6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE

SECURITIES EXCHANGE ACT OF 1934

For the month of May 2022

Commission File Number: 001-40413

Quipt Home Medical Corp.

(Translation of registrant’s name into English)

1019 Town Drive

Wilder, Kentucky 41076

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☐                Form 40-F  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

EXHIBIT INDEX

Exhibit	Description
99.1	Condensed Consolidated Interim Financial Statements and notes thereto as at and for the three and six months ended March 31, 2022 and 2021
99.2	Management’s Discussion and Analysis for the three and six months ended March 31, 2022
99.3	Form 52-109F2 - Certification of Interim Filings (CEO) dated May 16, 2022
99.4	Form 52-109F2 - Certification of Interim Filings (CFO) dated May 16, 2022
99.5	News Release dated May 16, 2022

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Quipt Home Medical Corp.
Date: May 16, 2022	/s/ Gregory Crawford
	Chief Executive Officer

EX-99.1

Exhibit 99.1

Quipt Home Medical Corp.

(Formerly, Protech Home Medical Corp.)

Condensed Consolidated Interim Financial Statements

2022 Second Quarter

For the three and six months ended

March 31, 2022 and 2021

(UNAUDITED)

(Expressed in US Dollars)

TABLE OF CONTENTS

Condensed Consolidated Interim Statements of Financial Position	Page 1
Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)	Page 2
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity	Page 3
Condensed Consolidated Interim Statements of Cash Flows	Page 4
Notes to the Condensed Consolidated Interim Financial Statements	Pages 5-30

Quipt Home Medical Corp. (formerly, Protech Home Medical Corp.)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

(UNAUDITED)

(Expressed in thousands of US Dollars, except per share amounts)

		As at		As at
		March 31,		September 30,
	Notes	2022		2021
ASSETS
Current Assets
Cash		$	17,394	$	34,612
Accounts receivable, net	4		13,710		11,938
Inventory	5		11,780		9,253
Prepaid and other current assets			1,066		1,430
Total current assets			43,950		57,233
Long-term assets
Property, equipment, and right of use assets, net	6		26,190		23,506
Goodwill	7		25,999		12,456
Intangible assets, net	7		13,959		14,874
Deferred financing costs	11		346		416
Deposits			82		88
Total long-term assets			66,576		51,340
TOTAL ASSETS		$	110,526	$	108,573
LIABILITIES
Current Liabilities
Accounts payable		$	10,990	$	9,842
Accrued liabilities			2,691		3,202
Current portion of equipment loans	11		5,351		6,992
Current portion of leases	11		3,010		2,981
Government grant	8		631		4,885
Deferred revenue	9		2,536		2,452
Purchase price payable	3		3,306		2,383
Total current liabilities			28,515		32,737
Long-term Liabilities
Debentures	11		10,047		11,784
Equipment loans	11		240		392
Lease liabilities	11		5,760		4,784
SBA Loan	11		121		121
Long-term purchase price payable	3		133		133
TOTAL LIABILITIES			44,816		49,951
SHAREHOLDERS' EQUITY
Capital stock	12		203,763		202,827
Contributed surplus			24,248		21,001
Shares to be issued	12		657		657
Accumulated deficit			(162,958)		(165,863)
TOTAL SHAREHOLDERS' EQUITY			65,710		58,622
TOTAL LIABILITIES AND EQUITY		$	110,526	$	108,573

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page   1

Quipt Home Medical Corp. (formerly, Protech Home Medical Corp.)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(Expressed in thousands of US Dollars, except per share amounts)

		Three Months		Three Months		Six Months		Six Months
		Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,
	Notes	2022		2021		2022		2021
Revenue
Rentals of medical equipment		$	17,866	$	13,839	$	32,847	$	26,192
Sales of medical equipment and supplies			15,687		10,401		30,230		20,803
Total revenues			33,553		24,240		63,077		46,995
Cost of inventory sold			7,354		6,122		15,013		12,194
Operating expenses	14		19,423		12,734		35,249		24,263
Depreciation	6		4,992		3,603		9,558		6,969
Amortization of intangible assets	7		467		337		915		652
Stock-based compensation	12		1,161		12		3,271		27
Acquisition-related costs	3		4		16		66		72
(Gain) loss on disposal of property and equipment			(38)		(2)		(3)		(29)
Other income from government grant	8		(4,254)		—		(4,254)		—
Operating income (loss) from continuing operations			4,444		1,418		3,262		2,847
Financing expenses
Interest expense on convertible debenture			167		235		341		465
Interest expense on leases	11		180		127		347		252
Interest expense on loans	11		82		97		181		182
Interest expense on revolver			13		13		25		25
Amortization of financing costs	11		35		36		70		70
Other interest expense, net			10		5		22		5
Loss on foreign currency transactions			85		98		126		100
Change in fair value of warrants			—		6,043		—		6,391
Change in fair value of debentures	11		(1,319)		7,254		(1,058)		7,889
Income (loss) before taxes from continuing operations			5,191		(12,490)		3,208		(12,532)
Provision (benefit) for income taxes			155		—		303		(1,407)
Net income (loss)		$	5,036	$	(12,490)	$	2,905	$	(11,125)
Net income (loss) per share (Note 15)
Basic earnings (loss) per share		$	0.15	$	(0.43)	$	0.09	$	(0.39)
Diluted earnings (loss) per share		$	0.14	$	(0.43)	$	0.08	$	(0.39)
Weighted average number of common shares outstanding in thousands:
Basic			33,438		29,294		33,393		28,803
Diluted			35,577		29,294		35,700		28,803

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page   2

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’

EQUITY (UNAUDITED)

(Expressed in thousands of US Dollars, except per share amounts)

		Number of									Total
		Shares	Capital		Contributed		Shares to		Accumulated		shareholders'
	Notes	(000’s)	stock		surplus		be Issued		Deficit		equity
Balance September 30, 2020		28,069		171,405		16,519		—		(159,689)	$	28,235
Net loss		—		—		—		—		(11,125)		(11,125)
Stock-based compensation	12	—		—		27		—		—		27
Exercise of warrants, including transfer of derivative warrant liability of $1,725	12	968		6,524		—		—		—		6,524
Shares to be issued for acquisition		—		—		—		3,033		—		3,033
Issuance of stock to be issued		629		2,376		—		(2,376)		—		—
Conversion of debentures		619		4,349		—		—		—		4,349
Compensation options exercised	12	263		1,311		(311)		—		—		1,000
Stock options exercised	12	20		98		(47)		—		—		51
Balance March 31, 2021		30,568	$	186,063	$	16,188	$	657	$	(170,814)	$	32,094
Balance September 30, 2021		33,350	$	202,827	$	21,001	$	657	$	(165,863)	$	58,622
Net income		—		—		—		—		2,905		2,905
Conversion of debentures	11	160		887		—		—		—		887
Stock options exercised	12	21		49		(24)		—		—		25
Stock-based compensation	12	—		—		3,271		—		—		3,271
Balance March 31, 2022		33,531	$	203,763	$	24,248	$	657	$	(162,958)	$	65,710

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page   3

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (UNAUDITED)

(Expressed in thousands of US Dollars, except per share amounts)

		Six months		Six months
		ended March 31,		ended March 31,
	Notes	2022		2021
Operating activities
Net income (loss) from continuing operations		$	2,905	$	(11,125)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	6,7		10,473		7,621
Amortization of financing costs	11		70		70
Accretion of purchase price payable	3		23		—
Interest expense on leases and loans	11		532		434
Loss on foreign currency transactions			126		100
Loss on fair value of warrants	11		—		6,391
(Gain) loss on fair value of convertible debentures	11		(1,058)		7,889
Gain on disposal of property and equipment			(3)		(29)
Stock-based compensation	12		3,271		27
Other income from government grant	8		(4,254)		—
Bad debt expense	4		5,579		4,289
Change in inventory reserve			45		185
Deferred income taxes			—		(1,407)
Change in working capital:
Net increase in accounts receivable			(5,576)		(4,815)
Net increase in inventory			(571)		(2,366)
Net (increase) decrease in prepaid and other current assets			396		(260)
Net increase (decrease) in deferred revenue			(117)		35
Net increase (decrease) in accounts payables and accrued liabilities			352		(415)
Net cash flow provided by operating activities			12,193		6,624
Investing activities
Purchase of property and equipment	6		(3,683)		(1,178)
Cash proceeds from sale of property and equipment			227		153
Cash paid for acquisitions	3		(16,485)		(7,670)
Net cash flow used in investing activities			(19,941)		(8,695)
Financing activities
Repayments of loans	11		(6,359)		(4,739)
Repayments of leases			(2,036)		(1,497)
Payments of purchase price payable	3		(1,182)		(576)
Proceeds from exercise of warrants	12		—		4,799
Proceeds from exercise of options	12		24		1,051
Net cash flow used in financing activities			(9,553)		(962)
Net decrease in cash			(17,301)		(3,033)
Effect of exchange rate changes on cash held in foreign currencies			83		964
Cash, beginning of period			34,612		29,227
Cash, end of period		$	17,394	$	27,158

The accompanying notes are an integral part of these condensed consolidated interim financial statements

Page   4

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

1. Nature of operations

Reporting entity

Quipt Home Medical Corp. (“Quipt” or the “Company”) was incorporated under the Business Corporations Act (Alberta) on March 5, 1993. On December 30, 2013, the Company was continued into British Columbia, Canada. The address of the registered office is 666 Burrard St, Vancouver, British Columbia, V6C 2Z7. The head office is located at 1019 Town Drive, Wilder, Kentucky, United States. The Company is a participating Medicare provider that provides i) nebulizers, oxygen concentrators, and CPAP and BiPAP units; ii) traditional and non-traditional durable medical respiratory equipment and services; and iii) non-invasive ventilation equipment, supplies and services. The Company has embarked on an acquisition strategy for additional revenue and profit growth.

The Company changed its name from Protech Home Medical Corp. to Quipt Home Medical Corp. on May 13, 2021.

The Company’s shares are traded on the TSX Venture Exchange under the symbol QIPT. On May 27, 2021, the stock began trading on NASDAQ in the United States under the symbol QIPT. Effective May 13, 2021, the Company consolidated its issued and outstanding common shares based on one post-consolidation common share for every four pre-consolidation common shares. Unless otherwise stated, the share, options and warrants along with corresponding exercise prices and per-share amounts have been restated retrospectively to reflect this share consolidation.

Basis of measurement

These consolidated financial statements have been prepared on a going concern basis that assumes that the Company will continue its operations for the foreseeable future and be able to realize its assets and discharge its liabilities and commitments in the normal course of operations.

COVID-19 pandemic

In light of the ongoing spread of the novel coronavirus, or COVID-19, in the United States and abroad, including the emergence of new variants of the coronavirus, government and public health authorities continue to recommend or impose regulations designed to protect human life, but which have simultaneously had (and are expected to continue to have) serious adverse impacts on domestic and foreign economies. COVID-19COVID-19

In response to the COVID-19 pandemic, the Company has implemented protocols and procedures for the safety and protection of its employees (including patient-facing employees providing respiratory and other services), maximizing the availability of its services and products to support patient health needs, and the operational and financial stability of its business. The Company continues to make adjustments in response to changing government regulations and directives. COVID-19 and the emergence of variants could further impact the Company’s expected timelines and operations, its third-party service providers or suppliers, as a result of quarantines, facility closures, travel and logistics restrictions and other limitations in connection with the outbreak.

It is unknown how long the adverse conditions associated with COVID-19 and subsequent variants will last and what the complete financial effect will be to the Company’s business, operations, and financial results. Although the Company has taken steps to mitigate the impact of COVID-19, the continued presence and ‎spread of COVID-19 nationally and globally could have a material adverse impact on the Company’s ‎business, operations, and financial results and position, including through employee attrition, ‎disruptions to the Company’s supply chains and sales channels, restrictions of operations at the Company’s retail stores, changes in the number of Americans with health insurance resulting in a change in demand

Page   5

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

for the Company’s products, as well as a deterioration of general economic ‎conditions including a possible national or global recession.

To the extent the ongoing COVID-19 pandemic, or other health epidemic or outbreak, adversely affects the Company’s business and financial results, it may also have the effect of heightening many of the other risks described in this Risk Factors section.COVID-19 Because of the highly uncertain and dynamic nature of events relating to the continuing COVID-19 pandemic, it is not currently possible to estimate its impact on the Company’s business, results of operation and financial condition beyond that discussed above. However, these effects could have a material impact and the Company intends to continue to monitor the ongoing COVID-19 pandemic situation. The continuing nature and scope of COVID-19’s impacts to the Company’s business and operations will depend on a series of evolving factors and developments that are difficult to assess, predict, or control, which include, but are not limited to, the following:

•the severity and duration of the pandemic, including additional outbreaks or spikes in the number of COVID-19 cases, future mutations or related variants of the virus, and the efficacy and availability of vaccines;

•the extent and duration of the effect on consumer confidence, economic well-being, deferred medical care, the rate of elective procedures and even recommended screening tests, as well as customer demand;

•the duration, degree, and impact of governmental, business, or other measures implemented in response to the pandemic;

•the impacts on the Company’s distribution channels and supply chain;

•volatility or disruptions in the credit and financial markets;

•increased cyber security risks, including as a result of the Company’s employees, business partners, vendors, suppliers and other third parties with which the Company does business, working remotely;

•evolving macroeconomic factors, including general economic uncertainty, product costs, unemployment rates, and recessionary and inflationary pressures;

•the impact of the pandemic on economic activity and the pace and extent of recovery when the pandemic subsides, which may vary materially over time and among the different regions and markets the Company serves;

•the long-term impact of the COVID-19 pandemic on the global economy, financial markets, trade relations, consumer behavior, the industry in which the Company operates, and its business operations; and

•relaxation or lifting of government mandates and restrictions related to COVID-19, such as the mask mandate.

See Note 8 for relief payments the Company received related to the U.S. Coronavirus Aid, Relief and Economic Security (“CARES”) Act.

Page   6

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

2. Summary of significant accounting policies

Unreserved statement of compliance

These unaudited condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, “Interim Financial Reporting”, using accounting policies consistent with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. These condensed consolidated interim financial statements do not include all the disclosures required in annual consolidated financial statements and should be read in conjunction with the Company’s audited consolidated financial statements for the years ended September 30, 2021 and 2020.

The Company has followed the same basis of presentation, accounting policies and method of computation for these condensed consolidated interim financial statements as disclosed in the annual audited consolidated financial statements for the years ended September 30, 2021 and 2020.

The unaudited consolidated financial statements were approved and authorized for issue by the Board of Directors on May 16, 2022.

The consolidated financial statements, which are presented in US dollars, have been prepared under the historical cost convention, as modified by the measurement at fair values of certain financial assets and financial liabilities.

Critical accounting estimates

The preparation of financial statements in conformity with IFRS requires management to make certain estimates, judgments, and assumptions concerning the future. The Company’s management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised.

Estimates where management has made subjective judgments and where there is significant risk of material adjustments to assets and liabilities in future accounting periods include fair value measurements for financial instruments and share-based transactions, useful lives and impairment of non-financial assets (property and equipment and intangible assets), provision for expected credit losses, fair value measurements for assets and liabilities acquired in business acquisitions, and calculation of deferred taxes.

The following are the key estimates and assumption uncertainties that have a significant risk of resulting in a material adjustment within the next financial year:

a) Revenue recognition

Revenues are billed to and collections are received from both third-party insurers and patients. Because of continuing changes in the health care industry and third-party reimbursement, the consideration receivable from these insurance companies is variable as these billings can be challenged by the payor. Therefore, the amount billed by the Company is reduced by an estimate of the amount that the Company believes is an allowable charge to be ultimately allowed by the insurance contract. The above estimate involves significant judgment including an analysis of past collections and

Page   7

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting estimated revenue as required.

Rental of medical equipment

The Company rents medical equipment to customers for a fixed monthly amount on a month-to-month basis. The customer generally has the right to cancel the lease at any time during the rental period. The Company considers these rentals to be operating leases. Under IFRS 16 - “Leases”, the Company recognizes rental revenue on operating leases on a straight-line basis over the contractual lease term, resulting in deferred revenue for the portion of the monthly rent collected that is earned after the consolidated statement of financial position date. The term begins on the date products are delivered to patients, and revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including Medicare, private commercial payors, and Medicaid. Certain customer co-payments are included in revenue when payment is considered probable.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application or claim denial.

Sales of medical equipment and supplies

The Company sells equipment, replacement parts, and supplies to customers and recognizes revenue based on contractual payment rates as determined by the payors at the point in time where control of the good or service is transferred through delivery to the customer. The payors are generally charged at the time that the product is sold.

The transaction price on equipment sales is the amount that the Company expects to receive in exchange for the goods and services provided. Due to the nature of the industry, gross charges are retail charges and generally do not reflect what the Company is ultimately paid. As such, the transaction price is constrained for the difference between the gross charge and what is estimated to be collected from payors and from patients. The transaction price therefore is predominantly based on contractual payment rates as determined by the payors. The Company does not generally contract with uninsured customers but does offer point-of-sale payments at retail outlets. The payment terms and conditions of customer contracts vary by customer type and the products and services offered.

The Company determines its estimates of contractual allowances and discounts based upon contractual agreements and historical experience. While the rates are fixed for the product or service with the customer and the payors, such amounts typically include co-payments, co-insurance, and deductibles, which vary in amounts, and are due from secondary insurance providers and/or the patient. The Company includes in the transaction price only the amount that the Company expects to be entitled, which is substantially all of the payor billings at contractual rates.

Due to the nature of the industry and the reimbursement environment in which the Company operates, certain estimates are required to record net revenue and accounts receivable at their net realizable values. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements and the uncertainty of reimbursement amounts for certain services from certain

Page   8

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

payors may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of claim approval or denial.

Returns and refunds are not accepted on equipment sales. The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities as of March 31, 2022, relating to sale of medical equipment and supplies.

b) Valuation of accounts receivable

The measurement of expected credit losses considers information about past events and current conditions. Forward looking macro-economic factors are incorporated into the risk parameters, such as unemployment rates, inflation, and interest rates. Significant judgments are made in order to incorporate forward-looking information into the estimation of allowances and may result in changes to the provision from period to period which may significantly affect our results of operations.

The Company estimates that a certain portion of receivables from customers may not be collected and maintains a reserve for expected credit losses. The Company evaluates the net realizable value of accounts receivable as of the date of the consolidated balance sheets. Specifically, the Company considers historical realization data, including current and historical cash collections, accounts receivable aging trends, other operating trends, and relevant business conditions. Because of continuing changes in the health care industry and third-party reimbursement, it is possible that the estimates could change, which could have a material impact on the operations and cash flows. If circumstances related to certain customers change or actual results differ from expectations, our estimate of the recoverability of receivables could fluctuate from that provided for in our consolidated financial statements. A change in estimate could impact bad debt expense and accounts receivable.

c) Valuation of inventories

Inventory is recorded at the lower of cost or market. Inventory is expensed through cost of inventory sold when shipped to customers or transferred to property and equipment when rented to customers. The Company estimates that a certain portion of inventory purchased may be excess, obsolete, or non-saleable. The Company maintains a provision for obsolescence for these items. Valuation of the inventory was assessed, and all inventory items which are more than two years are old and not supported by recent sales were provided for 40% in accordance with Company’s policy.

d) Property and equipment

Property and equipment is stated at cost less accumulated depreciation. Major renewals and improvements are charged to the property accounts, while maintenance, and repairs which do not extend the useful life of the respective assets, are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets.

The estimated useful lives of the assets are as follows:

Description	Estimated Useful Life
Rental equipment	1-5 years
Computer equipment	3-5 years
Office furniture and fixtures	5-10 years
Leasehold improvements	Life of lease (1-7 years)

Page   9

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Right-of-use vehicles	5 years
Right of use real estate leases	Life of lease (1-6 years)

Depreciation of rental equipment commences once it has been deployed to a patient’s address and put in use. Property and equipment and other non-current assets with definite useful lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable.

e) Intangible assets

The Company has recorded various intangible assets consisting primarily of non-compete agreements, trademarks, customer contracts and customer relationships. Non-compete agreements are the value associated with the non-compete agreements entered by the sellers of purchased companies. Trademarks are the purchase price allocation for the value associated with the trade name of the acquired company. Customer contracts are comprised of the purchase price allocation of the present value of expected future customer billings based on the statistical life of a customer. Customer relationships are the value given in the purchase price allocation to the long-term associations with referral sources such as doctors, medical centers, etc. Finite life intangible assets are amortized on a straight-line basis over the estimated useful lives of the related assets as follows:

Description	Estimated Useful Life
Non-compete agreements	5 Years
Trademarks	10 Years
Customer contracts	2 Years
Customer relationships	10 Years

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) when the asset is derecognized.

The Company reviews the estimates for useful lives on an annual basis, or more frequently if events during the year indicate that a change may be required, with consideration given to technological obsolescence and other relevant business factors. A change in management’s estimate could impact depreciation/amortization expense and the carrying value of property and equipment and intangible assets.

f) Lease liabilities

Estimate of lease term

When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it will extend the lease at the end of the lease contract or exercise an early termination option. As it is not reasonably certain that the extension or early termination options will be exercised, the Company determined that the term of its leases are the lesser of original lease term or the life of the leased asset. This significant estimate could affect future results if the Company extends the lease or exercises an early termination option.

Incremental borrowing rate

When the Company recognizes a lease, the future lease payments are discounted using the Company’s incremental borrowing rate. This significant estimate impacts the carrying amount of the lease liabilities and the interest expense recorded on the consolidated statement of loss and comprehensive loss.

Page   10

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Critical Accounting Judgements

The following are the critical judgments, apart from those involving estimations, that have been made in the process of applying the Company's accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.

a) Functional currency

The consolidated financial statements of the Company are presented in US dollars, which is the Company’s functional currency. Determined using management’s judgment that the primary economic environment in which it will derive its revenue and expenses incurred to generate those revenues is the United States. Management has exercised judgment in selecting the functional currency of each of the entities that it consolidates based on the primary economic environment in which the entity operates and in reference to the various indicators including the currency that primarily influences or determines the selling prices of goods and services and the cost of production, including labor, material and other costs and the currency whose competitive forces and regulations mainly determine selling prices.

b) Business combinations

In accordance with IFRS 3, Business Combinations (“IFRS 3”), a transaction is recorded as a business combination if the significant assets, liabilities, or activities in addition to property and related mortgage debt assumed constitute a business. A business is defined as an integrated set of activities and assets, capable of being conducted and managed for the purpose of providing a return, lower costs, or other economic benefits. Where there are no such integrated activities, the transaction is treated as an asset acquisition. The estimation of the fair value of the assets and liabilities acquired in a business acquisition is subject to judgement concerning estimating market values and predicting future events. These values are uncertain and can materially impact the carrying value of the acquired assets and the amount allocated to goodwill.

c) Recognition and initial measurement

The Company recognizes financial assets when it becomes party to the contractual provisions of the instrument. Financial assets are measured initially at their fair value plus, in the case of financial assets not subsequently measured at fair value through profit or loss, transaction costs that are directly attributable to their acquisition. Transaction costs attributable to the acquisition of financial assets subsequently measured at fair value through profit or loss are expensed in the consolidated statement of income (loss) and comprehensive income (loss) when incurred.

Financial instruments

Fair value measurement

Assets and liabilities carried at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1 – Where financial instruments are traded in active financial markets; fair value is determined by reference to the appropriate quoted market price at the reporting date. Active markets are those in which transactions occur in significant frequency and volume to provide pricing information on an ongoing basis;

Page   11

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Level 2 – If there is no active market, fair value is established using valuation techniques, including discounted cash flow models. The inputs to these models are taken from observable market data where possible, including recent arm’s length market transaction and comparisons to the current fair value of similar instruments, but where this is not feasible, inputs such as liquidity risk, credit risk and volatility are used; and

Level 3 – In this level, fair value determinations are made with inputs other than observable market data.

Cash and cash equivalents are classified as Level 1. The convertible debentures have been valued using Level 1 inputs.

Financial instrument risk exposure

The Company’s activities expose it to a variety of financial risks: market risk (including credit risk, liquidity risk and interest rate risk), credit risk, and liquidity risk. These risks arise from the normal course of operations and all transactions are undertaken to support the Company’s ability to continue as a going concern. Risk management is carried out by management under policies promulgated by the Board of Directors. The Company’s overall risk management program seeks to minimize potential adverse effects on the Company’s financial performance.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk are primarily cash and accounts receivable. Each subsidiary places its cash with one major financial institution. At times, the cash in the financial institution is temporarily more than the amount insured by the Federal Deposit Insurance Corporation. Substantially all accounts receivable is due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Receivables generally are collected within industry norms for third-party payors. The Company continuously monitors collections from its clients and maintains a reserve for expected credit losses based upon any specific payor collection issues that are identified and historical experience. The expected loss rates are based on the historical loss rates and are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables, such as the unemployment rate of the states in which it conducts business. Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, a failure to make contractual payments after multiple collection efforts, including third party collection agencies.

As of March 31, 2022, the Company has approximately 8% of the Company’s receivables due from Medicare. As this is a federal health insurance program in the United States, there is nominal credit risk associated with these balances.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach in managing liquidity is to ensure, to the extent possible, that it will have sufficient liquidity to meet its liabilities when due by continuously monitoring actual and budgeted cash flows and monitoring financial market conditions for signs of weakness.

As of March 31, 2022, the Company faces no material liquidity risk and can meet all its current financial obligations as they become due and payable. The Company has $28,515,000 of liabilities that are due within one year but has $43,950,000 of current assets and availability under the revolving credit facility to meet those obligations.

Page   12

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk is limited to potential decreases on the interest rate offered on cash and cash equivalents held with Chartered Canadian and registered US financial institutions. The Company considers this risk to be immaterial. The interest on the debenture and equipment loans is not subject to cash flow interest rate risk as these instruments bear interest at fixed rates.

3. Acquisition of businesses and purchase accounting

Acquisition of Thrift Home Care, Inc

On October 1, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Thrift Home Care, Inc. (Thrift), a Mississippi-based company in the same industry as the Company. The purchase price was $2,171,000 of which $1,804,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $367,000. The Company has determined that the transaction is an acquisition of a business under IFRS 3, and it has been accounted for by applying the acquisition method. The Company expensed $8,000 of professional fees in conjunction with the acquisition.

The revenues and net loss for Thrift for the six months ended March 31, 2022 was approximately $1,050,000 and $(75,000), respectively.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to: property and equipment, intangible assets acquired, deferred tax liabilities, working capital adjustments, and purchase price. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition in the Company’s consolidated financial statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could be affected. The fair value of the acquired assets that is provisional pending final valuations of the assets and liabilities is as follows:

Cash	$	452
Accounts receivable		165
Inventory		150
Property and equipment		220
Right of use real estate		834
Goodwill (provisional)		1,373
Accounts payable		(140)
Accrued liabilities		(33)
Deferred revenue		(40)
Lease liabilities		(810)
Net assets acquired	$	2,171
Cash paid at closing	$	1,804
Cash to be paid after closing, included in purchase price payable		367
Consideration paid or payable	$	2,171

The goodwill is attributable to expected synergies from the combined operations. None of the goodwill is deductible for income tax purposes.

Page   13

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Acquisition of Heckman Healthcare Services & Supplies, Inc.

On November 1, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Heckman Healthcare Services & Supplies, Inc (Heckman). Heckman is an Illinois based company in the same industry as the Company. The purchase price was $2,434,000, of which $2,103,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $331,000. The Company has determined that the transaction is an acquisition of a business under IFRS 3, and it has been accounted for by applying the acquisition method. The Company expensed $6,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for Heckman for the six months ended March 31, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $1,100,000 and $(5,000), respectively, of which approximately $900,000 and $(5,000) were recognized in the period from November 1, 2021 to March 31, 2022.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to property and equipment, working capital adjustments, and purchase price. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition in the Company’s consolidated financial statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could be affected. The fair value of the acquired assets is provisional pending final valuations of the assets and liabilities is as follows:

Cash	$	169
Accounts receivable		146
Inventory		369
Property and equipment		613
Right of use real estate		67
Goodwill (provisional)		1,351
Accounts payable		(159)
Accrued liabilities		(95)
Deferred revenue		(27)
Net assets acquired	$	2,434
Cash paid at closing	$	2,103
Cash to be paid after closing, included in purchase price payable		331
Consideration paid or payable	$	2,434

The goodwill is attributable to expected synergies from the combining operations. None of the goodwill is deductible for income tax purposes.

Acquisition of Southeastern Biomedical Services, LLC

On November 9, 2021, the Company, through newly-created entity SE Biomedical Holdco, LLC (Southeastern Bio), a Kentucky limited liability company, entered into a purchase agreement to acquire substantially all of the assets of Southeastern Biomedical Services, LLC.  Southeastern Bio provides repair parts and service, calibration, and electrical safety for the durable medical equipment industry, and was a vendor of the Company. The purchase price was $697,000, of which $600,000 was paid in cash at closing, with remaining holdbacks payable on the six- and twelve-month

Page   14

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

anniversaries of the acquisition discounted at 2.39% for a fair value of $97,000. The Company has determined that the transaction is an acquisition of a business under IFRS 3, and it has been accounted for by applying the acquisition method. The Company expensed $5,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for Southeastern Bio for the six months ended March 31, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $1,000,000 and $(162,000), respectively, of which approximately $800,000 and $(90,000) were recognized in the period from November 9, 2021 to March 31, 2022.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to: property and equipment, intangible assets acquired, deferred tax liabilities, working capital adjustments, and purchase price. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition in the Company’s consolidated financial statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could be affected. The fair value of the acquired assets is provisional pending final valuations of the assets and liabilities and is as follows:

Accounts receivable	$	118
Inventory		75
Property and equipment		85
Right of use real estate		196
Goodwill (provisional)		487
Accounts payable		(126)
Lease liabilities		(138)
Net assets acquired	$	697
Cash paid at closing	$	600
Cash to be paid after closing, included in purchase price payable		97
Consideration paid or payable	$	697

The goodwill is attributable to expected synergies from the combining operations. All of the goodwill is deductible for income tax purposes.

Acquisition of At Home Health Equipment, LLC

On January 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of At Home Health Equipment, LLC (At Home). At Home is an Indiana based company in the same industry as the Company. The purchase price was $13,265,000, of which $11,798,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $1,287,000. The Company has determined that the transaction is an acquisition of a business under IFRS 3, and it has been accounted for by applying the acquisition method. The Company expensed $21,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for At Home for the six months ended March 31, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $6,400,000 and $100,000, respectively, of which approximately $3,100,000 and $100,000 were recognized in the period from January 1, 2022 to March 31, 2022.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to property and equipment, working capital adjustments, and purchase price. The Company expects to continue to obtain information to assist in determining the fair value of the net assets acquired at the acquisition date during the measurement period. Measurement

Page   15

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

period adjustments that the Company determines to be material will be applied retrospectively to the period of acquisition in the Company’s consolidated financial statements and, depending on the nature of the adjustments, other periods subsequent to the period of acquisition could be affected. The fair value of the acquired assets is provisional pending final valuations of the assets and liabilities is as follows:

Cash	$	495
Accounts receivable		1,346
Inventory		1,407
Prepaid and other current assets		63
Property and equipment		375
Right of use real estate		532
Right of use vehicles		800
Goodwill (provisional)		10,332
Accounts payable		(600)
Accrued liabilities		(284)
Deferred revenue		(135)
Lease liabilities		(1,066)
Net assets acquired	$	13,265
Cash paid at closing	$	11,978
Cash to be paid after closing, included in purchase price payable		1,287
Consideration paid or payable	$	13,265

The goodwill is attributable to expected synergies from the combining operations. All of the goodwill is deductible for income tax purposes.

Purchase Price Payable

The purchase price payable included on the statements of financial position consists of amounts related to prior period acquisitions in addition to the three fiscal year 2022 acquisitions less payments made to date. Below is the movement in purchase price payable for the six months ended March 31, 2022:

Balance September 30, 2020 (current $857 plus long-term $560)	$	1,417
Additions from acquisitions		1,261
Accretion of interest		—
Payments on prior period acquisitions		(576)
Balance March 31, 2021 (current $1,969 plus long-term $133)	$	2,102
Balance September 30, 2021 (current $2,383 plus long-term $133)	$	2,516
Additions from acquisitions		2,082
Accretion of interest		23
Payments on prior period acquisitions		(1,182)
Balance March 31, 2022 (current $3,306 plus long-term $133)	$	3,439

Page   16

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

4. Accounts Receivable

Accounts receivable represents amounts due from insurance companies and patients. As of March 31, 2022, the Company has approximately 8% of the Company’s receivables due from Medicare:

	As at		As at
	March 31, 2022		September 30, 2021
Gross receivable	$	19,734	$	15,413
Reserve for expected credit losses		(6,024)		(3,475)
Total	$	13,710	$	11,938

			Reserve for
	Gross		expected
As at September 30, 2021	Receivables		credit losses		Net Receivables
0 – 90 days	$	11,279	$	(1,418)	$	9,861
91 – 180 days		2,027		(731)		1,296
Over 180 days		2,107		(1,326)		781
Total	$	15,413	$	(3,475)	$	11,938
As at March 31, 2022
0 – 90 days	$	15,144	$	(2,899)	$	12,245
91 – 180 days		2,591		(1,428)		1,163
Over 180 days		1,999		(1,697)		302
Total	$	19,734	$	(6,024)	$	13,710

Below is the movement in the reserve for expected credit losses:

			For the year
	Six months		ended
	ended March 31,		September 30,
Reserve for expected credit losses	2022		2021
Opening balance	$	3,475	$	5,036
Bad debt expense		5,579		7,957
Amounts written off		(3,030)		(9,518)
Ending balance	$	6,024	$	3,475

5. Inventory

The following chart represents the components of inventory as at March 31, 2022 and September 30,2021:

	As at March 31,		As at September 30,
	2022		2021
Serialized	$	2,377	$	2,369
Non-serialized		9,486		6,922
Reserve for slow-moving inventory		(83)		(38)
Total Inventory	$	11,780	$	9,253

The reserve for slow-moving inventory is included under cost of inventory sold in the condensed consolidated interim statement of income (loss) and comprehensive income (loss).

Page   17

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

6. Property and equipment and right of use assets

					Office					Buildings and	Right of use		Right of use
	Rental		Computer		furniture and				Leasehold		assets –		assets – Real
Cost	equipment		equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	22,568	$	171	$	333	$	—	$	1,364	$	2,872	$	4,990	$	32,298
Transfers from inventory		5,088		—		—		—		—		—		—		5,088
Additions		—		4		—		—		22		157		1,171		1,354
Acquisitions		2,228		—		2		—		—		14		375		2,619
Disposals and write offs		(4,929)		(24)		(11)		—		(7)		(288)		(384)		(5,643)
Balance March 31, 2021	$	24,955	$	151	$	324	$	—	$	1,379	$	2,755	$	6,152	$	35,716
Balance September 30, 2021	$	31,146	$	155	$	327	$	—	$	1,498	$	4,175	$	7,750	$	45,051
Transfers from inventory		8,063		—		—		—		—		—		—		8,063
Additions		—		—		—		—		1		241		517		759
Acquisitions		695		—		85		211		303		985		1,443		3,722
Disposals and write offs		(7,502)		(35)		(181)		—		—		(509)		(443)		(8,670)
Balance March 31, 2022	$	32,402	$	120	$	231	$	211	$	1,802	$	4,892	$	9,267	$	48,925

					Office					Buildings and	Right of use		Right of use
	Rental		Computer		furniture and				Leasehold		assets –		assets – Real
Accumulated depreciation	equipment		equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	12,311	$	106	$	229	$	—	$	309	$	1,182	$	1,494	$	15,631
Depreciation		5,576		16		30		—		59		335		953		6,969
Disposals and write offs		(4,917)		(24)		(11)		—		(7)		(279)		(281)		(5,519)
Balance March 31, 2021	$	12,970	$	98	$	248	$	—	$	361	$	1,238	$	2,166	$	17,081
Balance September 30, 2021	$	16,419	$	104	$	279	$	—	$	431	$	1,635	$	2,677	$	21,545
Depreciation		7,621		14		55		—		80		626		1,162		9,558
Disposals and write offs		(7,478)		(35)		(181)		—		—		(331)		(343)		(8,368)
Balance March 31, 2022	$	16,562	$	83	$	153	$	—	$	511	$	1,930	$	3,496	$	22,735

Page   18

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

					Office					Buildings and	Right of use		Right of use
	Rental		Computer		furniture and				Leasehold		assets –		assets – Real
Net Book Value	equipment		equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	10,257	$	65	$	104	$	—	$	1,055	$	1,690	$	3,496	$	16,667
Balance March 31, 2021	$	11,985	$	53	$	76	$	—	$	1,018	$	1,517	$	3,986	$	18,635
Balance September 30, 2021	$	14,727	$	51	$	48	$	—	$	1,067	$	2,540	$	5,073	$	23,506
Balance March 31, 2022	$	15,840	$	37	$	78	$	211	$	1,291	$	2,962	$	5,771	$	26,190

Out of the $8,063,000 rental equipment transferred from inventory during the six months ended March 31, 2022, the Company obtained equipment loans (Note 11) for $4,381,000 with the balance of $3,682,000 paid in cash. For the six months ended March 31, 2021, the Company obtained equipment loans of $3,936,000 with the balance of $1,152,000 paid in cash.

7. Goodwill and Intangible Assets

											Sub-total
			Non-								intangibles
			compete				Customer		Customer		with finite
Cost	Goodwill		agreements		Brand		contracts		relationships		lives		Total
Balance September 30, 2020	$	3,895	$	637	$	1,881	$	3,851	$	11,766	$	18,135	$	22,030
Acquisitions		7,590		220		520		—		4,670		5,410		13,000
Disposals		—		—		—		—		(144)		(144)		(144)
Balance March 31, 2021	$	11,485	$	857	$	2,401	$	3,851	$	16,292	$	23,401	$	34,886
Balance September 30, 2021	$	12,456	$	1,007	$	3,251	$	3,851	$	20,690	$	28,799	$	41,255
Acquisitions		13,543		—		—		—		—		—		13,543
Disposals		—		—		—		—		(2)		(2)		(2)
Balance March 31, 2022	$	25,999	$	1,007	$	3,251	$	3,851	$	20,688	$	28,797	$	54,796

											Sub-total
			Non-								intangibles
			compete				Customer		Customer		with finite
Accumulation amortization	Goodwill		agreements		Brand		contracts		relationships		lives		Total
Balance September 30, 2020	$	—	$	522	$	989	$	3,845	$	7,200	$	12,556	$	12,556
Amortization		—		38		88		5		521		652		652
Disposals		—		—		—		—		(144)		(144)		(144)
Balance March 31, 2021	$	—	$	560	$	1,077	$	3,850	$	7,577	$	13,064	$	13,064
Balance September 30, 2021	$	—	$	607	$	1,200	$	3,851	$	8,267	$	13,925	$	13,925
Amortization		—		50		136		—		729		915		915
Disposals		—		—		—		—		(2)		(2)		(2)
Balance March 31, 2022	$	—	$	657	$	1,336	$	3,851	$	8,994	$	14,838	$	14,838

Sub-total

Page   19

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

			Non-								intangibles
			compete				Customer		Customer		with finite
Net carrying amount	Goodwill		agreements		Brand		contracts		relationships		lives		Total
Balance September 30, 2020	$	3,895	$	115	$	892	$	6	$	4,566	$	5,579	$	9,474
Balance March 31, 2021	$	11,485	$	297	$	1,324	$	1	$	8,715	$	10,337	$	21,822
Balance September 30, 2021	$	12,456	$	400	$	2,051	$	—	$	12,423	$	14,874	$	27,330
Balance March 31, 2022	$	25,999	$	350	$	1,915	$	—	$	11,694	$	13,959	$	39,958

8. Government Grant

During the year ended September 30, 2020, the Company received payments related to the two separate provisions of the US CARES Act.

Payroll Protection Plan (“PPP’)

On April 16, 2020, the Company received $4,254,000 related to the PPP, which was to assist companies in maintaining their workforce. The PPP provided for loans to qualifying businesses for amounts up to 2.5 times of the average monthly payroll expenses. The loans and accrued interest were forgivable if the borrower uses the loan proceeds for eligible purposes, including payroll, benefits, rent, and utilities for up to twenty-four weeks, and maintains certain payroll levels. On March 23, 2022, the loan was forgiven, and other income in the amount of $4,254,000 has been recorded on the condensed consolidated interim statements of income (loss) for the three and six months ended March 31, 2022.

Public Health and Social Services Emergency Fund (“Relief Fund”)

During the year ended September 30, 2020, the Company received $1,797,000 from the Relief Fund, which was established to support healthcare providers to prevent, prepare for, and respond to coronavirus, including health care related expenses or lost revenues, subject to certain terms and conditions. If those terms and conditions are met, payments do not need to be repaid. No expenses related to the PPP can be used to meet the terms and conditions for the Relief Fund.

In September 2021, the Company submitted its filing with the Health and Human Services (“HHS”) supporting the use of the funds under the terms and conditions of the Relief Fund. The HHS has not indicated whether any formal notification of acceptance will be provided. The Company has accounted for the proceeds under IAS 20. The cash inflow has been reported as a financing activity. The original proceeds were recognized as a liability, which was reduced based on certain related costs incurred. During the year ended September 30, 2020, the Company reduced the liability by $1,166,000, which was included in other income in the consolidated statements of income (loss) and comprehensive income (loss). No reduction was recorded in the six months ended March 31, 2022 or 2021.

	Current		Long-term		Total
Balance September 30, 2020	$	2,599	$	2,286	$	4,885
Change in current and long-term portions		709		(709)		—
Balance March 31, 2021	$	3,308	$	1,577	$	4,885
Balance September 30, 2021	$	4,885	$	—	$	4,885
Loan forgiveness recognized as Other income		(4,254)		—		(4,254)
Balance March 31, 2022	$	631	$	—	$	631

Page   20

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

9. Deferred Revenue

Activity for deferred revenue for the six months ended March 31, 2022 and year ended September 2021 is as follows:

	For the three
	months ended		For the year ended
	March 31, 2022		September 30, 2021
Beginning balance	$	2,452	$	1,804
Acquisitions		202		316
Net change		(118)		332
Ending balance	$	2,536	$	2,452

10. Derivative warrant liability

On June 29, 2020, the Company completed a bought deal public offering, a concurrent brokered private placement, and a non-brokered private placement to the Company’s Chief Executive Officer and a director of the Company, for 27,678,826 units, respectively. Each unit consisted of one common share and one-half of one common share purchase warrant (each whole warrant, a “Warrant”), for a total of 13,839,413 Warrants. Each Warrant will be exercisable to acquire one common share for a period of 12 months following the closing at an exercise price of C$6.40 per share. During the year ended September 30, 2020, 13,559,300 Warrants for 3,389,825 common shares were exercised, and the remaining 280,113 Warrants for 70,028 common shares expired on June 29, 2021. The Warrants were recorded as a liability since they are denominated in Canadian Dollars and the Company’s functional currency is US dollars. A revaluation was performed each period end, with the change in fair value recorded in the caption “Change in fair value of warrants.” Upon exercise, the warrant liability was derecognized and transferred to equity.

Warrant activity for the six months ended March 31, 2022 and 2021 is provided below:

		For the six		For the six
		months ended		months ended
	March 31, 2022		March 31, 2021
Beginning balance	$	—	$	1,855
Exercised		—		(1,725)
Change in fair value		—		6,391
Change in foreign exchange rate		—		207
Ending balance	$	—	$	6,728

11. Long-term Debt

Debentures

On March 7, 2019, the Company issued C$15,000,000 ($12,000,000) in 8.0% Convertible Unsecured Debentures due March 7, 2024, with interest payable semi-annually on June 30 and December 31. Each C$1,000 ($800) debenture is convertible at the option of the holder into 192.31 common shares. As of September 30, 2021, C$4,041,000 ($3,172,000) of debentures had been converted into common shares, leaving C$10,959,000 ($8,601,000) of face value debentures remaining. During the six months ended March 31, 2022, C$834,000 ($660,000) of debentures were converted into

Page   21

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

common shares, leaving C$10,125,000 ($8,102,000) of face value of the debentures remaining. The fair value of the debentures on the dates of conversion totaled C$1,121,000 ($887,000). After three years from the date of issuance, the Company can force conversion of the outstanding principal at a conversion price of C$5.20, if the daily volume weighted average price of the common shares exceeds C$6.48 per share for twenty consecutive trading days. The debenture agreement also allows for payment of cash in lieu of common shares upon exercise of conversion right by the holder, equivalent of the market price on the conversion date.

The debentures contain multiple embedded derivatives including conversion right, forced conversion option and payment in lieu of common shares. Since the Company is unable to measure the fair value of embedded derivatives reliably, it has chosen to designate the convertible debentures in their entirety (including conversion right, forced conversion option and payment in lieu of common shares) to be subsequently measured at fair value through profit or loss (FVTPL).

The debentures are valued at fair value using the current trading price of C$124 ($99) and C$137 ($109) as of March 31, 2022 and September 30, 2021, respectively, per unit. A gain of $1,319,000 and $1,058,000 was recorded for the three and six months ended March 31, 2022, respectively. A loss of $7,254,000 and $7,889,000 was recorded for the three and six month ended March 31, 2021, respectively. Following is the movement in these debentures:

	Six months ended		Year ended
	March 31, 2022		September 30, 2021
Beginning balance	$	11,784	$	12,930
Conversion to common shares		(887)		(5,359)
Change in fair value		(1,058)		3,591
Change in foreign exchange rate		208		622
Ending balance	$	10,047	$	11,784

In conjunction with issuance of the debentures, the Company issued compensation options to the underwriters for 129,808 shares of the Company at an exercise price of C$5.20 for a period of two years from the closing of the transaction. The fair value of the options has been valued at $1.02 per option for a total of $133,000 using the Black-Scholes pricing model.

Compensation options activity for the year ended September 30, 2021 and six months ended March 31, 2022 is provided below:

	Number	Weighted
	(000s)	average exercise price
Balance September 30, 2020	130	C$	5.20
Exercised	(130)		5.20
Balance March 31, 2021	—	C$	—
Balance September 30, 2021	—	C$	—
Exercised	—		—
Balance March 31, 2022	—	C$	—

Equipment Loans

The Company is offered financing arrangements from the Company’s suppliers and the suppliers’ designated financial institutions, under which payments for certain invoices or products can be financed and paid over an extended period. The financial institution pays the supplier when the original invoice becomes due, and the Company pays the third-party financial institution over a period of time. In some cases, the supplier accepts a discounted amount from the financial institution and the Company repays the financial institution the face amount of the invoice with no stated interest, in twelve

Page   22

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

equal monthly installments. The Company uses a 6% incremental borrowing rate to impute interest on these arrangements. In other cases, the supplier receives the full invoice price and Company pays a stated interest rate to the financial institution, ranging from 5.6% to 8.0%, with the terms of the financing ranging from 12 to 48 months. There are no covenants with the loans and the carrying value of the equipment that is pledged as security against the loans is $9,587,000 and $6,939,000 as of March 31, 2022 and September 30, 2021, respectively.

Following is the activity in equipment loans for the six months ended March 31, 2022 and 2021:

	Six months ended		Six months ended
	March 31, 2022		March 31, 2021
Beginning balance	$	7,384	$	4,750
Additions:
Acquisitions		—		3,005
Operations		4,381		3,936
Interest expense		181		182
Repayments		(6,355)		(4,739)
Ending balance		5,591		7,134
Current portion, less than 1 year		5,351		6,197
Long-term portion, due between 1 and 5 years	$	240	$	937

Leases Liabilities

The Company enters into leases for real estate and vehicles. Real estate leases are valued at the net present value of the future lease payments at an 8% incremental borrowing rate. Vehicle leases are recorded at rate implicit in the lease based on the current value and the estimated residual value of the vehicle, equating to rates ranging from 1.7% to 10.4%.

Below is the movement in lease liabilities for the six months ended March 31, 2022 and 2021:

			Real
	Vehicles		estate		Total
Balance September 30, 2020	$	1,627	$	3,640	$	5,267
Additions during the period:
Acquisitions		—		452		452
Operations		157		1,171		1,328
Interest		74		178		252
Repayments		(325)		(1,172)		(1,497)
Balance March 31, 2021	$	1,533	$	4,269	$	5,802
Balance September 30, 2021	$	2,414	$	5,351	$	7,765
Additions during the period:
Acquisitions		571		1,443		2,014
Operations		241		517		758
Interest		103		244		347
Change in lease terms		—		(78)		(78)
Repayments		(732)		(1,304)		(2,036)
Balance March 31, 2022	$	2,597	$	6,173	$	8,770

Page   23

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Future payments pursuant to lease liabilities are as follows:

	As at		As at
	March 31, 2022		September 30, 2021
Less than 1 year	$	3,575	$	3,491
Between 1 and 5 years		6,321		5,367
More than five years		287		38
Gross lease payments		10,183		8,896
Less: finance charges		(1,413)		(1,131)
Net lease liabilities	$	8,770	$	7,765

SBA Loan

In conjunction with an acquisition on February 1, 2021, the Company assumed an SBA Loan. The face amount of the loan is $150,000 and bears interest at stated interest rate of 3.75%. Due to the below-market interest rate, the Company valued the loan at the net present value of the payments using its incremental borrowing rate of 6%, resulting in a fair value on the acquisition date of $122,000. The loan is payable in 360 monthly installments of $731 beginning June 2021 and is secured by substantially all the assets of the acquired subsidiary.

Following is the activity in the SBA Loan for the six months ended March 31, 2022:

	Six months ended		Six months ended
	March 31, 2022		March 31, 2021
Beginning balance	$	121	$	—
Additions:
Interest expense		4		—
Repayments		(4)		—
Ending balance	$	121	$	—

Revolving Credit Facility

In September 2020, the Company entered a $20,000,000 asset-based revolving credit facility with a US bank. The facility matures in September 2024 and bears interest at floating rate of LIBOR plus 2.0% to 2.5%, with a LIBOR floor of 0.5% and has an unused commitment fee of 0.3%. The Company has no borrowings from this facility as at March 31, 2022 and September 30, 2021. Interest expense for the facility for the three and six months ended March 31, 2022 totaled $13,000 and $25,000, respectively, and primarily related to the unused commitment fee. The facility is subject to a borrowing base based on a percentage of eligible accounts receivable and expected future revenues from existing customer rentals. Issuance costs are recorded in “deferred financing costs” on the consolidated statements of financial position and are being amortized on a straight-line over the four-year term of the facility for a total of  $35,000 and $36,000 for the three months ended March 31, 2022 and 2021 and $70,000 and $70,000 for the six months ended March 31, 2022 and 2021, respectively.

12. Share capital

The Company considers its capital to be shareholders’ equity, which is comprised of capital stock, contributed surplus, shares to be issued, and accumulated deficit, in the amount of $65,710,000 and $58,622,000 as at March 31, 2022 and September 30, 2021, respectively.

Page   24

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

The Company raises capital, as necessary, to meet its needs and take advantage of perceived opportunities and, therefore, does not have a numeric target for its capital structure. Funds are primarily secured through equity, and long-term debt, including debentures, equipment loans and leases.

Management reviews its capital management approach on an ongoing basis and believes that given the relative size of the Company, this approach is reasonable. The Company invests all capital that is surplus to its immediate operational needs in short-term, liquid and highly rated financial instruments, such as cash, and short-term guarantee deposits, held with major Canadian and US financial institutions.

Authorized share capital

The Company’s authorized share capital consists of an unlimited number of common shares and an unlimited number of preferred shares issuable in series. The preferred shares issuable in series will have the rights, privileges, restrictions, and conditions assigned to the series upon the Board of Directors approving their issuance.

Issued share capital

The Company has only one class of common stock outstanding. Effective May 13, 2021, the Company consolidated its issued and outstanding common shares based on one post-consolidation common share for every four pre-consolidation common shares. Unless otherwise stated, the share, options and warrants along with corresponding exercise prices and per-share amounts have been restated retrospectively to reflect this share consolidation.

Common shares are classified as equity. Incremental costs directly attributable to the issuance of common shares are recognized as a reduction of equity, net of any income tax effects. Accumulated other comprehensive income represents items such as cumulative, foreign currency translation adjustments, the change in equity arising from unrealized gains and losses from financial instruments designated as available-for-sale, and changes in fair value of derivatives designated as cash flow hedges and is presented as a separate component of shareholders’ equity on the consolidated statements of financial position. The Company does not currently participate in hedging activities.

Bought deals and private placements

On June 29, 2020, the Company completed a bought deal public offering, a concurrent brokered private placement, and a non-brokered private placement to the Company’s Chief Executive Officer and a director of the Company, for a total of 27,678,826 pre-consolidation units, comprising 27,678,826 pre-consolidation shares, or 6,919,706 post-consolidation shares, and 27,678,826 warrants. Each unit issued was issued at a pre-consolidation price of C$1.15 for total gross proceeds of C$31,831,000 ($23,462,000) and consisted of one pre-consolidation common share and one-half of one common share purchase warrant (each whole warrant, a “Warrant”) for a total of 13,839,413 Warrants. The fair value of the Warrants was recorded as a liability and valued at June 29, 2020, at $0.12, for a total of $1,628,000, using the Black-Scholes pricing model, as described in Note 10. Upon exercise, the warrant liability was derecognized and transferred to equity.

Following the consolidation, for every four Warrants exercised in accordance with its terms, the holder will be entitled to acquire one common share for a period of 12 months following the closing at an exercise price of C$6.40 per share. During the year ended September 30, 2021, 13,559,300 Warrants for 3,389,825 common shares were exercised, for total proceeds of C$21,695,000, or $17,473,000.

Page   25

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Warrant activity for the six months ended March 31, 2022 and 2021 is provided below:

	Number	Weighted
	(000s)	average exercise price
Balance September 30, 2020	3,460	C$	6.40
Exercised	(969)		6.40
Balance March 31, 2021	2,491	C$	6.40
Balance September 30, 2021	—	C$	—
Exercised	—		—
Balance March 31, 2022	—	C$	—

Issuance costs of $2,855,000 in cash were incurred in prior periods. These costs were allocated ratably between common shares and warrant liability, with $2,645,000 recorded as a reduction of equity and $210,000 recorded as “Transaction costs on issuance of financial liabilities.” The Company issued compensation options to the underwriter for 367,826 shares at the issue price of C$4.60 for a period of two years from the closing of the offering. The fair value of the options has been valued at $1.24 for a total of $456,000.

Activity for the June 2020 compensation options for the six months ended March 31, 2022 and 2021 is as follows:

	Number	Weighted
	(000s)	average exercise price
Balance September 30, 2020	353	C$	4.60
Exercised	(133)		4.60
Balance March 31, 2021	220	C$	4.60
Balance September 30, 2021	115	C$	4.60
Exercised	—		—
Balance March 31, 2022	115	C$	4.60

Shares to be issued

In conjunction with an acquisition on October 23, 2020, a portion of the purchase price is payable in shares. $2,376,000 (629,000 shares at a fair value of $3.78 per share) was issued in January 2021, and $657,000 (246,000 shares at a fair value of $2.67) is expected to be issued in August 2022. The fair value of the stock has been discounted by 15% and 25%, respectively, using the Black-Scholes pricing model for put options, to reflect the inability to sell the stock for a period and for the time between the date of the acquisition and the dates the stock is to be issued.

Stock options and grants

The Company has a stock option plan, which it uses for grants to directors, officers, employees, and consultants. Options granted under the plan are non-assignable and may be granted for a term not exceeding ten years. Stock options having varying vesting periods and the options granted during the six months ended March 31, 2022 vest quarterly over quarterly over eight or twelve quarters.

Page   26

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

A summary of stock options is provided below:

		Weighted
	Number of options (000’s)	average exercise price
Balance September 30, 2020	2,627	C$	1.99
Granted	50		6.16
Exercised when weighted average share price was C$6.81	(20)		3.34
Expired	(58)		3.90
Forfeited	(1)		1.50
Balance March 31, 2021	2,598	C$	1.81
Balance September 30, 2021	3,786	C$	4.15
Issued	175		6.75
Exercised when weighted average share price was C$6.57	(21)		1.50
Expired	(13)		5.89
Forfeited	(95)		8.48
Balance March 31, 2022	3,832	C$	4.16

At March 31, 2022, the Company had 4,514,480 vested stock options with a weighted average exercise price of C$4.90.  

The fair value of the stock options granted used the Black-Scholes option pricing model calculated using the following assumptions:

	Six months Ended	Six months Ended
	March 31,	March 31,
	2022	2021
Share price at grant date	C$6.75	C$6.16
Risk-free interest rate	1.78%	0.92%
Expected volatility based on most recent 3 years' trading prices	55.67%	55.08%
Expected life of option	10 years	4 years
Expected dividend yield	Nil	Nil

Restricted stock units

On May 20, 2021, there were 953,750 restricted stock units granted to officers and directors. Each unit represents the right to ‎receive one common share, and vests over a period of two years from the grant date at the rate of one-eighth every three months commencing three months after the grant date, with 340,156 restricted stock units being vested as of March 31, 2022. The shares are to be issued in the calendar year subsequent to the calendar year in which the units vested, or earlier upon a Change in Control, as defined.

On February 1, 2022, there were 81,340  restricted stock units granted to officers. Each unit represents the right to ‎receive one common share, and vests in four installments on the last day of each calendar quarter of 2022, resulting in 20,335 restricted stock units being vested as of March 31, 2022. The shares are to be issued on December 31, 2022.

The fair value of the units on the date of grant are discounted to reflect the difference between the vesting dates and the issuance dates, resulting in compensation expense of C$7,586,000 ($6,285,000) and C$529,000 ($417,000) to be expensed over the vesting period with an increase to contributed surplus.

Page   27

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

A summary of restricted stock units:

		Weighted
	Number of units (000’s)	average grant-date price
Balance September 30, 2020	—	C$	—
Granted	—		—
Balance March 31, 2021	—	C$	—
Balance September 30, 2021	954	C$	8.48
Forfeited	(140)		8.48
Issued	81		6.83
Balance March 31, 2022	895	C$	8.33

Stock-based compensation

The Company accounts for stock-based compensation using the fair value method as prescribed by IFRS 2. Under this method, the fair value of stock options and restricted stock units at the date of grant is expensed over the vesting period and the offsetting credit is recorded as an increase in contributed surplus. Awards with graded vesting are considered to be multiple awards for fair value measurement. An estimate of the number of awards that are expected to be forfeited is also made at the time of grant and revised periodically if actual forfeitures differ from those estimates.

For the three and six months ended March 31, 2022 and 2021, the Company recorded stock-based compensation expense as follows:

	Three Months		Three Months		Six Months		Six Months
	Ended March 31,		Ended March 31,		Ended March 31,		Ended March 31,
	2022		2021		2022		2021
Restricted stock units	$	530	$	—	$	1,650	$	—
Stock options		631		12		1,621		27
Stock-based compensation expense	$	1,161	$	12	$	3,271	$	27

13. Commitments and contingencies

Commitments

The Company leases certain facilities with terms of less than a year that are classified as operating leases. Future payments pursuant to these leases are $18,000 and $28,000 as of March 31, 2022 and September 30, 2021, respectively, which are all due in less than one year.

Contingencies

The Company was in litigation with Lightwater Long Short Fund (“Lightwater”) during the years ended September 30, 2020 and 2021. The litigation was settled in December 2021 for approximately $150,000, which was recorded in operating expenses for the year ended September 30, 2021.

From time to time, the Company is involved in various legal proceedings arising from the ordinary course of business. None of the matters in which the Company is currently involved, either individually, or in the aggregate, is expected to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

Page   28

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

14. Operating expenses

	Three months		Three months		Six months		Six months
	ended March 31,		ended March 31,		ended March 31,		ended March 31,
	2022		2021		2022		2021
Payroll and employee benefits	$	9,965	$	6,997	$	18,583	$	13,435
Facilities		897		526		1,497		1,017
Bad debt expense		3,167		2,209		5,579		4,289
Billing		1,458		893		2,846		1,609
Professional fees		1,335		559		1,970		1,000
Marketing costs		277		215		614		343
Outbound freight		483		307		916		583
All other		1,841		1,028		3,244		1,987
Total operating expenses	$	19,423	$	12,734	$	35,249	$	24,263

15. Income (loss) per share

Income (loss) per common share is calculated using the weighted average number of common shares outstanding during the period. Diluted loss per share amounts are calculated giving effect to the potential dilution that would occur from the incremental shares issued if in-the-money securities or other contracts to issue common shares were exercised or converted to common shares by assuming the proceeds received from the exercise of stock options and warrants are used to purchase common shares at the prevailing market price. For periods with a net loss, the potential dilutive shares were excluded because their effect is anti-dilutive.

The following reflects the earnings and share data used in the basic and diluted income (loss) per share computations:

	Three months		Three months		Six months		Six months
	ended March 31,		ended March 31,		ended March 31,		ended March 31,
	2022		2021		2022		2021
Net income (loss) from continuing operations	$	5,036	$	(12,490)	$	2,905	$	(11,125)
Basic weighted average number of shares		33,438		29,294		33,393		28,803
Diluted weighted average number of shares		35,577		29,294		35,700		28,803
Total - Basic	$	0.15	$	(0.43)	$	0.09	$	(0.39)
Total - Diluted	$	0.14	$	(0.43)	$	0.08	$	(0.39)

The effect of instruments exercisable or convertible to common shares for the three and six months ended March 31, 2021 were excluded from the calculation of diluted loss per share because their effect is anti-dilutive.

16. Related party transactions

The Company has six market rate leases for office, warehouse, and retail space with a rental Company affiliated with the Company’s Chief Executive Officer, the majority of which were entered into in 2015. The leases have a combined area of 74,520 square feet. Lease payments under these leases are approximately $52,000 per month, plus taxes, utilities, and maintenance.

Page   29

Quipt Home Medical Corp. (Formerly, Protech Home Medical Corp.)

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(UNAUDITED) MARCH 31, 2022 AND 2021

(Tabular dollar amounts expressed in thousands of US Dollars, except per share amounts)

Expense for Board of Directors’ fees were $88,000 and $53,000 for the three months ended March 31, 2022 and 2021, respectively. Fees were $128,000 and $98,000 for the six months ended March 31, 2022 and 2021, respectively. Stock-based compensation for the Board of Directors was $(341,000) and $17,000 for the three months ended March 31, 2022 and 2021, respectively, and $237,000 and $21,000 for the six months ended March 31, 2022 and 2021, respectively.

Key management personnel also participate in the Company’s share option program (see Note 12). The Company recorded compensation to key management personnel the following:

	Three months		Three months		Six months		Six months
	ended March 31,		ended March 31,		ended March 31,		ended March 31,
	2022		2021		2022		2021
Salaries and benefits	$	244	$	261	$	511	$	488
Stock-based compensation		572		17		1,668		21
Total	$	816	$	278	$	2,179	$	509

17. Subsequent event

On April 1, 2022, the Company, through one of its indirect wholly-owned subsidiaries, entered into a purchase agreement to acquire Good Night Medical, LLC and its subsidiaries, (“Good Night”), an Ohio-based company. The purchase price was $6,105,000, of which $4,361,000 was paid in cash at closing, a $700,000 holdback payable on the twelve-month anniversary of the acquisition, and a PPP loan holdback of $1,044,000 for Good Night’s government grant not yet forgiven. The Company expects to pay either the sellers of Good Night or the government. The holdbacks are subject to normal post-closing adjustments, if any. The Company expensed $13,000 of professional fees in conjunction with the acquisition.

Pro forma six-month revenues and net income of Good Night had the acquisition occurred on October 1, 2021 are approximately $5,300,000 and $280,000, respectively. The Company is in the process of gathering the information required to allocate the purchase price to the acquired tangible and intangible assets and assumed liabilities as of the acquisition date.

Page   30

EX-99.2

Exhibit 99.2

’sDiscussion and Analysis
2nd Quarter       2022
Management’s Discussion and Analysis For the Three and Six Months Ended March 31, 2022	Quipt Home Medical Corp.

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

The following Management’s Discussion and Analysis (“MD&A”) of the financial condition and results of operations of Quipt Home Medical Corp., formerly Protech Home Medical Corp., and its subsidiaries (“Quipt” or the “Company”), prepared as of May 16, 2022 and should be read in conjunction with the consolidated financial statements For the three and six months ended March 31, 2022, including the notes therein. The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Unless otherwise specified, all financial data is presented in US dollars. The words “we”, “our”, “us”, “Company”, and “Quipt” refer to Quipt Home Medical Corp. and/or the management and employees of the Company.

Additional information relevant to the Company is available for review on SEDAR at www.sedar.com.

Table of Contents

Page 2	Caution Regarding Forward-Looking Statements
Page 3	Selected Quarterly Information
Page 3	About Our Business and Operating Results
Page 8	Financial Position
Page 12	Accounting and Disclosure Matters
Page 14	Financial Instruments and Risk Management
Page 15	Risk Factors

Page | 1

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

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, 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. Readers are cautioned regarding statements discussing profitability; growth strategies; anticipated trends in our industry; our future financing plans; and our anticipated needs for working capital. Actual events or results may differ materially from those discussed in forward-looking statements. There can be no assurance that the forward-looking statements 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 FORWARD-LOOKING INFORMATION CONTAINED IN THIS MD&A PRESENTS THE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS MD&A AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, THE COMPANY DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED BY APPLICABLE SECURITIES LEGISLATION

SECOND QUARTER AND YEAR-TO-DATE 2022 HIGHLIGHTS

● Increased revenues for the six months ended March 31, 2022 to $63 million, or 34.2% from the six months ended March 31, 2021.

● Completed four acquisitions during the six months ended March 31, 2022 and one subsequent to March 31, 2022.

● Increased the number of equipment set-ups to 239,438 for the six months ended March 31, 2022 from 160,294 in the prior year period, an increase of 49.4%.

● Increased the number of respiratory resupply set-ups to 101,850 for the six months ended March 31, 2022 from 70,698 in the prior year period, an increase of 44.1%.

● Generated Adjusted EBITDA of $13.1 million, a 23.5% increase from the prior year period, and represented 20.7% of revenue.

Page | 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

SELECTED QUARTERLY INFORMATION (UNAUDITED)

	For the three		For the three		For the six		For the six
	months		months		months		months
	ended March 31,		ended March 31,		ended March 31,		ended March 31,
	2022		2021		2022		2021
Number of patients serviced		78,273		56,972		115,299		85,228
Number of equipment set-ups or deliveries		118,878		83,606		239,438		160,294
Respiratory resupply set-ups or deliveries		50,713		35,702		101,850		70,698
Adjusted EBITDA(1)	$	7,047	$	5,386	$	13,051	$	10,567

(1) Refer to page three for definition of Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”)

The words “we”, “our”, “us”, “Company”, and “Quipt” refer to Quipt Home Medical Corp. and/or the management and employees of the Company.

Reporting entity

The Company changed its name from Protech Home Medical Corp. to Quipt Home Medical Corp. on May 13, 2021. The Company’s shares are traded on the TSX Venture Exchange under the symbol QIPT. Effective May 13, 2021, the Company consolidated its issued and outstanding common shares based on one post-consolidation common share for every four pre-consolidation common shares. The change in name and share consolidation were completed in anticipation of the Company’s application to list its common shares on the NASDAQ Capital Market (“NASDAQ”). On May 27, 2021, the stock began trading on NASDAQ in the United States under the symbol QIPT. Effective May 13, 2021, Unless otherwise stated, the share, options and warrants along with corresponding exercise prices and per-share amounts have been restated retrospectively to reflect this share consolidation.

ABOUT OUR BUSINESS

Quipt business objective

The explosive growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians, and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs. Quipt fills this need by delivering a growing number of specialized products and services to achieve these goals. Quipt seeks to provide an ever-expanding line of products and services over larger geographic regions within the United States using several growth strategies.

Future outlook

Quipt expects to generate net profit and positive Adjusted EBITDA, as defined herein. Our top priority continues to be the generation of operational net profit, positive cash flow, and growth in EBITDA in fiscal year 2022 and beyond. As we continue to expand in our existing markets, we plan to leverage our business platforms to enter new markets. As we continue to grow and achieve scale, the increasing cash generated from operations will be used to market our service and to gain market share. Our continued integration and rationalization, as well as our acquisitions, have given us a focus and path towards profitability at each business unit.

Page | 3

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Going forward, we seek to find ways to continue to grow our customer base and penetrate these markets, while continuing to streamline our operational platform and generate positive cash flow and operational profits. We will continue to improve on operational efficiencies and call center management as they are key execution points in order to maintain our healthy gross margin while growing revenues via the cross selling of services to existing and acquired patients.

OPERATING RESULTS

Accounting policies and estimates

The consolidated financial statements for the three and six months ended March 31, 2022 and 2021, are prepared under International Financial Reporting Standards (“IFRS”) issued by the governing body of the International Accounting Standards Board (“IASB”). The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses for the period of consolidated financial statements.

IFRS accounting treatment

Management does not rely upon non-cash IFRS accounting treatment of certain items such as impairment of goodwill and intangible assets, changes in the fair value of financial derivatives, stock-based compensation and amortization of intangible assets when planning, monitoring, and evaluating the Company’s performance or in making financial decisions.

Non-IFRS measures

Throughout this MD&A, references are made to several measures which are believed to be meaningful in the assessment of the Company’s performance. These metrics are non-standard measures under IFRS and may not be identical to similarly titled measures reported by other companies. Also, in the future, we may disclose different non-IFRS financial measures in order to help our investors more meaningfully evaluate and compare our future results of operations to our previously reported results of operations. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results as determined in accordance with IFRS. The primary purpose of these non-IFRS measures is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash or uncontrollable items on the Company’s operating performance.

EBITDA and Adjusted EBITDA

In calculating EBITDA and Adjusted EBITDA, certain items (mostly non-cash) are excluded from net income (loss), including interest, income taxes, depreciation, amortization, change in fair value of derivative financial liabilities, and stock-based compensation. Set forth below are descriptions of the financial items that have been excluded from net income or loss to calculate EBITDA and Adjusted EBITDA and the material limitations associated with using these non-IFRS financial measures as compared to net income or loss.

● Depreciation and amortization expense may be useful for investors to consider because they generally represent the wear and tear on our property and equipment used in our operations and amortization of intangibles valued in acquisitions. However, we do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating costs.

● The amount of interest expense we incur or interest income we generate may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense to be a representative component of the day-to-day operating performance of our business.

Page | 4

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

● The change in fair value of derivative financial liabilities is the change in value of the debenture, warrants, and purchase price payable in common shares, and these changes are non-cash.

● Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes and may reduce the amount of funds otherwise available for use. However, we do not consider the amount of income tax expense to be a representative component of the day-to-day operating performance of our business.

● Stock-based compensation may be useful for investors to consider because it is an estimate of the non-cash component of compensation received by the Company’s directors, officers, employees, and consultants. However, stock-based compensation is being excluded from the Company’s operating expenses because the decisions which gave rise to these expenses were not made to increase revenue in a particular period but were made for the Company’s long-term benefit over multiple periods. While strategic decisions, such as those to issue stock-based awards are made to further the Company’s long-term strategic objectives and impact the Company’s earnings under IFRS, these items affect multiple periods and management is not able to change or affect these items within any period.

● The amount of acquisition-related costs we incur, including for both completed and abandoned acquisitions may be useful for investors to consider and results in current cash outflows. However, we do not consider the amount to be a representative component of the day-to-day operating performance of our business.

● Other income related to CARES Act government grant programs may be useful for investors to consider as it resulted from cash inflows. However, we do not consider it to be a representative component of the day-to-day operating performance of our business, since it is non-recurring.

Management uses both IFRS and non-IFRS measures when planning, monitoring, and evaluating the Company’s performance.

The following table shows the Company’s IFRS measures reconciled to EBITDA and Adjusted EBITDA (non-IFRS measures) for the indicated periods.

	Three		Three		Six		Six
	months		months		months		months
	ended March		ended March		ended March		ended March
	31, 2022		31, 2021		31, 2022		31, 2021
Net income (loss)	$	5,036	$	(12,490)	$	2,905	$	(11,125)
Add back:
Depreciation and amortization		5,459		3,940		10,473		7,621
Interest expense, net		487		513		986		999
Provision (benefit) for income taxes		155		—		303		(1,407)
EBITDA		11,137		(8,037)		14,667		(3,912)
Stock-based compensation		1,161		12		3,271		27
Acquisition-related costs		237		16		299		72
Gain (loss) on foreign currency transactions		85		98		126		100
Other income from government grant		(4,254)		—		(4,254)		—
Change in fair value of debentures and warrants		(1,319)		13,297		(1,058)		14,280
Adjusted EBITDA	$	7,047	$	5,386	$	13,051	$	10,567

Page | 5

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

The following is a summary of the Company’s unaudited operating results as recorded in accordance with IFRS.

	(UNAUDITED)				(UNAUDITED)
	Three months		Three months		Six months		Six months
	ended March 31,		ended March 31,		ended March 31,		ended March 31,
	2022		2021		2022		2021
Revenues	$	33,553	$	24,240	$	63,077	$	46,995
Inventory sold		7,354		6,122		15,013		12,194
Operating expenses		19,423		12,734		35,249		24,263
Depreciation		4,992		3,603		9,558		6,969
Amortization of intangible assets		467		337		915		652
Stock-based compensation		1,161		12		3,271		27
Acquisition-related costs		4		16		66		72
Gain on disposals of property and equipment		(38)		(2)		(3)		(29)
Interest expense, net		487		513		986		999
Other income from governement grant		(4,254)		—		(4,254)		—
(Gain) loss on foreign currency transactions		85		98		126		100
Change in fair value of debentures and warrants		(1,319)		13,297		(1,058)		14,280
Provision (benefit) for income taxes		155		—		303		(1,407)
Net income (loss)	$	5,036	$	(12,490)	$	2,905	$	(11,125)
Income (loss) per share
Basic	$	0.15	$	(0.43)	$	0.09	$	(0.39)
Diluted	$	0.14	$	(0.43)	$	0.08	$	(0.39)

Revenue

For the three months ended March 31, 2022, revenue totaled $33,553,000, an increase of $9,313,000, or 38.4%, from the same period in 2021. This increase is mostly due to the acquisitions during fiscal 2021 and during the first six months of fiscal year 2022, which represents $7,569,000 of the increase with the remainder being from organic growth.

For the six months ended March 31, 2022, revenue totaled $63,077,000, an increase of $16,082,000, or 34.2%, from the same period in 2021. This increase is mostly due to the acquisitions during fiscal 2021 and during the first six months of fiscal year 2022 of which represents $14,961,000 of the increase, with the remainder being from organic growth.

Inventory sold

For the three months ended March 31, 2022, inventory sold totaled $7,354,000 as compared to $6,122,000 for the three months ended March 31, 2021. The increase in dollars was due to the growth in revenues. The improvement as a percent of revenues was due to better inventory utilization.

For the six months ended March 31, 2022, inventory sold totaled $15,013,000 as compared to $12,194,000 for the six months ended March 31, 2021. The increase in dollars was due to the growth in revenues. The improvement as a percent of revenues was due to better inventory utilization.

Page | 6

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Operating expenses

For the three months ended March 31, 2022, operating expenses were $19,423,000, an increase of $6,689,000 from $12,734,000 for the three months ended March 31, 2021. Acquisitions contributed approximately $4,152,000 of the increase. Remaining increases relate to costs associated with Company’s Nasdaq listing in the U.S., and investments to support the growth of the resupply portion of the Company’s business.

For the six months ended March 31, 2022, operating expenses were $35,249,000, an increase of $10,986,000 from $24,263,000 for the six months ended March 31, 2021. Acquisitions contributed approximately $7,231,000 of the increase. Remaining increases relate to costs associated with Company’s Nasdaq listing in the U.S., and investments to support the growth of the resupply portion of the Company’s business.

Depreciation expense

Depreciation expense increased by $1,389,000 to $4,992,000 for the three months ended March 31, 2022. This increase is due to the acquisitions and other property and equipment additions during the year ended September 30, 2021 and the six months ended March 31, 2022.

Depreciation expense increased by $2,589,000 to $9,558,000 for the six months ended March 31, 2022. This increase is due to the acquisitions and other property and equipment additions during the year ended September 30, 2021 and the six months ended March 31, 2022.

Stock-based compensation

Stock-based compensation increased to approximately $1,161,000 and $3,271,000 for the three and six months ended March 31, 2022, respectively, due to the grants of 953,750 restricted stock units and 1,396,000 stock options in May 2021 and the 81,340 restricted stock units in February 2022.

Interest expense

Total interest expense for the three months ended March 31, 2022 decreased by $26,000 to $487,000 in the three months ended March 31, 2022 from $513,000 for the three months ended March 31, 2021.

Total interest expense for the six months ended March 31, 2022 decreased by $13,000 to $986,000 in the six months ended March 31, 2022 from $999,000 for the six months ended March 31, 2021.

Change in fair value of derivative financial liabilities

The Company has two financial liabilities that are recorded at fair value through profit or loss. The debenture issued during 2019 is valued at fair value using the current trading price. The change in fair value for the debenture was a gain of $1,319,000 and a loss $7,254,000 for the three months ended March 31, 2022 and 2021, respectively. Warrants issued with the June 2020 bought deal are valued using the Black-Scholes pricing model, which resulted in a loss of $6,043,000 for the three months ended March 31, 2021. The Warrants were exercised or expired on June 29, 2021, and therefore, there is no impact on the three months ended March 31, 2022.

The debenture issued during 2019 is valued at fair value using the current trading price. The change in fair value for the debenture was a gain of $1,058,000 and a loss $7,889,000 for the six months ended March 31, 2022 and 2021, respectively. Warrants issued with the June 2020 bought deal are valued using the Black-Scholes pricing model, which resulted in a

Page | 7

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

loss of $6,391,000 for the six months ended March 31, 2021. The Warrants were exercised or expired on June 29, 2021, and therefore, there is no impact on the six months ended March 31, 2022.

Provision (benefit) for income taxes

For the three months ended March 31, 2022, the provision for income taxes was $155,000 for state and local taxes. For the six months ended March 31, 2022, the provision for income taxes was $303,000 for state and local taxes. For the six months ended March 31, 2021, the deferred tax liability arising from a purchase price allocation of an acquisition of $1,407,000 was offset by the deferred tax asset from tax loss carryforwards and recorded as recovery of income taxes.

FINANCIAL POSITION (UNAUDITED)

	As at		As at
	March 31, 2022		September 30, 2021
Cash	$	17,394	$	34,612
Accounts receivable, inventory and prepaid assets		26,556		22,621
Property and equipment		26,190		23,506
Other assets		40,386		27,834
Total assets	$	110,526	$	108,573
Accounts payable and other current liabilities	$	28,515	$	32,737
Long term debt and other long-term liabilities		16,301		17,214
Total liabilities		44,816		49,951
Shareholders’ equity		65,710		58,622
Total liabilities and shareholders’ equity	$	110,526	$	108,573

Liquidity

Management considers liquid assets to consist of cash and its line of credit availability. As of March 31, 2022, the Company had cash on hand of $17,394,000 and line of credit availability of $20,000,000. The Company’s approach in managing liquidity is to ensure, to the extent possible, that it will have enough liquidity to meet its liabilities when due by continuously monitoring actual and budgeted cash flows and monitoring financial market conditions for signs of weakness.

As of March 31, 2022, the Company faces no material liquidity risk and can meet all its current financial obligations as they become due and payable. The Company has $28,515,000 of liabilities that are due within one year but has $43,950,000 of current assets and $20,000,000 of availability under the revolving credit facility to meet those obligations.

Capital management

The Company considers its capital to be shareholders’ equity, which is comprised of share capital, contributed surplus, shares to be issued, and accumulated deficit, which totaled $65,710,000 at March 31, 2022, along with long-term debt, which totaled $16,301,000 at March 31, 2022.

The Company raises capital, as necessary, to meet its needs and take advantage of perceived opportunities and, therefore, does not have a numeric target for its capital structure. Funds are primarily secured through equity capital, convertible debentures raised by way of private placements, and debt instruments.

Page | 8

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

On June 29, 2020, the Company completed a bought deal public offering, a concurrent brokered private placement, and a non-brokered private placement to the Company’s Chief Executive Officer and a director of the Company, for a total of 27,678,826 units. Each unit issued was issued at a price of C$1.15 for total gross proceeds of C$31,831,000 and consisted of one common share and one-half of one common share purchase warrant (each whole warrant, a “Warrant”). The fair value of the Warrants is recorded as a liability and valued using the Black-Scholes pricing model. Upon exercise, the warrant liability was derecognized and transferred to equity. The unexercised Warrants were derecognized and recorded in the caption “Change in fair value of derivative financial liabilities” upon their expiration on June 29, 2021.

Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

The Company invests all capital that is surplus to its immediate operational needs in short-term, liquid, and highly rated financial instruments, such as cash and short-term guarantee deposits, held with major Canadian and US financial institutions.

The Company had the following equity instruments outstanding at March 31, 2022 and September 30, 2021:

(UNAUDITED)

	As at	As at
	March 31, 2022	September 30, 2021
	(000’s)	(000’s)
Common shares	33,531	33,350
Options	3,832	3,786
Restricted stock units	895	954
Compensation options	115	115

Financing

Historically and currently, the Company has financed its operations primarily from cash flow from operations, equipment loans, debentures, leases, equity financing, and through the issuance of shares to acquire businesses.

Debentures

On March 7, 2019, the Company issued C$15,000,000 in 8.0% Convertible Unsecured Debentures due March 7, 2024, with interest payable semi-annually on June 30 and December 31. Each C$1,000 ($807) debenture is convertible at the option of the holder into 192.31 common shares. As of September 30, 2021, C$4,037,000 of debentures had been converted into common shares, leaving C$10,959,000 ($8,601,000) of face value debentures remaining. During the six months ended March 31, 2022, C$834,000 of debentures were converted into common shares, leaving C$10,125,000 ($8,012,000) of face value of the debentures remaining. The fair value of the debentures on the dates of conversion totaled C$12,555,000, or $10,047,000. After three years from date of issuance, the Company can force conversion of the outstanding principal at a conversion price of C$5.20, if the daily volume weighted average price of the common shares exceeds C$6.48 per share for twenty consecutive trading days. The debenture agreement also allows for payment of cash in lieu of common shares upon exercise of conversion right by the holder, equivalent of the market price on the conversion date.

Equipment Loans

The Company is offered financing arrangements from the Company’s suppliers and the supplier’s designated financial institution, in which payments for certain invoices or products can be financed and paid over an extended period. The

Page | 9

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

financial institution pays the supplier when the original invoice becomes due, and the Company pays the third-party financial institution over a period of time. In some cases, the supplier accepts a discounted amount from the financial institution and the Company repays the financial institution the face amount of the invoice with no stated interest, in twelve equal monthly installments. The Company uses a 6% incremental borrowing rate to impute interest on these arrangements. In other cases, the supplier receives the full invoice price and Company pays a stated interest rate to the financial institution, ranging from 5.6% to 8.0%, with the terms of the financing ranging from 12 to 48 months. Future payments on these liabilities are as follows:

Less than 1 year	$	5,459
Between 1 and 5 years		254
Total	$	5,713

Lease Liabilities

The Company enters into leases for real estate and vehicles. Real estate leases are valued at the net present value of the future lease payments at an 8% incremental borrowing rate. Vehicle leases are recorded at an interest rate implicit in the lease based on the current value and the estimated residual value of the vehicle, equating to rates ranging from 1.7% to 10.4%. Future payments on these liabilities are as follows:

Less than 1 year	$	3,575
Between 1 and 5 years		6,321
More than 5 years		287
Total		10,183
Less: finance charges		(1,413)
Lease liabilities		8,770
Current portion of lease liabilities		3,010
Long-term portion of lease liabilities	$	5,760

Revolving Credit Facility

In September 2020, the Company entered a $20,000,000 asset-based revolving credit facility with a US bank. The facility matures in September 2024 and bears interest at floating rate of LIBOR plus 2.0% to 2.5%, with a LIBOR floor of 0.5% and has an unused commitment fee of 0.3%. The Company has no borrowings from this facility as at March 31, 2022 and September 30, 2021. Interest expense for the facility for the three and six months ended March 31, 2022 totaled $13,000 and $25,000, respectively, and primarily related to the unused commitment fee. The facility is subject to a borrowing base based on a percentage of eligible accounts receivable and expected future revenues from existing customer rentals. Issuance costs are recorded in “deferred financing costs” on the consolidated statements of financial position and are being amortized on a straight-line over the four-year term of the facility for a total of $35,000 and $70,000 for each of the three and six months ended March 31, 2022 and 2021, respectively.

Contingencies

The Company was in litigation with Lightwater Long Short Fund (“Lightwater”) during the years ended September 30, 2020 and 2021. The litigation was settled in December 2021 for approximately $150,000, which was recorded in operating expenses for the year ended September 30, 2021.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

From time to time, the Company is involved in various legal proceedings arising from the ordinary course of business. None of the matters in which the Company is currently involved, either individually, or in the aggregate, is expected to have a material adverse effect on the Company’s consolidated financial position, results of operations, or cash flows.

Quarterly operating results from continuing operations

	Quarter ended		Quarter ended		Quarter ended		Quarter ended
	Mar. 31, 2022		Dec. 31, 2021		Sep. 30, 2021		Jun. 30, 2021
Revenue	$	33,553	$	29,525	$	29,118	$	26,238
Net income (loss) from continuing operations		5,036		(2,131)		(1,379)		6,329
Net income (loss) per share – continuing operations		0.15		(0.06)		(0.02)		0.20
Total assets	$	110,526	$	107,376	$	108,573	$	106,542

	Quarter ended		Quarter ended		Quarter ended		Quarter ended
	Mar. 31, 2021		Dec. 31, 2020		Sep. 30, 2020		Jun. 30,2020
Revenue	$	24,240	$	22,755	$	19,641	$	18,572
Net income (loss) from continuing operations		(12,490)		1,366		(475)		(2,528)
Net income (loss) per share – continuing operations		(0.43)		0.05		(0.01)		(0.12)
Total assets	$	89,728	$	78,274	$	72,065	$	70,637

Results of operations for the healthcare services market in which the Company operates show little seasonality from quarter to quarter. The increase in revenues from the past year is primarily due to the Company’s acquisitions during the year ended September 30, 2021 and the six months ended March 31, 2022.

Related party transactions

The Company has six market rate leases for office, warehouse, and retail space with a rental Company affiliated with the Company’s Chief Executive Officer, the majority of which were entered into in 2015. The leases have a combined area of 74,520 square feet. Lease payments under these leases are approximately $52,000 per month, plus taxes, utilities, and maintenance.

Expense for Board of Directors’ fees were $88,000 and $53,000 for the three months ended March 31, 2022 and 2021, respectively. Fees were $128,000 and $98,000 for the six months ended March 31, 2022 and 2021, respectively. Stock-based compensation for the Board of Directors was $(341,000) and $17,000 for the three months ended March 31, 2022 and 2021, respectively, and $237,000 and $21,000 for the six months ended March 31, 2022 and 2021, respectively.

Key management personnel also participate in the Company’s share option program (see Note 12). The Company recorded compensation to key management personnel as follows:

	Three months		Three months		Six months		Six months
	ended		ended		ended		ended
	March 31, 2022		March 31, 2021		March 31, 2022		March 31, 2021
Salaries and benefits	$	244	$	261	$	511	$	488
Stock-based compensation		572		17		1,668		21
Total	$	816	$	278	$	2,179	$	509

Page | 11

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Off balance sheet arrangements

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

ACCOUNTING AND DISCLOSURE MATTERS

Financial reporting controls

The Company is required to certify the design and evaluation of its disclosure controls and procedures. The Company is not required to certify the design and effectiveness regarding internal controls over financial reporting. As of September 30, 2021, the Company has evaluated the design and effectiveness of its disclosure controls and procedures and determined them to be ineffective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized, and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. The Company has initiated  SOX compliance efforts and engaged outside consultants to assist in the evaluation of the design and effectiveness of the Company’s internal controls over financial reporting and to remediate the ineffective disclosure controls.

There were no substantive changes in the Company’s disclosure controls and procedures and internal controls over financial reporting during the period ended March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Company’s disclosure controls and procedures and internal controls over financial reporting.

Critical accounting estimates

The preparation of financial statements in conformity with IFRS requires management to make certain estimates, judgments, and assumptions concerning the future. The Company’s management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised.

Estimates where management has made subjective judgments and where there is significant risk of material adjustments to assets and liabilities in future accounting periods include fair value measurements for financial instruments and share-based transactions, useful lives and impairment of non-financial assets (property and equipment and intangible assets), provision for expected credit losses, fair value measurements for assets and liabilities acquired in business acquisition, and calculation of deferred taxes.

Revenue recognition

Revenues are billed to and collections are received from both third-party insurers and patients. Because of continuing changes in the health care industry and third-party reimbursement, the consideration receivable from these insurance companies is variable as these billings can be challenged by the payer. Therefore, the amount billed by the Company is reduced by an estimate of the amount that the Company believes is an allowable charge to be ultimately allowed by the insurance contract. The above estimate involves significant judgment including an analysis of past collections and historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting as required.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Valuation of accounts receivable

The measurement of expected credit losses considers information about past events and current conditions. Forward looking macro-economic factors are incorporated into the risk parameters, such as unemployment rates, inflation, and interest rates. Significant judgments are made in order to incorporate forward-looking information into the estimation of allowances and may result in changes to the provision from period to period which may significantly affect our results of operations.

The Company estimates that a certain portion of receivables from customers may not be collected and maintains a reserve for credit losses. The Company evaluates the net realizable value of accounts receivable as of the date of the consolidated statements of financial position. Specifically, the Company considers historical realization data, including current and historical cash collections, accounts receivable aging trends, other operating trends, and relevant business conditions. Because of continuing changes in the health care industry and third-party reimbursement, it is possible that the estimates could change, which could have a material impact on the operating results and cash flows. If circumstances related to certain customers change or actual results differ from expectations, our estimate of the recoverability of receivables could fluctuate from that provided for in our consolidated financial statements. A change in estimate could impact bad debt expense and accounts receivable.

Business combinations

In accordance with IFRS 3 – Business Combination (“IFRS 3”), a transaction is recorded as a business combination if the significant assets, liabilities, or activities in addition to property and related debt assumed constitute a business. A business is defined as an integrated set of activities and assets, capable of being conducted and managed for the purpose of providing a return, lower costs, or other economic benefits. Where there are no such integrated activities, the transaction is treated as an asset acquisition. The estimation of the fair value of the assets and liabilities acquired in a business acquisition is subject to judgement concerning estimating market values and predicting future events. These values are uncertain and can materially impact the carrying value of the acquired assets and the amount allocated to goodwill.

Lease liabilities

Estimate of lease term

When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it will extend the lease at the end of the lease contract or exercise an early termination option. As it is not reasonably certain that the extension or early termination options will be exercised, the Company determined that the term of its leases are the lesser of original lease term or the life of the leased asset. This significant estimate could affect future results if the Company extends the lease or exercises an early termination option.

Incremental borrowing rate

When the Company recognizes a lease, the future lease payments are discounted using the Company’s incremental borrowing rate. This significant estimate impacts the carrying amount of the lease liabilities and the interest expense recorded on the consolidated statement of loss and comprehensive loss.

Significant accounting judgments

The following are the critical judgments, apart from those involving estimations, that have been made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.

Page | 13

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Functional currency

The consolidated financial statements of the Company are presented in US dollars, which is the Company’s functional currency, determined using management’s judgment that the primary economic environment in which it will derive its revenue and expenses incurred to generate those revenues is the United States. Management has exercised judgment in selecting the functional currency of each of the entities that it consolidates based on the primary economic environment in which the entity operates and in reference to the various indicators including the currency that primarily influences or determines the selling prices of goods and services and the cost of production, including labor, material and other costs and the currency whose competitive forces and regulations mainly determine selling prices.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial instrument risk exposure

The Company’s activities expose it to a variety of financial risks: market risk (including price risk, currency risk and interest rate risk), credit risk and liquidity risk. These risks arise from the normal course of operations and all transactions are undertaken to support the Company’s ability to continue as a going concern. Risk management is carried out by management under policies approved by the Board of Directors. Management identifies and evaluates the financial risks in co-operation with the Company’s operating units. The Company’s overall risk management program seeks to minimize potential adverse effects on the Company’s financial performance.

Credit risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk are primarily cash and accounts receivable. Each subsidiary places its cash with one major financial institution. At times, the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation. Substantially all accounts receivables are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, directly from patients or for rebates due from manufacturers. Receivables generally are collected within industry norms for third-party payors and from manufacturers. The Company continuously monitors collections from its clients and maintains a reserve for credit losses based upon any specific payor collection issues that are identified and historical experience.

The Company recorded bad debt expense of $5,579,000 and $4,289,000 for the six months ended March 31, 2022, and 2021, respectively. As of March 31, 2022, no one customer represented more than 10% of outstanding accounts receivable. The Company does have more than 8% of receivables due from Medicare. As this is a federal health insurance program in the United States, there is nominal credit risk associated with these balances.

Currency risk

Currency risk is the risk that the Company will be subject to foreign currency fluctuations in satisfying obligations denominated in foreign currencies. All of the Company’s sales and inventory sold and most all of the Company’s operating expenses are in US dollars. The Company’s debentures, derivative warrant liability, purchase price payables in shares, and common shares are denominated in Canadian dollars. Cash is maintained in both US dollars and Canadian dollars. Consequently, the Company is exposed to foreign exchange fluctuations.

The Company’s objective in managing its foreign currency risk is to minimize its net exposures to foreign currency cash flows by holding most of its cash in US dollars. The Company monitors foreign currency exposures and from time to time

Page | 14

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

could authorize the use of derivative financial instruments such as forward foreign exchange contracts to economically hedge a portion of foreign currency fluctuations.

Based on the above net exposure at the six months ended March 31, 2022, depreciation, or appreciation of the US dollar against the Canadian dollar could result in a significant effect on net loss. The Company has not employed any foreign currency hedging programs.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach in managing liquidity risk is to ensure, to the extent possible, that it will have enough liquidity to meet its liabilities when due, under normal conditions by continuously monitoring actual and budgeted cash flows.

As of March 31, 2022, the Company faces no material liquidity risk and can meet all its current financial obligations as they become due and payable. The Company has $28,515,000 of fliabilities that are due within one year but has $43,950,000 of current assets and $20,000,000 of availability under its revolving credit facility to meet those obligations

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate risk is limited to potential decreases on the interest rate offered on cash held with US and Canadian financial institutions. The Company considers this risk to be immaterial. The interest on the Company’s debt is not subject to cash flow interest rate risk as these instruments bear interest at fixed rates. The Company’s revolving line of credit has a floating rate, but the Company does not borrow significant amounts on this line.

RISK FACTORS

While it is impossible to identify all such risk factors, factors that could cause actual results to differ materially from those estimated by us include:

Market Price of the Company’s shares

The Company’s shares are listed and posted for trading on the NASDAQ and the TSX Venture Exchange. Securities of small-cap and healthcare companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include macroeconomic developments in North America and globally, and market perceptions of the attractiveness of particular industries. The price of the Company’s shares is also likely to be significantly affected by short-term changes in cost of goods, or in financial condition or results of operations. Other factors unrelated to the performance of the Company that may have an effect on the price of the Company’s shares include the following: the extent of analytical coverage available to investors concerning the business of the Company may be limited if investment banks with research capabilities do not follow the Company’s securities; lessening in trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of the Company’s shares; the size of the Company’s public float may limit the ability of some institutions to invest in the Company’s securities; and a substantial decline in the price of the Company’s shares that persists for a significant period of time could cause the Company’s securities, if listed on an exchange, to be delisted from such exchange, further reducing market liquidity.

As a result of any of these factors, the market price of the Company’s shares at any given point in time may not accurately reflect the long-term value of the Company. Securities class-action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of

Page | 15

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Dilution

The Company will require additional funds in respect of the further development of the Company through acquisitions. If the Company raises funds by issuing additional equity securities, such financing will dilute the equity interests of its existing shareholders.

Future Sales of Shares by Existing Shareholders

Sales of the Company’s shares in the public markets, or the potential for such sales, could decrease the trading price of the Company’s shares and could impair The Company’s ability to raise capital through future sales of the Company’s shares. The Company may from time to time have previously issued securities at an effective price per share which will be lower than the market price of the Company’s shares. Accordingly, certain shareholders of the Company may have an investment profit in the Company’s shares that they may seek to liquidate.

Limited History of Operations

The Company has a limited history of operations. There can be no assurance that the business of the Company will be successful and generate, or maintain, any profit.

Reimbursement Rates May Decline / Competitive Bid

Reimbursement for services to be provided by the Company come primarily from Medicare and private health insurance companies. The reimbursement rates offered are outside the control of the Company. Reimbursement rates for much of the US health care market have been subject to continual reductions as health insurers and governmental entities attempt to control health care costs. The extent and timing of any reduction in reimbursement rates cannot be predicted by the Company.

Specifically, the Centers for Medicare & Medicaid Services (“CMS”) oversees a competitive bidding program covering durable medical equipment (“DME”), the process in which a Medicare supplier provides DME products to Medicare beneficiaries. It is possible that the Company may not be selected in some or all the Competitive Bidding Area (“CBA”) and/or product categories if and when the next competitive bidding process occurs. Non-selection for CBA and/or product category may result in loss of revenue and referral sources.

Reductions in reimbursement rates can have a material impact on the profitability of the Company’s operations. A reduction in reimbursement may be unrelated to any concurrent decline in the cost of operations, thereby resulting in reduced profitability. The Company’s costs of operations could increase, but the cost increases may not be passed on to customers because reimbursement rates are set without regard to the cost of service.

Dependence Upon Relationships with Key Suppliers

There are few manufacturers of equipment for certain of the Company’s products. This presents risks that suppliers may not be able to provide equipment to satisfy demand. Demand may outstrip supply, leading to equipment shortages. Conversely, incorrect demand forecasting could lead to excess inventory. If the Company fails to achieve certain volume of sales, prices of inventory may increase. The industry is subject to a high level of regulatory scrutiny, and government or manufacturer recalls could adversely affect the Company’s ability to achieve revenue targets. Inadequate supply could

Page | 16

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

impair the Company’s ability to attract new business and could create upward pricing pressure on equipment and supplies, adversely affecting margins for the Company.

Reliance Upon Few Payors

The Company will earn revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the US government being the largest entity making payments. If the Medicare program were to slow payments of receivables for any reason, the Company would be adversely impacted. In addition, both governmental and private health insurance companies may seek ways to avoid or delay reimbursement, which could adversely affect cash flow and revenues for the Company.

Government Regulation

Some operations of the Company will require certain licenses and permits from the authorities in the United States. The ability of the Company and its subsidiaries to obtain, sustain, or renew any such licenses and permits on acceptable terms is subject to changes in regulations and policies and to the discretion of the applicable authorities or other governmental agencies. The ability of the Company to collect certain revenues in the future will depend on the Company receiving approval of an independent diagnostic testing facility and entering into an agreement with Medicare. There is no guarantee that the Company will meet these conditions. The Company will be subject to regulation from United States federal and state authorities. Regulatory action could disrupt its ability to provide services. Such regulatory action could come in the form of actions against manufacturers, unrelated to the Company’s conduct, or actions based upon the Company’s operations. Regulatory action could prevent or delay reimbursement for certain services.

There could also be legislative action that could adversely affect the Company’s business model, including, without limitation: a decision by the United States government to become the exclusive provider of health care services at some time in the future; changes in United States federal or state laws, rules, and regulations, including those governing the corporate practice of medicine, and fee splitting; and changes in the United States Anti-Kickback Statute and Stark Law and/or similar state laws, rules, and regulations. Conversely, budgetary problems in the United States could lead to reduced funding, substantial modification, or elimination of Medicare programs, which would end reimbursement for many patients. There can be no assurance that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail the business of the Company. Amendments to current laws and regulations could have a substantial adverse impact on the Company.

Highly Competitive Market

The Company will participate in a highly competitive market, which may become more competitive as new players enter. Certain competitors will be subsidiaries or divisions of larger, much better capitalized companies. Certain competitors will have vertically integrated manufacturing and services sectors of the market. The Company may have less capital and may encounter greater operational challenges in serving the market. Better capitalized competitors may also be expected to borrow money or raise debt to purchase equipment more easily than the Company.

Foreign Subsidiaries

The Company plans to conduct all its operations through respective United States subsidiaries. Therefore, to the extent of these holdings, the Company (directly and indirectly) will be dependent on the cash flows of these subsidiaries to meet its obligations. The ability of such subsidiaries to make payments to their parent companies may be constrained by the following factors: the level of taxation, particularly corporate profits and withholding taxes, in the jurisdiction in which each subsidiary operates; and the introduction of exchange controls or repatriation restrictions or the availability of hard currency to be repatriated.

Page | 17

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Attraction and Retention of Key Personnel Including Directors

The Company has a small management team and the loss of a key individual or inability to attract suitably qualified staff could have a material adverse impact on the business of the Company. The success of the Company depends on the ability of management to interpret market data correctly and to interpret and respond to economic, market and other conditions to locate and adopt appropriate opportunities. No assurance can be given that individuals with the required skills will continue employment with the Company or that replacement personnel with comparable skills can be found. The Company will be dependent on the services of key executives, including the directors of the Company and a small number of highly skilled and experienced executives and personnel. Due to the relatively small size of the Company, the loss of these persons or the Company’s inability to attract and retain additional highly skilled employees may adversely affect its business and future operations.

Dividends

The Company currently intends to retain future earnings to finance the operation, development, and expansion of its business. The Company does not anticipate paying cash dividends on the Company’s shares in the foreseeable future. Payment of future cash dividends, if any, will be at the discretion of the Company’s Board and will depend on the Company’s financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors that the Company’s Board may consider relevant. Accordingly, investors will only see a return on their investment if the value of the Company’s shares appreciates.

Discretion in the Use of Available Funds

Management will have broad discretion concerning the use of available funds of the Company as well as the timing of their expenditures. As a result, shareholders and investors will be relying on the judgment of management of the Company for the application of available funds of the Company. Management may use the available funds in ways that an investor may not consider desirable. The results and the effectiveness of the application of available funds are uncertain. If available funds are not applied effectively, the Company’s results of future operations and cash flow may suffer.

Potential Conflicts of Interest

Some of the directors and officers of the Company are engaged and will continue to be engaged as directors and officers of other companies in the search for additional business opportunities on behalf of such other corporations, and situations may arise where these directors and officers will be in direct competition with the Company. Some of the directors and officers of the Company are or may become directors or officers of other companies engaged in other business ventures.

Conflicts of interest, if any, which arise may be subject to and be governed by procedures prescribed by the Business Corporations Act (British Columbia) which require a director or officer of a corporation who is a party to or is a director or an officer of or has a material interest in any person who is a party to a material contract or proposed material contract with the Company to disclose his interest and to refrain from voting on any matter in respect of such contract unless otherwise permitted under the Business Corporations Act (British Columbia). Any decision made by any of such directors and officers involving the Company should be made in accordance with their duties and obligations to deal fairly and in good faith with a view to the best interests of the Company and its shareholders.

Insurance and Uninsured Risks

The Company’s business will continue to be subject to several risks and hazards generally, including general liability. Such occurrences could result in damage to property, inventory, facilities, personal injury or death, damage to the properties of the Company, or the properties of others, monetary losses, and possible legal liability. The Company may be

Page | 18

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

subject to product liability and medical malpractice claims, which may adversely affect its operations. The Company’s industry is highly regulated, and the Company may be subject to regulatory scrutiny for violations of regulations and laws. The Company could be adversely affected by the time and cost involved with regulatory investigations even if it has operated in compliance with all laws. Investigations could also adversely affect the timely payment of receivables.

Although the Company will maintain insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance will not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. The Company might also become subject to liability which may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Additional Capital

The development and the business (including acquisitions) of the Company may require additional financing, which may involve high transaction costs, dilution to shareholders, high interest rates or unfavorable terms and conditions. Failure to obtain sufficient financing may result in the delay or indefinite postponement of its business plans. As the Company will likely be unable to obtain traditional debt financing until it has a profitable and longer operating history, the initial primary source of funding available to the Company will consist of equity financing. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable to the Company.

Loss of Foreign Private Issuer Status

The Company may lose its foreign private issuer status in the future, which could result in significant additional costs and expenses. As a foreign private issuer, as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company is currently exempt from certain of the provisions of the U.S. federal securities laws. For example, an issuer with total assets in excess of $10 million and whose outstanding equity securities are held by 2,000 or more persons, or 500 or more persons who are not “accredited investors”, must register such securities as a class under the Exchange Act. However, as a foreign private issuer subject to Canadian continuous disclosure requirements, the Company may claim the exemption from registration under the Exchange Act provided by Rule 3-2(b) thereunder, even if these thresholds are exceeded. To be considered a foreign private issuer, the Company must satisfy a United States shareholder test (not more than 50% of the voting securities of a company must be held by residents of the United States) if any of the following disqualifying conditions apply: (i) the majority of the Company’s executive officers or directors are United States citizens or residents; (ii) more than 50 percent of the Company’s assets are located in the United States; or (iii) the Company’s business is administered principally in the United States. Based on information available as at the date hereof, approximately 26.7% of the Company’s outstanding voting securities are anticipated to be directly or indirectly held of record by residents of the United States. If the Company loses its status as a foreign private issuer, these regulations could apply and it could also be required to commence reporting on forms required of U.S. domestic companies, such as Forms 10-K, 10-Q and 8-K. It could also become subject to U.S. proxy rules, and certain holders of its equity securities could become subject to the insider reporting and “short swing” profit rules under Section 16 of the Exchange Act. In addition, any securities issued by the Company if it loses foreign private issuer status would become subject to certain rules and restrictions under the Securities Act of 1933, as amended, even if they are issued or resold outside the United States. Compliance with the additional disclosure, compliance and timing requirements under these securities laws would likely result in increased expenses and would require the Company’s management to devote substantial time and resources to comply with new regulatory requirements.

Page | 19

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

United States Operations and Exchange Rate Fluctuations

All the Company’s revenue generating operations will occur in the United States. The Company will be subject to several risks associated with its operations that may increase liability and costs and require significant management attention. These risks include:

● compliance with laws of the United States that will apply to the Company’s United States operations, including lawful access, privacy laws and anti-corruption laws

● instability in economic or political conditions, including inflation, recession, and political uncertainty

● potential adverse tax consequences; and

● litigation in United States courts.

In addition, the Company will be exposed to foreign exchange risk as a result of all of its revenue-generating operations taking place in the United States and thus, revenues and expenses being earned and paid in US dollars while having a significant amount of debt denominated in Canadian dollars. If the Canadian dollar appreciates relative to the US dollar, the Company’s Canadian dollar liabilities decrease when translated to US dollars for financial reporting purposes. Conversely, if the Canadian dollar depreciates relative to the US dollar, the Company’s Canadian dollar liabilities will increase when translated to US dollars for financial reporting purposes.

The Company expects to continue to maintain cash balances in both United States and Canadian dollars, but management anticipates that it will not purchase any securities or financial instruments to speculate on or hedge against a rise or fall in the value of the United States dollar.

COVID-19 Pandemic

In light of the ongoing spread of the novel coronavirus, or COVID-19, in the United States and abroad, including the emergence of new variants of the coronavirus, government and public health authorities continue to recommend or impose regulations designed to protect human life, but which have simultaneously had (and are expected to continue to have) serious adverse impacts on domestic and foreign economies.

In response to the COVID-19 pandemic, the Company has implemented protocols and procedures for the safety and protection of its employees (including patient-facing employees providing respiratory and other services), maximizing the availability of its services and products to support patient health needs, and the operational and financial stability of its business. The Company continues to make adjustments in response to changing government regulations and directives. COVID-19 and the emergence of variants could further impact the Company’s expected timelines and operations, its third-party service providers or suppliers, as a result of quarantines, facility closures, travel and logistics restrictions and other limitations in connection with the outbreak.

It is unknown how long the adverse conditions associated with COVID-19 and subsequent variants will last and what the complete financial effect will be to the Company’s business, operations, and financial results. Although the Company has taken steps to mitigate the impact of COVID-19, the continued presence and ‎spread of COVID-19 nationally and globally could have a material adverse impact on the Company’s ‎business, operations, and financial results and position, including through employee attrition, ‎disruptions to the Company’s supply chains and sales channels, restrictions of operations at the Company’s retail stores, changes in the number of Americans with health insurance resulting in a change in demand

Page | 20

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

for the Company’s products, as well as a deterioration of general economic ‎conditions including a possible national or global recession.

To the extent the ongoing COVID-19 pandemic, or other health epidemic or outbreak, adversely affects the Company’s business and financial results, it may also have the effect of heightening many of the other risks described in this Risk Factors section. Because of the highly uncertain and dynamic nature of events relating to the continuing COVID-19 pandemic, it is not currently possible to estimate its impact on the Company’s business, results of operations and financial condition beyond that discussed above. However, these effects could have a material impact and the Company intends to continue to monitor the ongoing COVID-19 pandemic situation. The continuing nature and scope of COVID-19’s impacts to the Company’s business and operations will depend on a series of evolving factors and developments that are difficult to assess, predict, or control, which include, but are not limited to, the following:

• the severity and duration of the pandemic, including additional outbreaks or spikes in the number of COVID-19 cases, future mutations or related variants of the virus, and the efficacy and availability of vaccines;

• the extent and duration of the effect on consumer confidence, economic well-being, deferred medical care, the rate of elective procedures and even recommended screening tests, as well as customer demand;

• the duration, degree, and impact of governmental, business, or other measures implemented in response to the pandemic;

•the impacts on the Company’s distribution channels and supply chain;

•volatility or disruptions in the credit and financial markets;

• increased cyber security risks, including as a result of the Company’s employees, business partners, vendors, suppliers and other third parties with which the Company does business, working remotely;

• evolving macroeconomic factors, including general economic uncertainty, product costs, unemployment rates, and recessionary and inflationary pressures;

• the impact of the pandemic on economic activity and the pace and extent of recovery when the pandemic subsides, which may vary materially over time and among the different regions and markets the Company serves;

• the long-term impact of the COVID-19 pandemic on the global economy, financial markets, trade relations, consumer behavior, the industry in which the Company operates, and its business operations; and

•relaxation or lifting of government mandates and restrictions related to COVID-19, such as the mask mandate.

The above factors and risks, among others, are difficult to predict and could result in material adverse impacts to the Company’s business, operations, cash flows, financial condition, and the value of the Company’s share price. In addition, it is difficult to predict the potentially adverse impacts that COVID-19 could continue to have on the Company’s customers, suppliers, vendors, and other business partners, which, in turn could materially and adversely impact the Company’s business. Additionally, the impact of COVID-19 could further exacerbate the impact of the other risk factors contained in this and the other reports the Company files with the SEC and the relevant Canadian securities regulatory authorities. The Company continues to monitor the situation and work with its stakeholders (including customers, ‎employees, and suppliers) in order to assess further possible implications to its business, supply chain, and ‎customers, and, where practicable, mitigate adverse consequences and responsibly address this global ‎pandemic.‎

Page | 21

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Federal, state, and local authorities have taken several actions designed to assist healthcare providers in providing care to COVID-19 and other patients and to mitigate the adverse economic impact of the COVID-19 pandemic. Legislative actions taken by the federal government include the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020. Through the CARES Act, the federal government has authorized payments to be distributed to healthcare providers through the Public Health and Social Services Emergency Fund (“Provider Relief Fund” or “PRF”). Additionally, the CARES Act revised the Medicare accelerated and advance payment program in an attempt to disburse payments to healthcare providers more quickly to mitigate the financial impact on healthcare providers. See Note 8 for relief payments the Company received related to the US Coronavirus Aid, Relief and Economic Security (“CARES”) Act.

Supply Chain Constraints and Commodity Pricing

The COVID-19 pandemic has disrupted the global supply chain and, accordingly, the global economy has been experiencing supply chain constraints, due to factory closures and reduced manufacturing output. In the event that supplies and materials required by the Company in order to deliver its products and services are interrupted or delayed as a result of supply chain issues, it may have an material adverse impact on the Company’s financial condition and results of operations could be adversely affected.

Inflation Risks

Inflation in the United States began to rise significantly in the second half of the calendar year of 2021 and has continued to accelerate in the calendar year 2022. This is primarily believed to be the result of the economic impacts from the COVID-19 pandemic, including the global supply chain disruptions, strong economic recovery and associated widespread demand for goods, and government stimulus packages, among other factors. For instance, global supply chain disruptions have resulted in shortages in materials and services. Such shortages have resulted in inflationary cost increases for labor, materials, and services, and could continue to cause costs to increase as well as scarcity of certain products. The Company is experiencing inflationary pressures in certain areas of its business, including with respect to fuel costs for delivery vehicles, surcharges from vendors, and wage inflation.  The Company cannot, however, predict any future trends in the rate of inflation or associated increases in its operating costs and how that may impact its business. To the extent the Company is unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on its business, the Company’s revenues and gross margins could decrease, and its financial condition and results of operations could be adversely affected.

Changes in Market Interest Rates

Interest rates have recently been at relatively low levels on a historical basis. Recently, in light of the economic recovery and higher than anticipated inflation, the U.S. Federal Reserve recently raised the federal rate in March and again in May in response to rising inflation rates. The Company’s current long-term debt has fixed rates, however, increased market rates may materially and negatively affect the Company’s future borrowing rates.

Economic Conditions and Economic Downturn or Recession Risk

The benefits the Company has realized and may continue to realize from participating in relief programs provided under the CARES Act may not be sufficient to enable it to withstand the current economic conditions and any extended economic downturn or recession which may result from the COVID-19 pandemic.

The Company has received funds under the CARES Act, and has benefited from other relief measures pursuant to the CARES Act and other government stimulus. Receipt of additional government funds and other benefits from the CARES Act is subject to, in certain circumstances, a detailed application and approval process and it is unclear whether the

Page | 22

MANAGEMENT’S DISCUSSION AND ANALYSIS

March 31, 2022 and 2021

(Tabular dollar amounts expressed in thousands, except per share amounts)

Company will meet any eligibility requirements, receive any funds and the extent to which these funds may offset the Company’s pandemic-related cash flow disruptions. Additionally, retaining these funds subjects the Company to various terms and conditions. While the Company has taken steps to ensure compliance with these terms and conditions, any violation may trigger repayment of some or all of the funds received. Further, funds the Company has received or may receive, either directly through participation in government programs, or indirectly through increased revenues attributable to a possible economic recovery generated in whole or in part by the CARES Act, may not be sufficient to mitigate the impact of the COVID-19 pandemic.

Recall of certain Royal Philips BiPAP and CPAP Devices and Ventilators

The recall of certain Royal Philips BiPAP and CPAP devices and ventilators that the Company distributes and sells could have a significant negative impact on the Company’s business, reputation, results of operations, financial condition, and prospects. On June 14, 2021, Royal Philips (“Philips”) initiated a voluntary recall notification with the U.S. Food and Drug Administration (“FDA”) for certain Philips BiPAP (bi-level positive airway pressure) and CPAP (continuous positive airway pressure) and mechanical ventilator devices that the Company distributes and sells. Philips initiated this recall to address potential health risks related to the polyester-based polyurethane (“PE-PUR”) sound abatement foam component in these devices. To date, Philips has produced millions of BiPAP and CPAP devices and ventilators using the PE-PUR sound abatement foam. Despite a complaint rate of 0.03% in 2020, Philips determined based on testing that there are possible health risks to users of the devices related to this type of foam, including that the foam may degrade into particles that may be ingested or inhaled by the user, and that the foam may off-gas certain chemicals. According to Philips, the potential risks of particulate exposure include headache, irritation, inflammation, respiratory issues, and possible toxic and carcinogenic effects, and the potential health risks of chemical exposure due to off-gassing include headache, irritation, hypersensitivity, nausea/vomiting, and possible toxic and carcinogenic effects.

Philips has stated that it (i) is providing the relevant regulatory agencies with required information related to the launch and implementation of the projected correction, (ii) will replace the current sound abatement foam with a new material, (iii) has already begun the preparations, which include obtaining the relevant regulatory clearances, and (iv) aims to address all affected devices in scope of this correction as expeditiously as possible. While Philips produces alternative CPAP devices and ventilators that are not impacted by the recall, these alternative CPAP devices and ventilators are being used to replace recalled CPAP devices and ventilators rather than be sold to suppliers for placement with newly diagnosed patients. Depending on the time it takes for the FDA and Philips to resolve the issue, potential delays and shortages of BiPAP and CPAP devices and ventilators may occur in the industry in which the Company operates, which could have a significant negative impact on the Company’s business, reputation, results of operations, financial condition and prospects if it is unable to procure replacement products at a reasonable cost on a timely basis, or at all.

Additionally, the Company does not currently know the full scope of potential risks that may arise as a result of the recall and replacement of BiPAP and CPAP and mechanical ventilator devices described above. Due to the volume of the Company’s patients currently using, or who have used in the past, the BiPAP and CPAP and mechanical ventilator devices affected by the recall described above as well as future users of any replacement devices, any litigation, class action or governmental enforcement actions (including, but not limited to, claims relating to product liability, negligence, patient harm including claims for personal injury or wrongful death, consumer protection, or fraud, overpayment or improper billing for services and products affected by the recall or replacement) that may involve the Company could have a significant negative impact on the Company’s business, reputation, results of operations, financial condition and prospects. In general, the reporting of product defects or voluntary recalls to the FDA or analogous regulatory bodies outside the United States could result in manufacturing audits, inspections and broader recalls or other disruptions to the Company and/or its suppliers’ businesses. The recall described above and future recalls, whether voluntary or required, could result in significant costs to the Company and significant adverse publicity, which could harm the Company’s ability to market its products in the future.

Page | 23

EX-99.3

Exhibit 99.3

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Gregory Crawford, as Chief Executive Officer of Quipt Home Medical Corp., certify the following:

1.  Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Quipt Home Medical Corp. (the “issuer”) for the interim period ended March 31, 2022.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design:  Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it 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 the issuer’s GAAP.

5.1 Control framework:  The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is COSO Internal Control Integrated Framework.

5.2 N/A

5.3 Limitation on scope of design:  The issuer has disclosed in its interim MD&A

(a) the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of

(iii)a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and

(b) summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements.

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on October 1, 2021 and ended on March 31, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: May 16, 2022

/s/Gregory Crawford

Gregory Crawford

Chief Executive Officer

EX-99.4

Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Hardik Mehta, as Chief Financial Officer of Quipt ‎Home Medical Corp., certify the following:

1.  Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Quipt Home Medical Corp. (the “issuer”) for the interim period ended March 31, 2022.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility:  The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design:  Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it 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 the issuer’s GAAP.

5.1 Control framework:  The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is COSO Internal Control Integrated Framework.

5.2 N/A

5.3 Limitation on scope of design:  The issuer has disclosed in its interim MD&A

(a) the fact that the issuer’s other certifying officer(s) and I have limited the scope of our design of DC&P and ICFR to exclude controls, policies and procedures of

(iii) a business that the issuer acquired not more than 365 days before the last day of the period covered by the interim filings; and

(b) summary financial information about the proportionately consolidated entity, special purpose entity or business that the issuer acquired that has been proportionately consolidated or consolidated in the issuer’s financial statements.

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on October 1, 2021 and ended on March 31, 2022 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Dated: May 16, 2022

(signed) “Hardik Mehta”

Hardik Mehta

Chief Financial Officer

EX-99.5

Exhibit 99.5

QUIPT HOME MEDICAL REPORTS RECORD SECOND QUARTER FISCAL 2022 FINANCIAL RESULTS

POSTS REVENUE GROWTH OF 38% AND ADJUSTED EBITDA GROWTH OF 31%

REITERATES OUTLOOK FOR CALENDAR YEAR END 2022

Cincinnati, Ohio – May 16, 2022 – Quipt Home Medical Corp. (the “Company”) (NASDAQ:QIPT; TSXV:QIPT), a U.S. based leader in the home medical equipment industry, focused on end-to-end respiratory care, today announced its second quarter fiscal 2022 financial results and operational highlights. These results pertain to the three-month period ended March 31, 2022 and are reported in U.S. Dollars.

Financial Highlights:

◾ Revenue for Q2 2022 was $33.6 million compared to $24.2 million for Q2 2021, representing a 38% increase in revenue year-over-year. Compared to Q1 2022, the Company experienced sequential organic growth of 2%.

o As of March 31, 2022, the Company’s backlog decreased to approximately 6,500 patients in the queue to be set up on sleep devices. At the start of Fiscal Q3 2022, the Company had the highest CPAP inventory level since the recall began and is continuing to drive patient set-ups to ease the backlog. The Company remains cautiously optimistic that sleep device allocations will increase in the second half of 2022, which will continue to relieve some of the backlog, generating a lift in revenue from this impacted segment of the business.

o The sleep segment revenue impact was approximately $1.0 million to $1.5 million in Q2 2022.

◾ Recurring Revenue as of Q2 2022 was 77% of total revenue.

◾ Revenue for the six months ended March 31, 2022 of $63 million, a 34.2% increase from the prior year period.

◾ Adjusted EBITDA for Q2 2022 was $7.0 million (21% margin), compared to Adjusted EBITDA for Q2 2021 of $5.4 million, representing a 31% increase year-over-year.

◾ Adjusted EBITDA for the six months ended March 31, 2022 of $13.1 million, a 24% increase from the prior year period, and represented 20.7% of revenue.

◾ Net income for Q2 2022 was $5 million or $0.14 per fully diluted share, compared to a loss of $12.5 million for Q2 2021 or $(0.43) per fully diluted share.

◾ Cash flow from continuing operations was $12.2 million for the six months ended March 31, 2022 compared to $6.6 million in the corresponding period.

◾ The Company reported $17.4 million of cash on hand as at March 31, 2022.

◾ The Company has an undrawn credit facility of $20 million as at March 31, 2022.

Operational Highlights:

◾ Through the Company’s continued use of technology and centralized intake processes, respiratory resupply set-ups and/or deliveries increased to 50,713 for the three months ended March 31, 2022, compared to 35,702 for the same period ended March 31, 2021, an increase of 42%.

◾ The Company’s customer base increased 37% year over year from 56,972 unique patients served in Q2 2021 to 78,273 unique patients in Q2 2022.

◾ Compared to 118,878 unique set-ups/deliveries in Q2 2022, the Company completed 83,606 unique set-ups/deliveries in Q2 2021, an increase of 42%.

◾ The Company has recently accelerated its hiring of experienced sales personnel to expand its sales reach across the United States.

◾ The Company continues to experience robust demand for respiratory equipment, such as Oxygen Concentrators, Ventilators, as well as the CPAP resupply and other supplies business.

◾ The Company operates out of 87 locations in eighteen states across the United States, completing hundreds of thousands of deliveries each year to more than 180,000 active patients, with over 19,000 referring physicians.

Acquisition Related Updates:

◾ Completed four acquisitions during the six months ended March 31, 2022 and one subsequent to March 31, 2022.

◾ On January 1, 2022, the Company acquired At Home Health Equipment, Inc., a business with operations in Indiana, reporting unaudited trailing 12-month annual revenues of approximately $13 million ‎and $1.6 million in net income with anticipated Adjusted EBITDA of $2.9 million (22% margin) post integration. The acquisition added over 15,000 active patients. Integration is near completion.

Subsequent Events to the Three Months Ended December 31, 2021:

◾ On April 19, 2022, the Company announced the acquisition of Good Night Medical, LLC, a business with operations across seven U.S. states, reporting unaudited trailing 12-month annual revenues of approximately $7.5 million ‎and with anticipated Adjusted EBITDA of $1.5 million (20% margin) post integration. The acquisition added 10,000 active patients, and encompassed locations across seven U.S. states including Arkansas, Georgia, Massachusetts, North Carolina, Ohio, Texas and California. The acquisition provides Quipt an expansionary opportunity into Massachusetts, North Carolina and Texas, which are new U.S. states for Quipt’s coverage sphere including important new commercial insurance contracts. Integration is well underway.

◾ On April 26, 2022, the Company announced the execution of a national insurance contract with a top five health insurer in the United States, which will expand patient accessibility across the country.

Reiteration of Outlook for Calendar End 2022 (Fiscal Year Q1 2023):

Based on the current operations, market trends and completed and prospective acquisitions, the Company is reiterating its outlook for its annual run-rate revenue by the end of calendar 2022 (Fiscal Q1 2023) to be $180-$190 million with $38-$43 million in run-rate Adjusted EBITDA.

Management Commentary:

“We are extremely proud of the robust results we experienced in our fiscal second quarter which showed accelerating momentum across our heavily weighted respiratory product mix as the quarter progressed. Looking to the beginning of the fiscal third quarter, we are pleased to report we had the highest level of CPAP inventory since the recall began and have seen a positive inventory trend continue in real time,” said CEO and Chairman Greg Crawford. “Moreover, demand remains very strong for at home respiratory care which will continue to foster consistent financial performance. This strong demand coupled with an extremely bullish regulatory environment, provides us the ability to drive our organic and inorganic initiatives over the near term, and we are working diligently to progress on our plan of becoming a leader in clinical respiratory care throughout the United States. On the acquisition front, our pipeline remains very strong with many strategic opportunities ranging in size, and we look forward to progressing on attractive targets to leverage the unparalleled scalable platform we have created. Our strategy is allowing us to grow market share in new and existing markets and we are also excited to accelerate the hiring of experienced sales professionals as we exit the pandemic environment, which we expect to be a drive of future organic growth. We are extremely encouraged about the growth path we are on, carving out a special segment of the homecare industry and we are well positioned to seize the growth opportunity ahead of us.”

Chief Financial Officer Hardik Mehta added, “Our record fiscal second quarter results demonstrate our ability to successfully navigate a challenging operating environment, with revenue reaching $33.6 million, experiencing improving

organic growth over fiscal Q1 2022, strong operating cash flow and seeing our Adjusted EBITDA margin accelerate to 21%. The strong performance was driven through elevated demand for oxygen, ventilation therapy and our other supplies business, leading to larger volumes, and continuing to support the business with lower operating costs. We are also very pleased with the integration process of our recent acquisitions, as we continue to drive meaningful cost and revenue synergies. Integration is the key to our ongoing financial and operating success as it positions us to continue working towards potential future strategic acquisitions. We continue to add attractive targets to our already deep acquisition pipeline that fit our stringent criteria including potential expansionary opportunities into synergistic verticals of service that would enhance our end-to-end product and service offering. Our goal is to be very active over the near term and look forward to updating investors on our progress.”

The financial statements of the Company for the three and six months ended March 31, 2022 and 2021 and accompanying Management Discussion & Analysis (MD&A) are available at www.sedar.com.

ABOUT QUIPT HOME MEDICAL CORP.

The Company provides in-home monitoring and disease management services focused on end-to-end respiratory solutions for patients in the United States healthcare market. It seeks to continue to expand its offerings to include the management of several chronic disease states focusing on patients with heart or pulmonary disease, sleep disorders, reduced mobility, and other chronic health conditions. The primary business objective of the Company is to create shareholder value by offering a broader range of services to patients in need of in-home monitoring and chronic disease management. The Company’s organic growth strategy is to increase annual revenue per patient by offering multiple services to the same patient, consolidating the patient’s services, and making life easier for the patient.

Reader Advisories

Readers are cautioned that the financial information regarding recent acquisitions disclosed herein is unaudited and derived as a result of the Company’s due diligence, including a review of the acquisition’s bank statements and tax returns.

There can be no assurance that any of the potential acquisitions in the Company’s pipeline or in negotiations will be completed as proposed or at all and no definitive agreements have been executed. Completion of any transaction will be subject to applicable director, shareholder and regulatory approvals.

Unless otherwise specified, all dollar amounts in this press release are expressed in U.S. ‎dollars.‎

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking information" as such term is defined in applicable Canadian securities legislation. The words "may", "would", "could", "should", "potential", "will", "seek", "intend", "plan", "anticipate", "believe", "estimate", "expect" and similar expressions as they relate to the Company, including: sleep device allocations increasing in the second half of 2022, which will relieve some of the backlog, generating a lift in revenue from this impacted segment of the business; anticipated Adjusted EBITDA of acquisitions post integration; and the Company’s outlook for calendar 2022‎; are intended to identify forward-looking information. All statements other than statements of historical fact may be forward-looking information. Such statements reflect the Company's current views and intentions with respect to future events, and current information available to the Company, and are subject to certain risks, uncertainties and assumptions, including, without limitation: the Company’s ability to maintain/slightly increase its collections ratios; the Company maintaining its gross margins and maintaining its revenue growth; the Company maintaining its selling, general and administrative expenses; acquisitions achieving results at least as good as historical performances; the financial ‎information regarding ‎acquisitions being verified when included in the Company’s consolidated financial ‎statements prepared in ‎accordance with generally accepted accounting principles in Canada as set out in the ‎CPA Canada ‎Handbook - ‎Accounting under Part I, which incorporates International Financial ‎Reporting ‎Standards as issued by the ‎International Accounting Standards Board‎; the Company successfully identified, ‎negotiating and completing ‎additional acquisitions, including accretive acquisitions; and the Company organically ‎growing at a rate of 10% and ‎completing ‎acquisitions that add at least $39 to 49 million in new revenue at approximately

20% Adjusted EBITDA in order to ‎‎meet 2022 outlook. ‎Many factors could cause the actual results, performance or achievements that may be expressed or implied by such forward-looking information to vary from those described herein should one or more of these risks or uncertainties materialize. Examples of such risk factors include, without limitation: credit; market (including equity, commodity, foreign exchange and interest rate); liquidity; operational (including technology and infrastructure); reputational; insurance; strategic; regulatory; legal; environmental; capital adequacy; the general business and economic conditions in the regions in which the Company operates; the ability of the Company to execute on key priorities, including the successful completion of acquisitions, business retention, and strategic plans and to attract, develop and retain key executives; difficulty integrating newly acquired businesses; the ability to implement business strategies and pursue business opportunities; low profit market segments; disruptions in or attacks (including cyber-attacks) on the Company's information technology, internet, network access or other voice or data communications systems or services; the evolution of various types of fraud or other criminal behavior to which the Company is exposed; the failure of third parties to comply with their obligations to the Company or its affiliates; the impact of new and changes to, or application of, current laws and regulations; decline of reimbursement rates; dependence on few payors; possible new drug discoveries; a novel business model; dependence on key suppliers; granting of permits and licenses in a highly regulated business; the overall difficult litigation environment, including in the U.S.; increased competition; changes in foreign currency rates; increased funding costs and market volatility due to market illiquidity and competition for funding; the availability of funds and resources to pursue operations; critical accounting estimates and changes to accounting standards, policies, and methods used by the Company; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events; as well as those risk factors discussed or referred to in the Company’s disclosure documents filed with the securities regulatory authorities in certain provinces of Canada and available at www.sedar.com. Should any factor affect the Company in an unexpected manner, or should assumptions underlying the forward-looking information prove incorrect, the actual results or events may differ materially from the results or events predicted. Any such forward-looking information is expressly qualified in its entirety by this cautionary statement. Moreover, the Company does not assume responsibility for the accuracy or completeness of such forward-looking information. The forward-looking information included in this press release is made as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking information, other than as required by applicable law.

Non-GAAP Measures

This press release refers to “Adjusted EBITDA” which is a non-GAAP and non-IFRS financial measure that does not have a standardized meaning prescribed by GAAP or IFRS. The Company’s presentation of this financial measure may not be comparable to similarly titled measures used by other companies. This financial measure is intended to provide additional information to investors concerning the Company’s performance. Adjusted EBITDA is defined as EBITDA excluding stock-based compensation. Adjusted EBITDA is a Non-IFRS measure the Company uses as an indicator of financial health and excludes several items which may be useful in the consideration of the financial condition of the Company, including interest expense, income taxes, depreciation, amortization, stock-based compensation, goodwill impairment and change in fair value of debentures and financial derivatives. The following table shows our Non-IFRS measure (Adjusted EBITDA) reconciled to our net income for the indicated periods:

	Three		Three		Six		Six
	months		months		months		months
	ended March		ended March		ended March		ended March
	31, 2022		31, 2021		31, 2022		31, 2021
Net income (loss)	$	5,036	$	(12,490)	$	2,905	$	(11,125)
Add back:
Depreciation and amortization		5,459		3,940		10,473		7,621
Interest expense, net		487		513		986		999
Provision (benefit) for income taxes		155		—		303		(1,407)
EBITDA		11,137		(8,037)		14,667		(3,912)
Stock-based compensation		1,161		12		3,271		27
Acquisition-related costs		237		16		299		72
Gain (loss) on foreign currency transactions		85		98		126		100
Other income from government grant		(4,254)		—		(4,254)		—
Change in fair value of debentures and warrants		(1,319)		13,297		(1,058)		14,280
Adjusted EBITDA	$	7,047	$	5,386	$	13,051	$	10,567

Management uses this non- IFRS measure as a key metric in the evaluation of the Company’s performance and the consolidated financial results. The Company believes this non- IFRS measure is useful to investors in their assessment of the operating performance and the valuation of the Company. In addition, this non- IFRS measure addresses questions the Company routinely receives from analysts and investors and, in order to assure that all investors have access to similar data, the Company has determined that it is appropriate to make this data available to all investors. However, non- IFRS financial measures are not prepared in accordance with IFRS, and the information is not necessarily comparable to other companies and should be considered as a supplement to, not a substitute for, or superior to, the corresponding measures calculated in accordance with IFRS.

For further information please visit our website at www.Quipthomemedical.com, or contact:

Cole Stevens

VP of Corporate Development

Quipt Home Medical Corp.

859-300-6455

cole.stevens@myquipt.com

Gregory Crawford

Chief Executive Officer

Quipt Home Medical Corp.

859-300-6455

investorinfo@myquipt.com