the Company as at December 31, 2017. As a result of the operating agreements with these entities, the Company controls KGAA and AGAA and 100% of the financial results of this subsidiary are included in the Company’s consolidated financial results.

The following tables summarize the financial information of these entities, including fair value adjustments at acquisition but excluding intercompany eliminations, as at December 31, 2017 and 2016.

	KGAA				AGAA
Ownership %	51%				51%
	2017		2016		2017		2016
Cash and cash equivalents	$	1,049,265	$	1,333,289	$	1,552,981	$	2,866,916
Trade and other receivables		665,601		750,393		1,412,034		1,403,277
Prepaids		23,494		-		37,283		10,635
Current taxes receivable		92,427		-
Intangible assets		8,912,880		10,822,783		27,761,626		31,060,037
		10,743,667		12,906,465		30,763,924		35,340,865
Accounts payable and accrued liabilities		428,358		315,542		709,905		453,759
Current taxes payable		-		133,862		-		-
		428,358		449,404		709,905		453,759
Member contributions		7,106,555		8,149,450		23,037,106		29,244,110
Current period earnings		3,208,754		4,307,611		7,016,913		5,642,996
		10,315,309		12,457,061		30,054,019		34,887,106
Total liabilities and equity	$	10,743,667	$	12,906,465	$	30,763,924	$	35,340,865
	KGAA				AGAA
	2017		2016		2017		2016
Anesthesia revenue	$	10,194,489	$	10,307,361	$	15,938,161	$	11,593,180
Anesthesia services expense		6,577,415		5,573,305		8,926,966		5,949,366
Net income before tax		3,617,074		4,734,056		7,011,195		5,643,814
Tax expense		408,319		426,445		(5,717)		-
Net income	$	3,208,755	$	4,307,611	$	7,016,912	$	5,643,814
Net income attributable to non-controlling interest	$	1,589,007	$	2,123,964	$	3,438,287	$	2,765,469
Non-controlling interest	$	4,981,492	$	6,216,255	$	14,726,051	$	17,094,265

(c) The Company also holds the following interests:

Entity	Interest
Community Anesthesia PLLC		65%
Macon Gastroenterology Anesthesia Associates LLC		65%
Arapahoe Gastroenterology Anesthesia Associates LLC		51%
DDAB LLC		51%
Osceola Gastroenterology Anesthesia Associates LLC		60%
West Florida Anesthesia Associates LLC		55%
Central Colorado Anesthesia Associates LLC		51%
Raleigh Sedation Associates LLC		51%

As a result of the operating agreements with each of the above entities, the Company has control over these entities and thus 100% of the financial results of these subsidiaries are included in the Company’s consolidated financial results.

The following tables summarize the aggregate financial information for the above entities, including fair value adjustments at acquisition but excluding tax and intercompany eliminations, as at December 31, 2017 and 2016.

	2017		2016
Cash and cash equivalents	$	5,022,739	$	1,742,274
Trade and other receivables		7,369,420		2,359,873
Prepaids		118,960		13,821
Intangible assets		75,348,680		30,877,177
		87,859,799		34,993,145
Accounts payable and accrued liabilities		2,657,257		659,482
Loans		900,000		-
		3,557,257		659,482
Member contributions		80,561,493		33,308,961
Current period earnings		3,741,049		1,024,702
		84,302,542		34,333,663
Total liabilities and equity	$	87,859,799	$	34,993,145
	2017		2016
Anesthesia revenue	$	30,503,731	$	11,044,835
Anesthesia services expense		26,762,683		9,994,210
Net income before tax	$	3,741,048	$	1,050,625
Tax expense		-		-
Net income	$	3,741,048	$	1,050,625
Net income attributable to non-controlling interest	$	2,123,477	$	503,784
Non-controlling interest	$	37,569,771	$	13,099,934

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Share capital

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Share capital

15. Share capital:

(a) Authorized:

100,000,000 common shares without par value.

(b) Issued and outstanding – common shares:

Other than in connection with shares issued in respect of the Company’s share unit and share option plans and in connection with the Company’s normal course issuer bid (note 15(e)), there were no share transactions in the year ended December 31, 2017.

On March 29, 2016, the Company issued 46,851 common shares on the exercise of 46,851 broker warrants issued in connection with the Company’s bought deal equity offering on March 25, 2015. Gross proceeds on exercise were $121,095 (CAD$159,293) and the fair value of the instruments exercised was $48,332.

On September 7, 2016, the Company issued 53,854 common shares on the exercise of 53,854 broker warrants issued in connection with the Company’s bought deal equity offering on March 25, 2015. Gross proceeds on exercise were $141,996 (CAD$183,104) and the fair value of the instruments exercised was $55,562.

(c) Stock option plan:

Under the Company’s Stock Option Plan, the Company may grant options to its directors, officers, consultants and eligible employees. The plan provides for the granting of stock options at the fair market value of the Company’s stock at the date of grant, and the term of options range from two to ten years. The Board of Directors may, in its sole discretion, determine the time during which options shall vest and the method of vesting. All options under the Plan will be subject to vesting provisions determined by the Board of Directors, over a period of not less than 18 months, in equal portions on a quarterly basis. Options granted to consultants providing investor relations activities will vest at the end of 12 months or longer from the date of issuance.

A summary of the status of the plan as of December 31, 2017 and 2016 is as follows (options are granted in CAD and USD amounts are calculated using prevailing exchange rates):

	Number of options		Weighted average exercise price
				CAD		USD
Outstanding, January 1, 2016		2,974,311	$	0.60	$	0.43
Issued		-		-		-
Exercised		(1,358,687)		0.57		0.42
Forfeited		(12,500)		0.52		0.39
Expired		-		-		-
Outstanding, December 31, 2016		1,603,124		0.63		0.47
Issued		-		-		-
Exercised		(247,500)		0.32		0.25
Forfeited		(10,937)		0.60		0.48
Expired		-		-		-
Outstanding, December 31, 2017		1,344,687	$	0.69	$	0.55

The following table summarizes information about the stock options outstanding at December 31, 2017:

Options outstanding

Options exercisable

Exercise price

Weighted

Weighted

Weighted

Weighted

Weighted

$CAD

$USD

Number     of options

average remaining contractual life (years)

average exercise price ($CAD)

average exercise price ($USD)

Number     of options

average exercise price ($CAD)

average exercise price ($USD)

0.60 – 0.70

0.48 – 0.56

1,344,687

6.05

0.69

0.55

1,272,812

0.68

0.54

As at December 31, 2016:

			Options outstanding								Options exercisable
Exercise price					Weighted		Weighted		Weighted				Weighted		Weighted
$CAD	$USD		Number     of options		average remaining contractual life (years)		average exercise price ($CAD)		average exercise price ($USD)		Number     of options		average exercise price ($CAD)		average exercise price ($USD)
0.28 – 0.58		0.20 – 0.43		214,687		0.93		0.28		0.20		214,687		0.28		0.20
0.59 – 0.70		0.44 – 0.52		1,388,437		7.04		0.68		0.51		962,812		0.68		0.51
				1,603,124		6.23		0.63		0.47		1,177,499		0.61		0.45

For the year ended December 31, 2017, the Company recognized $22,179 (2016 - $97,486), in compensation expense as a result of stock options awarded and vested. Compensation expense is recorded in the consolidated statement of operations and comprehensive income and is allocated to product sales expenses (note 6), corporate expenses (note 7) and anesthesia expenses (note 5) on the same basis as the allocations of cash compensation.

During the years ended December 31, 2017 and 2016, no additional stock options were granted.

(d) Share unit plan:

In June 2017, the shareholders of the Company approved a Share Unit Plan. Employees, directors and eligible consultants of the Company and its designated subsidiaries are eligible to participate in the Share Unit Plan. In accordance with the terms of the plan, the Company will approve those employees, directors and eligible consultants who are entitled to receive share units and the number of share units to be awarded to each participant. Each share unit awarded conditionally entitles the participant to receive one common share of the Company upon attainment of the share unit vesting criteria. The vesting of share units is conditional upon the expiry of time-based vesting conditions or performance-based vesting conditions. Once the share units vest, the participant is entitled to receive the equivalent number of underlying common shares.

A summary of the status of the plan as of December 31, 2017 and 2016 is as follows:

	Time based   share units		Performance   based share   units
Outstanding, January 1, 2016		509,000		1,000,000
Issued		704,000		1,350,000
Exercised		(80,000)		-
Forfeited		(65,000)		-
Expired		-		-
Outstanding, December 31, 2016		1,068,000		2,350,000
Issued		324,000		-
Exercised		(302,000)		(1,000,000)
Forfeited		(53,500)		-
Expired		-		-
Outstanding, December 31, 2017		1,036,500		1,350,000

During the year ended December 31, 2017, the Company issued 324,000 share units (“Time based share units”). The weighted average fair value per unit was $3.31 (CAD$4.16) based on the market value of the underlying shares at the date of issuance.

During the year ended December 31, 2017, 1,000,000 of those Performance based share units which vest upon the Company meeting certain market based performance targets vested. Upon vesting, the Company issued 1,000,000 common shares. The Company also issued net shares of 292,549 in respect of 302,000 time based share units which vested during the year.

During the year ended December 31, 2016, the Company issued 704,000 share units (“Time based share units”). The weighted average fair value per unit was $5.01 (CAD$6.74) based on the market value of the underlying shares at the date of issuance.

During the year ended December 31, 2016, the Company also issued 250,000 share units (“Performance based share units”). These share units vest upon the Company meeting certain performance targets and expire 10 years after grant. The weighted average fair value of these units at the date of grant was $3.73 (CAD$5.01) per unit. The fair value of these share units was calculated as of the grant date based on the market value of the underlying shares at the date of issuance.

In addition to the above share units issued in 2016, the Company also issued 1,100,000 share units (“Performance based share units”) which vest upon the Company meeting certain market based performance targets and expire ten years after grant. The weighted average fair value of these units at the date of grant was $4.93 (CAD$6.62) per unit. The fair value of these share units was calculated as of the grant date using a binomial pricing model with the following weighted average assumptions:

	2016
Risk-free interest rate	1.04%
Expected volatility	62.0%
Pre-vest forfeiture rate	0%
Weighted average share price	CAD$7.26

During the year ended December 31, 2017, the Company recognized $3,431,832 (2016 - $1,279,188), in compensation expense in relation to the granting and vesting of share units.

(e) Normal Course Issuer Bid:

On November 6, 2017, the Board of Directors of the Company approved a normal course issuer bid to purchase outstanding shares of the Company. The Company may purchase up to 7,120,185 shares pursuant to the bid, representing no more than 10.0% of the Company’s shares outstanding on October 31, 2017. All purchases of shares under the bid are made pursuant to an Automated Share Purchase Plan. Subject to any block purchases made in accordance with the rules of the TSX, the bid is subject to a daily repurchase maximum of 103,902 shares. Shares are purchased at the market price of the shares at the time of purchase and are purchased on behalf of the Company by a registered investment dealer through the facilities of the TSX or alternative Canadian and US marketplaces.

As of December 31, 2017, the Company repurchased 1,339,800 of its shares for a total cost, including transaction fees, of $2,872,713 (CAD$3,669,120). As at December 31, 2017, 1,267,400 of these shares have been cancelled with the remaining 72,400 shares cancelled on January 5, 2018.

(f) Earnings per share:

The calculation of basic earnings per share for the years ended December 31, 2017 and 2016 is as follows:

	2017						2016
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share   amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	6,558,966		73,712,670	$	0.089	$	10,564,233		71,826,884	$	0.147
Share options				1,306,309						2,113,563
Share units				467,231						263,383
Diluted	$	6,558,966		75,486,210	$	0.087	$	10,564,233		74,203,830	$	0.142

For the year ended December 31, 2017, 157,952 options (2016 – 315,251) and 2,047,200 share units (2016 – 1,179,073) were excluded from the diluted weighted average number of common shares calculation.

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding. The treasury method is used to determine the calculation of dilutive shares.

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Income taxes

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Income taxes

16. Income taxes:

(a) Income tax expense is comprised of the following:

	2017		2016
Current tax expense	$	5,527,161	$	5,310,454
Deferred tax expense (recovery):
Origination and reversal of temporary differences		(1,559,332)		(830,584)
Change in enacted tax rates and other		2,334,678		(224,720)
Total tax expense (recovery)	$	6,302,507	$	4,255,150

The reconciliation of income tax computed at statutory tax rates to income tax expense, using a 23% (2016 – 26%) statutory rate, is:

	2017		2016
Tax expense at statutory income tax rates	$	4,593,244	$	5,286,493
Permanent differences		557,406		159,800
Income attributable to non-controlling interest		(1,571,060)		(1,306,217)
Foreign income taxed at different rates		344,742		243,256
Impact of change in tax rates		2,585,691		-
Other		(207,516)		(128,182)
Total tax expense (recovery)	$	6,302,507	$	4,255,150

The Company’s statutory tax rate in Canada in 2017 is reduced from 26% to 23% due to the expected benefits to be derived from the IBA patent program in Canada. In 2018, the Canadian statutory tax rate will increase from 26% to 27%. The Company has recorded the impact of the change in tax rate in 2017. As a result of tax legislation enacted in the U.S. at the end of 2017, the federal corporate tax rate applicable to years after 2017 was substantially reduced. As a result, the Company recorded a deferred income tax expense in respect of its U.S. operations in 2017 at a combined federal and state income tax rate of 26.6% (2016 – 39%).

(b) Recognized deferred tax assets and liabilities:

The Company had the following deferred tax assets and liabilities resulting from temporary differences recognized for financial statement and income tax purposes.

	2017		2016
Deferred tax assets:
Property and equipment	$	8,916		141
Intangible assets		4,291,655		-
Finance related costs		374,721		527,462
Reserves		-		74,105
Share transaction costs		196,508		273,332
Stock-based compensation		387,943		426,051
Deferred consideration		-		1,523,663
Earn-out obligation		499,052		5,128,162
Deferred tax liabilities:
Intangible assets		-		(1,006,371)
Deferred consideration		(44,255)		-
Reserves		(7,157)		-
Unrealized foreign exchange		-		(508,770)
Net deferred tax asset	$	5,707,383	$	6,437,775

Deferred tax assets by jurisdiction	2017		2016
Canada:
Deferred tax asset	$	201,555	$	405,108
Deferred tax liability		(99,254)		(506,954)
Net deferred tax asset (liability)	$	102,301	$	(101,846)
United States:
Deferred tax asset	$	5,690,541	$	7,559,797
Deferred tax liability		(85,459)		(1,020,176)
Net deferred tax asset (liability)	$	5,605,082	$	6,539,621

(c) Unrecognized deferred tax assets and liabilities:

As at December 31, 2017 and 2016, the Company had tax losses of $nil from both its Canadian and US operations.

Realization of the deferred tax assets is dependent on several factors, including a presumption of future profitability, which is subject to uncertainty. The Company has assessed that it is probable that its deferred tax assets will be realized.

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Capital disclosures

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Capital disclosures

17. Capital disclosures:

The Company’s objective in managing capital is to safeguard its ability to continue as a going concern and to sustain future development of the business. In the management of capital, the Company includes shareholders’ equity, excluding accumulated other comprehensive loss. The Company’s objective is met by retaining adequate equity to provide for the possibility that cash flows from assets will not be sufficient to meet future cash flow requirements. In order to maintain or adjust its capital structure, the Company may issue new shares. The Board of Directors does not establish quantitative return on capital criteria for management. The Company is not subject to any externally imposed capital requirements, but is subject to debt covenants in respect of its notes payable and bank indebtedness (note 13). The Company’s overall strategy with respect to capital management remains unchanged from the year ended December 31, 2016.

	2017		2016
Shareholders’ equity attributable to shareholders, excluding other comprehensive income	$	67,725,744	$	60,582,603

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Net finance expense

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Net finance expense

18. Net finance expense

Recognized in earnings in the years ended December 31:

	2017		2016
Finance income:
Foreign exchange gain	$	-	$	(1,007,673)
Net change in fair value of financial liabilities at fair value through earnings (note 19)		(11,747,441)		-
Total finance income	$	(11,747,441)	$	(1,007,673)
Finance expense:
Interest and accretion expense on borrowings	$	3,322,321	$	4,024,240
Accretion expense on earn-out obligation and deferred consideration		600,602		560,150
Amortization of deferred financing fees		224,463		614,472
Net change in fair value of financial liabilities at fair value through earnings		-		204,958
Foreign exchange loss		88,084		-
Extinguishment of notes payable and bank indebtedness		2,044,867		-
Other		50,475		27,215
Total finance expense	$	6,330,812	$	5,431,035
Net finance (income) expense	$	(5,416,629)	$	4,423,362

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Financial instruments

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Financial instruments

19. Financial instruments:

The Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, derivative assets, trade and other payables, employee benefit obligations, short term advances, loans, notes payable and bank indebtedness, deferred consideration and the Company’s earn-out obligation. The fair values of these financial instruments, except the derivative asset, certain of the notes payable balances, the deferred consideration and the earn-out obligation, approximate carrying value because of their short-term nature. The earn-out obligation and derivate asset are classified as financial instruments recorded at fair value through earnings. For all other balances, the fair value of these financial instruments approximates carrying value; the Scotia Facility is a floating rate instrument and due to the subordinate nature of the Crown Note, management has assessed that the carrying value of this fixed rate instrument reflects fair value.

An established fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement. There are three levels of inputs that may be used to measure fair value:

• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The Company’s derivative asset was carried at fair value as disclosed in note 12. The fair value of the derivative asset was determined using models to estimate the present value of expected future cash flows. The derivative asset was considered a Level 2 instrument because, while observable inputs are available, they were not quoted in an active market.

The Company’s earn-out obligation is measured at fair value on a recurring basis using significant unobservable inputs (Level 3). The Earn-Out Obligation relates to the GAA acquisition in 2014. The total purchase price under the acquisition included an additional $14,655,000 payable within 4.5 years after closing based on the achievement of certain financial performance targets of GAA. This valuation technique included inputs relating to estimated cash outflows under the arrangement and the use of a discount rate appropriate to the Company. During the year ended December 31, 2017, the Company revised its assumptions underlying the discount rate used in the calculation of the fair value of the earn-out obligation to account for changes in the underlying credit risk of the Company and also adjusted the model based on current expectations of the financial performance of GAA for the remainder of the earn-out period. This was performed in conjunction with the impairment analysis performed on the GAA cash generating unit.

The downward adjustment of the discount rate from 3.80% at December 31, 2016 to 3.59% at December 31, 2017, in conjunction with adjustments to certain of the cash flow probabilities in the model, resulted in a decrease of $11,747,441 to the fair value of the earn-out obligation. The impact of this adjustment was recorded as finance income.

The fair value measurements are sensitive to the discount rate used in calculating the fair values as well as the probability assessments used. A 1% increase in the discount rate would reduce the fair value of the earn-out obligation by $26,819.    During the year ended December 31, 2017, the Company recorded accretion expense of $473,738 in relation to this liability, reflecting the change in fair value of the liabilities that is attributable to credit risk.

Reconciliation of level 3 fair values:

	Earn-out Obligation
Balance as at January 1, 2017		$13,149,130
Recorded in finance expense:
Accretion expense		473,738
Fair value adjustment		(11,747,441)
Balance as at December 31, 2017		$1,875,427

The Company’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk and market risk.

(a) Credit risk:

Credit risk is the risk of financial loss to the Company if counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’s cash and cash equivalents, and trade receivables. The carrying amount of the financial assets represents the maximum credit exposure.

The Company limits its exposure to credit risk on cash and cash equivalents by placing these financial instruments with high-credit quality financial institutions and only investing in liquid, investment grade securities.

The Company has a number of individual customers and no one customer represents a concentration of credit risk.

The carrying amount of trade receivables is reduced through the use of an allowance account and the amount of the loss is recognized in the income statement within anesthesia services expense and product sales expense. When a receivable balance is considered uncollectible it is written off against the allowance. Subsequent recoveries of amounts previously written off are credited against operating expenses in the income statement.

No one customer accounts for more than 10% of the Company’s consolidated revenue. The Company establishes a provision for losses on accounts receivable if it is determined that all or part of the outstanding balance is uncollectable. Collectability is reviewed regularly and an allowance is established or adjusted, as necessary, using a combination of the specific identification method and historic collection patterns. The following table sets forth details of the age of receivables that are not overdue as well as an analysis of overdue amounts and related allowance for the doubtful accounts.

	2017		2016
Total trade receivables	$	20,589,210	$	13,934,290
Less: allowance for doubtful accounts		(5,363,657)		(4,129,370)
Total trade receivables, net	$	15,225,553	$	9,804,920
Of which:
Current	$	10,065,389	$	7,781,818
31 to 60 days		3,251,297		1,674,626
61 to 90 days		2,359,768		1,147,918
91 days or greater		4,912,756		3,329,928
Total trade receivables	$	20,589,210	$	13,934,290

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	2017		2016
Cash and cash equivalents	$	12,486,884	$	9,507,004
Trade receivables		15,225,553		9,804,920
	$     27,712,437		$     19,311,924
Continuity of allowance for bad debts:
Beginning balance	$	4,129,370	$	2,344,684
Write-offs		(4,065,645)		(2,180,257)
Provision		5,302,732		3,964,943
Other		(2,800)		-
Total allowance for bad debts	$	5,363,657	$	4,129,370

(b) Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company ensures that there is sufficient liquidity to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash. The relative maturity in respect of contractual and legal obligations are summarized as follows:

At December 31, 2017	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	5,661,844	$	5,661,844	$	-	$	-	$	-
Employee benefits		500,754		500,754		-		-		-
Notes payable and bank indebtedness		68,502,574		4,018,179		64,484,395		-		-
Earn-out obligation		1,977,334		-		1,977,334		-		-
Deferred consideration		3,300,000		1,000,000		2,300,000		-		-
	$	79,942,506	$	11,180,777	$	68,761,729	$	-	$	-

The Company also has financial obligations in respect of its normal course issuer bid. Refer to note 15(e).

At December 31, 2016	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	3,229,685	$	3,229,685	$	-	$	-	$	-
Employee benefits		226,874		226,874		-		-		-
Notes payable and bank indebtedness		48,495,668		8,970,825		39,524,843		-		-
Earn-out obligation		14,120,227		-		14,120,227		-		-
Deferred consideration		4,200,000		900,000		3,300,000		-		-
	$	70,272,454	$	13,327,384	$	56,945,070	$	-	$	-

(c) Market risk:

Market risk is the risk that changes in market prices, such as foreign currency exchange rates and interest rates, will affect the Company’s income or the value of the financial instruments held.

(i) Foreign currency risk:

The majority of the Company’s sales and purchases are made in U.S. dollars. However, certain of the Company’s revenues and expenses are denominated in Canadian dollars. Foreign currency risk reflects the risk that the Company’s earnings will be impacted by fluctuations in exchange rates. The objective of the Company’s foreign exchange risk management activities is to minimize transaction exposures and the resulting volatility of the Company’s earnings. The Company manages this risk by pricing sales in U.S. dollars or the currency of the expenses being incurred. The Company has not entered into any forward foreign exchange contracts as at December 31, 2017. Due to the immaterial nature of the Company’s Canadian dollar revenues and expenses, foreign currency risk in this area is considered low. Similarly, foreign currency risk in respect of foreign currency denominated working capital balances is also low due to its limited value and exposure.

At December 31, 2016, the Company had a Canadian dollar denominated loan. The Company had entered into a cross currency swap to mitigate foreign currency risk in respect of the loan (note 12). Foreign exchange gains and losses arising from the revaluation of the loan were included in earnings, but offset by gains and losses arising on the cross currency swap derivative contract. As a result, with all other variables held constant, a 10% point increase in the value of the Canadian dollar relative to the U.S. dollar would not have had a material impact on net income.

(ii) Interest rate risk:

As at December 31, 2017, the Company’s only interest bearing liability is its Scotia Facility. With respect to the Company’s Scotia Facility, with all other variables held constant, a 10% point increase in the interest rate would have reduced net income by approximately $164,000 (2016 - $92,000) for the year ended December 31, 2017. There would be an equal and opposite impact on the net income with a 10% point decrease.

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Commitments and contingencies

12 Months Ended

Dec. 31, 2017

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Commitments and contingencies

20. Commitments and contingencies:

(a) The following are the minimum payments required for the lease of premises:

Less than one year	$	237,299
One to three years		249,677
Four to five years		-
Thereafter		-
Total	$	486,976

Rent expense for the year ended December 31, 2017 was $236,455 (2016 - $132,596).

(b) 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 product 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.

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Related party transactions

12 Months Ended

Dec. 31, 2017

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Related party transactions

21. Related party transactions:

Balances and transactions between the Company and its wholly owned and controlled subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of the transactions between the Company and other related parties are disclosed below:

(a) Related party transactions:

The Company paid or accrued fees of $194,750 (2016 - $210,100) to Directors of the Company. Additionally, the Company made product sales totaling $39,485 (2016 - $37,277) to one company (2016 - four companies) owned or controlled by one of the Company’s Directors (2016 – two of the Company’s Directors). The transaction terms with related parties may not be on the same price as those that would result from transactions among non-related parties.

Until June 16, 2016, one of the directors of the Company was an indirect shareholder of KGAA.

(b) Key management personnel compensation, including directors, is as follows:

	2017		2016
Salaries, directors’ fees and other benefits		$    1,307,233		$    1,369,329
Share-based payments		2,807,306		801,311
		$    4,114,539		$    2,170,640

(i) Share-based payments represent the amount expensed during the year for options granted.

(ii) There were no post-employment, termination or other long-term benefits paid during the years ended December 31, 2017 and 2016.

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Segmented information

12 Months Ended

Dec. 31, 2017

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Segmented information

The Company operates in two industry segments: the sale of medical products and the provision of anesthesia services. The revenues relating to geographic segments based on customer location, in United States dollars, for the years ended December 31, 2017 and 2016 are as follows:

	2017		2016
Revenue:
Canada and other	$	238,342	$	238,049
United States		100,003,738		78,116,583
Total	$	100,242,080	$	78,354,632

The Company’s property and equipment, intangibles and other assets are located in the following geographic regions as at December 31, 2017 and 2016:

	2017		2016
Property and equipment:
Canada	$	347,676	$	316,145
United States		16,690		8,053
Total	$	364,366	$	324,198
Intangible assets:
Canada	$	35,181	$	31,934
United States		163,057,425		133,635,377
Total	$	163,092,606	$	133,667,311
Other assets:
Canada	$	-	$	1,261,298
United States		-		-
Total	$	-	$	1,261,298

The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the years ended December 31, 2017 and 2016. The Company does not allocate expenses related to corporate activities. These expenses are presented within “Other” to allow for reconciliation to reported measures.

	2017
	Anesthesia services		Product sales		Other		Total
Revenue	$	88,741,075	$	11,501,005	$	-	$	100,242,080
Operating costs		74,315,424		4,997,550		6,375,110		85,688,084
Operating income (loss)	$	14,425,651	$	6,503,455	$	(6,375,110)	$	14,553,996
	2016
	Anesthesia services		Product sales		Other		Total
Revenue	$	67,821,879	$	10,532,753	$	-	$	78,354,632
Operating costs		45,229,986		4,503,110		3,866,696		53,599,792
Operating income (loss)	$	22,591,893	$	6,029,643	$	(3,866,696)	$	24,754,840

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Significant accounting policies (Policies)

12 Months Ended

Dec. 31, 2017

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Basis of consolidation

(a) Basis of consolidation:

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company. Control exists when the Company has power over an investee, when the Company is exposed, or has rights, to variable returns from the investee and when the Company has the ability to affect those returns through its power over the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control.

Cash equivalents

(b) Cash equivalents:

The Company considers all highly liquid investments with an original maturity of 90 days or less, when acquired, to be cash equivalents, which are carried at amortized cost and are classified as loans and receivables.

Foreign currency

(c) Foreign currency:

Transactions in foreign currencies are translated to the respective functional currencies of the subsidiaries of the Company at exchange rates at the dates of the transactions.

Period end balances of monetary assets and liabilities in foreign currency are translated to the respective functional currencies using period end foreign currency rates. Foreign currency gains and losses arising from settlement of foreign currency transactions are recognized in earnings. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Revenue recognition

(d) Revenue recognition:

Revenue from product sales and anesthesia services in the normal course of activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and contractual adjustments. The Company recognizes revenue from product sales at the time the product is shipped, which is when title passes to the customer, and when all significant contractual obligations have been satisfied, collection is probable and the amount of revenue can be estimated reliably. Revenue from the performance of anesthesia services is measured at the fair value of the consideration received or receivable, net of contractual allowances and other discounts. The Company recognizes net patient revenue at the time the anesthesia services are performed; this aligns with when all significant contractual obligations related to the anesthesia services have been satisfied, collection is probable and the amount of revenue can be estimated reliably. Provisions for contractual allowances and discounts are recognized on an accrual basis. These amounts are deducted from gross service revenue to determine net service revenue.

Employee benefits

(e) Employee benefits:

Salaries and short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under cash bonus plans if the Company has a legal or constructive obligation to pay an amount as a result of services rendered by an employee and the obligation can be estimated reliably.

Inventories

(f) Inventories:

Inventories are measured at the lower of cost, determined using the first-in first-out method, and net realizable value. Inventory costs include the purchase price and other costs directly related to the acquisition of inventory, and bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the Company’s ordinary course of business, less the estimated costs of completion and selling expenses.

Property and equipment

(g) Property and equipment:

Property and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Where the costs of certain components of an item of property and equipment are significant in relation to the total cost of the item and have different useful lives, they are accounted for and depreciated separately.

The estimated useful lives and the methods of depreciation for the current and comparative periods are as follows:

Asset	Basis	Rate
Computer equipment	Declining balance	30%
Computer software	Declining balance	100%
Furniture and equipment	Declining balance	20%
Leasehold improvements	Straight-line	Shorter of initial lease
		term or useful life
Injection mold	Straight-line	5 years

These depreciation methods most closely reflect the expected pattern of consumption of the future economic benefits embodied in the asset.

Estimates for depreciation methods, useful lives and residual values are reviewed at each reporting period-end and adjusted if appropriate.

Intangible assets

(h) Intangible assets:

Intangible assets, consisting of acquired exclusive professional service agreements to provide anesthesia services and the cost of acquiring patents, are recorded at historical cost. For patents, costs also include legal costs involved in expanding the countries in which the patents are recognized to the extent expected cash flows from those countries exceed these costs over the amortization period and costs related to new patents. The amortization term for professional services agreements are based on the contractual terms of the agreements. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are measured at cost less accumulated amortization and accumulated impairment losses. Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line		15 years
Intellectual property new technology	Straight-line		20 years
Exclusive professional services agreements	Straight-line		2.5 to 15 years

Financial instruments

(i) Financial instruments:

Financial assets and financial liabilities are initially measured at fair value and are subsequently measured based on their classification as described below. Transaction costs that are directly attributable to the acquisition or issuance of a financial asset or liability, other than financial assets and liabilities classified at fair value through earnings, are added or deducted from the fair value of the respective financial asset or financial liability on initial recognition. Transaction costs that are directly attributable to the acquisition of a financial asset or financial liability classified at fair value through earnings are recognized immediately in earnings.

Financing fees related to debt are recorded as a reduction to the debt balance and amortized to finance expense using the effective interest rate method.

Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

The Company’s financial instruments are classified into the following categories: at fair value through earnings, loans and receivables, available-for-sale financial assets and other financial liabilities. The classification depends on the nature and purpose of the financial instrument and is determined at the time of initial recognition.

The Company has classified cash and cash equivalents, trade and other receivables as loans and receivables. Loans and receivables are initially measured at fair value and are subsequently re-measured at amortized cost using the effective interest method, less any impairment losses.

Financial assets at fair value through earnings are financial assets that are held for trading and include derivative instruments that are not included in a qualifying hedging relationship. Financial assets classified as financial assets at fair value through earnings are initially measured at fair value with any gains or losses arising on re-measurement recognized in earnings.

Financial liabilities classified at fair value through earnings are financial liabilities that are held for trading or designated into this category at inception. Financial liabilities classified as financial liabilities at fair value through earnings include contingent consideration and are initially measured at fair value with any gains or losses arising on re-measurement recognized through earnings. The Company has classified its earn-out obligation as financial liabilities at fair value through earnings.

Other financial liabilities includes trade payables, other payables, note payables and bank indebtedness and are initially measured at fair value and are subsequently measured at amortized cost using the effective interest method.

The Company has classified trade and other payables, employee benefit obligations, short term advances, loans, notes payable and bank indebtedness as other financial liabilities.

Available-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale and that are not classified in any of the other categories. Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses and foreign currency differences on available-for-sale debt instruments, are recognized in other comprehensive income and presented within equity. When an investment is derecognized, the cumulative gain or loss in other comprehensive income is transferred to earnings. The Company has no instruments classified as available-for-sale.

Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred, and the Company has transferred substantially all of the risks and rewards of ownership.

Impairment

(j) Impairment:

Financial assets:

Financial assets not carried at fair value through earnings are assessed at each reporting date to determine whether there is objective evidence that they are impaired. The Company considers that a financial asset is impaired if objective evidence indicates that a loss event which negatively affected the estimated future cash flows has occurred after initial recognition of the asset.

An impairment test is performed, on an individual basis, for each material financial asset. Other individually non-material financial assets are tested as groups of financial assets with similar risk characteristics. Impairment losses are recognized in earnings.

An impairment loss in respect of a financial asset measured at amortized cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses are recognized in earnings and reflected in an allowance account against the respective financial asset. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through earnings.

A permanent impairment loss for an available-for-sale investment is recognized by transferring the cumulative loss previously recognized in other comprehensive income to earnings.

Non-financial assets:

The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the recoverable amount is estimated.

The recoverable amount of an asset or a cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of cash inflows from other assets or groups of assets (cash-generating unit). Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An asset’s carrying amount, increased through reversal of an impairment loss, must not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Income taxes

(k) Income taxes:

Income tax expense is comprised of current and deferred tax. Current tax and deferred tax are recognized into earnings except to the extent that it relates to a business combination, or items recognized directly in other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable earnings, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities but are intended to be settled on a net basis or the tax assets and liabilities will be realized simultaneously. A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

Share-based compensation

(l) Share-based compensation:

The Company records share-based compensation related to stock options and share units granted using the fair value based method estimated using either the Black-Scholes model or Binomial method. Under this method, compensation cost is measured at fair value at the date of grant and expensed as employee benefits over the period in which employees unconditionally become entitled to the award. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that do meet the related service and non-market performance conditions at the vesting date.

Share capital

(m) Share capital:

Common shares are classified as equity. Incremental costs directly attributable to the issue of common shares, stock options and share options are recognized as a deduction from equity, net of any tax effects.

Earnings per share

(n) Earnings per share:

The Company presents basic and diluted earnings per share (EPS) data for its common shares. Basic EPS is calculated by dividing the net income or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period, adjusted for own shares held, if applicable. Diluted EPS is determined by adjusting the income or loss attributable to common shareholders and the weighted average number of common shares outstanding, adjusted for own shares held if applicable, for the effects of all dilutive potential common shares.

Provisions

(o) Provisions:

Provisions are recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of resources will be required to settle the obligation. Provisions are determined by discounting expected future cash outflows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Management uses judgment to estimate the amount, timing and probability of the liability based on facts known at the reporting date. The unwinding of the discount is recognized as a finance expense.

Segment reporting

(p) Segment reporting:

The Company’s operating segments consist of the sale of medical products and the provision of anesthesia services.

Finance costs

(q) Finance costs:

Finance cost is primarily comprised of interest on the Company’s notes payable and bank indebtedness and also includes the amortization of costs incurred to obtain loan financing and any fees in respect of arranging loan financing. Deferred finance costs are amortized using the effective interest method over the term of the related loan financing. Deferred finance costs are presented as a reduction to the related liability.

Foreign exchange gains and losses are reported on a net basis as either finance income or finance expense as the finance costs relate to Canadian dollar denominated debt.

Business combinations

(r) Business combinations:

Business combinations are accounted for using the acquisition method. The consideration for an acquisition is measured at the fair values of the assets transferred, the liabilities assumed and the equity interests issued at the acquisition date. The excess of the consideration over the fair value of the identifiable net assets acquired is recorded as goodwill. Transaction costs that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred. On an acquisition-by-acquisition basis, any non-controlling interest is measured either at fair value of the non-controlling interest or at the fair value of the proportionate share of the net assets acquired.

Contingent consideration is measured at fair value on acquisition date and is included as part of the consideration transferred. The fair value of the contingent consideration liability is re-measured at each reporting date with the corresponding gain or loss being recognized in earnings.

New standards and interpretations not yet applied

(t) New standards and interpretations not yet applied:

(i) IFRS 9 - Financial Instruments:

On July 24, 2014 the IASB issued the complete IFRS 9 (IFRS 9 (2014)). IFRS 9 (2014) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2014), financial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. The standard also introduces additional changes relating to financial liabilities and amends the impairment model by introducing a new ‘expected credit loss’ model for calculating impairment.

(t) New standards and interpretations not yet applied:

(i) IFRS 9 - Financial Instruments:

IFRS 9 (2014) aligns hedge accounting more closely with risk management. This does not fundamentally change the types of hedging relationships or the requirement to measure and recognize ineffectiveness, however it will provide more hedging strategies that are used for risk management to qualify for hedge accounting and introduce more judgment to assess the effectiveness of a hedging relationship. Special transitional requirements have been set for the application of the new general hedging model.

The Company will adopt IFRS 9 (2014) in its financial statements for the annual period beginning on January 1, 2018. The Company has evaluated the impact of IFRS 9 and has determined that IFRS 9 will not have a significant impact on the Company. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

(iv) IFRS 15 - Revenue Recognition:

On May 28, 2014 the IASB issued IFRS 15 Revenue from Contracts with Customers. The new standard is effective for annual periods beginning on or after January 1, 2018. Earlier application is permitted.

IFRS 15 will replace IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers, and SIC 31 Revenue – Barter Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognized. New estimates and judgmental thresholds have been introduced which may affect the amount and/or timing of revenue recognized.

The new standard applies to contracts with customers. It does not apply to insurance contracts, financial instruments or lease contracts, which fall in the scope of other standards. The Company will adopt IFRS 15 in its financial statements for the annual period beginning on January 1, 2018. The Company has evaluated the impact of IFRS 15 and has determined that IFRS 15 will not have a significant impact on the Company other than additional required disclosures. The Company is continuing to evaluate the impact of disclosures to its future consolidated financial statements.

(t) New standards and interpretations not yet applied:

(v) IFRS 16 – Leases:

In January 2016, the IASB issued IFRS 16 – Leases, which supersedes IAS 17 – Leases. IFRS 16 establishes principles for the recognition, measurement, presentation and disclosure of leases. The standard establishes a single model for lessees to bring leases on-balance sheet while lessor accounting remains largely unchanged and retains the finance and operating lease distinctions. IFRS 16 is effective for annual periods beginning on or after January 1, 2019, with earlier adoption permitted, but only if also applying IFRS 15 – Revenue from contracts with Customers. The Company is currently evaluating the impact on IFRS 16 on its financial statements.

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Significant accounting policies (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Estimated Useful Lives and the Methods of Depreciation for Current and Comparative Periods

The estimated useful lives and the methods of depreciation for the current and comparative periods are as follows:

Asset	Basis	Rate
Computer equipment	Declining balance	30%
Computer software	Declining balance	100%
Furniture and equipment	Declining balance	20%
Leasehold improvements	Straight-line	Shorter of initial lease
		term or useful life
Injection mold	Straight-line	5 years

Intangible Assets Finite Lives Amortized Over Period

Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line		15 years
Intellectual property new technology	Straight-line		20 years
Exclusive professional services agreements	Straight-line		2.5 to 15 years

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Business combinations (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Business Combinations

During the year ended December 31, 2017, the Company completed six business combinations. All business combinations completed during the period have been included in the anesthesia segment of the Company and include the following:

Acquired Operation	Date Acquired	Consideration
DDAB, LLC (“DDAB”)	February 2017		$5,273,570
Osceola Gastroenterology Anesthesia Associates, LLC (“OGAA”)	March 2017		$3,401,819
West Florida Anesthesia Associates, LLC (“WFAA”)	August 2017		$5,840,000
Central Colorado Anesthesia Associates, LLC (“CCAA”)	September 2017		$7,888,919
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC (“RSA”)	September 2017		$7,248,960
Alamo Sedation Associates, LLC (“ASA”)	September 2017		$3,500,000

During the year ended December 31, 2016, the Company completed three business combinations. All business combinations completed during the year have been included in the anesthesia segment of the Company and include the following:

Acquired Operation	Date Acquired	Consideration
Austin Gastroenterology Anesthesia Associates, PLLC (“AGAA”)	May 2016		$16,821,896
Community Anesthesia, PLLC (“Community”)	June 2016		$13,636,639
Arapahoe Gastroenterology Anesthesia Associates, LLC (“Arapahoe”)	June 2016		$  3,700,000

Schedule of Consideration Transferred and Preliminary Estimated Fair Values of Assets and Liabilities Acquired at Acquisition Date

The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the assets and liabilities acquired at the acquisition date. Certain of the estimates of fair value, most notably the professional services agreements, are preliminary and may be subject to further adjustments.

	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Cash	$	4,089,791	$	3,401,819	$	5,840,000	$	7,888,919	$	7,248,960	$	3,500,000	$	31,969,489
Contingent consideration		1,183,779		-		-		-		-		-		1,183,779
Purchase consideration	$	5,273,570	$	3,401,819	$	5,840,000	$	7,888,919	$	7,248,960	$	3,500,000		33,153,268
Non-controlling interest		5,066,763		2,267,879		4,778,182		7,579,550		6,964,687		-		26,657,061
	$	10,340,333	$	5,669,698	$	10,618,182	$	15,468,469	$	14,213,647	$	3,500,000	$	59,810,329
Assets and liabilities acquired:
Exclusive professional services agreements		10,340,333	$	5,669,698	$	10,606,192	$	15,468,469	$	14,213,648	$	3,500,000	$	59,798,340
Pre-close trade receivables		525,000		-		-		-		-		-		525,000
Pre-close trade payables		(525,000)		-		-		-		-		-		(525,000)
Prepaid expenses and deposits		-		-		11,889		-		-		-		11,889
Fair value of net identifiable assets and liabilities acquired	$	10,340,333	$	5,669,698	$	10,618,081	$	15,468,469	$	14,213,648	$	3,500,000	$	59,810,229
Exclusive professional services agreements – amortization term		4.5 years		5 years		15 years		7 years		5 years		7 years
Acquisition costs expensed													$	570,900

The following table summarizes the fair value of the consideration transferred and the preliminary estimated fair values of the assets and liabilities acquired at the acquisition date. Certain of the estimates of fair value, most notably the professional services agreements, are preliminary and may be subject to further adjustments.

	Austin		Community		Arapahoe		Total
Cash	$	13,000,000	$	13,636,639	$	3,700,000	$	30,336,639
Deferred consideration		3,821,895		-		-		3,821,895
Purchase consideration		16,821,895		13,636,639		3,700,000		34,158,534
Non-controlling interest		16,162,214		7,342,806		3,554,902		27,059,922
	$	32,984,109	$	20,979,445	$	7,254,902	$	61,218,456
Assets and liabilities acquired:
Exclusive professional services agreements		32,984,109		20,979,445	$	7,254,902	$	61,218,456
Pre-close trade receivables		-		917,998		-		917,998
Pre-close trade payables		-		(917,998)		-		(917,998)
Fair value of net identifiable assets and liabilities acquired	$	32,984,109	$	20,979,445	$	7,254,902	$	61,218,456
Exclusive professional services agreements – amortization term		10 years		5 years		5 years
Acquisition costs expensed in relation to above acquisitions							$	348,251

Acquisitions Contributed Revenue and Net Earnings Before Tax

In the year ended December 31, 2017, the above noted acquisitions contributed revenue and net earnings before tax as follows:

	Year ended December 31, 2017
	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Revenue	$	3,244,190	$	1,829,591	$	1,315,951	$	3,963,932	$	3,196,268	$	724,216	$	14,274,148
Net earnings (loss) before tax	$	(414,599)	$	(92,803)	$	504,231	$	2,101,049	$	1,358,055	$	290,830	$	3,746,763
Amortization	$	2,106,364	$	897,702	$	294,616	$	669,780	$	781,751	$	127,778	$	4,877,991

In the year ended December 31, 2016, the above noted acquisitions contributed revenue and net earnings before tax as follows:

	Year ended December 31, 2016
	AGAA		Community		Arapahoe		Total
Revenue	$	11,593,180	$	4,482,059	$	2,492,127	$	18,567,366
Net earnings (loss) before tax	$	5,643,814	$	(348,740)	$	971,899	$	6,266,973
Amortization	$	1,924,073	$	2,272,773	$	725,490	$	4,922,336

Acquisitions Contributed of Pro Forma Information Revenue and Net Earnings Before Tax

	Year ended December 31, 2017
Pro Forma Information (unaudited)
	DDAB		OGAA		WFAA		CCAA		RSA		ASA		Total
Revenue	$	3,539,116	$	2,311,062	$	3,158,282	$	12,178,353	$	10,801,852	$	2,605,406	$	34,594,071
Net earnings (loss) before tax	$	(452,290)	$	(117,225)	$	1,210,154	$	6,670,023	$	4,589,574	$	1,046,277	$	12,946,513
Amortization	$	2,297,852	$	1,133,940	$	707,079	$	2,209,781	$	2,842,729	$	500,000	$	9,691,381

	Year ended December 31, 2016
Pro Forma Information (unaudited)
	AGAA		Community		Arapahoe		Total
Revenue	$	18,573,853	$	7,733,243	$	4,658,181	$	30,965,277
Net earnings before tax	$	9,042,159	$	(601,708)	$	1,816,634	$	10,257,085
Amortization	$	3,298,411	$	4,195,889	$	1,450,980	$	8,945,280

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Anesthesia services expense (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Anesthesia Services Expense

For the years ended December 31:

	2017		2016
Employee related	$	29,032,414	$	19,092,648
Depreciation and amortization		23,732,757		14,834,481
Bad debt expense		5,235,934		3,932,374
Office related		6,778,232		5,344,226
Impairment of professional services contract (note 11)		6,653,015		-
Acquisition expense		668,317		426,694
Medical supplies		677,905		690,551
Stock based compensation		426,416		201,538
Travel and entertainment		318,787		154,778
Professional fees		503,485		443,234
Insurance		288,162		108,637
Corporate		-		825
	$	74,315,424	$	45,229,986

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Product sales expense (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Product Sales Expense

For the years ended December 31:

	2017		2016
Employee related	$	1,629,851	$	1,427,602
Product cost and support		2,207,057		2,031,707
Professional fees		418,385		279,013
Office related		298,672		253,672
Stock based compensation		372,223		398,388
Insurance		14,749		54,326
Depreciation and amortization		56,907		44,863
Foreign exchange		(294)		13,539
	$	4,997,550	$	4,503,110

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Corporate expense (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Corporate Expense

For the years ended December 31:

	2017		2016
Employee related	$	1,439,041	$	1,376,208
Professional fees		947,572		533,467
Corporate		493,918		437,563
Stock based compensation		2,655,372		776,748
Travel and entertainment		224,074		248,719
Office related		233,053		180,737
Insurance		310,736		244,610
Depreciation		15,481		52,772
Foreign exchange		55,863		15,872
	$	6,375,110	$	3,866,696

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Trade and other receivables (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Trade and Other Receivables

	2017		2016
Trade receivables (note 19(a))	$	15,225,553	$	9,804,920
Other receivables		260,759		31,819
	$	15,486,312	$	9,836,739

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Trade and other payables (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Trade and Other Payables

	2017		2016
Trade payables	$	2,042,487	$	372,612
Payments due to former owners of business combinations		76,403		58,667
Accruals and other payables		3,542,954		2,798,406
	$	5,661,844	$	3,229,685

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Property and equipment (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Property and Equipment

	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Cost
Balance as at January 1, 2016	$	43,312	$	116,195	$	4,727	$	311,273	$	475,507
Additions		16,016		1,805		-		95,375		113,196
Dispositions		(3,629)		-		-		-		(3,629)
Balance as at December 31, 2016		55,699		118,000		4,727		406,648		585,074
Additions		26,356		97,021		1,057		1,414		125,848
Dispositions		-		-		-		-		-
Balance as at December 31, 2017	$	82,055	$	215,021	$	5,784	$	408,062	$	710,922
	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Accumulated depreciation
Balance as at January 1, 2016	$	22,162	$	39,130	$	2,594	$	126,915	$	190,801
Depreciation expense		7,950		19,893		426		42,369		70,638
Dispositions		(563)		-		-		-		(563)
Balance as at December 31, 2016		29,549		59,023		3,020		169,284		260,876
Depreciation expense		13,408		24,074		465		47,732		85,680
Dispositions		-		-		-		-		-
Balance as at December 31, 2017	$	42,957	$	83,097	$	3,485	$	217,016	$	346,556
	Computer equipment and software		Furniture and equipment		Leasehold improvements		Injection mold		Total
Net book value
December 31, 2017	$	39,098	$	131,924	$	2,299	$	191,046	$	364,366
December 31, 2016	$	26,150	$	58,977	$	1,707	$	237,364	$	324,198

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Intangible assets (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Intangible Assets

	Professional Services Agreements		Patents		Total
Cost
Balance as at January 1, 2016	$	94,416,692	$	532,598	$	94,949,290
Additions through business combinations (note 4)		61,218,456		-		61,218,456
Balance as at December 31, 2016		155,635,148		532,598		156,167,746
Additions through business combinations (note 4)		59,798,340		-		59,798,340
Impairment		(6,653,015)		-		(6,653,015)
Balance as at December 31, 2017	$	208,780,473	$	532,598	$	209,313,071
	Professional Services Agreements		Patents		Total
Accumulated depreciation
Balance as at January 1, 2016	$	7,175,823	$	466,200	$	7,642,023
Amortization expense		14,823,948		34,464		14,858,412
Balance as at December 31, 2016		21,999,771		500,664		22,500,435
Amortization expense		23,723,277		(3,247)		23,720,030
Balance as at December 31, 2017	$	45,723,048	$	497,417	$	46,220,465
	Professional Services Agreements		Patents		Total
Net book value
December 31, 2017	$	163,057,425	$	35,181	$	163,092,606
December 31, 2016	$	133,635,377	$	31,934	$	133,667,311

Summary of Aggregate Carrying Amounts of Intangible Assets

The aggregate carrying amounts of intangible assets allocated to each entity, prior to impairment charges, are as follows:

	2017		2016
GAA	$	49,013,454	$	54,510,290
Community		14,510,783		18,706,671
	$	63,524,237	$	73,216,961

Summary of Key Assumptions Used in Performing the Impairment Tests

The key assumptions used in performing the impairment tests in 2017 were:

Cash generating unit	Valuation method	Discount rate	Perpetual growth rate
GAA	Value in use	18.0%	1.4%
Community	Value in use	20.50%	1.3%

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Notes payable (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Notes Payable/Consolidated Minimum Loans Payments

The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows:

	Minimum Principal
At December 31, 2017
Not later than one year	$	1,250,000
Between one to three years	$	60,450,000
Between four to five years	$	-
Thereafter	$	-
	$	61,700,000

Summary of Detailed Information about Financial Covenants Ratios

As at December 31, 2017 the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

Notes Payable [member]

Summary of Notes Payable/Consolidated Minimum Loans Payments

December 31, 2017	Crown Note		Scotia Facility		Total
Current portion	$	-		1,101,468	$	1,101,468
Non-current portion		-		60,228,851		60,228,851
Total loans and borrowings	$	-		61,330,319	$	61,330,319
December 31, 2016	Crown Note		Scotia Facility		Total
Current portion	$	-		5,791,787	$	5,791,787
Non-current portion		15,208,256		22,930,518		38,138,774
Total loans and borrowings	$	15,208,256		28,722,305	$	43,930,561

Crown Note [member]

Summary of Reconciliation of Movements in Borrowings to Cash Flows Arising from Financing Activities

The reconciliation of movements in borrowings to cash flows arising from financing activities are as follows:

	2017		2016
Drawings at January 1	$	16,758,000	$	16,256,250
Additions to note		-		-
Repayments of note		(17,043,750)		-
Effects of changes in foreign exchange rates		285,750		501,750
Drawings at December 31	$	-	$	16,758,000

Scotia Facility [member]

Summary of Reconciliation of Movements in Borrowings to Cash Flows Arising from Financing Activities

The reconciliation of movements in borrowings to cash flows arising from financing activities are as follows:

	2017		2016
Drawings at January 1	$	29,000,000	$	17,000,000
Additions to long term debt		68,200,000		26,000,000
Repayments of long-term debt		(35,500,000)		(14,000,000)
Drawings at December 31	$	61,700,000	$	29,000,000

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Subsidiary undertakings (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Principal Subsidiaries

The list below sets out the principal material operating subsidiaries of the Company. These subsidiaries engage in intercompany transactions, all of which are eliminated on consolidation within these financial statements.

Subsidiary	Jurisdiction of Incorporation
CRH Medical Corporation	British Columbia, Canada
CRH Medical Corporation	Delaware, United States
CRH Anesthesia Management LLC	Delaware, United States
Gastroenterology Anesthesia Associates LLC	Georgia, United States
Macon Gastroenterology Anesthesia Associates LLC	Georgia, United States
CRH Anesthesia of Cape Coral LLC	Florida, United States
CRH Anesthesia of Knoxville LLC	Tennessee, United States
Knoxville Gastroenterology Anesthesia Associates LLC	Tennessee, United States
Austin Gastroenterology Anesthesia Associates PLLC	Texas, United States
Community Anesthesia PLLC	Massachusetts, United States
Arapahoe Gastroenterology Anesthesia Associates LLC	Delaware, United States
DDAB LLC	Georgia, United States
Osceola Gastroenterology Anesthesia Associates LLC	Florida, United States
West Florida Anesthesia Associates LLC	Florida, United States
Central Colorado Anesthesia Associates LLC	Colorado, United States
Raleigh Sedation Associates LLC	North Carolina, United States
Blue Ridge Sedation Associates LLC	North Carolina, United States
Alamo Sedation Associates LLC	Texas, United States

Summary of Principal Subsidiaries

(c) The Company also holds the following interests:

Entity	Interest
Community Anesthesia PLLC		65%
Macon Gastroenterology Anesthesia Associates LLC		65%
Arapahoe Gastroenterology Anesthesia Associates LLC		51%
DDAB LLC		51%
Osceola Gastroenterology Anesthesia Associates LLC		60%
West Florida Anesthesia Associates LLC		55%
Central Colorado Anesthesia Associates LLC		51%
Raleigh Sedation Associates LLC		51%

Knoxville Gastroenterology Anesthesia Associates LLC ("KGAA") [member]

Summary of Financial Information of Subsidiary

The following tables summarize the financial information of these entities, including fair value adjustments at acquisition but excluding intercompany eliminations, as at December 31, 2017 and 2016.

	KGAA				AGAA
Ownership %	51%				51%
	2017		2016		2017		2016
Cash and cash equivalents	$	1,049,265	$	1,333,289	$	1,552,981	$	2,866,916
Trade and other receivables		665,601		750,393		1,412,034		1,403,277
Prepaids		23,494		-		37,283		10,635
Current taxes receivable		92,427		-
Intangible assets		8,912,880		10,822,783		27,761,626		31,060,037
		10,743,667		12,906,465		30,763,924		35,340,865
Accounts payable and accrued liabilities		428,358		315,542		709,905		453,759
Current taxes payable		-		133,862		-		-
		428,358		449,404		709,905		453,759
Member contributions		7,106,555		8,149,450		23,037,106		29,244,110
Current period earnings		3,208,754		4,307,611		7,016,913		5,642,996
		10,315,309		12,457,061		30,054,019		34,887,106
Total liabilities and equity	$	10,743,667	$	12,906,465	$	30,763,924	$	35,340,865
	KGAA				AGAA
	2017		2016		2017		2016
Anesthesia revenue	$	10,194,489	$	10,307,361	$	15,938,161	$	11,593,180
Anesthesia services expense		6,577,415		5,573,305		8,926,966		5,949,366
Net income before tax		3,617,074		4,734,056		7,011,195		5,643,814
Tax expense		408,319		426,445		(5,717)		-
Net income	$	3,208,755	$	4,307,611	$	7,016,912	$	5,643,814
Net income attributable to non-controlling interest	$	1,589,007	$	2,123,964	$	3,438,287	$	2,765,469
Non-controlling interest	$	4,981,492	$	6,216,255	$	14,726,051	$	17,094,265

Community Anesthesia PLLC, Macon Gastroenterology Anesthesia Associates LLC and Arapahoe Gastroenterology Anesthesia Associates LLC [member]

Summary of Financial Information of Subsidiary

The following tables summarize the aggregate financial information for the above entities, including fair value adjustments at acquisition but excluding tax and intercompany eliminations, as at December 31, 2017 and 2016.

	2017		2016
Cash and cash equivalents	$	5,022,739	$	1,742,274
Trade and other receivables		7,369,420		2,359,873
Prepaids		118,960		13,821
Intangible assets		75,348,680		30,877,177
		87,859,799		34,993,145
Accounts payable and accrued liabilities		2,657,257		659,482
Loans		900,000		-
		3,557,257		659,482
Member contributions		80,561,493		33,308,961
Current period earnings		3,741,049		1,024,702
		84,302,542		34,333,663
Total liabilities and equity	$	87,859,799	$	34,993,145
	2017		2016
Anesthesia revenue	$	30,503,731	$	11,044,835
Anesthesia services expense		26,762,683		9,994,210
Net income before tax	$	3,741,048	$	1,050,625
Tax expense		-		-
Net income	$	3,741,048	$	1,050,625
Net income attributable to non-controlling interest	$	2,123,477	$	503,784
Non-controlling interest	$	37,569,771	$	13,099,934

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Share capital (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Status of Plan

A summary of the status of the plan as of December 31, 2017 and 2016 is as follows (options are granted in CAD and USD amounts are calculated using prevailing exchange rates):

	Number of options		Weighted average exercise price
				CAD		USD
Outstanding, January 1, 2016		2,974,311	$	0.60	$	0.43
Issued		-		-		-
Exercised		(1,358,687)		0.57		0.42
Forfeited		(12,500)		0.52		0.39
Expired		-		-		-
Outstanding, December 31, 2016		1,603,124		0.63		0.47
Issued		-		-		-
Exercised		(247,500)		0.32		0.25
Forfeited		(10,937)		0.60		0.48
Expired		-		-		-
Outstanding, December 31, 2017		1,344,687	$	0.69	$	0.55

Summary of Information about Stock Options Outstanding

The following table summarizes information about the stock options outstanding at December 31, 2017:

Options outstanding

Options exercisable

Exercise price

Weighted

Weighted

Weighted

Weighted

Weighted

$CAD

$USD

Number     of options

average remaining contractual life (years)

average exercise price ($CAD)

average exercise price ($USD)

Number     of options

average exercise price ($CAD)

average exercise price ($USD)

0.60 – 0.70

0.48 – 0.56

1,344,687

6.05

0.69

0.55

1,272,812

0.68

0.54

As at December 31, 2016:

			Options outstanding								Options exercisable
Exercise price					Weighted		Weighted		Weighted				Weighted		Weighted
$CAD	$USD		Number     of options		average remaining contractual life (years)		average exercise price ($CAD)		average exercise price ($USD)		Number     of options		average exercise price ($CAD)		average exercise price ($USD)
0.28 – 0.58		0.20 – 0.43		214,687		0.93		0.28		0.20		214,687		0.28		0.20
0.59 – 0.70		0.44 – 0.52		1,388,437		7.04		0.68		0.51		962,812		0.68		0.51
				1,603,124		6.23		0.63		0.47		1,177,499		0.61		0.45

Summary of Status of Plan for Other Equity Instruments

A summary of the status of the plan as of December 31, 2017 and 2016 is as follows:

	Time based   share units		Performance   based share   units
Outstanding, January 1, 2016		509,000		1,000,000
Issued		704,000		1,350,000
Exercised		(80,000)		-
Forfeited		(65,000)		-
Expired		-		-
Outstanding, December 31, 2016		1,068,000		2,350,000
Issued		324,000		-
Exercised		(302,000)		(1,000,000)
Forfeited		(53,500)		-
Expired		-		-
Outstanding, December 31, 2017		1,036,500		1,350,000

Summary of Fair Value of Share Units Calculated Using Binomial Pricing Model

The fair value of these share units was calculated as of the grant date using a binomial pricing model with the following weighted average assumptions:

	2016
Risk-free interest rate	1.04%
Expected volatility	62.0%
Pre-vest forfeiture rate	0%
Weighted average share price	CAD$7.26

Summary of Calculation of Basic Earnings Per Share

The calculation of basic earnings per share for the years ended December 31, 2017 and 2016 is as follows:

	2017						2016
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share   amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	6,558,966		73,712,670	$	0.089	$	10,564,233		71,826,884	$	0.147
Share options				1,306,309						2,113,563
Share units				467,231						263,383
Diluted	$	6,558,966		75,486,210	$	0.087	$	10,564,233		74,203,830	$	0.142

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Income taxes (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Income Tax Expense

(a) Income tax expense is comprised of the following:

	2017		2016
Current tax expense	$	5,527,161	$	5,310,454
Deferred tax expense (recovery):
Origination and reversal of temporary differences		(1,559,332)		(830,584)
Change in enacted tax rates and other		2,334,678		(224,720)
Total tax expense (recovery)	$	6,302,507	$	4,255,150

Summary of Reconciliation of Income Tax Computed at Statutory Tax Rates to Income Tax Expense

The reconciliation of income tax computed at statutory tax rates to income tax expense, using a 23% (2016 – 26%) statutory rate, is:

	2017		2016
Tax expense at statutory income tax rates	$	4,593,244	$	5,286,493
Permanent differences		557,406		159,800
Income attributable to non-controlling interest		(1,571,060)		(1,306,217)
Foreign income taxed at different rates		344,742		243,256
Impact of change in tax rates		2,585,691		-
Other		(207,516)		(128,182)
Total tax expense (recovery)	$	6,302,507	$	4,255,150

Summary of Deferred Tax Assets and Liabilities

The Company had the following deferred tax assets and liabilities resulting from temporary differences recognized for financial statement and income tax purposes.

	2017		2016
Deferred tax assets:
Property and equipment	$	8,916		141
Intangible assets		4,291,655		-
Finance related costs		374,721		527,462
Reserves		-		74,105
Share transaction costs		196,508		273,332
Stock-based compensation		387,943		426,051
Deferred consideration		-		1,523,663
Earn-out obligation		499,052		5,128,162
Deferred tax liabilities:
Intangible assets		-		(1,006,371)
Deferred consideration		(44,255)		-
Reserves		(7,157)		-
Unrealized foreign exchange		-		(508,770)
Net deferred tax asset	$	5,707,383	$	6,437,775

Deferred tax assets by jurisdiction	2017		2016
Canada:
Deferred tax asset	$	201,555	$	405,108
Deferred tax liability		(99,254)		(506,954)
Net deferred tax asset (liability)	$	102,301	$	(101,846)
United States:
Deferred tax asset	$	5,690,541	$	7,559,797
Deferred tax liability		(85,459)		(1,020,176)
Net deferred tax asset (liability)	$	5,605,082	$	6,539,621

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Capital disclosures (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Shareholders' Equity Attributable to Shareholders, Excluding Other Comprehensive Income

	2017		2016
Shareholders’ equity attributable to shareholders, excluding other comprehensive income	$	67,725,744	$	60,582,603

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Net finance expense (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Net Finance Expense

Recognized in earnings in the years ended December 31:

	2017		2016
Finance income:
Foreign exchange gain	$	-	$	(1,007,673)
Net change in fair value of financial liabilities at fair value through earnings (note 19)		(11,747,441)		-
Total finance income	$	(11,747,441)	$	(1,007,673)
Finance expense:
Interest and accretion expense on borrowings	$	3,322,321	$	4,024,240
Accretion expense on earn-out obligation and deferred consideration		600,602		560,150
Amortization of deferred financing fees		224,463		614,472
Net change in fair value of financial liabilities at fair value through earnings		-		204,958
Foreign exchange loss		88,084		-
Extinguishment of notes payable and bank indebtedness		2,044,867		-
Other		50,475		27,215
Total finance expense	$	6,330,812	$	5,431,035
Net finance (income) expense	$	(5,416,629)	$	4,423,362

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Financial instruments (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Reconciliation of Level 3 Fair Values

Reconciliation of level 3 fair values:

	Earn-out Obligation
Balance as at January 1, 2017		$13,149,130
Recorded in finance expense:
Accretion expense		473,738
Fair value adjustment		(11,747,441)
Balance as at December 31, 2017		$1,875,427

Summary of Age of Analysis that are not overdue and Related Allowance for Doubtful Accounts

The following table sets forth details of the age of receivables that are not overdue as well as an analysis of overdue amounts and related allowance for the doubtful accounts.

	2017		2016
Total trade receivables	$	20,589,210	$	13,934,290
Less: allowance for doubtful accounts		(5,363,657)		(4,129,370)
Total trade receivables, net	$	15,225,553	$	9,804,920
Of which:
Current	$	10,065,389	$	7,781,818
31 to 60 days		3,251,297		1,674,626
61 to 90 days		2,359,768		1,147,918
91 days or greater		4,912,756		3,329,928
Total trade receivables	$	20,589,210	$	13,934,290

Summary of Financial Assets Represents Maximum Credit Exposure

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

	2017		2016
Cash and cash equivalents	$	12,486,884	$	9,507,004
Trade receivables		15,225,553		9,804,920
	$     27,712,437		$     19,311,924
Continuity of allowance for bad debts:
Beginning balance	$	4,129,370	$	2,344,684
Write-offs		(4,065,645)		(2,180,257)
Provision		5,302,732		3,964,943
Other		(2,800)		-
Total allowance for bad debts	$	5,363,657	$	4,129,370

Summary of Maturity Analysis of Contractual and Legal Obligations

At December 31, 2017	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	5,661,844	$	5,661,844	$	-	$	-	$	-
Employee benefits		500,754		500,754		-		-		-
Notes payable and bank indebtedness		68,502,574		4,018,179		64,484,395		-		-
Earn-out obligation		1,977,334		-		1,977,334		-		-
Deferred consideration		3,300,000		1,000,000		2,300,000		-		-
	$	79,942,506	$	11,180,777	$	68,761,729	$	-	$	-

The Company also has financial obligations in respect of its normal course issuer bid. Refer to note 15(e).

At December 31, 2016	Maturity
	TOTAL		Less than one year		One to three years		Four to five years		After five years
Trade and other payables	$	3,229,685	$	3,229,685	$	-	$	-	$	-
Employee benefits		226,874		226,874		-		-		-
Notes payable and bank indebtedness		48,495,668		8,970,825		39,524,843		-		-
Earn-out obligation		14,120,227		-		14,120,227		-		-
Deferred consideration		4,200,000		900,000		3,300,000		-		-
	$	70,272,454	$	13,327,384	$	56,945,070	$	-	$	-

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Commitments and contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Minimum Payments Required for the Lease of Premises

(a) The following are the minimum payments required for the lease of premises:

Less than one year	$	237,299
One to three years		249,677
Four to five years		-
Thereafter		-
Total	$	486,976

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Related party transactions (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Key Management Personnel Compensation Including Directors

Key management personnel compensation, including directors, is as follows:

	2017		2016
Salaries, directors’ fees and other benefits		$    1,307,233		$    1,369,329
Share-based payments		2,807,306		801,311
		$    4,114,539		$    2,170,640

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Segmented information (Tables)

12 Months Ended

Dec. 31, 2017

Text block1 [abstract]

Summary of Revenues and Company's Property and Equipment, Intangibles and Other Assets Located in Geographical Regions

	2017		2016
Revenue:
Canada and other	$	238,342	$	238,049
United States		100,003,738		78,116,583
Total	$	100,242,080	$	78,354,632

The Company’s property and equipment, intangibles and other assets are located in the following geographic regions as at December 31, 2017 and 2016:

	2017		2016
Property and equipment:
Canada	$	347,676	$	316,145
United States		16,690		8,053
Total	$	364,366	$	324,198
Intangible assets:
Canada	$	35,181	$	31,934
United States		163,057,425		133,635,377
Total	$	163,092,606	$	133,667,311
Other assets:
Canada	$	-	$	1,261,298
United States		-		-
Total	$	-	$	1,261,298

Summary of Operating Segments

The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the years ended December 31, 2017 and 2016. The Company does not allocate expenses related to corporate activities. These expenses are presented within “Other” to allow for reconciliation to reported measures.

	2017
	Anesthesia services		Product sales		Other		Total
Revenue	$	88,741,075	$	11,501,005	$	-	$	100,242,080
Operating costs		74,315,424		4,997,550		6,375,110		85,688,084
Operating income (loss)	$	14,425,651	$	6,503,455	$	(6,375,110)	$	14,553,996
	2016
	Anesthesia services		Product sales		Other		Total
Revenue	$	67,821,879	$	10,532,753	$	-	$	78,354,632
Operating costs		45,229,986		4,503,110		3,866,696		53,599,792
Operating income (loss)	$	22,591,893	$	6,029,643	$	(3,866,696)	$	24,754,840

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Significant Accounting Policies - Estimated Useful Lives and the Methods of Depreciation for Current and Comparative Periods (Detail)	12 Months Ended
	Dec. 31, 2017
Disclosure of detailed information about property, plant and equipment [line items]
Basis	Straight-line
Injection mold [member]
Disclosure of detailed information about property, plant and equipment [line items]
Basis	Straight-line
Shorter of initial lease term or useful life	5 years
Computer equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Basis	Declining balance
Rate	30
Computer software [member]
Disclosure of detailed information about property, plant and equipment [line items]
Basis	Declining balance
Rate	100
Furniture and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Basis	Declining balance
Rate	20
Leasehold improvements [member]
Disclosure of detailed information about property, plant and equipment [line items]
Basis	Straight-line

XML

Significant Accounting Policies - Intangible Assets Finite Lives Amortized Over Period (Detail)	12 Months Ended
	Dec. 31, 2017
Intellectual property rights [member]
Disclosure of detailed information about intangible assets [line items]
Basis	Straight-line
Rate	15 years
Intellectual property new technology [member]
Disclosure of detailed information about intangible assets [line items]
Basis	Straight-line
Rate	20 years
Exclusive professional services agreements [member]
Disclosure of detailed information about intangible assets [line items]
Basis	Straight-line
Bottom of range [member] | Exclusive professional services agreements [member]
Disclosure of detailed information about intangible assets [line items]
Rate	2.5 years
Top of range [member] | Exclusive professional services agreements [member]
Disclosure of detailed information about intangible assets [line items]
Rate	15 years

XML

Business Combination - Additional Information (Detail)					1 Months Ended						12 Months Ended
	Mar. 31, 2017 USD ($)	Jan. 01, 2017 USD ($)	Sep. 30, 2016 USD ($)	Jan. 01, 2016 USD ($)	Sep. 30, 2017 USD ($)	Aug. 31, 2017 USD ($)	Mar. 31, 2017 USD ($)	Feb. 28, 2017 USD ($)	Jun. 30, 2016 USD ($)	May 31, 2016 USD ($)	Dec. 31, 2017 USD ($) Business	Dec. 31, 2016 USD ($) Business
Disclosure of detailed information about business combination [line items]
Number of business combination completed | Business											6	3
Revenue		$ 120,600,000		$ 90,800,000							$ 30,965,277
Net earnings (loss) before tax		$ 29,100,000		$ 24,300,000							10,257,085
Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Estimated purchase consideration paid											31,969,489	$ 30,336,639
Total consideration											33,153,268	34,158,534
Non-controlling interest											26,657,061	$ 27,059,922
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of detailed information about business combination [line items]
Revenue											18,573,853
Net earnings (loss) before tax											9,042,159
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired										2016-05		2016-05
Membership interest acquired										51.00%
Estimated purchase consideration paid										$ 13,000,000		$ 13,000,000
Total consideration										16,821,895		16,821,896
Non-controlling interest										$ 16,162,214		$ 16,162,214
Non controlling percent										49.00%
Date of acquisition										May 31, 2016
Total purchase price										$ 17,200,000
Deferred cash consideration										$ 4,200,000
Deferred consideration payable term										4 years
Deferred consideration discounted value										$ 3,821,895
Deferred consideration as current liability										773,134
Deferred consideration as non current liability										3,133,693
Additional member contributions by company										285,600
Additional member contributions by non controlling interest										$ 274,400
Community Anesthesia, PLLC ("Community") [member]
Disclosure of detailed information about business combination [line items]
Revenue											7,733,243
Net earnings (loss) before tax											(601,708)
Community Anesthesia, PLLC ("Community") [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired									2016-06			2016-06
Membership interest acquired									65.00%
Estimated purchase consideration paid												$ 13,636,639
Total consideration									$ 13,636,639			13,636,639
Non-controlling interest									$ 7,342,806			$ 7,342,806
Non controlling percent									35.00%
Date of acquisition									Jun. 15, 2016
Working capital advance			$ 100,000
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of detailed information about business combination [line items]
Revenue											4,658,181
Net earnings (loss) before tax											$ 1,816,634
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired									2016-06			2016-06
Membership interest acquired									51.00%
Estimated purchase consideration paid												$ 3,700,000
Total consideration									$ 3,700,000			3,700,000
Non-controlling interest									$ 3,554,902			$ 3,554,902
Non controlling percent									49.00%
Date of acquisition									Jun. 30, 2016
Contributed member loan by company									$ 107,100
Contributed member loan by non-controlling interest									$ 102,900
DDAB LLC [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired								2017-02			2017-02
Membership interest acquired								51.00%
Estimated purchase consideration paid								$ 4,089,791			$ 4,089,791
Total consideration								1,183,779			5,273,570
Non-controlling interest								$ 5,066,763			$ 5,066,763
Non controlling percent								49.00%
Date of acquisition								Feb. 01, 2017
Working capital advance	$ 71,819
Osceola Gastroenterology Anesthesia Associates, LLC [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired							2017-03				2017-03
Membership interest acquired	60.00%						60.00%
Estimated purchase consideration paid											$ 3,401,819
Total consideration	$ 3,401,819						$ 3,401,819				3,401,819
Non-controlling interest	$ 2,267,879						$ 2,267,879				$ 2,267,879
Non controlling percent							40.00%
Date of acquisition							Mar. 15, 2017
Contributed member loan by company							$ 90,000
Contributed member loan by non-controlling interest							$ 60,000
West Florida Anesthesia Associates, LLC [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired						2017-08					2017-08
Membership interest acquired						55.00%
Estimated purchase consideration paid											$ 5,840,000
Total consideration						$ 5,840,000					5,840,000
Non-controlling interest						$ 4,778,182					$ 4,778,182
Non controlling percent						45.00%
Date of acquisition						Aug. 01, 2017
Contributed member loan by company						$ 82,500
Contributed member loan by non-controlling interest						$ 67,500
Central Colorado Anesthesia Associates, LLC [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired					2017-09						2017-09
Membership interest acquired					51.00%
Estimated purchase consideration paid											$ 7,888,919
Total consideration					$ 7,888,919						7,888,919
Non-controlling interest					$ 7,579,550						$ 7,579,550
Non controlling percent					49.00%
Date of acquisition					Sep. 11, 2017
Contributed member loan by company					$ 178,500
Contributed member loan by non-controlling interest					$ 171,500
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired					2017-09						2017-09
Membership interest acquired					51.00%
Estimated purchase consideration paid											$ 7,248,960
Total consideration					$ 7,248,960						7,248,960
Non-controlling interest					$ 6,964,687						$ 6,964,687
Non controlling percent					49.00%
Date of acquisition					Sep. 11, 2017
Contributed member loan by company					$ 204,000
Contributed member loan by non-controlling interest					$ 196,000
Alamo Sedation Associates, LLC [member] | Anesthesia services [member]
Disclosure of detailed information about business combination [line items]
Date Acquired					2017-09						2017-09
Membership interest acquired					100.00%
Estimated purchase consideration paid											$ 3,500,000
Total consideration					$ 3,500,000						$ 3,500,000
Date of acquisition					Sep. 28, 2017

XML

Business Combination - Summary of Business Combinations (Detail) - Anesthesia services [member] - USD ($)	1 Months Ended						12 Months Ended
	Sep. 30, 2017	Aug. 31, 2017	Mar. 31, 2017	Feb. 28, 2017	Jun. 30, 2016	May 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about business combination [line items]
Consideration							$ 33,153,268	$ 34,158,534
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of detailed information about business combination [line items]
Date Acquired						2016-05		2016-05
Consideration						$ 16,821,895		$ 16,821,896
Community Anesthesia, PLLC ("Community") [member]
Disclosure of detailed information about business combination [line items]
Date Acquired					2016-06			2016-06
Consideration					$ 13,636,639			$ 13,636,639
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of detailed information about business combination [line items]
Date Acquired					2016-06			2016-06
Consideration					$ 3,700,000			$ 3,700,000
DDAB LLC [member]
Disclosure of detailed information about business combination [line items]
Date Acquired				2017-02			2017-02
Consideration				$ 1,183,779			$ 5,273,570
Osceola Gastroenterology Anesthesia Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Date Acquired			2017-03				2017-03
Consideration			$ 3,401,819				$ 3,401,819
West Florida Anesthesia Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Date Acquired		2017-08					2017-08
Consideration		$ 5,840,000					$ 5,840,000
Central Colorado Anesthesia Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Date Acquired	2017-09						2017-09
Consideration	$ 7,888,919						$ 7,888,919
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC [member]
Disclosure of detailed information about business combination [line items]
Date Acquired	2017-09						2017-09
Consideration	$ 7,248,960						$ 7,248,960
Alamo Sedation Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Date Acquired	2017-09						2017-09
Consideration	$ 3,500,000						$ 3,500,000

XML

Business Combinations - Schedule of Consideration Transferred and Preliminary Estimated Fair Values of Assets and Liabilities Acquired at Acquisition Date (Detail) - Anesthesia services [member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2017	Aug. 31, 2017	Mar. 31, 2017	Feb. 28, 2017	Jun. 30, 2016	May 31, 2016
Disclosure of detailed information about business combination [line items]
Cash	$ 31,969,489	$ 30,336,639
Contingent consideration	1,183,779
Deferred consideration		3,821,895
Purchase consideration	33,153,268	34,158,534
Non-controlling interest	26,657,061	27,059,922
Fair value of net identifiable assets and liabilities acquired	59,810,329	61,218,456
Assets and liabilities acquired:
Exclusive professional services agreements	59,798,340	61,218,456
Pre-close trade receivables	525,000	917,998
Pre-close trade payables	(525,000)	(917,998)
Prepaid expenses and deposits	11,889
Fair value of net identifiable assets and liabilities acquired	59,810,329	61,218,456
Acquisition costs expensed	570,900	348,251
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of detailed information about business combination [line items]
Cash		13,000,000						$ 13,000,000
Deferred consideration		3,821,895
Purchase consideration		16,821,896						16,821,895
Non-controlling interest		16,162,214						$ 16,162,214
Fair value of net identifiable assets and liabilities acquired		32,984,109
Assets and liabilities acquired:
Exclusive professional services agreements		32,984,109
Fair value of net identifiable assets and liabilities acquired		$ 32,984,109
Exclusive professional services agreements - amortization term		10 years
Community Anesthesia, PLLC ("Community") [member]
Disclosure of detailed information about business combination [line items]
Cash		$ 13,636,639
Purchase consideration		13,636,639					$ 13,636,639
Non-controlling interest		7,342,806					7,342,806
Fair value of net identifiable assets and liabilities acquired		20,979,445
Assets and liabilities acquired:
Exclusive professional services agreements		20,979,445
Pre-close trade receivables		917,998
Pre-close trade payables		(917,998)
Fair value of net identifiable assets and liabilities acquired		$ 20,979,445
Exclusive professional services agreements - amortization term		5 years
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of detailed information about business combination [line items]
Cash		$ 3,700,000
Purchase consideration		3,700,000					3,700,000
Non-controlling interest		3,554,902					$ 3,554,902
Fair value of net identifiable assets and liabilities acquired		7,254,902
Assets and liabilities acquired:
Exclusive professional services agreements		7,254,902
Fair value of net identifiable assets and liabilities acquired		$ 7,254,902
Exclusive professional services agreements - amortization term		5 years
DDAB LLC [member]
Disclosure of detailed information about business combination [line items]
Cash	4,089,791					$ 4,089,791
Contingent consideration	1,183,779
Purchase consideration	5,273,570					1,183,779
Non-controlling interest	5,066,763					$ 5,066,763
Fair value of net identifiable assets and liabilities acquired	10,340,333
Assets and liabilities acquired:
Exclusive professional services agreements	10,340,333
Pre-close trade receivables	525,000
Pre-close trade payables	(525,000)
Fair value of net identifiable assets and liabilities acquired	$ 10,340,333
Exclusive professional services agreements - amortization term	4 years 18 days
Osceola Gastroenterology Anesthesia Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Cash	$ 3,401,819
Purchase consideration	3,401,819				$ 3,401,819
Non-controlling interest	2,267,879				$ 2,267,879
Fair value of net identifiable assets and liabilities acquired	5,669,698
Assets and liabilities acquired:
Exclusive professional services agreements	5,669,698
Fair value of net identifiable assets and liabilities acquired	$ 5,669,698
Exclusive professional services agreements - amortization term	5 years
West Florida Anesthesia Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Cash	$ 5,840,000
Purchase consideration	5,840,000			$ 5,840,000
Non-controlling interest	4,778,182			$ 4,778,182
Fair value of net identifiable assets and liabilities acquired	10,618,182
Assets and liabilities acquired:
Exclusive professional services agreements	10,606,192
Prepaid expenses and deposits	11,889
Fair value of net identifiable assets and liabilities acquired	$ 10,618,182
Exclusive professional services agreements - amortization term	15 years
Central Colorado Anesthesia Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Cash	$ 7,888,919
Purchase consideration	7,888,919		$ 7,888,919
Non-controlling interest	7,579,550		7,579,550
Fair value of net identifiable assets and liabilities acquired	15,468,469
Assets and liabilities acquired:
Exclusive professional services agreements	15,468,469
Fair value of net identifiable assets and liabilities acquired	$ 15,468,469
Exclusive professional services agreements - amortization term	7 years
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC [member]
Disclosure of detailed information about business combination [line items]
Cash	$ 7,248,960
Purchase consideration	7,248,960		7,248,960
Non-controlling interest	6,964,687		6,964,687
Fair value of net identifiable assets and liabilities acquired	14,213,647
Assets and liabilities acquired:
Exclusive professional services agreements	14,213,647
Fair value of net identifiable assets and liabilities acquired	$ 14,213,647
Exclusive professional services agreements - amortization term	5 years
Alamo Sedation Associates, LLC [member]
Disclosure of detailed information about business combination [line items]
Cash	$ 3,500,000
Purchase consideration	3,500,000		$ 3,500,000
Fair value of net identifiable assets and liabilities acquired	3,500,000
Assets and liabilities acquired:
Exclusive professional services agreements	3,500,000
Fair value of net identifiable assets and liabilities acquired	$ 3,500,000
Exclusive professional services agreements - amortization term	7 years

XML

Business Combinations - Acquisitions Contributed Revenue and Net Earnings Before Tax (Detail) - Anesthesia services [member] - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of revenue [line items]
Revenue	$ 14,274,148	$ 18,567,366
Net earnings (loss) before tax	3,746,763	6,266,973
Amortization	4,877,991	4,922,336
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of revenue [line items]
Revenue		11,593,180
Net earnings (loss) before tax		5,643,814
Amortization		1,924,073
Community Anesthesia, PLLC ("Community") [member]
Disclosure of revenue [line items]
Revenue		4,482,059
Net earnings (loss) before tax		(348,740)
Amortization		2,272,773
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of revenue [line items]
Revenue		2,492,127
Net earnings (loss) before tax		971,899
Amortization		$ 725,490
DDAB LLC [member]
Disclosure of revenue [line items]
Revenue	3,244,190
Net earnings (loss) before tax	(414,599)
Amortization	2,106,364
Osceola Gastroenterology Anesthesia Associates, LLC [member]
Disclosure of revenue [line items]
Revenue	1,829,591
Net earnings (loss) before tax	(92,803)
Amortization	897,702
West Florida Anesthesia Associates, LLC [member]
Disclosure of revenue [line items]
Revenue	1,315,951
Net earnings (loss) before tax	504,231
Amortization	294,616
Central Colorado Anesthesia Associates, LLC [member]
Disclosure of revenue [line items]
Revenue	3,963,932
Net earnings (loss) before tax	2,101,049
Amortization	669,780
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC [member]
Disclosure of revenue [line items]
Revenue	3,196,268
Net earnings (loss) before tax	1,358,055
Amortization	781,751
Alamo Sedation Associates, LLC [member]
Disclosure of revenue [line items]
Revenue	724,216
Net earnings (loss) before tax	290,830
Amortization	$ 127,778

XML

Business Combinations - Acquisitions Contributed of Pro Forma Information Revenue and Net Earnings Before Tax (Detail) - USD ($)			12 Months Ended
	Jan. 01, 2017	Jan. 01, 2016	Dec. 31, 2017
Disclosure of revenue [line items]
Revenue	$ 120,600,000	$ 90,800,000	$ 30,965,277
Net earnings (loss) before tax	$ 29,100,000	$ 24,300,000	10,257,085
Amortization			8,945,280
Business acquisition [member]
Disclosure of revenue [line items]
Revenue			34,594,071
Net earnings (loss) before tax			12,946,513
Amortization			9,691,381
DDAB LLC [member] | Business acquisition [member]
Disclosure of revenue [line items]
Revenue			3,539,116
Net earnings (loss) before tax			(452,290)
Amortization			2,297,852
Osceola Gastroenterology Anesthesia Associates, LLC [member] | Business acquisition [member]
Disclosure of revenue [line items]
Revenue			2,311,062
Net earnings (loss) before tax			(117,225)
Amortization			1,133,940
West Florida Anesthesia Associates, LLC [member] | Business acquisition [member]
Disclosure of revenue [line items]
Revenue			3,158,282
Net earnings (loss) before tax			1,210,154
Amortization			707,079
Central Colorado Anesthesia Associates, LLC [member] | Business acquisition [member]
Disclosure of revenue [line items]
Revenue			12,178,353
Net earnings (loss) before tax			6,670,023
Amortization			2,209,781
Raleigh Sedation Associates, LLC & Blue Ridge Sedation Associates, PLLC [member] | Business acquisition [member]
Disclosure of revenue [line items]
Revenue			10,801,852
Net earnings (loss) before tax			4,589,574
Amortization			2,842,729
Alamo Sedation Associates, LLC [member] | Business acquisition [member]
Disclosure of revenue [line items]
Revenue			2,605,406
Net earnings (loss) before tax			1,046,277
Amortization			500,000
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of revenue [line items]
Revenue			18,573,853
Net earnings (loss) before tax			9,042,159
Amortization			3,298,411
Community Anesthesia, PLLC ("Community") [member]
Disclosure of revenue [line items]
Revenue			7,733,243
Net earnings (loss) before tax			(601,708)
Amortization			4,195,889
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of revenue [line items]
Revenue			4,658,181
Net earnings (loss) before tax			1,816,634
Amortization			$ 1,450,980

XML

Anesthesia Services Expense - Summary of Anesthesia Services Expense (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about Anesthesia services expense [line items]
Corporate	$ 6,375,110	$ 3,866,696
Operating costs	85,688,084	53,599,792
Anesthesia services [member]
Disclosure of detailed information about Anesthesia services expense [line items]
Employee related	29,032,414	19,092,648
Depreciation and amortization	23,732,757	14,834,481
Bad debt expense	5,235,934	3,932,374
Office related	6,778,232	5,344,226
Impairment of professional services contract (note 11)	6,653,015
Acquisition expense	668,317	426,694
Medical supplies	677,905	690,551
Stock based compensation	426,416	201,538
Travel and entertainment	318,787	154,778
Professional fees	503,485	443,234
Insurance	288,162	108,637
Corporate		825
Operating costs	$ 74,315,424	$ 45,229,986

XML

Product Sales Expense - Summary of Product Sales Expense (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about product sales expense [line items]
Operating costs	$ 85,688,084	$ 53,599,792
Product sales [member]
Disclosure of detailed information about product sales expense [line items]
Employee related	1,629,851	1,427,602
Product cost and support	2,207,057	2,031,707
Professional fees	418,385	279,013
Office related	298,672	253,672
Stock based compensation	372,223	398,388
Insurance	14,749	54,326
Depreciation and amortization	56,907	44,863
Foreign exchange	(294)	13,539
Operating costs	$ 4,997,550	$ 4,503,110

XML

Corporate Expense - Summary of Corporate Expense (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about corporate expense [line items]
Operating costs	$ 85,688,084	$ 53,599,792
Other [member]
Disclosure of detailed information about corporate expense [line items]
Employee related	1,439,041	1,376,208
Professional fees	947,572	533,467
Corporate	493,918	437,563
Stock based compensation	2,655,372	776,748
Travel and entertainment	224,074	248,719
Office related	233,053	180,737
Insurance	310,736	244,610
Depreciation	15,481	52,772
Foreign exchange	55,863	15,872
Operating costs	$ 6,375,110	$ 3,866,696

XML

Trade and Other Receivables - Summary of Trade and Other Receivables (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Trade and other current receivables [abstract]
Trade receivables	$ 15,225,553	$ 9,804,920
Other receivables	260,759	31,819
Trade and other receivables	$ 15,486,312	$ 9,836,739

XML

Trade and Other Payables - Summary of Trade and Other Payables (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Trade and other current payables [abstract]
Trade payables	$ 2,042,487	$ 372,612
Payments due to former owners of business combinations	76,403	58,667
Accruals and other payables	3,542,954	2,798,406
Total	$ 5,661,844	$ 3,229,685

XML

Property and Equipment - Summary of Property and Equipment (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about property, plant and equipment [line items]
Balance	$ 324,198
Balance	364,366	$ 324,198
Computer equipment and software [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	26,150
Balance	39,098	26,150
Furniture and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	58,977
Balance	131,924	58,977
Leasehold improvements [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	1,707
Balance	2,299	1,707
Injection mold [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	237,364
Balance	191,046	237,364
Cost [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	585,074	475,507
Additions	125,848	113,196
Dispositions		(3,629)
Balance	710,922	585,074
Cost [member] | Computer equipment and software [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	55,699	43,312
Additions	26,356	16,016
Dispositions		(3,629)
Balance	82,055	55,699
Cost [member] | Furniture and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	118,000	116,195
Additions	97,021	1,805
Balance	215,021	118,000
Cost [member] | Leasehold improvements [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	4,727	4,727
Additions	1,057
Balance	5,784	4,727
Cost [member] | Injection mold [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	406,648	311,273
Additions	1,414	95,375
Balance	408,062	406,648
Accumulated depreciation [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	260,876	190,801
Depreciation expense	85,680	70,638
Dispositions		(563)
Balance	346,556	260,876
Accumulated depreciation [member] | Computer equipment and software [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	29,549	22,162
Depreciation expense	13,408	7,950
Dispositions		(563)
Balance	42,957	29,549
Accumulated depreciation [member] | Furniture and equipment [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	59,023	39,130
Depreciation expense	24,074	19,893
Balance	83,097	59,023
Accumulated depreciation [member] | Leasehold improvements [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	3,020	2,594
Depreciation expense	465	426
Balance	3,485	3,020
Accumulated depreciation [member] | Injection mold [member]
Disclosure of detailed information about property, plant and equipment [line items]
Balance	169,284	126,915
Depreciation expense	47,732	42,369
Balance	$ 217,016	$ 169,284

XML

Intangible Assets - Summary of Intangible Assets (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about intangible assets [line items]
Balance	$ 133,667,311
Balance	163,092,606	$ 133,667,311
Cost [member]
Disclosure of detailed information about intangible assets [line items]
Balance	156,167,746	94,949,290
Additions through business combinations (note 4)	59,798,340	61,218,456
Impairment	(6,653,015)
Balance	209,313,071	156,167,746
Accumulated depreciation [member]
Disclosure of detailed information about intangible assets [line items]
Balance	22,500,435	7,642,023
Amortization expense	23,720,030	14,858,412
Balance	46,220,465	22,500,435
Professional services agreements [member]
Disclosure of detailed information about intangible assets [line items]
Balance	133,635,377
Balance	163,057,425	133,635,377
Professional services agreements [member] | Cost [member]
Disclosure of detailed information about intangible assets [line items]
Balance	155,635,148	94,416,692
Additions through business combinations (note 4)	59,798,340	61,218,456
Impairment	(6,653,015)
Balance	208,780,473	155,635,148
Professional services agreements [member] | Accumulated depreciation [member]
Disclosure of detailed information about intangible assets [line items]
Balance	21,999,771	7,175,823
Amortization expense	23,723,277	14,823,948
Balance	45,723,048	21,999,771
Patents [member]
Disclosure of detailed information about intangible assets [line items]
Balance	31,934
Balance	35,181	31,934
Patents [member] | Cost [member]
Disclosure of detailed information about intangible assets [line items]
Balance	532,598	532,598
Balance	532,598	532,598
Patents [member] | Accumulated depreciation [member]
Disclosure of detailed information about intangible assets [line items]
Balance	500,664	466,200
Amortization expense	(3,247)	34,464
Balance	$ 497,417	$ 500,664

XML

Intangible Assets - Summary of Aggregate Carrying Amounts of Intangible Assets (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Intangible assets	$ 163,092,606	$ 133,667,311
Individual assets or cash-generating units [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Intangible assets	63,524,237	73,216,961
Individual assets or cash-generating units [member] | Gastroenterology Anesthesia Associates LLC [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Intangible assets	49,013,454	54,510,290
Individual assets or cash-generating units [member] | Community Anesthesia, PLLC ("Community") [member]
Disclosure of information for impairment loss recognised or reversed for individual asset or cash-generating unit [line items]
Intangible assets	$ 14,510,783	$ 18,706,671

XML

Intangible Assets - Summary of Key Assumptions Used in Performing the Impairment Tests (Detail) - Individual assets or cash-generating units [member]	12 Months Ended
	Dec. 31, 2017
Gastroenterology Anesthesia Associates LLC [member]
Disclosure of information for cash-generating units [line items]
Valuation method	Value in use
Discount rate	18.00%
growth rate	1.40%
Community Anesthesia, PLLC ("Community") [member]
Disclosure of information for cash-generating units [line items]
Valuation method	Value in use
Discount rate	20.50%
growth rate	1.30%

XML

Intangible Assets - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Gastroenterology Anesthesia Associates LLC [member]
Disclosure of information for cash-generating units [line items]
Impairment of professional services agreement	$ 6,653,015
Community Anesthesia, PLLC ("Community") [member]
Disclosure of information for cash-generating units [line items]
Impairment of professional services agreement		$ 0

XML

Derivative Asset - Additional Information (Detail)		12 Months Ended
	Jan. 21, 2016 CAD ($)	Dec. 31, 2017	Jun. 26, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CAD ($)
Disclosure of derivative asset [line items]
Derivative asset				$ 1,261,298
Cross currency swap agreement [member]
Disclosure of derivative asset [line items]
Derivative asset			$ 1,313,874
Maturity of cross currency swap agreement		Jun. 26, 2017
Crown Note [member]
Disclosure of derivative asset [line items]
Principal amount of Crown Note					$ 19,863,000	$ 22,500,000
Crown Note [member] | Cross currency swap agreement [member]
Disclosure of derivative asset [line items]
Principal amount of Crown Note				$ 15,538,674
Crown Note, interest rate	13.17%
Crown Note [member] | Bank of Nova Scotia [member] | Cross currency swap agreement [member]
Disclosure of derivative asset [line items]
Cross currency swap, foreign exchange rate	1.448
Principal amount of Crown Note	$ 22,500,000
Crown Note, interest rate	12.00%

XML

Notes Payable - Summary of Notes Payable (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of notes payable [line items]
Current portion	$ 1,101,468	$ 5,791,787
Non-current portion	60,228,851	38,138,774
Total loans and borrowings	61,330,319	43,930,561
Crown Note [member]
Disclosure of notes payable [line items]
Non-current portion		15,208,256
Total loans and borrowings		15,208,256
Scotia Facility [member]
Disclosure of notes payable [line items]
Current portion	1,101,468	5,791,787
Non-current portion	60,228,851	22,930,518
Total loans and borrowings	$ 61,330,319	$ 28,722,305

XML

Notes Payable - Additional Information (Detail)				1 Months Ended		12 Months Ended
	Jun. 26, 2017 USD ($)	Jun. 15, 2016 USD ($)	Nov. 24, 2015	Jun. 30, 2017 USD ($)	Jun. 30, 2017 CAD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 CAD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2014 CAD ($)
Disclosure of notes payable [line items]
Finance expense						$ 6,330,812	$ 5,431,035
Scotia Facility [member]
Disclosure of notes payable [line items]
Credit facility maturity date			Apr. 30, 2018
Credit facility maximum borrowing capacity	$ 100,000,000	$ 55,000,000
Amendment fees		$ 390,400
Credit facility drawn amount						$ 61,700,000	$ 29,000,000
Borrowing interest rate						LIBOR plus 2.50%
Borrowings, adjustment to interest rate basis						2.50%
Amendment fees incurred	445,598
Write off of deferred financing costs	$ 173,511
Crown Note [member]
Disclosure of notes payable [line items]
Notes payable principal amount										$ 19,863,000	$ 22,500,000
Cash compensation paid				$ 17,043,750	$ 22,500,000			$ 1,191,780	$ 1,350,000
Compensation paid by share | shares								2,000,000
Interest, prepayment penalties and other extinguishment costs				1,188,051	$ 1,568,384
Finance expense				$ 1,789,882
Top of range [member] | Crown Note [member]
Disclosure of notes payable [line items]
Borrowing interest rate										12.00%	12.00%
Bottom of range [member] | Crown Note [member]
Disclosure of notes payable [line items]
Borrowing interest rate										10.00%	10.00%

XML

Notes Payable - Summary of Reconciliation of Movements in Borrowings to Cash Flows Arising from Financing Activities (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Additions to long term debt	$ (566,819)
Repayments of long-term debt	131,819	$ 266,994
Crown Note [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Drawings at January 1	16,758,000	16,256,250
Repayments of long-term debt	(17,043,750)
Effects of changes in foreign exchange rates	285,750	501,750
Drawings at December 31		16,758,000
Scotia Facility [member]
Disclosure of reconciliation of liabilities arising from financing activities [line items]
Drawings at January 1	29,000,000	17,000,000
Additions to long term debt	68,200,000	26,000,000
Repayments of long-term debt	(35,500,000)	(14,000,000)
Drawings at December 31	$ 61,700,000	$ 29,000,000

XML

Notes Payable - Summary of Detailed Information about Financial Statements (Detail)	Dec. 31, 2017
Covenant ratios [Abstract]
Total funded debt ratio	2.50
Fixed charge coverage ratio	1.15

XML

Notes Payable - Summary of Consolidated Minimum Loan Payments (Detail)	Dec. 31, 2017 USD ($)
Disclosure of detailed information about borrowings [line items]
Minimum Principal	$ 61,700,000
Less than one year [member]
Disclosure of detailed information about borrowings [line items]
Minimum Principal	1,250,000
One to three years [member]
Disclosure of detailed information about borrowings [line items]
Minimum Principal	$ 60,450,000

XML

Subsidiary Undertakings - Summary of Principal Subsidiaries (Detail)	12 Months Ended
	Dec. 31, 2017
CRH Medical Corporation [member] | British Columbia, Canada [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	CRH Medical Corporation
Jurisdiction of Incorporation	British Columbia, Canada
CRH Medical Corporation [member] | Delaware, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	CRH Medical Corporation
Jurisdiction of Incorporation	Delaware, United States
CRH Anesthesia Management LLC [member] | Delaware, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	CRH Anesthesia Management LLC
Jurisdiction of Incorporation	Delaware, United States
Gastroenterology Anesthesia Associates LLC [member] | Georgia, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Gastroenterology Anesthesia Associates LLC
Jurisdiction of Incorporation	Georgia, United States
Macon Gastroenterology Anesthesia Associates LLC ("MGAA") [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	65.00%
Macon Gastroenterology Anesthesia Associates LLC ("MGAA") [member] | Georgia, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Macon Gastroenterology Anesthesia Associates LLC
Jurisdiction of Incorporation	Georgia, United States
CRH Anesthesia of Cape Coral LLC [member] | Florida, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	CRH Anesthesia of Cape Coral LLC
Jurisdiction of Incorporation	Florida, United States
CRH Anesthesia of Knoxville LLC [member] | Tennessee, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	CRH Anesthesia of Knoxville LLC
Jurisdiction of Incorporation	Tennessee, United States
Knoxville Gastroenterology Anesthesia Associates LLC ("KGAA") [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	51.00%
Knoxville Gastroenterology Anesthesia Associates LLC ("KGAA") [member] | Tennessee, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Knoxville Gastroenterology Anesthesia Associates LLC
Jurisdiction of Incorporation	Tennessee, United States
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	51.00%
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member] | Texas, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Austin Gastroenterology Anesthesia Associates PLLC
Jurisdiction of Incorporation	Texas, United States
Community Anesthesia, PLLC ("Community") [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	65.00%
Community Anesthesia, PLLC ("Community") [member] | Massachusetts, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Community Anesthesia PLLC
Jurisdiction of Incorporation	Massachusetts, United States
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of subsidiaries [line items]
Proportion of ownership interest in subsidiary	51.00%
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member] | Delaware, United States [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Arapahoe Gastroenterology Anesthesia Associates LLC
Jurisdiction of Incorporation	Delaware, United States
DDAB LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	DDAB LLC
Jurisdiction of Incorporation	Georgia, United States
Proportion of ownership interest in subsidiary	51.00%
Osceola Gastroenterology Anesthesia Associates, LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Osceola Gastroenterology Anesthesia Associates LLC
Jurisdiction of Incorporation	Florida, United States
Proportion of ownership interest in subsidiary	60.00%
West Florida Anesthesia Associates, LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	West Florida Anesthesia Associates LLC
Jurisdiction of Incorporation	Florida, United States
Proportion of ownership interest in subsidiary	55.00%
Central Colorado Anesthesia Associates, LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Central Colorado Anesthesia Associates LLC
Jurisdiction of Incorporation	Colorado, United States
Proportion of ownership interest in subsidiary	51.00%
Raleigh Sedation Associates LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Raleigh Sedation Associates LLC
Jurisdiction of Incorporation	North Carolina, United States
Proportion of ownership interest in subsidiary	51.00%
Blue Ridge Sedation Associates LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Blue Ridge Sedation Associates LLC
Jurisdiction of Incorporation	North Carolina, United States
Alamo Sedation Associates, LLC [member]
Disclosure of subsidiaries [line items]
Name of subsidiary	Alamo Sedation Associates LLC
Jurisdiction of Incorporation	Texas, United States

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Subsidiary Undertakings - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017
Bottom of range [member]
Disclosure of subsidiaries [line items]
Percentage of financial results of subsidiary included in parent company's consolidated financial results	10.00%
Community Anesthesia, PLLC ("Community") [member]
Disclosure of subsidiaries [line items]
Percentage of financial results of subsidiary included in parent company's consolidated financial results	100.00%
Macon Gastroenterology Anesthesia Associates LLC ("MGAA") [member]
Disclosure of subsidiaries [line items]
Percentage of financial results of subsidiary included in parent company's consolidated financial results	100.00%
Arapahoe Gastroenterology Anesthesia Associates, LLC ("Arapahoe") [member]
Disclosure of subsidiaries [line items]
Percentage of financial results of subsidiary included in parent company's consolidated financial results	100.00%
Knoxville Gastroenterology Anesthesia Associates LLC ("KGAA") [member]
Disclosure of subsidiaries [line items]
Percentage of financial results of subsidiary included in parent company's consolidated financial results	100.00%
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of subsidiaries [line items]
Percentage of financial results of subsidiary included in parent company's consolidated financial results	100.00%

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Subsidiary Undertakings - Summary of Financial Information of Subsidiary (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of financial information of consolidated subsidiaries [line items]
Cash and cash equivalents	$ 12,486,884	$ 9,507,004	$ 3,572,344
Trade and other receivables	15,486,312	9,836,739
Prepaids	889,882	550,811
Current taxes receivable		1,551,140
Intangible assets	163,092,606	133,667,311
Assets	198,450,878	163,538,882
Accounts payable and accrued liabilities	5,661,844	3,229,685
Current taxes payable	577,553	2,067,671
Member contributions	8,390,026	7,142,964
Current period earnings	5,410,181	733,155
Equity	124,936,288	96,926,287	56,974,365
Total liabilities and equity	198,450,878	163,538,882
Anesthesia revenue	100,242,080	78,354,632
Anesthesia services expense	(74,315,424)	(45,229,986)
Net income before tax	19,970,625	20,331,478
Tax expense	6,302,507	4,255,150
Net income	13,668,118	16,076,328
Net income attributable to non-controlling interest	7,109,152	5,512,095
Non-controlling interest	57,277,316	36,410,456
Non-controlling interests [member]
Disclosure of financial information of consolidated subsidiaries [line items]
Equity	57,277,316	36,410,456	$ 9,249,220
Anesthesia revenue	30,503,731	11,044,835
Anesthesia services expense	26,762,683	9,994,210
Net income before tax	3,741,048	1,050,625
Net income	3,741,048	1,050,625
Net income attributable to non-controlling interest	2,123,477	503,784
Non-controlling interest	$ 37,569,771	13,099,934
Knoxville Gastroenterology Anesthesia Associates LLC ("KGAA") [member]
Disclosure of financial information of consolidated subsidiaries [line items]
Ownership %	51.00%
Cash and cash equivalents	$ 1,049,265	1,333,289
Trade and other receivables	665,601	750,393
Prepaids	23,494
Current taxes receivable	92,427
Intangible assets	8,912,880	10,822,783
Assets	10,743,667	12,906,465
Accounts payable and accrued liabilities	428,358	315,542
Current taxes payable		133,862
Liabilities	428,358	449,404
Member contributions	7,106,555	8,149,450
Current period earnings	3,208,754	4,307,611
Equity	10,315,309	12,457,061
Total liabilities and equity	10,743,667	12,906,465
Anesthesia revenue	10,194,489	10,307,361
Anesthesia services expense	6,577,415	5,573,305
Net income before tax	3,617,074	4,734,056
Tax expense	408,319	426,445
Net income	3,208,755	4,307,611
Net income attributable to non-controlling interest	1,589,007	2,123,964
Non-controlling interest	$ 4,981,492	6,216,255
Austin Gastroenterology Anesthesia Associates, PLLC ("AGAA") [member]
Disclosure of financial information of consolidated subsidiaries [line items]
Ownership %	51.00%
Cash and cash equivalents	$ 1,552,981	2,866,916
Trade and other receivables	1,412,034	1,403,277
Prepaids	37,283	10,635
Intangible assets	27,761,626	31,060,037
Assets	30,763,924	35,340,865
Accounts payable and accrued liabilities	709,905	453,759
Liabilities	709,905	453,759
Member contributions	23,037,106	29,244,110
Current period earnings	7,016,913	5,642,996
Equity	30,054,019	34,887,106
Total liabilities and equity	30,763,924	35,340,865
Anesthesia revenue	15,938,161	11,593,180
Anesthesia services expense	8,926,966	5,949,366
Net income before tax	7,011,195	5,643,814
Tax expense	(5,717)
Net income	7,016,912	5,643,814
Net income attributable to non-controlling interest	3,438,287	2,765,469
Non-controlling interest	14,726,051	17,094,265
Community, Macon, Arapahoe, DDAB, Osceola, West Florida, Central Colorado and Raleigh [member]
Disclosure of financial information of consolidated subsidiaries [line items]
Cash and cash equivalents	5,022,739	1,742,274
Trade and other receivables	7,369,420	2,359,873
Prepaids	118,960	13,821
Intangible assets	75,348,680	30,877,177
Assets	87,859,799	34,993,145
Accounts payable and accrued liabilities	2,657,257	659,482
Loans	900,000
Liabilities	3,557,257	659,482
Member contributions	80,561,493	33,308,961
Current period earnings	3,741,049	1,024,702
Equity	84,302,542	34,333,663
Total liabilities and equity	$ 87,859,799	$ 34,993,145

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Share Capital - Additional Information (Detail)						1 Months Ended	12 Months Ended
	Jan. 05, 2018 USD ($)	Sep. 07, 2016 USD ($) shares	Sep. 07, 2016 CAD ($) shares	Mar. 29, 2016 USD ($) shares	Mar. 29, 2016 CAD ($) shares	Nov. 30, 2017 shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2017 CAD ($) shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2016 CAD ($) shares
Disclosure of classes of share capital [line items]
Number of shares authorised							100,000,000	100,000,000
Number of shares issued		53,854	53,854	46,851	46,851
Broker warrants issued		53,854	53,854	46,851	46,851
Gross proceeds on exercise of options		$ 141,996	$ 183,104	$ 121,095	$ 159,293		$ (6,626)		$ 586,688
Broker warrants with a fair value | $		$ 55,562		$ 48,332
Stock option description							All options under the Plan will be subject to vesting provisions determined by the Board of Directors, over a period of not less than 18 months, in equal portions on a quarterly basis. Options granted to consultants providing investor relations activities will vest at the end of 12 months or longer from the date of issuance.	All options under the Plan will be subject to vesting provisions determined by the Board of Directors, over a period of not less than 18 months, in equal portions on a quarterly basis. Options granted to consultants providing investor relations activities will vest at the end of 12 months or longer from the date of issuance.
Compensation expense | $							$ 22,179		$ 97,486
Stock options granted							0	0	0	0
Number of other equity instruments issued							292,549	292,549
Compensation expense related to granting and vesting of share unit | $							$ 3,431,832		$ 1,279,188
Shares approved in normal course issuer bid						7,120,185
Maximum percentage of shares approved in normal course issuer bid						10.00%
Maximum daily repurchase in normal course issuer bid						103,902
Repurchase of shares							1,339,800	1,339,800
Total cost, including transaction fee							$ 2,872,713	$ 3,669,120
Repurchased shares canceled | $	$ 72,400						$ 1,267,400
Share options [member]
Disclosure of classes of share capital [line items]
Shares excluded from diluted weighted average number of common shares calculation							157,952	157,952	315,251	315,251
Share units [member]
Disclosure of classes of share capital [line items]
Shares excluded from diluted weighted average number of common shares calculation							2,047,200	2,047,200	1,179,073	1,179,073
Bottom of range [member]
Disclosure of classes of share capital [line items]
Term of stock option plan							2 years	2 years
Top of range [member]
Disclosure of classes of share capital [line items]
Term of stock option plan							10 years	10 years
Time based share units [member]
Disclosure of classes of share capital [line items]
Number of other equity instruments issued							324,000	324,000	704,000	704,000
Weighted average exercise price of other equity instruments issued							$ 3.31	$ 4.16	$ 5.01	$ 6.74
Number of other equity instruments vested							302,000	302,000	80,000	80,000
Performance based share units [member]
Disclosure of classes of share capital [line items]
Number of other equity instruments issued									250,000	250,000
Weighted average exercise price of other equity instruments issued									$ 3.73	$ 5.01
Performance based share units [member]
Disclosure of classes of share capital [line items]
Number of other equity instruments issued									1,350,000	1,350,000
Number of other equity instruments vested							1,000,000	1,000,000
Performance based share units [member] | Additional share unit issuance [member]
Disclosure of classes of share capital [line items]
Number of other equity instruments issued									1,100,000	1,100,000
Weighted average exercise price of other equity instruments issued									$ 4.93	$ 6.62

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Share Capital - Summary of Status of Plan (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CAD ($)
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of options, beginning balance	1,603,124	1,603,124
Number of options, issued	0	0	0	0
Number of options, exercised			(1,177,499)	(1,177,499)
Number of options ending balance			1,603,124	1,603,124
Weighted average exercise price	$ 0.47	$ 0.63
Weighted average exercise price, exercised			$ 0.45	$ 0.61
Weighted average exercise price, ending balance			$ 0.47	$ 0.63
Options [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Number of options, beginning balance	1,603,124	1,603,124	2,974,311	2,974,311
Number of options, issued	0	0	0	0
Number of options, exercised	(247,500)	(247,500)	(1,358,687)	(1,358,687)
Number of options, forfeited	(10,937)	(10,937)	(12,500)	(12,500)
Number of options, expired	0	0	0	0
Number of options ending balance	1,344,687	1,344,687	1,603,124	1,603,124
Weighted average exercise price	$ 0.47	$ 0.63	$ 0.43	$ 0.60
Weighted average exercise price, issued	0	0	0	0
Weighted average exercise price, exercised	0.25	0.32	0.42	0.57
Weighted average exercise price, forfeited	0.48	0.60	0.39	0.52
Weighted average exercise price, expired	0	0	0	0
Weighted average exercise price, ending balance	$ 0.55	$ 0.69	$ 0.47	$ 0.63

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Share Capital - Summary of Information about Stock Options Outstanding (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2016 CAD ($)	Dec. 31, 2017 CAD ($)	Dec. 31, 2016 CAD ($)
Disclosure of range of exercise prices of outstanding share options [line items]
Number of options Outstanding			1,603,124			1,603,124
Weighted average remaining contractual life (years)outstanding			6.23			6.23
Weighted average exercise price Outstanding			$ 0.47			$ 0.63
Number of options Exercisable			1,177,499	1,177,499
Weighted average exercise price			$ 0.45	$ 0.61
0.48 - 0.56 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of options Outstanding	1,344,687				1,344,687
Weighted average remaining contractual life (years)outstanding	6.05				6.05
Weighted average exercise price Outstanding	$ 0.55				$ 0.69
Number of options Exercisable	1,272,812	1,272,812
Weighted average exercise price	$ 0.54	$ 0.68
0.20 to 0.43 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of options Outstanding			214,687			214,687
Weighted average remaining contractual life (years)outstanding			0.93			0.93
Weighted average exercise price Outstanding			$ 0.20			$ 0.28
Number of options Exercisable			214,687	214,687
Weighted average exercise price			$ 0.20	$ 0.28
0.44 to 0.52 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Number of options Outstanding			1,388,437			1,388,437
Weighted average remaining contractual life (years)outstanding			7.04			7.04
Weighted average exercise price Outstanding			$ 0.51			$ 0.68
Number of options Exercisable			962,812	962,812
Weighted average exercise price			$ 0.51	$ 0.68
Bottom of range [member] | 0.48 - 0.56 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price	0.48
Bottom of range [member] | 0.20 to 0.43 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price			0.20
Bottom of range [member] | 0.44 to 0.52 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price			0.44
Bottom of range [member] | 0.6 - 0.7 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price					0.60
Bottom of range [member] | 0.28 to 0.58 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price						0.28
Bottom of range [member] | 0.59 to 0.70 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price						0.59
Top of range [member] | 0.48 - 0.56 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price	$ 0.56
Top of range [member] | 0.20 to 0.43 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price			0.43
Top of range [member] | 0.44 to 0.52 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price			$ 0.52
Top of range [member] | 0.6 - 0.7 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price					$ 0.70
Top of range [member] | 0.28 to 0.58 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price						0.58
Top of range [member] | 0.59 to 0.70 [member]
Disclosure of range of exercise prices of outstanding share options [line items]
Exercise price						$ 0.70

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Share Capital - Summary of Status of Plans of Other Equity Instruments (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of terms and conditions of share-based payment arrangement [line items]
Issued	292,549
Time based share units [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Beginning balance	1,068,000	509,000
Issued	324,000	704,000
Exercised	(302,000)	(80,000)
Forfeited	(53,500)	(65,000)
Expired	0	0
Ending balance	1,036,500	1,068,000
Performance based share units [member]
Disclosure of terms and conditions of share-based payment arrangement [line items]
Beginning balance	2,350,000	1,000,000
Issued		1,350,000
Exercised	(1,000,000)
Expired	0	0
Ending balance	1,350,000	2,350,000

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Share Capital - Summary of Fair Value of Share Units Calculated Using Binomial Pricing Model (Detail)	12 Months Ended
	Dec. 31, 2016 CAD ($)
Disclosure of terms and conditions of share-based payment arrangement [abstract]
Risk-free interest rate	1.04%
Expected volatility	62.00%
Pre-vest forfeiture rate	0.00%
Weighted average share price	$ 7.26

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Share Capital - Summary of Calculation of Basic Earnings Per Share (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Earnings per share [line items]
Net earnings attributable to shareholders Basic and Diluted	$ 6,558,966	$ 10,564,233
Weighted average number of common shares outstanding basic	73,712,670	71,826,884
Weighted average number of common shares outstanding diluted	75,486,210	74,203,830
Per share amount basic	$ 0.089	$ 0.147
per share amount diluted	$ 0.087	$ 0.142
Share options [member]
Earnings per share [line items]
Weighted average number of common shares outstanding basic	1,306,309	2,113,563
Share units [member]
Earnings per share [line items]
Weighted average number of common shares outstanding basic	467,231	263,383

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Income Taxes - Summary of Income Tax Expense (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Major components of tax expense (income) [abstract]
Current tax expense	$ 5,527,161	$ 5,310,454
Origination and reversal of temporary differences	(1,559,332)	(830,584)
Change in enacted tax rates and other	2,334,678	(224,720)
Total tax expense (recovery)	$ 6,302,507	$ 4,255,150

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Income Taxes - Summary of Reconciliation of Income Tax Computed at Statutory Tax Rates to Income Tax Expense (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Major components of tax expense (income) [abstract]
Tax expense at statutory income tax rates	$ 4,593,244	$ 5,286,493
Permanent differences	557,406	159,800
Income attributable to non-controlling interest	(1,571,060)	(1,306,217)
Foreign income taxed at different rates	344,742	243,256
Impact of change in tax rates	2,585,691
Other	(207,516)	(128,182)
Total tax expense (recovery)	$ 6,302,507	$ 4,255,150

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Income Taxes - Summary of Reconciliation of Income Tax Computed at Statutory Tax Rates to Income Tax Expense (Parenthetical) (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Major components of tax expense (income) [abstract]
Statutory tax rates to income tax expense	23.00%	26.00%

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Income Taxes - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Income Tax Expense [Line Items]
Statutory tax rates to income tax expense	23.00%	26.00%
Canada [member] | Top of range [member]
Disclosure Of Income Tax Expense [Line Items]
Statutory tax rates to income tax expense	26.00%
Canada [member] | Top of range [member] | Changes in tax rates or tax laws enacted or announced [member]
Disclosure Of Income Tax Expense [Line Items]
Statutory tax rates to income tax expense	27.00%
Canada [member] | Bottom of range [member]
Disclosure Of Income Tax Expense [Line Items]
Statutory tax rates to income tax expense	23.00%
Canada [member] | Bottom of range [member] | Changes in tax rates or tax laws enacted or announced [member]
Disclosure Of Income Tax Expense [Line Items]
Statutory tax rates to income tax expense	26.00%
Federal and state [Member]
Disclosure Of Income Tax Expense [Line Items]
Statutory tax rates to income tax expense	26.60%	39.00%

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Income Taxes - Summary of Deferred Tax Assets and Liabilities (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	$ 5,707,383	$ 6,539,621
Deferred tax liabilities		(101,846)
Net deferred tax asset (liability)	5,707,383	6,437,775
Property, plant and equipment, deferred tax assets [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	8,916	141
Deferred tax liabilities intangible assets [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	4,291,655
Deferred tax liabilities		(1,006,371)
Finance related costs [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	374,721	527,462
Reserves [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset		74,105
Deferred tax liabilities	(7,157)
Share transaction costs [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	196,508	273,332
Stock-based compensation [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	387,943	426,051
Deferred consideration [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset		1,523,663
Deferred tax liabilities	(44,255)
Earn-out obligation [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	499,052	5,128,162
Unrealized foreign exchange [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities		(508,770)
Country of Domicile [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	201,555	405,108
Deferred tax liabilities	(99,254)	(506,954)
Net deferred tax asset (liability)	102,301	(101,846)
Foreign countries [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax asset	5,690,541	7,559,797
Deferred tax liabilities	(85,459)	(1,020,176)
Net deferred tax asset (liability)	$ 5,605,082	$ 6,539,621

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Income Taxes - Summary of Deferred Tax Assets and Liabilities (Parenthetical) (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Country of Domicile [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Tax losses	$ 0	$ 0
Foreign countries [member]
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Tax losses	$ 0	$ 0

XML

Capital Disclosures - Summary of Shareholders' Equity Attributable to Shareholders, Excluding Other Comprehensive Income (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of objectives, policies and processes for managing capital [abstract]
Shareholders' equity attributable to shareholders, excluding other comprehensive income	$ 67,725,744	$ 60,582,603

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Net Finance Expense - Summary of Net Finance Expense (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Finance income:
Foreign exchange gain		$ (1,007,673)
Net change in fair value of financial liabilities at fair value through earnings (note 19)	$ (11,747,441)
Total finance income	(11,747,441)	(1,007,673)
Finance expense:
Interest and accretion expense on borrowings	3,322,321	4,024,240
Accretion expense on earn-out obligation and deferred consideration	600,602	560,150
Amortization of deferred financing fees	224,463	614,472
Net change in fair value of financial liabilities at fair value through earnings		204,958
Foreign exchange loss	88,084
Extinguishment of notes payable and bank indebtedness	2,044,867
Other	50,475	27,215
Total finance expense	6,330,812	5,431,035
Net finance (income) expense	$ (5,416,629)	$ 4,423,362

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Financial Instruments - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in fair value of earn-out obligation	$ 11,747,441
Level 3 of fair value hierarchy [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in fair value of earn-out obligation	(11,747,441)
Accretion expense related to fair value of earn-out obligation	$ 473,738
Recurring fair value measurement [member] | Level 3 of fair value hierarchy [member]
Disclosure of detailed information about financial instruments [line items]
Downward adjustment of the discount rate	3.80%	3.59%
Increase (decrease) in fair value of earn-out obligation	$ (11,747,441)
Credit risk [member]
Disclosure of detailed information about financial instruments [line items]
Customer represents concentration of credit risk	No one customer
Credit risk [member] | Top of range [member]
Disclosure of detailed information about financial instruments [line items]
Customer accounts for percentage of entitys revenue	10.00%
1% increase in the discount rate [member] | Recurring fair value measurement [member] | Level 3 of fair value hierarchy [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in fair value of earn-out obligation	$ (26,819)
Accretion expense related to fair value of earn-out obligation		$ 473,738
10% increase in interest rate [member] | Interest rate risk [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in net income	(164,000)	(92,000)
10% decrease in interest rate [member] | Interest rate risk [member]
Disclosure of detailed information about financial instruments [line items]
Increase (decrease) in net income	164,000	$ 92,000
GAA [member] | Recurring fair value measurement [member] | Level 3 of fair value hierarchy [member]
Disclosure of detailed information about financial instruments [line items]
Additional amount payable	$ 14,655,000
Payable period	4.5 years

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Financial Instruments - Summary of Reconciliation of Level 3 Fair Values (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($)
Disclosure of fair value measurement of liabilities [line items]
Beginning balance	$ 13,149,130
Fair value adjustment	11,747,441
Ending balance	1,875,427
Level 3 of fair value hierarchy [member]
Disclosure of fair value measurement of liabilities [line items]
Beginning balance	13,149,130
Accretion expense	473,738
Fair value adjustment	(11,747,441)
Ending balance	$ 1,875,427

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Financial Instruments - Summary of Age of Analysis that are not overdue and Related Allowance for Doubtful Accounts (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure of financial assets that are either past due or impaired [line items]
Total trade receivables	$ 20,589,210	$ 13,934,290
Less: allowance for doubtful accounts	(5,363,657)	(4,129,370)
Total trade receivables, net	15,225,553	9,804,920
Current [member]
Disclosure of financial assets that are either past due or impaired [line items]
Total trade receivables	10,065,389	7,781,818
31 to 60 days [member]
Disclosure of financial assets that are either past due or impaired [line items]
Total trade receivables	3,251,297	1,674,626
61 to 90 days [member]
Disclosure of financial assets that are either past due or impaired [line items]
Total trade receivables	2,359,768	1,147,918
91 days or greater [member]
Disclosure of financial assets that are either past due or impaired [line items]
Total trade receivables	$ 4,912,756	$ 3,329,928

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Financial Instruments - Summary of Financial Assets Represents Maximum Credit Exposure (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Disclosure of credit risk exposure [line items]
Cash and cash equivalents	$ 12,486,884	$ 9,507,004	$ 3,572,344
Trade receivables	15,225,553	9,804,920
Beginning balance	4,129,370
Ending balance	5,363,657	4,129,370
Credit risk [member]
Disclosure of credit risk exposure [line items]
Cash and cash equivalents	12,486,884	9,507,004
Trade receivables	15,225,553	9,804,920
Exposure to credit risk	27,712,437	19,311,924
Beginning balance	4,129,370	2,344,684
Write-offs	(4,065,645)	(2,180,257)
Provision	5,302,732	3,964,943
Other	(2,800)
Ending balance	$ 5,363,657	$ 4,129,370

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Financial Instruments - Summary of Maturity Analysis of Contractual and Legal Obligations (Detail) - USD ($)	Dec. 31, 2017	Dec. 31, 2016
Disclosure Of Maturity Analysis For Financial Liabilities [Line Items]
Employee benefits	$ 500,754	$ 226,874
Earn-out obligation	1,875,427	13,149,130
Liquidity risk [member]
Disclosure Of Maturity Analysis For Financial Liabilities [Line Items]
Trade and other payables	5,661,844	3,229,685
Employee benefits	500,754	226,874
Notes payable and bank indebtedness	68,502,574	48,495,668
Earn-out obligation	1,977,334	14,120,227
Deferred consideration	3,300,000	4,200,000
Financial liabilities	79,942,506	70,272,454
Liquidity risk [member] | Less than one year [member]
Disclosure Of Maturity Analysis For Financial Liabilities [Line Items]
Trade and other payables	5,661,844	3,229,685
Employee benefits	500,754	226,874
Notes payable and bank indebtedness	4,018,179	8,970,825
Deferred consideration	1,000,000	900,000
Financial liabilities	11,180,777	13,327,384
Liquidity risk [member] | One to three years [member]
Disclosure Of Maturity Analysis For Financial Liabilities [Line Items]
Notes payable and bank indebtedness	64,484,395	39,524,843
Earn-out obligation	1,977,334	14,120,227
Deferred consideration	2,300,000	3,300,000
Financial liabilities	$ 68,761,729	$ 56,945,070

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Commitments and Contingencies - Summary of Minimum Payments Required for the Lease of Premises (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($)
Disclosure of maturity analysis of operating lease payments [line items]
Minimum payments required for the lease of premises	$ 486,976
Less than one year [member]
Disclosure of maturity analysis of operating lease payments [line items]
Minimum payments required for the lease of premises	237,299
One to three years [member]
Disclosure of maturity analysis of operating lease payments [line items]
Minimum payments required for the lease of premises	$ 249,677

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Commitments and Contingencies - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of commitments and contingencies [abstract]
Rent expense	$ 236,455	$ 132,596

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Related Party Transactions - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of transactions between related parties [line items]
Product sales	$ 39,485	$ 37,277
Directors [member]
Disclosure of transactions between related parties [line items]
Paid or accrued fees	$ 194,750	$ 210,100

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Related Party Transactions - Summary of Key Management Personnel Compensation Including Directors (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of key management personnel compensation [abstract]
Salaries, directors' fees and other benefits	$ 1,307,233	$ 1,369,329
Share-based payments	2,807,306	801,311
Key management personnel compensation	$ 4,114,539	$ 2,170,640

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Related Party Transactions - Summary of Key Management Personnel Compensation Including Directors (Parenthetical) (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of key management personnel compensation [abstract]
Post-employment paid	$ 0	$ 0
Termination benefits paid	0	0
Other long-term benefits paid	$ 0	$ 0

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Segmented Information - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017 Segment
Disclosure of operating segments [abstract]
Number of segments	2

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Segmented Information - Summary of Revenues and Company's Property and Equipment, Intangibles and Other Assets Located in Geographical Regions (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of geographical areas [line items]
Total revenue	$ 100,242,080	$ 78,354,632
Property and equipment	364,366	324,198
Intangible assets	163,092,606	133,667,311
Other assets		1,261,298
Canada and other [member]
Disclosure of geographical areas [line items]
Total revenue	238,342	238,049
United States [member]
Disclosure of geographical areas [line items]
Total revenue	100,003,738	78,116,583
Property and equipment	16,690	8,053
Intangible assets	163,057,425	133,635,377
Canada [member]
Disclosure of geographical areas [line items]
Property and equipment	347,676	316,145
Intangible assets	$ 35,181	31,934
Other assets		$ 1,261,298

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Segmented Information - Summary of Operating Segments (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Disclosure of operating segments [line items]
Revenue	$ 100,242,080	$ 78,354,632
Operating costs	85,688,084	53,599,792
Operating income (loss)	14,553,996	24,754,840
Anesthesia services [member]
Disclosure of operating segments [line items]
Operating costs	74,315,424	45,229,986
Other [member]
Disclosure of operating segments [line items]
Operating costs	6,375,110	3,866,696
Operating income (loss)	(6,375,110)	(3,866,696)
Operating segments [member] | Anesthesia services [member]
Disclosure of operating segments [line items]
Revenue	88,741,075	67,821,879
Operating costs	74,315,424	45,229,986
Operating income (loss)	14,425,651	22,591,893
Operating segments [member] | Product sales [member]
Disclosure of operating segments [line items]
Revenue	11,501,005	10,532,753
Operating costs	4,997,550	4,503,110
Operating income (loss)	$ 6,503,455	$ 6,029,643