40-F

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

☐Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934

or

☒Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended:
September 30, 2022 Commission File Number: 001-40413

Quipt Home Medical Corp.

(Exact name of Registrant as specified in its charter)

British Columbia, Canada (Province or other jurisdiction of
incorporation or organization) 3841 (Primary Standard Industrial Classification Code Number) 98-1508109 (I.R.S. Employer Identification Number)

1019 Town Drive

Wilder, Kentucky 41076

(859) 878-2220

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

CT Corporation System

1015 15^th Street N.W., Suite 1000

Washington, DC 20005

(202) 572-3133

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

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	QIPT	The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

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

☒ Annual information form ☒ Audited annual financial statements

Indicate the number of outstanding shares of each of the registrant’s classes of capital or common stock as of the close of the period covered by the annual report: 35,605,280 common shares

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). ☒ Yes ☐ No

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

Emerging growth company ☒

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

EXPLANATORY NOTE

Quipt Home Medical Corp. (the “Company”, the “Registrant”) is a Canadian issuer that is permitted, under the multijurisdictional disclosure system adopted in the United States, to prepare this Annual Report on Form 40-F pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in accordance with Canadian disclosure requirements. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. Equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.

FORWARD LOOKING STATEMENTS

This Annual Report, including the exhibits hereto (collectively, the “Form 40-F”) contains “forward-looking information” and “forward-looking statements” within the meaning of Canadian and United States securities laws (including the U.S. Private Securities Litigation Reform Act of 1995). Forward-looking statements relate to future events or future performance and reflect the expectations or beliefs of management of the Company regarding future events, and include, but are not limited to, statements with respect to: operating results; profitability; financial condition and resources; anticipated needs for working capital; liquidity; capital resources; capital expenditures; milestones; licensing milestones; information with respect to future growth and growth strategies; anticipated trends in our industry; our future financing plans; timelines; currency fluctuations; government regulation; unanticipated expenses; commercial disputes or claims; limitations on insurance coverage; and availability of cash flow to fund capital requirements.

Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of the Company’s management made in light of its experience and its perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. The Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable.

In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “potential”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “will”, “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative of these terms or comparable terminology. By their very nature, forward-looking statements require the Company to make assumptions and are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. A variety of material factors include, among others:

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; loss of foreign private issuer status; 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; the occurrence of natural and unnatural ‎catastrophic events ‎and claims ‎‎resulting from such events; and risks related to COVID-19 including various ‎recommendations, orders ‎and ‎measures of governmental ‎authorities ‎to try to limit the pandemic, including travel ‎restrictions, border closures, ‎‎non-essential business ‎closures, ‎quarantines, self-isolations, shelters-in-place and ‎social distancing, disruptions ‎to ‎markets, economic ‎activity, ‎financing, supply chains and sales channels, and a ‎deterioration of general ‎economic ‎conditions ‎including a ‎possible national or global recession‎; 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, as well as any other risk factors detailed from time to time in the Company’s annual information form filed as Exhibit 99.1 to this Form 40-F and the Company’s management’s discussion and analysis filed as Exhibit 99.3 to this Form 40-F.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. The Company provides no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company does not intend, and do not assume any obligation, to update any forward-looking statements, other than as required by applicable securities laws.

These forward-looking statements are based on the reasonable beliefs, expectations and opinions of management of the Company as of the date of the AIF and MD&A. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those contained in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There is no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information or forward-looking statements. The Company does not intend, and does not assume any obligation, to update any forward-looking information or forward-looking statements, except as, and to the extent required by, applicable securities laws.

NOTE TO UNITED STATES READERS - DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES

The Registrant is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare this report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant prepares its financial statements, which are filed with this Form 40-F in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and the audits are subject to Public Company Accounting Oversight Board (PCAOB) audit and auditor independence standards.

PRINCIPAL DOCUMENTS

Annual Information Form

The Registrant’s Annual Information Form for the fiscal years ended September 30, 2022 and September 30, 2021 is filed as Exhibit 99.1 and incorporated by reference in this Annual Report on Form 40-F.

Audited Annual Financial Statements

The audited annual consolidated financial statements and notes thereto as at and for the fiscal years ended September 30, 2022 and September 30, 2021 together with the reports thereon of the independent registered public accounting firms are filed as Exhibit 99.2, and incorporated by reference in this Annual Report on Form 40-F.

Management Discussion and Analysis

The Registrant’s Management Discussion and Analysis for the fiscal years ended September 30, 2022 and September 30, 2021 is filed as Exhibit 99.3 and incorporated by reference in this Annual Report on Form 40-F.

CERTIFICATIONS AND DISCLOSURES REGARDING CONTOLS AND PROCEDURES

Certifications

The required certifications are included in Exhibits 99.4, 99.5, 99.6 and 99.7 of this Annual Report on Form 40-F.

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

Evaluation of disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that (i) information required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and its Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosureBased on our assessment as of September 30, 2022, Management concluded that our disclosure controls and procedures were ineffective.  

Management’s report on internal control over financial reporting. Management of the Company is responsible for establishing and maintaining adequate "internal control over financial reporting" (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). The Company's management, under the supervision of the CEO and CFO, and effected by the Company’s board of directors evaluated the effectiveness of ICFR.  Management has concluded that as of September 30, 2022, internal control over financial reporting was ineffective. Specifically, management concluded that the following material weaknesses existed as of September 30, 2022:

● Management did not maintain appropriately designed entity-level controls impacting the control environment, risk assessment procedures, and effective monitoring activities. These deficiencies were attributed to: (i) Management has not finalized the design and implementation, or retain appropriate documentation, of formal accounting policies, procedures and controls across substantially all of the Company’s business processes, (ii) ineffective identification and formal assessment of overall business risks, and (iii) ineffective evaluation and determination as to whether the components of internal control were present and functioning.

● Management did not maintain effective information technology general controls in the areas of user access management and segregation of duties within its systems supporting the Company’s accounting and financial reporting processes. Many of the Company’s manual controls dependent upon the information derived from these information technology systems were also ineffective, as management did not design and implement controls to validate the completeness and accuracy of underlying data utilized in the operation of those manual controls.

● Management did not design and maintain effective controls over certain aspects of its revenue recognition process and related accounts, including controls around the classification of certain contracts as operating leases under IFRS 16.

● Management did not appropriately design and implement management review controls at a sufficient level of precision around complex accounting areas and disclosure including business combinations and forecasts associated with intangible assets. 

Attestation Report of Independent Auditor

In accordance with the United States Jumpstart Our Business Startup Act (the “JOBS Act”) enacted on April 5, 2012, the Registrant qualifies as an “emerging growth company” (an “EGC”), which entitles the Registrant to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs. Specifically, the JOBS Act defers the requirement to have the Registrant’s independent auditor assess the Registrant’s internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act. As such, the Registrant is exempted from the requirement to include an auditor attestation report in this Form 40-F for so long as the Registrant remains an EGC, which may be for as long as five years following its initial registration in the United States.

Changes in Internal Control over Financial Reporting

During the year ended September 30, 2022, with outside consultants, the Company embarked upon a project to document, review, update, and evaluate internal controls over financial reporting and disclosure controls. While this project is still in process, the impact during the year ended September 30, 2022 caused changes in internal controls. The changes included review, assessment, documentation, and formalization of existing internal controls as well as identifying additional controls to increase risk mitigation and increase accuracy in financial reporting. This internal control project is anchored

in the framework and criteria established in Internal Control - Integrated Framework, issued by the 2013 Committee of Sponsoring Organizations of the Treadway Commission.

NOTICES PURSUANT TO REGULATION BTR

The Company was not required by Rule 104 of Regulation BTR to send any notices to any of its directors or executive officers during the fiscal year ended September 30, 2022.

AUDIT COMMITTEE

Audit Committee

The board of directors of the Company (the “Board”) has a separately designated standing audit committee (the “Audit Committee”) established in accordance with Section 3(a)(58)(A) of the Exchange Act and satisfies the requirements of Exchange Act Rule 10A-3. As of September 30, 2022, the Company’s Audit Committee was comprised of three directors, each of which, were in the opinion of the Company’s Board, are independent (as determined under Rule 10A-3 of the Exchange Act and applicable Nasdaq rules) and were financially literate, Brian J.Wessel (Chair), Kevin A. Carter, and Mark Greenberg.

Audit Committee Financial Expert

The Board has determined that Mr. Wessel, Chair of the Audit Committee as of September 30, 2022, qualified as an “audit committee financial expert” within the meaning of Item 407 of Regulation S-K.

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

CODE OF ETHICS

The Registrant has adopted a written Code of Business Conduct and Ethics (the "Code") that is applicable to all employees, contractors, consultants, officers and directors of the Registrant, and can be found on the Registrant’s website at https://quipthomemedical.com/corporate-ethics-policy/.

All departures from, all amendments to the Code, and all waivers of the Code with respect to any of the senior officers covered by it, which waiver may be made only by the board of directors of the Registrant in respect of senior officers, will be disclosed as required. The Code is located on the Registrant's website at https://quipthomemedical.com/corporate-ethics-policy/. Information contained in or otherwise accessible through the Registrant's website does not form part of this Form 40-F and is not incorporated into this Form 40-F by reference.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

BDO USA LLP, acted as the independent registered public accounting firm of the Registrant for the fiscal year ended September 30, 2022. MNP LLP, chartered professional accountants, acted as the independent registered public accounting firm of the Registrant for the fiscal year ended September 30, 2021. See the section “External Auditor Matters” in our Annual Information Form, attached as Exhibit 99.1 to this Annual Report, which section is incorporated by reference herein, for the total amount billed to the Company by BDO USA LLP, for services performed in the last fiscal year ended September 30, 2022 and by MNP LLP, for services performed in the fiscal year ended September 30, 2021, by category of service (for audit fees, audit related fees, tax fees and all other fees).

The Registrant's audit committee has adopted a pre-approval policy. Under this policy, all non-audit services must be pre-approved by the Audit Committee. The Registrant did not rely on the de minimis exemption provided by Section (c)(7) (i)(C) of Rule 2-01 of Regulation S-X.

OFF-BALANCE SHEET ARRANGEMENTS

The Registrant has not entered into any “off-balance sheet arrangements”, as defined in General Instruction B(11) to Form 40-F, that have or are reasonably likely to have a current or future effect on the Registrant’s financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The information provided under the heading “Tabular Disclosre of Contractual Obligations,” in Exhibit 99.3, the Company’s 2022 MD&A is incorporated by reference herein.

MINE SAFETY DISCLOSURE

Not applicable.

UNDERTAKING

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

CONSENT TO SERVICE OF PROCESS

The Registrant has previously filed with the Commission a written irrevocable consent and power of attorney on Form F-X. Any change to the name or address of the Registrant's agent for service shall be communicated promptly to the Commission by amendment to the Form F-X referencing the file number of the Registrant.

EXHIBIT INDEX

The following documents are being filed with the Commission as Exhibits to this Form 40-F:

Exhibit	Description
99.1	Annual Information Form for the year ended September 30, 2022, dated as of December 23, 2022
99.2	Audited Annual Consolidated Financial Statements and notes thereto as at and for the fiscal years ended September 30, 2022 and September 30, 2021 together with the report thereon of the independent auditor
99.3	Management’s Discussion and Analysis for the years ended September 30, 2022 and September 30, 2021
99.4	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934
99.5	Certification of Chief Financial Officer required by Rules 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934
99.6	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350
99.7	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350
99.8	Consent of BDO USA LLP
99.9	Consent of MNP LLP, Chartered Professional Accountants
101.INS	Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101

SIGNATURES

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

QUIPT HOME MEDICAL CORP.
By:	/s/ Gregory Crawford
	Name: Gregory Crawford
	Title: Chief Executive Officer

Date: December 23, 2022

EX-99.1

Exhibit 99.1

QUIPT HOME MEDICAL CORP.

ANNUAL INFORMATION FORM

for the year ended September 30, 2022

December 23, 2022

TABLE OF CONTENTS

CAUTION REGARDING FORWARD-LOOKING STATEMENTS	1
CURRENCY	2
TRADEMARKS AND TRADE NAMES	3
MARKET AND INDUSTRY DATA	3
CORPORATE STRUCTURE	3
NAME, ADDRESS AND INCORPORATION	3
INTERCORPORATE RELATIONSHIPS	4
GENERAL DEVELOPMENT OF THE BUSINESS	5
FISCAL YEAR ENDED SEPTEMBER 30, 2020	5
FISCAL YEAR ENDED SEPTEMBER 30, 2021	6
FISCAL YEAR ENDED SEPTEMBER 30, 2022	6
DEVELOPMENTS SUBSEQUENT TO THE FISCAL YEAR ENDED SEPTEMBER 30, 2022	9
SIGNIFICANT ACQUISITIONS DURING 2022	9
DESCRIPTION OF THE BUSINESS	9
COMPANY OVERVIEW	9
BUSINESS OBJECTIVE	9
KEY PERFORMANCE DRIVERS	9
SUBSIDIARIES	10
CYCLES	12
ECONOMIC DEPENDENCE	12
CHANGES TO CONTRACTS	12
EMPLOYEES	12
FOREIGN OPERATIONS	12
RISK FACTORS	12
DIVIDENDS	21
CAPITAL STRUCTURE	21
COMMON SHARES	21
EQUITY INCENTIVE AWARDS	22
MARKET FOR SECURITIES	28
TRADING PRICE AND VOLUME	28
PRIOR ISSUANCES OF UNLISTED SECURITIES	29
ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER	29
DIRECTORS AND OFFICERS	29
NAME, OCCUPATION AND SECURITY HOLDING (AS OF THE DATE HEREOF)	29
BIOGRAPHICAL INFORMATION	30
CEASE TRADE ORDERS, BANKRUPTCIES, PENALTIES OR SANCTIONS	32
CONFLICTS OF INTEREST	32
ADVANCE NOTICE PROVISIONS	33

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LEGAL PROCEEDINGS AND REGULATORY ACTIONS	33
LEGAL PROCEEDINGS	33
REGULATORY ACTIONS	33
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS	33
TRANSFER AGENT AND REGISTRAR	34
MATERIAL CONTRACTS	34
INTERESTS OF EXPERTS	34
AUDIT COMMITTEE INFORMATION	34
AUDIT COMMITTEE MANDATE	34
COMPOSITION OF THE AUDIT COMMITTEE	34
RELEVANT EDUCATION AND EXPERIENCE	34
EXTERNAL AUDITOR MATTERS	35
ADDITIONAL INFORMATION	36
SCHEDULE ”A” AUDIT COMMITTEE CHARTER	37

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This Annual Information Form (“AIF”) contains certain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking ‎statements” within the meaning of applicable securities legislation, including the United States Private Securities ‎Litigation Reform Act of 1995 (collectively, “forward-looking statements”)‎. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are ‎based upon the current beliefs, expectations, and assumptions regarding the future of its business, ‎future plans and strategies, and other future conditions of Quipt Home Medical Corp. (the “Company” or “Quipt”). Forward-looking ‎statements can be identified by the words ‎such as “expect”, “likely”, “may”, “will”,, “would”, “could”, “should”, “continue”, “contemplate”, “intend”, or ‎‎”anticipate”, “believe”, “envision”, “estimate”, “expect”, “plan”, “predict”, “project”, “target”, “potential”, ‎‎”proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or ‎statements that certain events or conditions “may” or “will” happen, or by discussions of strategy. Forward-looking ‎statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other ‎statements that are not statements of fact. Such forward-looking statements are made as of the date of this ‎AIF.‎

Forward-looking statements in this AIF therein include, but are not limited to, statements with respect to:‎ operating results; ‎profitability; ‎ financial condition and resources; ‎ anticipated needs for working capital; ‎ liquidity; ‎ capital resources; ‎capital expenditures;‎ milestones; ‎licensing milestones; ‎ information with respect to future growth and growth strategies; ‎ anticipated trends in the industry in with the Company operates; ‎ the Company’s future financing plans; ‎ timelines; ‎ currency fluctuations; ‎ government regulation; ‎ unanticipated expenses; ‎ commercial disputes or claims; ‎limitations on insurance coverage; ‎ availability and expectations regarding of cash flow to fund capital requirements;‎ the product offerings of the Company;‎ the competitive conditions of the industry;‎ the competitive and business strategies of the Company;‎ on-going implications of the novel coronavirus (“COVID-19”);‎ statements relating to the business and future activities of, and developments related to, the Company, ‎including such things as future business strategy, competitive strengths, goals, expansion and growth ‎of the Company’s business, operations and plans; and ‎other events or conditions that may occur in the future.‎

Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of the ‎Company’s management made in light of its experience and its perception of trends, current conditions and ‎expected developments, as well as other factors that management believes to be relevant and reasonable in the ‎circumstances at the date that such statements are made, but which may prove to be incorrect. The Company ‎believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. The ‎material factors and assumptions used to develop the forward-looking statements contained in this AIF, ‎without limitation:‎ the Company’s ability to successfully execute its growth strategies and business plan;‎ the ability to successfully identify strategic acquisitions;‎ the Company’s ability to realize anticipated benefits, synergies or generate revenue, profits or value from ‎its recent acquisitions into existing operations;‎ management’s perceptions of historical trends, current conditions and expected future developments;‎ the ability of the Company to take market share from competitors; ‎the Company’s ability to attract and retain skill staff;‎ market conditions and competition;‎ the products, services and technology offered by the Company’s competitors;‎ the Company’s ability to generate cash flow from operations the Company’s ability to keep pace with changing regulatory requirements;‎ ongoing ability to conduct business in the regulatory environments in which the Company operates and ‎may operate in the future;‎ that the Company’s ability to maintain strong business relationships with its suppliers, service provides and ‎other third parties will be maintained; ‎COVID-19 and recall related supply chain issues will be resolved within the near future;‎ the Company’s ability to fulfill prescriptions for services and products; ‎ the anticipated growth of the niche market of home equipment and monitoring; the anticipated increase in demand for various medical products and equipment;‎ demand and interest in the Company’s products and services; ‎the ability to deploy up front capital to purchase monitoring and treatment equipment; ‎anticipated and unanticipated costs; ‎ the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses;‎ the general economic, financial market, regulatory and political conditions in which the Company operates ‎and the absence of material adverse changes in the Company’s industry, regulatory environmental or ‎the global economy; and other considerations that management believes to be appropriate in the circumstances.‎

Forward-looking statements speak only as at the date they are made and are based on information currently ‎available and on the then current expectations. Readers are cautioned that forward-‎looking statements are not based on historical facts but instead are based on ‎reasonable assumptions and estimates ‎of management of the Company at the time they

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were provided ‎or made and involve known and unknown risks, ‎uncertainties and other factors which may cause the ‎actual results, performance or achievements of the Company, ‎as applicable, to be materially different ‎from any future results, performance or achievements expressed or implied ‎by such forward-looking ‎statements, including, but not limited to, known and unknown risks, uncertainties, ‎assumptions and other factors, including those listed under “Risk Factors”, which include: credit risks, market risks ‎‎(including those related to equity, commodity, foreign exchange and interest rate markets), liquidity risks, ‎operational risks (including those related to technology and infrastructure), and risks relating to reputation, ‎insurance, strategy, regulatory matters, legal matters, environmental matters and capital adequacy. Examples of ‎such risk factors include: the Company may be subject to significant capital requirements and operating risks; ‎changes in law, the ability to implement business strategies, growth strategies and pursue business opportunities; ‎state of the capital markets; the availability of funds and resources to pursue operations; 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; competition; difficulty integrating newly ‎acquired businesses; low profit market segments; disruptions in or attacks (including cyber-attacks) on information ‎technology, internet, network access or other voice or data communications systems or services; the evolution of ‎various types of fraud or other criminal behaviour; the failure of third parties to comply with their obligations; the ‎impact of new and changes to, or application of, current laws and regulations; the overall difficult litigation ‎environment, including in the United States; risks related to ‎infectious ‎diseases, including the impacts of COVID-19; ‎increased competition; changes in foreign currency rates; loss of foreign private issuer status; risks relating to the ‎deterioration of global economic conditions; increased funding costs and market volatility due to market illiquidity ‎and competition for funding; critical accounting estimates and changes to accounting standards, policies, and ‎methods; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events, ‎as well as other general economic, market and business conditions, amongst others, ‎as well as those risk factors ‎described under the heading “Risk Factors” and elsewhere in this AIF and therein and as described from time to time in documents filed by ‎the Company with Canadian securities regulatory authorities including, without limitation, Company’s audited annual financial statements and the Company’s management’s discussion and analysis (“MD&A”). Although the Company has attempted to identify ‎important factors that could cause actual actions, events or results to differ materially from those described in ‎forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, ‎estimated or intended. The Company provides no assurance that forward-looking statements will prove to be ‎accurate, as actual results and future events could differ materially from those anticipated in such statements.‎

Readers are cautioned that the above list of cautionary statements is not exhaustive. A number of factors could ‎cause actual events, performance or results to differ materially from what is projected in forward-looking ‎statements. The purpose of forward-looking statements is to provide the reader with a description of management’s ‎expectations, and such forward-looking statements may not be appropriate for any other purpose. You should not ‎place undue reliance on forward-looking statements contained in this AIF. Although the Company believes that the expectations ‎reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will ‎prove to have been correct. The Company undertakes no obligation to update or revise any forward-looking ‎statements, whether as a result of new information, future events or otherwise, except as required by applicable law. ‎The forward-looking statements contained in this AIF are expressly qualified in their entirety by this cautionary statement. ‎

CURRENCY

Unless the context otherwise requires, all references to “$” or “US$” refer to United States dollars.‎ All references to “C$” ‎means references to the lawful money ‎of Canada.

The following table sets forth (a) the rate of exchange for the Canadian dollar, expressed U.S. dollars, in effect for ‎the periods indicated; and (b) the high and low exchange rates for the Canadian dollar, expressed in U.S. dollars, ‎during the periods indicated, each based on the indicative rate of exchange as reported by the Bank of Canada for ‎conversion of Canadian dollars into U.S. dollars.‎

Year Ended September 30
C$to US$
	2022	2021	2020
High	0.8111	0.8306	0.7710
Low	0.7285	0.7491	0.6898
Closing	0.7296	0.7849	0.7497

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On September 29, 2022, the last business day quoted by the Bank of Canada during the financial year ended September 30, 2022, the daily exchange rate for the Canadian dollar in terms of United States dollars, as quoted by the Bank of Canada, was C$1.00 = US$0.7296. On December 22, 2022, the last business day prior to the date of this AIF, the daily exchange rate for the Canadian dollar in terms of United States dollars, as quoted by the Bank of Canada, was C$1.00 = US$0.7323.

TRADEMARKS AND TRADE NAMES

This AIF ‎includes references to the Company’s trademarks, including, without limitation, Quipt’s wordmark and service mark ‎on the face hereof, which are protected under applicable intellectual property laws and are the ‎Company’s property. The Company’s trademarks and trade names referred to herein may appear without the ® or ™ ‎symbol, but references to the Company’s trademarks and trade names in the absence of such symbols are not ‎intended to indicate, in any way, that the Company will not assert, to the fullest extent under applicable law, its ‎rights to these trademarks and trade names. All other trademarks and trade names used herein are the property of their ‎respective owners.‎

MARKET AND INDUSTRY DATA

Certain information in this AIF is obtained from third party sources, including public sources, and there can be no assurance as to the ‎accuracy or completeness of such information. Although believed to be reliable, management of the Company has ‎not independently verified any of the data from third party sources unless otherwise stated.‎

CORPORATE STRUCTURE

Name, Address and Incorporation

The Company was incorporated under the Business Corporations Act (Alberta) on March 5, 1997 under the name 730285 Alberta Inc. and changed its name to VF Capital Ltd. on June 19, 1997, and to Canadian Dental Partners Inc. on August 9, 1999, and to International Health Partners Inc. (“IHP”) on January 25, 2001. Pursuant to a reverse take-over transaction completed on June 1, 2010 by way of a three cornered amalgamation between 0871455 B.C. Ltd., PHM DME Healthcare Inc. (“PHM/DME”) and IHP (the “RTO Transaction”), IHP acquired all of the issued and outstanding shares in the capital of PHM/DME. IHP acquired all of the issued and outstanding shares of Stancap Holdings I Limited (“Stancap”) concurrent with the RTO Transaction (the “SHL Share Exchange”). Upon completion of the RTO Transaction and the SHL Share Exchange, on June 1, 2010, IHP changed its name to Patient Home Monitoring Corp. (“PHM”), as the Company was then called. Pursuant to a Certificate of Continuance filed on December 30, 2013, the Company changed its jurisdiction of governance by continuing from Alberta into British Columbia.

On December 21, 2017, concurrently, but not in connection with, the closing of the court approved plan of arrangement (the “Arrangement”) between the Company and Viemed Healthcare, Inc. (“Viemed”), the Company completed an amalgamation, by way of vertical short-form amalgamation under the Business Corporations Act (British Columbia) (the “BCBCA”), its wholly owned subsidiary, Stancap, (the “Amalgamation”). The Company is the continuing entity as a result of the Amalgamation and maintained its name as Patient Home Monitoring Corp. Pursuant to the Amalgamation, all of the issued and outstanding common shares of Stancap were cancelled, and the assets, obligations and liabilities of Stancap continued as the assets, obligations and liabilities of the Company. Where the term “Company” is used herein in the context of describing the Company’s assets and business, it may include its predecessor, PHM, prior to completion of the Amalgamation, as the context requires. When the term “Common Shares” is used herein, it may include the shares in the capital of the Company’s predecessor, PHM, prior to completion of the Amalgamation, as the context requires.

Trading of the consolidated shares of PHM upon completion of the RTO Transaction commenced on the TSX Venture Exchange (the “TSX-V”) on June 8, 2010 under the stock symbol “PHM”.

Following completion of the Arrangement, the shares of the Company commenced trading on the TSX-V on December 22, 2017 under the stock symbol “PHM”. Concurrent with the completion of the 2018 Consolidation (as defined below), the Company’s stock symbol was changed to “PTQ”.

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On December 31, 2018, the Company effected a consolidation (the ”2018 Consolidation”) of the common shares in the capital of the Company (each, a “Common Share”) on the basis of one (1) post-2018 Consolidation Common Share for every five (5) pre-2018 Consolidation Common Shares.

On May 4, 2018, the Company changed its name from “Patient Home Monitoring Corp.” to “Protech Home Medical Corp.”

On May 13, 2021, the Company effected the consolidation of its Common Shares (the “2021 Consolidation”), on the basis of one (1) post-2021 Consolidation Common Share for every four (4) pre-2021 Consolidation Common Shares. In connection with the 2021 Consolidation, the Company changed its name to “Quipt Home Medical Corp.” and its ticker symbol on the TSX-V was changed from “PHM” to “QIPT”.

As at the date of this AIF, the Company’s Common Shares are listed for trading on the TSX-V under the symbol “QIPT”, and on NASDAQ Capital Market (“NASDAQ”) ‎under the symbol “QIPT”.‎

The Company’s head office is located at 1019 Town Drive, Wilder, Kentucky 41076, and its registered office is located at 2800 Park Place, 666 Burrard Street, Vancouver, British Columbia V6C 2Z7.

Intercorporate Relationships

The following chart illustrates, as at the date of this AIF, the Corporation’s material subsidiaries, the percentage of voting securities of each that are held, directly or indirectly by the Company or its respective subsidiaries, and their respective jurisdiction of incorporation, continuance, formation, or organization, as applicable.

Subsidiary Name	Jurisdiction	Ownership
Quipt Home Medical Inc. (formerly, PHM Services Inc.)	Delaware	100% Quipt
Patient Home Monitoring Inc.	Washington	100% Quipt Home Medical Inc.
QMH Holdings Inc. (formerly, PHM Logistics Corporation)	Delaware	100% Quipt Home Medical Inc.
Acadia Medical Supply Inc.	Maine	100% QMH Holdings Inc.
Central Oxygen Inc.	Indiana	100% QMH Holdings Inc.
Cooley Medical Equipment Inc.	Kentucky/Virginia	100% QMH Holdings Inc.
Riverside Medical Inc.	Tennessee	100% QMH Holdings Inc.
Health Technology Resources LLC	Illinois	100% QMH Holdings Inc.
Resource Medical, Inc.	South Carolina	100% QMH Holdings Inc.
Resource Medical Group, LLC	South Carolina	100% QMH Holdings Inc.
Resource Medical Group of Charleston, LLC	South Carolina	100% QMH Holdings Inc.
Care Medical Partners LLC	Georgia	100% QMH Holdings Inc.
Care Medical Athens, Inc.	Georgia	100% Care Medical Partners LLC
Care Medical of Atlanta, LLC	Georgia	100% Care Medical Partners LLC
Care Medical of Augusta, LLC	Georgia	100% Care Medical Partners LLC
Care Medical of Gainesville, LLC	Georgia	100% Care Medical Partners LLC
Care Medical Savannah, LLC	Georgia	100% Care Medical Partners LLC
Black Bear Medical Group, Inc.	Maine	100% QMH Holdings Inc.
Black Bear Medical, Inc.	Maine	100% Black Bear Medical Group, Inc.
Coastal Med-Tech Corp.	Maine	100% Black Bear Medical Group, Inc.
Black Bear Medical NH, Inc.	Maine	100% Black Bear Medical Group, Inc.
West Home Health Care, Inc.	Virginia	100% QMH Holdings Inc.
Legacy Oxygen & Home Care Equipment, LLC	Kentucky	100% QMH Holdings Inc.
Patient Aids, Inc.	Kentucky	100% QMH Holdings Inc.
SleepWell, LLC	Georgia	100% QMH Holdings Inc.
Tuscan, Inc.	Ohio	100% QMH Holdings Inc.
Mayhugh’s Drugs Inc.	Florida	100% QMH Holdings Inc.
Oxygen Plus Inc.	California	100% QMH Holdings Inc.
Med Supply Center Inc.	Mississippi	100% QMH Holdings Inc.
Semo Drugs – Care Plus of MO, Inc.	Missouri	100% QMH Holdings Inc.

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Subsidiary Name	Jurisdiction	Ownership
100 W. Commercial Street, LLC	Missouri	100% Semo Drugs – Care Plus of MO, Inc.
Medical West Healthcare Center, LLC	Missouri	100% QMH Holdings Inc.
Thrift Home Care, Inc.	Mississippi	100% QMH Holdings Inc.
Heckman Healthcare Service & Supplies Inc.	Illinois	100% QMH Holdings Inc.
At Home Health Equipment, Inc.	Indiana	100% QMH Holdings Inc.
Good Night Medical, LLC	Ohio	100% QMH Holdings Inc.
NorCal Respiratory, Inc.	California	100% QMH Holdings Inc.
Access Respiratory Homecare, LLC	Louisiana	100% QMH Holdings Inc.
Hometown Medical, LLC	Mississippi	100% QMH Holdings Inc.

GENERAL DEVELOPMENT OF THE BUSINESS

Fiscal Year Ended September 30, 2020

In October 2019, the Company completed the acquisition of Cooley Medical Equipment, Inc. (“CME”), a ‎company ‎based in Kentucky. CME is a leader and top provider of respiratory services in Eastern and Central ‎Kentucky with six ‎locations that, when combined with the Company’s current operations, will significantly expand ‎the Company’s ‎geographical footprint. ‎

In December 2019, the Company completed the acquisition of Acadia ‎Medical, Inc. (“AMI”), a company based in ‎Maine. AMI is a leader and top provider of respiratory services in the ‎State of Maine. It currently has four locations and ‎will allow the Company to further expand its geographical footprint ‎and provide a larger number of services in the State of ‎Maine.‎

On April 20, 2020, the Company announced that it was approved for a $5.97 million loan under the Payroll Protection Program (“PPP”) administered by the U.S. Small Business Administration, that originated from the U.S. Coronavirus Aid, Relief and Economic Security (CARES) Act. The loan has a term of two years, is unsecured, and is guaranteed by the U.S. Small Business Administration. The loan bears interest at a fixed rate of 1.0 percent per annum with the first six months of interest deferred and will be forgiven if the loan proceeds are used by the Company to cover payroll costs (including benefits), rent and utilities during the eight-week period following the loan origination date. The Company expects to meet the requirements for full loan forgiveness. The forgiven amount is not included in taxable income.

On June 2, 2020, the Company commenced trading on the OTCQX® under the symbol “PTQQF”.

On June 29, 2020, the Company completed a bought deal prospectus offering of 25,001,000 units for an aggregate gross proceeds of $28,751,150, which included the exercise in full of the 15% over-allotment option. The syndicate of underwriters for the offering was co-led by Beacon Securities Limited (“Beacon”), as sole bookrunner, and Canaccord Genuity Corp. (“Canaccord”). The units under the Offering were offered and sold by way of a short form prospectus filed in British Columbia, Alberta and Ontario. The Company also completed its (i) brokered private placement of 1,750,000 units for additional gross proceeds of $2,012,500, which was conducted by a syndicate of agents co-led by Beacon, as sole bookrunner, and Canaccord; and (ii) its non-brokered private placement of 927,825 units for additional gross proceeds of $1,067,000, with Gregory Crawford, Chairman and CEO of the Company, and Mark Greenberg, a director of the Company. Each unit was comprised of one Common Share and one-half of one common share purchase warrant. Each whole warrant is exercisable to acquire one Common Share at an exercise price of $1.60 per share, subject to adjustment in certain events, until June 29, 2021.

On August 31, 2020, the Company completed the acquisition of Health Technology Resources, LLC (“HTR”), a leader in the respiratory home care services industry in the state of Illinois. HTR is also licensed in the state of Indiana and provides services to patients in Northwest Indiana. The Company acquired HTR for total cash consideration of approximately $5.4 million.

On September 21, 2020, the Company entered into an asset-based revolving credit facility (the “Credit Facility”) with CIT Bank, N.A. (“CIT”), pursuant to which CIT agreed to advance up to $20 million at a tiered rate. The Credit Facility has a four year maturity and may be extended pursuant to both parties agreement.

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Fiscal Year Ended September 30, 2021

On October 23, 2020, the Company acquired Sleepwell, LLC (“Sleepwell”), a leader of sleep services in the State of Georgia. The Company acquired Sleepwell for a combination of cash and share consideration of approximately $9.3 million and $5.1 million, respectively.

On December 9, 2020, Dr. Kevin A. Carter joined the board of directors of the Company (the “Board”) as an independent director.

On January 13, 2021, the Company announced that it had applied to list its Common Shares on NASDAQ.

On February 1, 2021, the Company acquired Mayhugh Drugs Inc. ‎(“MME”), a leader in the respiratory home care services industry in Northern Florida. The Company acquired MME for total consideration of approximately $5.8 million.

On May 13, 2021, the Company changed its name from “Protech Home Medical Corp.” to “Quipt Home Medical Corp.” and effected the 2021 Consolidation. In connection with the 2021 Consolidation, the Company’s ticker symbol on the TSX-V was changed from “PHM” to “QIPT”.

On May 14, 2021, the Company filed its Form 40-F Registration Statement (“Form 40-F”) with the United States Securities and Exchange ‎Commission (the “SEC”). Following the effectiveness of the Form 40-F, Quipt became a reporting issuer in the United States, in addition to being a reporting issuer in Canada. A copy of the Form 40-F is available under the Company’s profile on each of EDGAR at www.sec.gov/edgar and SEDAR at www.sedar.com as well as the Company’s website located at www.quipthomemedical.com.

At the open of markets on May 27, 2021, the Common Shares began trading on NASDAQ under the ticker symbol “QIPT”.

On June 1, 2021, the Company acquired three separate entities, Oxygen Plus, Inc, Semo Drug-Care Plus of Mo, Inc, and Med Supply Center, Inc, with combined operations in California, Missouri, Arkansas and Mississippi, in connection with its ongoing national expansion effort with the goal of economically growing its operating footprint to serve as a leader in respiratory homecare across the United States. Under the terms of the definitive purchase agreements, the Company acquired the three combined entities for total consideration of approximately $4.0 million in cash.

On August 20, 2021, the Company acquired, Medical West Healthcare Center, LLC, a business with operations in Missouri, which added three locations, 15,000 active patients, 1,500 unique referring physicians, and several important insurance contracts. The business acquired has a diverse payor mix and traditional durable medical equipment product mix. Under the terms of the definitive purchase agreement, the Company acquired the business for approximately $2.3 million in cash.

Fiscal Year Ended September 30, 2022

On October 1, 2021, the Company acquired Thrift Home Care, Inc, a business with operations in Mississippi, which added two locations, over 4,000 active patients, more than 10,000 unique orders, 590 unique referring physicians, and several important insurance contracts. The business has a diverse payor mix and full suite of products with a focus on respiratory care, representing over 65% of the mix. Under the terms of the definitive purchase agreement, the Company acquired the business for approximately $2.2 million in cash.

On November 1, 2021, the Company acquired, Heckman Healthcare Services & Supplies, a business with operations in Illinois, which added a strategic location servicing Central Illinois, a heavily weighted respiratory product mix, over 3,700 active patients, and important insurance contracts. The business has a diverse payor mix and full suite of products with a focus on respiratory care, representing over 85% of the mix. Under the terms of the definitive purchase agreement, the Company acquired the DME operation of the business for approximately $1.7 million in cash, and the real estate for $0.5 million.

On November 12, 2021, the Company filed and obtained a receipt for its final short form base shelf prospectus (the “Final Shelf Prospectus”) ‎with the securities commissions in each of the provinces and territories of Canada, and a corresponding registration ‎statement on Form F-10 (the “Registration Statement”) with the SEC under the U.S./Canada

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Multijurisdictional Disclosure System.‎ The Final Shelf Prospectus and corresponding Registration Statement will allow Quipt to undertake offerings of ‎common shares, preferred shares, debt securities, warrants, subscription receipts and units (collectively, the “Securities”), or any combination thereof, up to an aggregate total of $200,000,000 from time to time during the ‎‎25-month period that the Final Shelf Prospectus remains effective. The Securities may be offered in amounts, at ‎prices and on terms to be determined at the time of sale and, subject to applicable regulations, may include “at-the-‎market” transactions, public offerings or strategic investments. The specific terms of any offering of Securities, ‎including the use of proceeds from any offering, will be set forth in one or more shelf prospectus supplement(s) to be ‎filed with applicable securities regulators. ‎Among other potential uses, the ‎Company may use the net proceeds from the sale of ‎Securities for general corporate purposes, including funding ‎ongoing operations and/or working capital ‎requirements, to repay indebtedness outstanding from time to time, and ‎to fund capital projects and potential ‎future acquisitions. ‎ As at the date hereof, the Company anticipates using the net proceeds to the Company from ‎any ‎offering of Securities primarily to ‎fund its previously announced acquisition strategy‎. ‎ One or more securityholders of the Company may also offer and sell ‎Securities under the Final Shelf Prospectus and Registration Statement, as applicable, although the Company will not ‎receive any proceeds from any sale of any Securities by any selling securityholder(s).‎

On November 9, 2021, the Company acquired, Southeastern Biomedical Services, LLC, a privately held biomedical services company, with operations in the Southeastern United States for consideration of approximately $700,000 in cash. The acquisition provides the Company a synergistic opportunity to expand into a brand-new service line of biomedical repair services for respiratory equipment including preventative maintenance. The acquisition services a wide range of respiratory products including ventilators, oxygen devices, CPAP/bilevel devices and more, which includes devices from both the acute and non-acute settings from within the home and hospital environments.

On December 16, 2021, the Company announced that it anticipated that it would miss the deadline of December 29, 2021 to file is audited annual financial statements and management discussion & analysis for the financial years ended September 30, 2021 and 2020, and the CEO and CFO certificates, all as required by National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”) (collectively, the “Documents”). The delay was due, in part, to the accelerated deadline for the Company to complete the Documents as a result of its listing its Common Shares for trading on NASDAQ and the expedited basis in which the Company’s auditors had to complete the audit. Accordingly, the Company informed the British Columbia Securities Commission (“BCSC”) of its anticipated delay in filing the Documents and applied to the BCSC pursuant to Part 4 of National Policy 12-203 – Management Cease Trade Orders for a Management Cease Trade Order (“MCTO”) pending the filing of the Documents, which MCTO was granted by the BCSC on December 30, 2021 and prohibited the Company’s management from trading in the securities of the Company until such time as the Documents are filed. The Company filed the Documents on January 27, 2022, following which, effective January 28, 2022, the MCTO was revoked by the BCSC.

On January 1, 2022, the Company acquired At Home Health Equipment, Inc. (“At Home Health Equipment”), a business with operations in Indiana. At Home Health Equipment has been in the respiratory home care services space for over 25 years and has several difficult to obtain insurance contracts that enhance the Company’s presence in the region. The acquisition introduced a new location for the Company, covering an entire service area of Indianapolis, and increased the Company’s active patient count by over 15,000. The expansionary operating footprint aligned closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease (“COPD”), a key target patient group; Indiana is among the highest prevalence United States. Under the terms of the definitive purchase agreement, the Company acquired At Home Health Equipment for approximately $13.1 million in cash.

On January 12, 2022, the Company received a letter from the Nasdaq Listing Qualifications department notifying the Company that because the Company had not yet filed its Form 40-F related to its fiscal year ended September 30, 2021, that it no longer complied with Nasdaq’s Listing Rules (the “Rules”) for continued listing. Under the Rules, the Company had sixty (60) calendar days to submit a plan to regain compliance and after submitting a plan, Nasdaq can grant an exception of up to one hundred eighty (180) calendar days from the Form 40-F filing’s due date, or until June 27, 2022, to regain compliance. This was resolved on January 27, 2022 with the filing of the Form 40-F.

On February 2, 2022, Brian J. Wessel was appointed to the Board as an independent director and as the Chair of the Audit Committee, increasing the size of the Board from three to four members. Mr. Wessel filled the vacancy left by the passing of Eugene Ewing, who served on the Board and Chaired the Audit Committee since September 2018. Mr. Ewing was an accomplished and seasoned public company executive with a wealth of knowledge across a variety of industry groups.

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On April 1, 2022, the Corporation acquired Good Night Medical, LLC (“Good Night Medical”), a business with operations across seven U.S. states, including Arkansas, Georgia, Massachusetts, North Carolina, Ohio, Texas and California. The acquisition provided the Company an expansionary opportunity into Massachusetts, North Carolina and Texas, which were new U.S. states for the Company’s coverage sphere including new commercial insurance contracts. The other four U.S. states were then current areas of service for the Company, which provided for actionable revenue and cost synergy opportunities as further scale was created in each operating region. The expansionary operating footprint aligns closely with regions that have a high prevalence of COPD, a key target patient group; cumulatively the seven states Good Night Medical operated in contained some of the highest prevalence U.S. states. The acquisition of Good Night Medical resulted in approximately 10,000 additional active patients for the Company. Under the terms of the definitive purchase agreement, the Company acquired Good Night Medical for approximately $7 million in cash.

On April 26, 2022, the Company announced it had entered into a national insurance contract with a top five health insurer in the United States.

MNP LLP resigned as auditor of the Company by their own initiative effective May 17, 2022, and on May 18, 2022 the Board appointed BDO USA, LLP to fill the vacancy from such resignation. The resignation by MNP LLP and the appointment of the BDO USA, LLP were considered and approved by the Board and the Audit Committee. MNP LLP did not have any reservations in the auditor's reports for the relevant period (as defined in NI 51-102), and in the Corporation’s opinion there had been no reportable events (as defined in NI 51-102) on any its financial statements relating to the relevant period.

On June 1, 2022, the Company acquired Access Respiratory Homecare, LLC (“Access Respiratory Homecare”), a business with operations in Louisiana. The acquisition encompassed two locations in Louisiana, New Orleans and Lafayette, representing the 19th state of service for the Company. The acquisition added over 1,000 referring physicians and increased the Company’s active patient count by over 6,000. Access Respiratory Homecare had several difficult to obtain insurance contracts and the expansionary operating footprint aligns closely with regions that have a high prevalence of COPD, a key target patient group.

On June 3, 2022, the Company acquired NorCal Respiratory, Inc. (“NorCal Respiratory”), a business with operations in California. The acquisition encompassed three locations in California, covering the northern portion of the state. The acquisition added over 600 referring physicians, and increased the Company’s active patient count by over 3,600. NorCal Respiratory had several important insurance contracts and the expansionary operating footprint aligned closely with regions that have a high prevalence of COPD, a key target patient group. Under the terms of the definitive purchase agreement, the Company acquired NorCal Respiratory for approximately $3.1 million in cash.

On July 1, 2022, the Company acquired Hometown Medical, LLC (“Hometown Medical”), a business with operations in Mississippi. The acquisition encompasses two locations in Mississippi, doubling the Company’s then current location count in the state. The acquisition added over 1,000 referring physicians and increased the Company’s active patient count by over 11,000. Hometown Medical had a diversified payor mix and several difficult to obtain insurance contracts and its expansionary operating footprint aligned closely with regions that have a high prevalence of COPD, a key target patient group.

On August 1, 2022, the Company entered into a contract with Cardinal Health at-Home, a business unit of Cardinal Health, Inc. (NYSE:CAH) (“Cardinal”), wherein Quipt agreed to offer to sell, and Cardinal has agreed to supply and distribute, disposable medical supplies nationwide.

On August 9, 2022 the Company exercised its right (the “Conversion Right”) under the debenture indenture dated March 7, 2019, as amended,  between the Company and Computershare Trust Company of Canada (the “Debenture Indenture”), which governs all of the Company’s 8.0% unsecured convertible debentures issued on March 7, 2019 (the “2019 Debentures”), to convert (the “Conversion”) all of the principal amount outstanding of the remaining 2019 Debentures on September 8, 2022 (the “Conversion Date”) into Common Shares. Pursuant to the terms of the Debenture Indenture, the Company may force conversion of the outstanding principal amount (less any tax required by law to be deducted or withheld) of the 2019 Debentures into Common Shares at the conversion price of C$5.20 per Common Share if the volume weighted average trading price of the Common Shares on the TSX-V for 20 consecutive trading days equals or exceeds C$6.48. As of close of markets on August 8, 2022, the volume weighted average trading price of the Common Shares listed on the TSX-V exceeded C$6.48 for a period of 20 consecutive trading days. As a result of the Conversion on

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September 8, 2022, the remaining total of 2019 Debentures outstanding were converted into 365,769 Common Shares, and accrued and unpaid interest (less any required deductions or withholdings) was paid by the Company in cash to the applicable holders of the 2019 Debentures.

On August 15, 2022, the Company received a binding commitment letter from CIT Bank, N.A. (“CIT”), a division of First-Citizens Bank & Trust Company, that CIT will commit to provide 100% of the senior secured credit facilities in the aggregate amount of up to $80,000,000. On September 16, 2022, further to the binding commitment letter with CIT, the Company closed on senior secured credit facilities in an aggregate amount of $110,000,000, comprised of a term loan facility in an aggregate principal amount of $5,000,000, a delayed draw term loan facility in an aggregate principal amount of $85,000,000 and a revolving credit facility in an aggregate principal amount of $20,000,000 (collectively, the “Senior Credit Facilities”). The Company originally announced this transaction on August 15, 2022 when it executed a binding commitment letter with CIT for up to $80,000,000, however, as a result of strong demand from CIT and its syndicate of lenders the Senior Credit Facilities were increased. The Senior Credit Facilities are evidenced by an Amended and Restated Credit and Guaranty Agreement dated September 16, 2022 (the “Amended and Restated Credit and Guaranty Agreement”), which amended and restated the original Credit Agreement dated September 18, 2020 between the Company (and certain subsidiaries) and CIT (and other lenders). The primary use of proceeds of any loans made under the Senior Credit Facilities are intended to be used to finance potential future acquisitions and general working capital purposes.

Developments Subsequent to the Fiscal Year ended September 30, 2022

As of December 23, 2022, there are no subsequent events to report.

Significant Acquisitions During 2022

During 2022 the Company did not complete any significant acquisitions during its most recently completed financial year for which disclosure is required under Part 8 of NI 51-102.

DESCRIPTION OF THE BUSINESS

Company Overview

The Company’s main revenue source is in providing in-home medical equipment and supplies, providing respiratory ‎‎and durable medical equipment, to patients in the United States. ‎ The Company has physical operations in many ‎states within the United States. ‎

Business Objective

The Company, through its subsidiaries, provides in-home medical equipment and supplies, durable medical ‎‎‎equipment, to patients in the United States. The Company 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 apnea, ‎‎reduced mobility and other chronic health conditions requiring home-based ‎services in the United States. The initial ‎‎service line includes providing in-home equipment, supplies and ‎services to patients in the United States. The ‎‎primary business objective of the Company is to create shareholder value ‎by continuing to offer a broader range of ‎‎services to patients in need of in-home equipment and chronic disease ‎management, as well as acquiring other ‎‎companies operating in the United States healthcare service and product sectors. ‎The Company’s organic growth ‎‎strategy is aggregate patients in existing or complimentary markets, through both ‎acquisitions and taking market ‎‎share directly from competitors, as well as its technology investment plans, whereby the ‎Company plans to leverage ‎‎technology to increase patient compliance by making ongoing training and patient follow ‎up easier on the patient ‎‎and improve the speed and ease of equipment and device delivery and set-up‎.

Key Performance Drivers

The Company’s revenue lines are based on fulfilling prescriptions for services and products for patients that suffer ‎‎from chronic illness. The growing niche market of home equipment and monitoring provides significant opportunity ‎‎to garner

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market share and may require the ongoing deployment of up-front capital to purchase monitoring and ‎‎treatment equipment. The Company believes that it is well positioned to acquire the equipment necessary to grow ‎its ‎annuity stream businesses‎.

Subsidiaries

The principal business and operations of each of the Company’s material subsidiaries is discussed below.

Resource Medical Group, LLC and Resource Medical Group of Charleston, LLC

Resource Medical Group, LLC and Resource Medical Group of Charleston, LLC (collectively, “Resource Medical”) are ‎South Carolina limited liability companies, acquired by the Company in January 2014, which offer an array of durable ‎medical equipment focused on pulmonary disease services, home-based sleep apnea and chronic obstructive pulmonary ‎disease treatments, as well as home-based healthcare logistics and services. ‎

Resource Medical have a strong presence in South Carolina and an expansive product ‎offering, including the following: bariatric equipment, bathroom safety products, Bi-level PAP (bilevel positive airway ‎pressure), canes/crutches, continuous positive airway pressure (“CPAP”) and CPAP masks and accessories, hospital beds, ‎humidifiers, nebulizer and compressors, oxygen concentrator, patient lifts, walkers, wheelchairs, and products for wound ‎care. The demand for these items is expected to grow as the United States population continues to age and chronic ‎diseases among those aged 65 and over continue to increase.‎

Care Medical Partners LLC

Care Medical Partners LLC (“CMP”), which was acquired by the Company in June 2014 and consists of Care Medical ‎of Athens, Inc., Care Medical Atlanta, LLC, Care Medical of Augusta, LLC, Care Medical of Gainesville, LLC, and Care ‎Medical Savannah, LLC, focuses on CPAP and sleep apnea equipment and supplies, mobility equipment, oxygen and ‎other related equipment and medical supplies. Licensed to do business in Georgia and South Carolina and located ‎throughout Georgia, CMP has added to the Company’s product and service line in a key location, increasing access to ‎patients. Providing both home and hospital delivery, CMP provides medical supplies, ‎medical equipment in addition to mobility equipment and respiratory equipment.‎

Black Bear Medical, Inc., Black Bear Medical North, Inc. and Black Bear Medical NH, Inc.

Black Bear Medical Group, Inc. was acquired by the Company in January 2015, which consists of Black Bear Medical, ‎Inc., Costal Med-Tech Corp. and Black Bear Medical NH, Inc. (collectively, “BBM”), being entities licensed to do ‎business in Maine and New Hampshire. BBM specializes in home-based healthcare services, including mobility ‎solutions, and other durable medical equipment. These entities have widened the Company’s reach to upper east coast ‎patients in Maine and New Hampshire, strengthening its geographic presence and increasing its offerings.‎

Legacy Oxygen & Home Care Equipment, LLC

The Company acquired Legacy Oxygen & Home Care Equipment, LLC, a ‎regionally focused company, licensed to do business in Kentucky and Tennessee in May 2015. The company offers home-based medical ‎equipment and services for patients with chronic pulmonary conditions across multiple locations in Kentucky.‎

Patient-Aids, Inc.

The Company acquired Patient-Aids, Inc. (“Patient-Aids”), a high growth, high margin, and profitable Ohio-based ‎company focused on providing home-based healthcare services. Patient-Aids has, since 1982, been a dominant business in ‎their region being licensed to do business in Ohio, Kentucky, and Indiana. Its product lines and services focus on treating ‎patients with chronic power mobility conditions, respiratory conditions, and patients requiring traditional durable medical ‎home-based equipment.‎

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Sleepwell, LLC

The Company acquired Sleepwell, Inc. (“Sleepwell”). Sleepwell is a participating Medicare provider that primarily provides sleep-related products and services such as PAP units, supplies, and services. Sleepwell is a leader in sleep services in the State of Georgia, with significant penetration in the Southeastern corridor of the region. In addition to Georgia, Sleepwell also provides sleep services to patients in Dayton, Ohio, which is Sleepwell’s wholly-owned subsidiary, Tuscan, Inc., dba Halsom Home Care.

At Home Health Equipment, Inc.

The Company acquired At Home Health Equipment, Inc. (“At Home”), a business with operations in Indiana. At Home is a leader in the respiratory home care services space for over 25 years and has several difficult to obtain insurance contracts that significantly enhance Quipt’s presence in the region. At Home offers high-quality service, equipment and supplies. The expansionary operating footprint aligns closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease (“COPD”), a key target patient group. 

Hometown Medical. LLC

The Company acquired Hometown Medical, LLC (“Hometown”). Hometown is based in Mississippi offers a high-quality, full-service line of equipment and supplies, and has a diversified payor mix and several difficult to obtain insurance contracts and its expansionary operating footprint aligns closely with regions that have a high prevalence of Chronic Obstructive Pulmonary Disease (“COPD”), a key target patient group.

Specialized Skills and Knowledge

The Company employs a team of respiratory therapists to provide the services enumerated above. Each respiratory therapist is required to be state licensed, either as a Registered Respiratory Therapist and/or Certified Respiratory Therapist. The Company encourages and reimburse its respiratory therapists for pursuing the additional certification level of COPD Educator, which enhances the work that may be done with patients in and out of the hospital environment. Its clinical team manages patients that use its services that range from nebulizers to invasive ventilation.

The Company also employs a team of Assistive Technology Professionals (“ATP”) who provide customized mobility and bath safety equipment for patients. Its ATPs are certified through NRRTS (National Registry of Rehabilitation Technology Suppliers) and RESNA (Rehabilitation Engineering and Assistive Technology Society of North America). Part of the ATP team has gone further in their education to receive certifications that allow them to specialize in areas within complex rehabilitation.

The Company’s employees receive ongoing training that relates to the healthcare delivery system allowing the employees to have a complete understanding of the services that the Company provides to its patients.

Competitive Conditions

The Company has physical operations in 19 states. The Company participates in a highly competitive market, which may become more competitive as new players enter. Certain competitors have vertically integrated manufacturing and services sectors of the market. While most of the DME distributor industry is fragmented into small regional players, there are some noteworthy companies that have an acquisitive strategy similar to the Company. Within these markets the nationally based companies such as Lincare, Apria, Rotech, and Adapt Healthcare are the competitors that the Company faces more consistently.

New Products

The Company continually investigates and considers additional services that would complement the services already offered by its subsidiaries that would serve the current patient population and/or help the Company break into new segments of the regional populations it covers.

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Components

The Company has strong relationships with its suppliers and has gained purchasing power as a result of being a member of two purchasing groups (VGM and The MedGroup) that help secure competitive pricing. It has business reviews with its top vendors and is an early adopter of their new product introductions. There are few manufacturers of equipment which can be used at home. The emerging nature of the market presents risks that vendors may not be able to provide equipment to satisfy demand. The Company participates in test pilots that help it understand what new technologies are available and will continue to do so to identify steps it may need to take to be the industry leader.

Cycles

The calendar year is influential throughout the American health system due to the need for most patients to meet their deductibles as part of their insurance plans. These deductibles are generally met in the second half of the year, unless there is an immediate need for the treatment prescribed.

The industry is also influenced by weather changes or events. When the weather turns cold, more respiratory needs are experienced. If significant weather events occur (such as hurricanes, massive tornadoes, etc.), it leads to a demand for replacement equipment. Unique situations can arise from a business unit branch. Two such examples come from the Company’s Prothrombin Time International Normalized Ratio (“PTINR”) business and BBM.

The Company’s fiscal Q1 tends to see a decrease in enrollments due to weather, office closings and holiday hours providing fewer opportunities to train patients. The demand is constant for testing; the availability of training of patients is impacted as described.

With complex rehabilitation, BBM typically sees the best reimbursement from September to February largely due to the involvement of school therapists and physician practices as their patient base expands with the beginning of the school year.

Economic Dependence

The Company earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments. If the Medicare program were to slow payments of the Company receivables for any reason, the Company would be adversely impacted.

Changes to Contracts

The Centers for Medicare & Medicaid Services (“CMS”) policies of health insurance for Medicare in the United States may affect the amount of revenue the Company receives.

Employees

As at September 30, 2022, the Company had a total of approximately 800 employees. In addition, the Company has staff augmentation arrangements with global partners.

Foreign Operations

As at the date hereof, the Company conducts all of its operations through its subsidiaries, which operate exclusively in the United States and together have a service coverage area of 19 states.

RISK FACTORS

The following major risk factors should be given special consideration when evaluating trends, risks and uncertainties relating to the Company’s business. Any of the following risk factors could cause circumstances to differ materially from those described in forward-looking statements relating to the Company and could have a material adverse effect upon the

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Company, its business and future prospects. Although the following are major risk factors identified by management, they do not comprise a definitive list of all risk factors related to the Company.

Some of the risk factors described herein are interrelated and, ‎consequently, investors should treat such risk factors as a whole. If any event arising from these risks occurs, the ‎Company’s business, prospects, financial condition, results of operations and cash flows could be materially adversely affected. In addition, other risks and uncertainties not presently known by management could impair the Company and its business in the future. Additional risks and uncertainties of which the ‎Company is currently unaware or that are unknown or that the Company currently deems to be immaterial could ‎have a material adverse effect on the business, financial condition and results of operation of the Company. The ‎Company cannot provide any assurance that it will successfully address any or all of these risks.‎

This AIF also contains ‎forward-looking statements that involve risks and uncertainties. The Company’s ‎actual results could differ ‎materially from those anticipated in forward-looking statements as a result of a ‎number of factors. See also the ‎section titled “Caution Regarding Forward-Looking Statements”.‎

Market Price of the Common Shares

The Common Shares are currently listed and posted for trading on the TSX-V and NASDAQ. 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 Common ‎Shares is also likely to be significantly affected by short-term changes in cost of goods, or ‎in financial condition or ‎results of operations of the Company. Other factors unrelated to the performance of the ‎Company that may have an ‎effect on the price of the Common 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 ‎Common Shares; the size of the Company’s public float ‎may limit the ability of some institutions to invest in the Company’s securities; a substantial decline in the price of the ‎Common 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; adverse changes in general market or ‎industry conditions or economic trends; the COVID-19 pandemic, or a variety of other factors.‎

As a result of any of these factors, the market price of the Common 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 ‎similar litigation. Securities litigation could result in substantial costs and damages and divert ‎management’s attention ‎and resources‎.‎

Future Sales of Shares by Shareholders

Sales of a large number of the Common Shares in the public markets, or the potential for such sales, could decrease ‎the ‎trading price of the Common Shares and could impair the Company’s ability to raise capital through future ‎sales of the ‎Common Shares. The Company cannot predict the effect that future sales of Common Shares or other equity-related ‎securities would have on the market price of the Common Shares. The price of the Common Shares could be affected by ‎possible sales of the Common Shares by hedging or arbitrage trading activity. If the Company raises additional funding ‎by issuing additional equity securities, such financing may substantially dilute the interests of shareholders of the ‎Company and reduce the value of their investment. ‎

Dilution

The Company may require additional funds in respect of the further development of the Company’s business. If the Company raises funds by issuing additional equity securities, such financing will dilute the equity interests of its shareholders.

Global financial conditions can reduce share prices and limit access to financing

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The economic viability of the Company’s business plan is impacted by the Company’s ability to obtain ‎financing. Global economic conditions impact the general availability of financing through public and private debt ‎and equity markets, as well as through other avenues. ‎

Significant political, market and economic events may have wide-reaching effects and, to the extent they are not ‎accurately anticipated or priced into markets, may result in sudden periods of market volatility and correction. ‎Periods of market volatility and correction may have an adverse impact on economic growth and outlook, as well ‎as lending and capital markets activity, all of which may impact the Company’s ability to secure adequate ‎financing on favourable terms, or at all.‎

Furthermore, general market, political and economic conditions, including, for example, inflation, interest and ‎currency exchange rates, political developments, legislative or regulatory changes, social or labour unrest and ‎stock market trends will affect the Company’s operating environment and its operating costs, profit margins and ‎share price. Uncertainty or adverse changes relating to government regulation, economic and foreign policy ‎matters, and other world events have the potential to adversely affect the performance of and outlook for the ‎Canadian and global economies, which in turn may affect the ability of the Company to access financing on ‎favourable terms or at all. For example, recent uncertainty regarding Canada’s ability to access North American ‎markets via the North American Free Trade Agreement and increased levels of turmoil in certain geopolitical ‎hotspots have the potential to increase uncertainty and volatility in Canadian and global markets, respectively. The ‎occurrence of negative sentiment or events in the Canadian and broader global economy could have a material ‎adverse effect on the Company’s business, financial condition, results of operations, cash flows or prospects.

Limited History of Operations

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

Novel Business Model

Home monitoring of patients is a relatively new business, making it difficult to predict market acceptance, development, expansion and direction. The home monitoring services to be provided by the Company represent a relatively new development in the United States healthcare industry. Accordingly, adoption by patients and physicians can require education, which can result in a lengthy sales cycle. The market may take time to develop. Physicians and/or patients may be slow to adopt new methods. The development of the Company’s home monitoring business is dependent on a number of factors. These factors include: the Company’s ability to differentiate the Company’s services from those of the Company’s competitors; the extent and timing of the acceptance of the Company’s services as a replacement for, or supplement to, traditional methods of servicing and monitoring patients; the effectiveness of the Company’s sales and marketing and engagement efforts with customers and their health plan participants; the Company’s ability to provide quality customer service, as perceived by patients and physicians.

Because the monitoring business is evolving, the Company may not be able to anticipate and adapt to the developing market. Moreover, the Company cannot predict with certainty the future growth rate or the ultimate size of the market.

Reimbursement Rates May Decline

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 in this area, and much of the United States health care market in general, 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.

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.

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Loss of Competitive Bids

On the reimbursement front, the CMS ‎oversees a competitive bidding ‎program covering durable medical equipment (“DME”), the process in which ‎a Medicare supplier provides DME ‎products to Medicare beneficiaries. Pursuant to the CMS, beginning in 2021, a ‎new competitive bidding process known as ‎Round 2021 will be launched by the CMS, covering contracts running ‎from January 1, 2021 to December 31, 2023. It is ‎possible that the Company may not be selected in some or all the ‎Competitive Bidding Area (“CBA”) that is has bid ‎for. It is also possible that the Company may not be selected for ‎some or all of the product categories that it has bid ‎more. Non-selection for CBA and/or product category may ‎result in loss of revenue and referral sources.‎

Dependence Upon Relationships with Key Suppliers

There are few manufacturers of equipment which can be used for home use of patients. There is the possibility that a new meter will encounter difficulties or “bugs” when first sent to market, and that initial technical support costs may be higher than for more well-established meters. Even if the Company switches to other competing meters, they may also encounter technical difficulties or regulatory issues. The emerging nature of the market 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. The industry is subject to a high level of regulatory scrutiny, and government or manufacturer recalls could adversely affect the Company’s ability to provide services and achieve revenue targets.

Inadequate supply could 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. Several equipment manufacturers are pursuing a strategy of vertical integration, and should the Company ever need to order equipment from those manufacturers, such equipment may not be available on favourable terms.

Reliance Upon Few Payers

The Company earns revenues by seeking reimbursement from Medicare and private health insurance companies, with the Medicare program of the United States government being the primary entity making payments. If the Medicare program were to slow payments of the Company 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 require certain licences and permits from the authorities in the United States. The ability of the Company and its subsidiaries to obtain, sustain or renew any such licences 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. There is no guarantee that the Company will meet these conditions.

The Company is subject to regulation from United States federal and state authorities. Regulatory action could disrupt the Company’s 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 operation. 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.

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CMS policies of health insurance for Medicare in the United States may affect the amount of revenue the Company receives. The Company is subject to risk that reimbursement rates for its services from both federal and private payers will decline over time. Reimbursement from federal programs is subject to constant regulatory review and increasing audits by federal authorities, the effect of which may be to increase costs of service and delay or affect reimbursement, which could negatively impact cash flow and/or revenue. Audits may be costly and time consuming, and could delay cash flow, even if the Company acted properly in all respects.

The policies of health insurance carriers in the United States may affect the amount of revenue the Company receives.

Healthcare Reform Legislation

Healthcare reform laws significantly affect the U.S. healthcare services industry. In recent years, many legislative proposals have been introduced or proposed in Congress and in some state legislatures that would affect major changes in the healthcare system, either nationally or at the state level. At the federal level, Congress has continued to propose or consider healthcare budgets that substantially reduce payments under the Medicare and Medicaid programs. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential legislation on us is uncertain and difficult, if not impossible, to predict. That impact may be material to the Company’s business, financial condition or results of operations.

Highly Competitive Market

The industry in which the Company operations is a highly competitive market and 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.

Low Profit Market Segments

Where the Company provides services to a patient who does not use provide rental equipment often or for an extended period of time, profitability may be unlikely in respect of that patient. In these cases, the Company may not have a rental equipment with the patient long enough to recoup costs. Where the Company owns the rental equipment, the failure of the patient to return the equipment to the Company may impact profitability. Legal costs of bringing an action to obtain return of a equipment may exceed the value of the equipment, leading to losses with certain patient populations even under a favourable reimbursement environment.

Foreign Subsidiaries

The Company conducts all its operations through its United States subsidiaries. Therefore, to the extent of these holdings, the Company (directly and indirectly) is 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.

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 Company may also encounter difficulties in obtaining and maintaining suitably qualified staff. 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 in order 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 is dependent on the services of key executives, including the Board 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.

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Growth Management

The Company may have difficulty identifying or acquiring suitable acquisition targets and maintaining the organic growth which is a significant aspect of its business model. If it is unable to manage growth, the Company may be unable to achieve its expansion strategy, which could adversely impact its earnings per share and its revenue and profits.

Dividends

The Company has never declared or paid any dividends on its Common Shares. The Company intends, for the ‎foreseeable future, to retain tis future earnings, if any, to finance the Company’s business activities. The payment of future dividends, ‎if any, will be reviewed periodically by the Board and will depend upon, among other things, ‎conditions then existing including earnings, financial conditions, cash on hand, financial requirements to fund business ‎activities, development and growth, and other factors that the Board may consider appropriate in the ‎circumstances. ‎

Discretion in the Use of Available Funds

Management has broad discretion concerning the use of the Company’s available funds as well as the timing of expenditures. As a result, shareholders and investors will be relying on the judgment of management for the application of the 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 the available funds are uncertain. If the available funds are not applied effectively, the Company’s results of operations may suffer.

Potential Conflicts of Interest

There are potential conflicts of interest to which some of the directors and officers of the Company may be subject in connection with the operations of the Company and situations may arise where the directors and officers may be in direct competition with the Company. Conflicts of interest, if any, which arise may be subject to and be governed by procedures prescribed by the BCBCA 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 BCBCA. 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 is subject to a number of 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 subject to product liability and medical malpractice claims, which may adversely affect its operations. The industry in which the Company operates is highly regulated, and it 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 maintains 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.

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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. The initial primary source of funding available to the Company consists 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 favourable 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 12g3-2(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 March 31, 2022 (the ‎‎last business day of the Company’s second fiscal quarter), the Company estimates that approximately 36% ‎of ‎the Company’s outstanding voting securities are 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 U.S. Securities Act, 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.

United States Operations and Exchange Rate Fluctuations

All of the Company’s revenue is generated from operations in the United States. The Company is subject to a number of 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 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.

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 Common Shares are denominated in Canadian dollars. Cash is primarily maintained in U.S. dollars, with a small amount in Canadian dollars. Consequently, the Company is exposed to minimal foreign exchange fluctuations. The Company will continue to maintain cash balances in both U.S. and Canadian dollars, but management anticipates that it will not purchase any securities or financial instruments to speculate on currency fluctuations or engage in any currency hedging programs.

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Global Economy

Recent market events and conditions, including disruptions in the international credit markets and other financial systems and the deterioration of global economic conditions, could impede the Company’s access to capital or increase the cost of capital. Notwithstanding various actions by the United States and foreign governments, concerns about the general condition of the capital markets, financial instruments, banks, investment banks, insurers and other financial institutions caused the broader credit markets to deteriorate and stock markets to fluctuate substantially.

These disruptions in the current credit and financial markets have had a significant material adverse impact on a number of financial institutions and have limited access to capital and credit for many companies. These disruptions could, among other things, make it more difficult for the Company to obtain, or increase its cost of obtaining, capital and financing for its operations. Access to additional capital may not be available to the Company on terms acceptable to it, or at all.

Cybersecurity

The Company relies on digital and internet technologies to conduct and expand its operations, including reliance on information technology to process, transmit and store sensitive and confidential data, including protected health information, personally identifiable information, and proprietary and confidential business performance data. As a result, the Company and/or its customers are exposed to risks related to cybersecurity. Such risks may include unauthorized access, use, or disclosure of sensitive information, corruption or destruction of data, or operational disruption resulting from system impairment (e.g., malware). The Company’s operations depend, in part, on how well it protects networks, equipment, information technology systems and software against damage from a number of threats, including, but not limited to damage to hardware, computer viruses, hacking and theft. The Company’s operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, information technology systems and software, as well as pre‐emptive expenses to mitigate the risks of failures. A compromise of the Company’s information technology or confidential information, or that of the Company’s patients and third parties with whom the Company interacts, may result in negative consequences, including the inability to process patient transactions, reputational harm affecting patient and/or investor confidence, potential liability under privacy, security, consumer protection or other applicable laws, regulatory penalties and additional regulatory scrutiny, any of which could have a material adverse effect on the Company’s business, financial position, results of operations or cash flows. As the Company has access to sensitive and confidential information, including personal information and personal health information, and since the Company may be vulnerable to material security breaches, theft, misplaced, lost or corrupted data, programming errors, employee errors and/or malfeasance (including misappropriation by departing employees), there is a risk that sensitive and confidential information, including personal information and personal health information, may be disclosed through improper use of Company systems, software solutions or networks or that there may be unauthorized access, use, disclosure, modification or destruction of such information. The Company’s ongoing risk and exposure to these matters is partially attributable to the evolving nature of these threats. As a result, cybersecurity and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage, malfunction, human error, technological error or unauthorized access is a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

COVID-19 Pandemic

On March 11, 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus (“COVID-19”) a global pandemic. In response to the outbreak, governmental authorities in the United States and internationally have introduced various recommendations and measures to try to limit the pandemic, including travel restrictions, border closures, non-essential business closures, quarantines, self-isolations, shelters-in-place, and social distancing. The COVID-19 outbreak and the response of governmental authorities to try to limit it are having a significant impact on the private sector and individuals, including unprecedented business, employment, and economic disruptions.

The continued spread of COVID-19 nationally and globally could have an adverse impact on the Company’s business, operations and financial results, including through disruptions in the Company’s labour inputs, supply chains and sales channels. In response to COVID-19, the United States’ guidelines issued on March 16, 2020 specifically noted that healthcare services were a critical infrastructure industry as defined by the Department of Homeland Security and employees of companies in this industry have a social responsibility to maintain a normal work schedule to meet service

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demands. In response to the COVID-19 pandemic, the Company has modified its current policies and implemented the instructions provided by the Centers for Disease Control and Prevention in order to best protect its employees and patient network. In addition, the Company accelerated inventory purchases to safeguard against any potential future supply chain weaknesses and meet potential increased demand. These measures and similar measures taken by other businesses may adversely impact the Company’s labour productivity and its supply chains.

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 for the Company’s products, as well as a deterioration of general economic conditions including a possible national or global recession. Due to the speed with which the COVID-19 situation is developing and the uncertainty of its magnitude, outcome, and duration, it is not possible to estimate its impact on the Company’s business, operations, financial results and position or prospects at this time.

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.

Finally, the actual and threatened spread of COVID-19 globally could adversely affect global economies and financial markets, resulting in a prolonged economic downturn and a decline in the value of the Company’s share price. The extent to which COVID19 (or any other disease, epidemic, or pandemic) impacts business activity or financial results, and the duration of any such negative impact, will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning COVID-19 and the actions required to contain or treat its impact, among others.

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 in the past have used, the BiPAP and CPAP and mechanical ‎ventilator devices

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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. ‎

Risks of Litigation and Governmental Proceedings

The Company is, and in the future may be, subject to legal and governmental proceedings and claims. The parties in such legal actions may seek amounts from us that may not be covered in whole or in part by insurance. Defending against such legal actions could result in significant costs and could require a substantial amount of time and effort by the Company’s management team. The Company cannot predict the outcome of litigation or governmental proceedings to which it is a party or whether it will be subject to future legal actions. As a result, the potential costs associated with legal actions against the Company could adversely affect its business, financial condition, results of operations, cash flows or prospects.

Forward-Looking Statements May Prove to be Inaccurate

Readers are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking ‎statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and ‎specific nature, that could cause actual results to differ materially from those suggested by the forward-looking ‎statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially ‎inaccurate. Additional information on the risks, assumptions and uncertainties are found in this AIF and in ‎certain of the documents incorporated by reference herein under the heading “Caution Regarding ‎Forward-Looking Statements”.‎

DIVIDENDS

As of the date of this AIF, the Company has not paid any dividends and has no current intention to declare dividends on the Common Shares in the foreseeable future. Any decision to pay dividends on the Common Shares in the future will be at the discretion of the Board and will depend on, among other things, the Company’s results of operations, contractual restrictions, capital requirements, business prospects and other factors that the Board may consider relevant.

CAPITAL STRUCTURE

The Company is authorized to issue an unlimited number of Common Shares, an unlimited number of first preferred shares (each, a “First Preferred Share”) without par value, and an unlimited number of second preferred shares (each, a “Second Preferred Share”) without par value.

Common Shares

As of September 30, 2022, there were 35,605,280 Common Shares issued and outstanding as fully paid and non-assessable. As of the date hereof, there are 35,605,280 Common Shares issued and outstanding as fully paid and non-assessable.

All of the Common Shares are of the same class and, once issued, rank equally as to dividends, voting powers and participation in assets and in all other respects, on liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs after the Company has paid out its liabilities. The issued Common Shares are not subject to call or assessment by the Company nor are there any pre-emptive, conversion, exchange, redemption or retraction rights attaching to the Common Shares.

All registered holders of Common Shares are entitled to receive notice of any general or special meeting to be convened by the Company. At any general or special meeting, subject to the restrictions on joint registered owners of Common

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Shares, each holder of Common Shares is entitled to one vote per share of which it is the registered owner and may exercise such votes either in person or by proxy. Otherwise, on a show of hands every Shareholder who is present in person and entitled to vote will have one vote, and on a poll every Shareholder has one vote for each Common Share of which it is the registered owner. The Company’s articles provide that the rights and provisions attached to any class of shares, in which shares are issued, may not be modified, amended or varied unless consented to by special resolution passed by a majority of not less than two-thirds of the votes cast in person or by proxy by holders of shares of that class.

Preferred Shares

As of September 30, 2022, and as of the date hereof, there were no First Preferred Shares or Second Preferred Shares issued and outstanding.

The First Preferred Shares of each series shall, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company or for the purpose of winding–up its affairs, rank on parity with the First Preferred Shares of every other series and be entitled to preference over the Second Preferred Shares of every other series and the Common Shares of the Company. The Second Preferred Shares of each series shall, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company or for the purpose of winding–up its affairs, rank on parity with the Second Preferred Shares of every other series and be entitled to preference over the Common Shares of the Company.

Equity Incentive Awards

On March 25, 2021, the directors of the Company approved the 2021 Equity Incentive Plan of the Company (the “Omnibus Plan”), which became effective upon approval by the shareholders of the Company at the annual and special meeting (the “Meeting”) held on May 3, 2021 (the “Effective Date”), pursuant to which the Company is able to issue share-based long-term incentives. The Omnibus Plan is intended to replace the Company’s amended and restated fixed number stock option plan (and its predecessors) (the “2019 Option Plan”) and its restricted share unit and deferred share unit plan (the “2017 RSU/DSU Plan”, and together with the 2019 Option Plan, the “Predecessor Plans”).

All directors, officers, employees and consultants of the Company and/or its affiliates (“Participants”) are eligible to receive Awards (as such term is defined below) under the Omnibus Plan, subject to the terms of the Omnibus Plan. Awards include Common Share purchase options (“Options”), stock appreciation rights (“Stock Appreciation Rights”), restricted share awards (“Restricted Share Awards”), Restricted Share Units (“RSUs”), performance shares (“Performance Shares”), performance units (“Performance Units”), cash-based awards (“Cash-Based Awards”) and other share-based awards (collectively, the “Awards”), under the Omnibus Plan.

The Omnibus Plan serves several purposes for the Company. One purpose is to advance the interests of the Company by developing the interests of Participants in the growth and development of the Company by providing such persons with the opportunity to acquire a proprietary interest in the Company. All Participants are considered eligible to be selected to receive an Award under the Omnibus Plan. Another purpose is to attract and retain key talent and valuable personnel, who are necessary to the Company’s success and reputation, with a competitive compensation mechanism. Finally, the Omnibus Plan will align the interests of Participants with those of shareholders by devising a compensation mechanism which encourages the prudent maximization of distributions to shareholders and long-term growth.

With the adoption of the Omnibus Plan, the main components of the Company’s compensation program will be as follows ‎: (i) base salary (fixed cash amount), (ii) short-term performance incentives (variable cash bonuses), and (iii) a broad range ‎of long-term “at risk” equity-based incentives under the Omnibus Plan.‎

The Omnibus Plan is administered by the Board or, if applicable, a committee of the Board.

The maximum number of Common ‎Shares available and reserved for issuance, at any time, under the Omnibus Plan, together with any other security-based compensation arrangements adopted by the‎ Company, including the Predecessor Plans, may not exceed 6,126,698 Common Shares, being twenty percent (20%) of the issued and outstanding Common Shares on the ‎Effective Date. The maximum amount of the ‎foregoing Common Shares that may be awarded under the Omnibus Plan as “Incentive Stock Options” (as defined in the Omnibus ‎Plan), shall be equal to the number of Common

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Shares reserved for issuance under the Omnibus Plan, namely, 20% of the issued and outstanding Common Shares on the ‎Effective Date.

The number of Common Shares issuable to insiders, at any time, under all security based compensation arrangements of the Company, may not exceed 10% of the Company’s issued and outstanding Common Shares as of the date of the grant or issuance, as applicable; and the number of Common Shares issued to insiders within any one-year period, under all security based compensation arrangements of the Company, may not exceed 10% of the Company’s issued and outstanding Common Shares. The maximum aggregate number of Common Shares that are issuable pursuant to Awards issued or granted, as applicable, to any one Participant under the Omnibus Plan, together with all other share based compensation, granted or issued in any 12 month period to any one Participant must not exceed 5% of the Common Shares, calculated as at the date any Award is granted or issued to the Participant (unless the Company has obtained the requisite disinterested shareholder approval). The aggregate number of Options which may be granted to any one Participant that is a consultant of the Company in any 12 month period must not exceed 2% of the issued Common Shares of the Company calculated at the first such grant date. In addition, the aggregate number of Options granted to all persons retained to provide investor relations activities must not exceed 2% of the issued Common Shares of the Company in any 12 month period calculated at the first such grant date (and including any Participant that performs investor relations activities and/or whose role or duties primarily consist of investor relations activities) and any such Options granted to any person retained to provide investor relations activities must vest in a period of not less than 12 months from the date of grant of the Award and with no more than 25% of the Options vesting in any three month period notwithstanding any other provision of the Omnibus Plan.

The amount of Awards granted to a non-employee director, within a calendar year period, pursuant to the Omnibus Plan shall not exceed US$750,000 in value of the aggregate of Common Share and cash Awards. The Omnibus Plan does not otherwise provide for a maximum number of Common Shares which may be issued to an individual pursuant to the Omnibus Plan and any other share compensation arrangement (expressed as a percentage or otherwise).

Cessation of Service and Transferability

The Board may provide the circumstances in which Awards shall be exercised, vested, paid or ‎forfeited in the event a Participant ‎ceases to provide service to the Corporation or any affiliate prior to the end of a performance ‎period or exercise or settlement of such ‎Award.‎ Any Awards granted must expire within a reasonable period, not exceeding 12 months, following the date a Participant ‎ceases to be an eligible Participant under the Omnibus Plan.‎

Subject to limited exceptions in the ‎Omnibus Plan for certain Awards, an Award may be assignable or transferable by a Participant only by will or by the laws of descent and distribution following the death of the Participant.

Adjustments and Change in Control

In the event of any stock dividend or extraordinary cash dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Corporation, appropriate adjustments shall, subject to the prior acceptance of the Exchange other than in respect of a stock split or reverse stock split, be made in the number and class of Common Shares subject to the ‎Omnibus Plan and to any outstanding Awards, and in the exercise price per share of any outstanding Awards.

In the event of a Change in Control, the surviving, continuing, successor or purchasing entity or its parent may, without the consent of any Participant, and subject to the prior acceptance of the Exchange, either assume or continue outstanding awards or substitute substantially equivalent awards for its shares. If so determined by the Board, share-based Awards will be deemed assumed if, for each share subject to the award prior to the Change in Control, its holder is given the right to receive the same amount of consideration that a shareholder would receive as a result of the Change in Control. Any awards that are not assumed or continued in connection with a Change in Control or exercised or settled prior to the Change in Control will terminate effective as of the time of the Change in Control.

Subject to the restrictions of Section 409A of the United States Internal Revenue Code (the “Code”), the Board may provide for the acceleration of vesting or settlement of any or all outstanding awards upon such terms and to such extent as it determines. The vesting of all awards held by non-employee directors will be accelerated in full upon a Change in Control.

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The ‎Omnibus Plan also authorizes the Board in its discretion and without the consent of any Participant, to cancel each or any award denominated in shares upon a Change in Control in exchange for a payment to the Participant with respect each vested share (and each unvested share if so determined) subject to the cancelled award of an amount equal to the excess of the consideration to be paid per common share in the Change in Control transaction over the exercise or purchase price per share, if any, under the award.

Subject to the restrictions of Section 409A of the Code, the Board may provide for the acceleration of vesting or settlement of any or all outstanding awards in connection with a Change in Control upon such conditions, including termination of the Participant’s service prior to, upon, or following the Change in Control, and to such extent as the Board determines.

Amendment Provision

The Board may amend, suspend or terminate the ‎Omnibus Plan at any time. However, without the approval of the Corporation’s shareholders and, if required pursuant to Policy 4.4 – Incentive Stock Options “Policy 4.4” of the Exchange as amended from time to time, the acceptance of the Exchange, there shall be (a) no increase in the maximum aggregate number of Common Shares that may be issued under the ‎Omnibus Plan, subject to certain exceptions as set out in the ‎Omnibus Plan, (b) no change in the class of persons eligible to receive Awards, (c) the limits on the amount of Awards that may be granted to any one person or any category of Participant; (d) the method of determining the exercise price of Options; (e) the maximum term of Options; (f) the expiry and termination provisions applicable to Options; and (g) no other amendment of the ‎Omnibus Plan that would require approval of the Corporation’s shareholders under any applicable law, including the rules of any stock exchange or quotation system upon which the Common Shares may then be listed or quoted. In addition, without the approval of the Corporation’s disinterested shareholders, (a) the exercise price of an Option shall not be reduced, and (b) the term of an Option held by an insider at the time of the proposed amendment shall not be extended. Notwithstanding the foregoing, the following types of amendments will not be subject to shareholder approval: (a) amendments to fix typographical errors; and (b) amendments to clarify existing provisions of the ‎Omnibus Plan that do not have the effect of altering the scope, nature and intent of such provisions. No amendment, suspension or termination of the ‎Omnibus Plan shall affect any then outstanding Award unless expressly provided by the Board. Except as provided by the next sentence, no amendment, suspension or termination of the ‎Omnibus Plan may have a materially adverse effect on any then outstanding Award without the consent of the Participant.

Notwithstanding any other provision of the ‎Omnibus Plan or any Award agreement to the contrary, the Board may, in its sole and absolute discretion and without the consent of any Participant, amend the Plan or any Award agreement, to take effect retroactively or otherwise, as it deems necessary or advisable for the purpose of conforming the Plan or such Award agreement to any present or future applicable law, including, but not limited to, Section 409A of the Code.

Dividends

Any dividends or dividend equivalents payable in connection with a full value award will be subject to the same restrictions as the underlying award and will not be paid until and unless such award vests. Participants holding Restricted Share Awards will have the right to vote the Common Shares and to receive any dividends or other distributions paid in cash or Common Shares, subject to the same vesting conditions as the original Award. For clarity, during any period in which shares acquired pursuant to a Restricted Share Award remain subject to vesting conditions, ‎the Participant shall not have the right to exercise any voting rights in respect of such Restricted Share Award. In the event that there ‎are not a sufficient number of Common Shares reserved for issuance under the Omnibus Plan to satisfy any dividends ‎in respect of any applicable Awards, the Corporation shall be permitted to satisfy any such dividends in cash.‎

Participants have no rights to receive cash dividends with respect to Restricted Share Units until Common Shares are issued in settlement of such Awards. However, the Board may grant Restricted Share Units that entitle their holders to dividend equivalent rights, which are rights to receive cash or additional Restricted Share Units whose value is equal to any cash dividends the Company pays. Dividend equivalent rights will be subject to the same vesting conditions and settlement terms as the original Award. In its discretion, the Board may provide for a Participant awarded Performance Shares to receive dividend equivalent rights with respect to cash dividends paid on the Common Shares to the extent that the Performance Shares become vested. The Board may grant dividend equivalent rights with respect to other share-based Awards that will be subject to the same vesting conditions and settlement terms as the original Award.

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Options

The Omnibus Plan replaced the 2019 Option Plan. Options under the Omnibus Plan include ‎Nonstatutory ‎Stock Options and Incentive Stock Options.‎

The exercise price for each Option shall be established in the discretion of the Board; provided, however, ‎that (a) the exercise price ‎per share shall be not less than the Fair Market Value (as defined in the Omnibus Plan) of a Common Share on the ‎effective date of ‎grant of the Option; and (b) no Incentive Stock Option granted to a Ten Percent Owner (as defined in the Omnibus Plan) shall ‎have ‎an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a ‎Common Share on the effective ‎date of grant of the Option‎. With the approval of the Board, a Participant ‎may elect to exercise an ‎Option, in whole or in part, on a ‘cashless exercise’ (“Cashless Exercise”) basis or a ‘net exercise’ (“Net Exercise”) basis. In ‎connection with a Cashless Exercise of Options, a brokerage firm will loan money to a Participant to purchase Common Shares ‎underlying the Options and will sell a sufficient number of Common Shares to cover the exercise price of the Options in order to ‎repay the loan made to the Participant and the Participant retains the balance of the Common Shares. In connection with a Net ‎Exercise of Options, a Participant would receive Common Shares equal in value to the difference between the Option price and the ‎fair ‎market value of the Common Shares on the date of exercise, computed in accordance with the Omnibus Plan.‎

The term of each Option shall be fixed by the Board but shall not exceed 10 years from the date of grant thereof, subject to certain ‎limited exceptions. Notwithstanding the foregoing, should the expiration date for an Option held by a Participant who is a resident ‎of Canada fall within a Black-Out Period (as defined in the Omnibus Plan), such expiration date shall be automatically ‎extended without any further act or formality to that date which is the 10th business day after the end of the Black-Out Period.‎

Unless the Board decides otherwise, Options granted under Omnibus Plan will expire at the earliest of: (i) the ‎expiry date; (ii) one ‎year after termination due to disability of the Participant or after the Participant’s death; (iii) in the case of a termination for cause, ‎immediately upon such termination of service or act; and (iv) 30 days after termination without cause or termination for any other ‎reason.‎

Incentive Stock Options may only be granted to employees. To the extent Options designated as Incentive Stock Options become ‎‎exercisable for the first time during any calendar year for Common Shares having an aggregate fair market value greater than ‎‎$100,000, the portion of such Options which exceeds such amount shall be treated as Nonstatutory Stock Options. Incentive ‎‎Stock Options are subject to additional requirements and restrictions as provided in the Omnibus Plan and as required by the Code.‎

Stock Appreciation Rights

The Board may grant Stock Appreciation Rights either in tandem with a related option (a “Tandem ‎SAR”) or independently of any ‎option (a “Freestanding SAR”). A Tandem SAR requires the ‎option holder to elect between the exercise of the underlying option ‎for Common Shares or the ‎surrender of the option and the exercise of the related Stock Appreciation Right. A Tandem SAR ‎is ‎exercisable only at the time and only to the extent that the related stock option is exercisable, ‎while a Freestanding SAR is ‎exercisable at such times or upon such events and subject to such ‎terms, conditions, performance criteria or restrictions as specified ‎by the Board. The exercise price for each Stock Appreciation Right shall be established in the discretion of the Board; provided, however, that the ‎exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option, and the exercise ‎price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a Common Share on the effective date ‎of grant of the Stock Appreciation Right.‎

‎Upon the exercise of any Stock Appreciation Right, the Participant is entitled to receive an ‎amount equal to the excess of the fair ‎market value of the underlying Common Shares as to which ‎the right is exercised over the aggregate exercise price for such shares. ‎Payment of this amount ‎upon the exercise of a Tandem SAR may be made only in Common Shares whose fair market ‎value on the ‎exercise date equals the payment amount. At the Board’s discretion, payment of ‎this amount upon the exercise of a Freestanding ‎SAR may be made in cash or Common Shares. ‎The maximum term of any Stock Appreciation Right granted under the Omnibus ‎Plan is ten years.‎

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Stock Appreciation Rights are generally nontransferable by the Participant other than by ‎will or by the laws of descent and ‎distribution, and are generally exercisable during the ‎Participant’s lifetime only by the participant. If permitted by the Board, a ‎Tandem SAR related ‎to a nonstatutory stock option and a Freestanding SAR may be assigned or transferred to certain ‎family ‎members or trusts for their benefit to the extent permitted by the Board. Other terms of ‎ Stock Appreciation Rights are generally ‎similar to the terms of comparable Options.‎

Other Stock-Based Awards

Under the Omnibus Plan, the Board may grant other stock-based Awards that are denominated or payable in, ‎valued in whole or in ‎part by reference to, or otherwise ‎related to, Common Shares, as deemed by the Board to ‎be consistent with the purposes of ‎the ‎Omnibus Plan and the goals of the Company, including, without limitation, RSUs, Stock ‎Appreciation Rights, and phantom ‎awards. Stock Appreciation Rights are subject to the same requirements as Nonstatutory ‎Options.‎

Other stock-based Awards may be settled in Common Shares, cash or a combination thereof.‎

Performance Shares and/or Performance Units (each, a “Performance Award”) may be granted by the Board ‎in its sole discretion ‎awarding cash or Common Shares ‎‎(including Restricted Stock) or a combination ‎thereof based upon the achievement of goals as ‎determined by the Board. Types of other stock-based Awards or Performance Awards include, without ‎limitation, purchase rights, ‎phantom ‎stock, Stock Appreciation Rights, RSUs, performance units, Restricted ‎Stock or Common ‎Shares subject to performance goals, ‎Common Shares awarded that are not subject to any ‎restrictions or conditions, convertible or ‎exchangeable debentures related to ‎Common Shares, other ‎rights convertible into Common Shares, Awards valued by reference to ‎the value of Common Shares or the ‎‎performance of the Company or a specified subsidiary, affiliate division or department, ‎Awards ‎based upon performance goals ‎established by the Board and settlement in cancellation of ‎rights of any person with a vested ‎interest in any other ‎plan, fund, program or arrangement that is ‎or was sponsored, maintained or participated in by the Company ‎or any subsidiary.‎

In its discretion, the Board may specify such criteria, periods or performance goals for ‎vesting in the foregoing ‎stock-based Awards ‎or Performance Awards and/or payment thereof to Participants as it shall determine; and the extent to which ‎such criteria, periods or ‎goals ‎have been met shall be determined by the Board. All terms and conditions of such ‎stock-based Awards and Performance ‎Awards shall be determined by the Board and ‎set forth in the applicable ‎Award agreement.‎

Restricted Share Awards

The Omnibus Plan provides the Board with additional equity-based compensation alternatives ‎in the form of ‎Restricted Share Awards. The Board may grant restricted share awards under the Omnibus Plan either in the form of a ‎restricted ‎share purchase right, giving a participant an immediate right to purchase Common ‎Shares, or in the form of a restricted share bonus, ‎in which Common ‎Shares are issued in ‎consideration for services to the Company rendered by the Participant. The Board ‎determines ‎the purchase price payable under Restricted Share Awards, which may be less than the ‎then current Fair Market Value of ‎the Common ‎Shares but not less than the Discounted Market Price (as such term is defined in the policies of the TSXV). Restricted Share Awards may be subject to ‎vesting conditions based on such service or performance criteria as ‎the Board specifies, including ‎the attainment of one or more performance goals. Common Shares acquired pursuant to a Restricted ‎Share Award may not be ‎transferred by the participant until vested. Unless otherwise provided by the Board, a Participant ‎will ‎forfeit any restricted shares as to which the vesting restrictions have not lapsed prior to the ‎Participant’s termination of service. ‎Participants holding restricted shares will have the right to ‎vote the shares and to receive any dividends or other distributions paid in ‎cash or shares, subject ‎to the same vesting conditions as the original Award.‎

Restricted Share Units

The Board may grant Restricted Share Units under the Omnibus Plan, ‎which represent rights to receive Common Shares on a future ‎date determined in accordance ‎with the Participant’s award agreement. No monetary payment is required for receipt of ‎Restricted ‎Share Units or the Common Shares issued in settlement of the award, the consideration ‎for which is furnished in the form of the ‎Participant’s services to the Company. The Board may ‎grant Restricted Share Unit awards subject to the attainment of one or ‎more performance goals ‎similar to those described below in connection with Performance Awards, or may make the ‎awards subject ‎to vesting conditions similar to those applicable to restricted share awards. ‎Restricted Share Units may not be transferred by the ‎Participant. Unless otherwise provided by ‎the Board, a

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Participant will forfeit any Restricted Share Units which have not vested ‎prior to the ‎Participant’s termination of service. Participants have no voting rights or rights to receive cash ‎dividends with respect to ‎Restricted Share Unit awards until Common Shares are issued in ‎settlement of such awards. However, the Board may grant ‎Restricted Share Units that entitle their ‎holders to dividend equivalent rights, which are rights to receive cash or additional restricted ‎‎share units whose value is equal to any cash dividends the Company pays. Dividend equivalent ‎rights will be subject to the same ‎vesting conditions and settlement terms as the original award. ‎ In the event that there are not a sufficient number of Common Shares reserved for issuance under the Omnibus Plan to ‎satisfy any dividend equivalent rights in respect of such Restricted Share Units, the Company shall be permitted to satisfy any such dividends in ‎cash.‎

Performance Awards

The Board may grant Performance Awards subject to such ‎conditions and the attainment of such performance goals over such ‎periods as the Board ‎determines in writing and sets forth in a written agreement between the Company and the ‎Participant. These ‎awards may be designated as Performance Shares or Performance Units, which ‎consist of unfunded bookkeeping entries generally ‎having initial values equal to the Fair Market ‎Value determined on the grant date of a Common Shares in the case of ‎Performance ‎Shares and a monetary value established by the Board at the time of grant in the ‎case of Performance Units. Performance Awards ‎will specify a predetermined amount of ‎Performance Shares or Performance Units that may be earned by the Participant to the extent ‎that ‎one or more performance goals are attained within a predetermined performance period. To the ‎extent earned, Performance ‎Awards may be settled in cash, Common Shares (including restricted ‎shares that are subject to additional vesting) or any ‎combination of these.‎

Performance goals will be based on the attainment of specified target levels with respect ‎to one or more measures of business or ‎financial performance of the Company and each ‎subsidiary corporation consolidated with the Company for financial reporting ‎purposes, or such ‎division or business unit of the Company as may be selected by the Board. The Board, in its ‎discretion, may ‎base performance goals on one or more of the following such measures (or any ‎other metric or goals the Board may determine): ‎revenue; sales; expenses; operating income; gross ‎margin; operating margin; earnings before any one or more of: share-based ‎compensation ‎expense, interest, taxes, depreciation and amortization; pre-tax profit; adjusted pre-tax profit; net ‎operating income; net ‎income; economic value added; free cash flow; operating cash flow; ‎balance of cash, cash equivalents and marketable securities; ‎share price; earnings per share; return ‎on shareholder equity; return on capital; return on assets; return on investment; total ‎shareholder ‎return, employee satisfaction; employee retention; market share; customer satisfaction; product ‎development; research ‎and development expense; completion of an identified special project, ‎completion of a joint venture or other corporate transaction, ‎and personal performance objectives ‎established for an individual Participant or group of Participants.‎

The target levels with respect to these performance measures may be expressed on an ‎absolute basis or relative to an index, budget ‎or other standard specified by the Board. The ‎degree of attainment of performance measures will be calculated in accordance with ‎the ‎Corporation’s financial statements, generally accepted accounting principles, if applicable, or other ‎methodology established by ‎the Board, but prior to the accrual or payment of any Performance ‎Award for the same performance period, and, according to criteria ‎established by the Board, ‎excluding the effect (whether positive or negative) of changes in accounting standards or any ‎unusual or ‎infrequently occurring event or transaction occurring after the establishment of the ‎performance goals applicable to a Performance ‎Award.‎

Following completion of the applicable performance period, the Board will determine the ‎extent to which the applicable performance ‎goals have been attained and the resulting value to be ‎paid to the Participant. The Board may make positive or negative adjustments ‎to Performance ‎Award payments to reflect an individual’s job performance or other factors determined by the ‎ Board. In its ‎discretion, the Board may provide for a Participant awarded Performance Shares to ‎receive dividend equivalent rights with respect to ‎cash dividends paid on the Common Shares to the extent that the Performance Shares become vested. The Board may ‎provide for ‎Performance Award payments in lump sums or installments.‎

Unless otherwise provided by the Board, if a Participant’s service terminates due to the ‎Participant’s death or disability prior to ‎completion of the applicable performance period, the ‎final award value will be determined at the end of the performance period on ‎the basis of the ‎performance goals attained during the entire performance period but will be prorated for the ‎number of days of the ‎Participant’s service during the performance period. The Board may ‎provide similar treatment for a Participant whose service is ‎involuntarily terminated. If a ‎Participant’s service terminates prior to completion of the applicable performance period for any ‎other ‎reason, the Omnibus Plan provides that the Performance Award will be

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forfeited. No ‎Performance Award may be sold or ‎transferred other than by will or the laws of descent and ‎distribution prior to the end of the applicable performance period.‎

Cash-Based Awards and Other Share-Based Awards

The Board may grant Cash-Based ‎Awards or other share-based Awards in such amounts and subject to such terms and conditions ‎as ‎the Board determines. Cash-Based Awards will specify a monetary payment or range of ‎payments, while other share-based ‎Awards will specify a number of shares or units based on ‎shares or other equity-related Awards. Such Awards may be subject to ‎vesting conditions based ‎on continued performance of service or subject to the attainment of one or more performance ‎goals similar ‎to those described above in connection with performance awards. Settlement of ‎Awards may be in cash or Common Shares, as ‎determined by the Board. A Participant will have ‎no voting rights with respect to any such Award unless and until shares are issued ‎pursuant to the ‎Award. The Board may grant dividend equivalent rights with respect to other share-based ‎Awards that will be ‎subject to the same vesting conditions and settlement terms as the original ‎Award. The effect on such Awards of the Participant’s ‎termination of service will be determined ‎by the Board and set forth in the Participant’s Award agreement.‎

The summary above of the material terms of the ‎Omnibus Plan and each of the Predecessor Plans‎ is qualified in its entirety by reference to the full text thereof‎, a copy of each of which is available under the Company’s profile on SEDAR at www.sedar.com.

MARKET FOR SECURITIES

Trading Price and Volume

Common Shares

The Common Shares are listed and posted for trading on the TSX-V under the symbol “QIPT”. The following table sets out the monthly market price range and trading volume of the Common Shares on the TSX-V during the year ended September 30, 2022.

Month(1)	High (C$)	Low (C$)	Total Volume
September 2022	5.99	5.33	423,000
August 2022	6.51	5.50	887,400
July 2022	7.40	6.24	2,229,400
June 2022	7.19	5.86	1,145,700
May 2022	6.78	5.66	482,300
April 2022	6.26	5.21	600,500
March 2022	6.51	5.35	630,900
February 2022	6.11	5.14	934,000
January 2022	7.40	5.78	970,300
December 2021	7.63	6.30	2,439,300
November 2021	8.02	6.70	1,129,300
October 2021	8.87	6.35	1,736,300

Notes:

(1) Source: TMX Money.

The price of the Common Shares as quoted by the TSX-V at the close of business on September 30, 2022, being the last trading day of the year ended September 30, 2022, was C$5.70 and close of business on December 22, 2022 which was the last trading day preceding the date of this AIF, was C$6.31.

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The 2019 Debentures were listed and posted for trading on the TSX-V under the symbol “QIPT.DB.A” until they were subject to Conversion on September 8, 2022. The following table sets out the monthly market price range and trading volume of the 2019 Debentures on the TSX-V during the year ended September 30, 2022.

Month(1)	High (C$)	Low (C$)	Total Volume
September 2022(2)	123.90	123.90	50
August 2022	128.89	120.76	240
July 2022	120.76	120.76	10
June 2022(3)	—	—	—
May 2022	122.79	118.36	60
April 2022	124.00	110.01	160
March 2022	124.00	124.00	20
February 2022	144.16	124.00	180
January 2022	144.88	140.00	580
December 2021	158.99	130.00	350
November 2021	155.10	142.13	120
October 2021	151.98	150.00	200

Notes:

(1) Source: TMX Money.

(2) All outstanding 2019 Debentures were subject to Conversion on September 8, 2022.

(3) ‎There was no trading in June 2022.‎

Prior Issuances of Unlisted Securities

Since the beginning of the most recently completed financial year, the Company has not issued any securities that are not listed or quoted on a marketplace, other than pursuant to the terms of the Omnibus Plan.

ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION ON TRANSFER

The Company does not have securities that are held in escrow or that are subject to a contractual restriction on transfer.

DIRECTORS AND OFFICERS

Name, Occupation and Security Holding (as of the date hereof)

Name, Province or State and Country of Residence and Position(4)	Director or Officer Since(3)	Principal Occupations During Past Five Years(1)
Gregory Crawford Chief Executive Officer and Director Fort Thomas, Kentucky, USA	December 21, 2017	President, Chief Executive Officer of the Company since December 21, 2017. Chief Operating Officer of the Company from April 19, 2016 to December 21, 2017. President and Chief Executive Officer of Patient-Aids from 2004 to October 2015, when Patient-Aids was acquired by the Company.
Mark Greenberg(2) Director Cincinnati, Ohio, USA	December 21, 2017	Managing Partner of Silverstone Capital Advisors since March 2009. Managing Partner of Ludlow, Ward & Greenberg Capital Partners from 2005-2009.

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Name, Province or State and Country of Residence and Position(4)	Director or Officer Since(3)	Principal Occupations During Past Five Years(1)
Brian Wessel(2) Director San Antonio, Texas, USA	February 2, 2022	Retired partner from Ernst & Young, LLP, serving from January 1988 until July 2021.(5)
Dr. Kevin A. Carter(2) Director Bellbrook, Ohio, USA	December 7, 2020	Partner/Physician/Director of ‎‎Providence Medical Group since June ‎‎‎2014.‎ Medical Director of the Kettering ‎Health Network Sleep Disorder ‎Centers since January 2016.‎ Medical Director at the Englewood ‎Sleep Center since ‎October 2020.‎ Veteran Affairs of Dayton physician ‎‎since February 2020‎
Hardik Mehta Chief Financial Officer Mason, Ohio, USA	February 15, 2018	Chief Financial Officer of the Company since February 2018. Prior to being appointed CFO, Mr. Mehta worked as a finance professional and an investment banker at investment banking and advisory firm, Silverstone Capital Advisors from 2009 to 2018.
Robbie Grossman Corporate Secretary Toronto, Ontario, Canada	January 30, 2012	Corporate finance, M&A and securities lawyer at DLA Piper (Canada) LLP since March 2018, at McMillan LLP from September 2013 to March 2018.

Notes:

(1) The information as to place of residence and principal occupation has been confirmed by the respective directors and officers individually.

(2) Member of the Audit Committee.

(3) Each director will hold office until his re-election or replacement at the next annual meeting of the shareholders unless he resigns his duties or his office becomes vacant following his death, dismissal or any other cause prior to such meeting.

(4) The term of office of the officers expires at the discretion of the Board.

(5) Mr. Wessel has not held any principal occupations, businesses or employment within the five preceding years other than as noted above.

As at the date hereof, the directors and officers of the Company, as a group, beneficially own, or control or direct, directly or indirectly, 1,342,298 Common Shares representing approximately 3.8% of the outstanding Common Shares before giving effect to the exercise of convertible securities held by such directors and executive officers (4,134,388 Common Shares representing approximately 10.36% of the outstanding the Common Shares, on a partially diluted basis). The statement as to the number of the Common Shares beneficially owned, or over which a director or executive officer exercises control or direction, directly or indirectly, not being within the knowledge of the Company, has been furnished by the directors and executive officers.

Biographical Information

Gregory Crawford, Chief Executive Officer and Director

Mr. Crawford has been the President and Chief Executive Officer of the Company since December 21, 2017. Mr. Crawford joined the Company through the Company’s acquisition of Patient-Aids. in October of 2015. In April of 2016, Mr. Crawford became the Company’s Chief Operating Officer. Mr. Crawford began his career at Patient-Aids in 1994, becoming a partner 3-years later and Patient-Aids’ sole owner by 2004. Under Mr. Crawford’s ownership, Patient-Aids grew at an annual rate of 25%, and from 2013 through 2015 more than doubled its revenue and quadrupled its earnings as it acquired and successfully integrated five home medical equipment businesses. Since 1982, Patient-Aids has been the dominant HME business in its region. Their product lines and services focus on treating patients with chronic respiratory conditions, mobility conditions, and patients requiring traditional durable medical home-based equipment.

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Mark Greenberg, Director

Mr. Greenberg is Managing Partner and Founder of Silverstone Capital Advisors and brings more than 30-years of senior executive operating and transaction expertise and experience. He has been a senior executive and operating president of units in Fortune 500 companies and a CEO and Chairman of middle market and high growth, venture capital-backed companies, as well as an investment banker and restructuring and financial advisor serving middle market and financial institution clients nationwide. As a principal investor, advisor, investment banker and transaction team member Mark has participated in more than 150 M&A and capital sourcing transactions. These have included transactions involving units of Fortune 1000 companies, middle market companies and high growth venture funded businesses.

Brian Wessel, Director

Mr. Wessel is a senior business executive with over 34 years of global client service, operational and financial expertise. As a former senior partner at Ernst & Young, LLP (“EY”), Mr. Wessel provided audit and advisory services to public, private, and private-equity-owned companies across multiple industry sectors. Additionally, Mr. Wessel led EY’s Capital Markets practice group in Mexico overseeing various foreign private issuers listed on the U.S., European and Japanese stock exchanges. Brian has a compelling executive track record of successfully leading through complex business transactions and advising companies on accounting, auditing and financial reporting matters. Mr. Wessel adds significant knowledge and practical experience in complex accounting and financial reporting matters, SEC registration statements, business combinations, audits of internal control over financial reporting and carve-out audits. Furthermore, Mr. Wessel has deep experience with various types of transactions including business acquisitions and divestitures.

Prior to retiring from EY in 2021, Mr. Wessel served in a variety of leadership roles during the transformation and growth of EY into a $37 billion professional services firm that has been recognized on Fortune 100 Best Companies to Work For® list for over 20 years in a row. With extensive international experience working with various multinational corporations and living in the U.S., Latin America and Australia, Mr. Wessel has a deep understanding of cultural diversity and how to cultivate international business relationships and empower teams.

Brian is a graduate of Bellarmine University in Louisville, Kentucky, receiving his BA in Accounting. Mr. Wessel holds his CPA certification in Kentucky and Texas.

Dr. Kevin A. Carter, Director

Kevin A. Carter, DO, FAASM, is Board Certified in Sleep Medicine by the American Board of Family Medicine; he is also Board Certified in Family Medicine. Dr. Carter formerly served as Medical Director at the Martin Army Sleep Medicine Center at Fort Benning, Georgia. Prior to his appointment as director of the Company, he served as a United States Army Field Surgeon, with service including deployment in Iraq. Currently, through the Carter Sleep Center, he offers full-spectrum sleep medicine evaluations, diagnosis, and treatments. Dr. Carter holds the degree of Fellow by the American Academy of Sleep Medicine, a recognition that he has met the highest standards in the practice of sleep medicine.

Dr. Carter is a graduate of the Ohio University Heritage College of Osteopathic Medicine. He completed a Family Medicine residency at DeWitt Army Community Hospital and Sleep Medicine fellowship at Walter Reed Army Medical Center. He is also an active member of both the American Academy of Sleep Medicine and the American Academy of Family Physicians.

Hardik Mehta, Chief Financial Officer

Mr. Mehta joined the Company as Chief Financial Officer in February 2018. Prior to becoming CFO, Mr. Mehta worked as a finance professional and an investment banker at investment banking and advisory firm, Silverstone Capital Advisors for nearly ten years. Mr. Mehta has significant acquisition, transaction finance, accounting and negotiating experience. Mr. Mehta has been an advisor on more than 30 M&A and funding transactions, including buy-side transactions, in which he oversaw quality of earnings analysis, due diligence and post-transaction integration planning. Additionally, Mr. Mehta has developed a deep understanding and has mastered both financial and operational aspects of the HME/DME industry. He has also worked on multiple M&A transactions in these industries.

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Mr. Mehta has extensive experience in capital markets and excels in financial planning and analysis. He holds an undergraduate degree in engineering and a MBA in finance from the Lindner Graduate School of Business at the University of Cincinnati.

Robbie Grossman, Corporate Secretary

Mr. Grossman has a cross border securities, M&A and corporate finance practice underscored by deep experience in acting for emerging issuers and public companies. Robbie acts for issuers and dealers on public offerings, private placements, exchange listings, reverse takeovers, mergers and acquisitions, restructurings and continuous disclosure obligations for public companies, across a wide variety of industries and business sectors. He has been with DLA Piper (Canada) LLP since March 2018, and previously was at McMillan LLP from September 2013 to March 2018 and at Garfinkle Biderman LLP from February 2004 to September 2013. Mr. Grossman has been, and currently is, an officer and director of several publicly traded companies. Robbie Grossman holds a LL.B. from the University of Windsor and a B.A. (Political Science) from Concordia University, and he was called to the Ontario bar in 2002.

Cease Trade Orders, Bankruptcies, Penalties or Sanctions

To the best of the Company’s knowledge, no director or executive officer of the Company is, as at the date of this AIF, or was within 10 years before the date of this AIF, a director, chief executive officer or chief financial officer of any company that was: (i) subject to a cease trade order or similar order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or (ii) subject to such an order that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Except as noted below, to the best of the Company’s knowledge, no director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company: (i) is, as at the date of this AIF, or has been within the 10 years before the date of this AIF, a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or (ii) has, within the 10 years before the date of this AIF, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

Robbie Grossman was the Assistant Secretary of RedWater Energy Corp. until May 2015 which was subject to (a) a cease trade order in May 2015 for failure to file annual audited financial statements, management’s discussion and analysis, and certifications, for the year ended December 31, 2014, (b) a court ordered receiver in May 2015, and (c) a bankruptcy order October 28, 2015.

To the best of the Company’s knowledge, no director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company, has been subject to: (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Conflicts of Interest

To the best of the Company’s knowledge, and other than as disclosed herein, there are no known existing or potential conflicts of interest among the Company and any director or officer of the Company, except that certain of the directors, officers and other members of management serve as directors, officers, promoters and members of management of other public companies, and therefore it is possible that a conflict may arise between their duties to the Company and their duties as a director, officer, promoter or member of management of such other companies. Any decision made by any of such

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directors and officers involving the Company will 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. In addition, each of the directors is required to declare and refrain from voting in any matter in which such directors may have a conflict of interest in accordance with the procedures set forth in the BCBCA or other applicable corporate legislation. See “Risk Factors - Conflicts of Interest”.

The Company has six market rate leases for office, warehouse, and retail space with a rental company affiliated with Gregory Crawford, the President and Chief Executive Officer of the Company, the majority of which were entered into in 2015. See “Interest of Management and Others in Material Transactions” for additional details.

Advance Notice Provisions

The Company’s Articles provide for advance notice of nominations of directors of the Company which require that ‎advance notice be provided to the Company in circumstances where nominations of persons for election to the board of ‎directors are made by shareholders of the Company other than pursuant to: (i) a requisition of a meeting of shareholders ‎made pursuant to the provisions of the BCBCA; or (ii) a shareholder proposal made pursuant to the provisions of the ‎BCBCA. A copy of the Articles is available under the Company’s profile on SEDAR at www.sedar.com.‎

LEGAL PROCEEDINGS AND REGULATORY ACTIONS

Legal Proceedings

Other than as described below, during the financial year ended September 30, 2022, the Company was not a party to any material legal proceedings and no such proceedings were known by the Company to be contemplated.

The Company was in litigation with Lightwater Long Short Fund since 2018. The litigation was due to Lightwater claiming damages for matters related to subscription agreements in a prior private placement. During the year ended September 30, 2022, the Company settled the litigation with Lightwater Long Short Fund for an aggregate of C$375,000, half of which amount was, in accordance with the terms of an arrangement agreement dated January 11, 2017, as amended on October 31, 2017, the responsibility of, and contributed by, the Company and the balance was paid for by a third party.

Regulatory Actions

During the financial year ended September 30, 2022, the Company was not subject to any penalties or sanctions imposed by a court or regulatory body and was not a party to any settlement agreement entered into before a court or regulatory body, relating to provincial or territorial securities legislation.

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS

Except as otherwise disclosed herein, none of the directors or executive officers of the Company, any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to all the Common Shares, nor any associate or affiliate of the foregoing persons, has any material interest, direct or indirect, in any transaction of the Company or any of its subsidiaries within the three most recently completed financial years or during the current financial year which has or is reasonably expected to materially affect the Company.

The Company has six 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 for the years ended September 30, 2022 and 2021, and increased to approximately $65,000 per month beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

Robbie Grossman, the Corporate Secretary of the Company, is a partner at DLA Piper (Canada) LLP, which law firm provides legal services to the Company. The Company and its subsidiaries incurred fees of approximately US$298,972 during the financial year ended September 30, 2022.

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TRANSFER AGENT AND REGISTRAR

The Company’s registrar and transfer agent is Computershare Investor Services Inc., located at 2^nd Floor, 510 Burrard Street, Vancouver, British Columbia V6C 3A8.

MATERIAL CONTRACTS

The following are the material contracts of the Company entered into within the most recently completed financial year, or before the most recently completed financial year that are still in effect that are required to be filed by the Company:

1. the Omnibus Plan‎, as described under “Capital Structure - Equity Incentive Awards “;

2. the 2019 Option Plan ‎, as described under “Capital Structure - Equity Incentive Awards “; and

3. the Amended and Restated Credit and Guaranty Agreement, as described under “General Development of the Business - Fiscal Year Ended September 30, 2022”.

INTERESTS OF EXPERTS

The Company’s auditor, BDO USA, LLP, is independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations.

MNP LLP, the Company’s former external auditor, is independent within the meaning of the relevant rules and related interpretations prescribed by the relevant professional bodies in Canada and any applicable legislation or regulations.

AUDIT COMMITTEE INFORMATION

Audit Committee Mandate

The full text of the Company’s audit committee charter (the “Charter”) is included as Schedule ”A” to this AIF.

Composition of the Audit Committee

The members of the audit committee (the “Audit Committee”), as outlined under “Directors and Officers - Name, Occupation and Security Holding”, are: Brian Wessel (Chair), Mark Greenberg, and Dr. Kevin A. Carter. The members of the Audit Committee are financially literate (as such term is defined in National Instrument 52-110 – Audit Committees (“NI 52-110”) and independent (as such term is defined in NI 52-110 and in the BCBCA).

Relevant Education and Experience

NI 52-110 provides that an individual is “financially literate” if he has the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by a company’s financial statements.

In addition to each member’s general business experience, the education and experience of each audit committee member relevant to the performance of his responsibilities as an audit committee member is as follows:

Brian Wessel, Chair

Mr. Wessel is a senior business executive with over 34 years of global client service, operational and financial expertise. As a former senior partner at EY, Mr. Wessel provided audit and advisory services to public, private, and private-equity-owned companies across multiple industry sectors. Additionally, Mr. Wessel led EY’s Capital Markets practice group in Mexico overseeing various foreign private issuers listed on the U.S., European and Japanese stock exchanges. Mr. Wessel has a compelling executive track record of successfully leading through complex business transactions and advising companies on accounting, auditing and financial reporting matters. Mr. Wessel adds significant knowledge and practical experience in complex accounting and financial reporting matters, SEC registration statements, business combinations,

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audits of internal control over financial reporting and carve-out audits. Furthermore, Mr. Wessel has deep experience with various types of transactions including business acquisitions and divestitures. Prior to retiring from EY in 2021, Mr. Wessel served in a variety of leadership roles during the transformation and growth of EY into a $37 billion professional services firm that has been recognized on Fortune 100 Best Companies to Work For® list for over 20 years in a row. With extensive international experience working with various multinational corporations and living in the U.S., Latin America and Australia, Mr. Wessel has a deep understanding of cultural diversity and how to cultivate international business relationships and empower teams. Mr. Wessel is a graduate of Bellarmine University in Louisville, Kentucky, receiving his BA in Accounting. Mr. Wessel holds his CPA certification in Kentucky and Texas. Mr. Wessel’s experience and education makes him uniquely qualified to Chair the Audit Committee the Company.

Mark Greenberg

Mr. Greenberg is Managing Partner and Founder of Silverstone Capital Advisors and brings more than thirty years of senior executive operating and transaction expertise and experience. He has been a senior executive and operating president of units in Fortune 500 companies and a CEO and Chairman of middle market and high growth, venture capital-backed companies, as well as an investment banker and restructuring and financial advisor serving middle market and financial institution clients nationwide. As a principal investor, advisor, investment banker and transaction team member. Mr. Greenberg has participated in more than 150 M&A and capital sourcing transactions. These have included transactions involving units of Fortune 1000 companies, middle market companies and high growth venture funded businesses.

Dr. Kevin A. Carter

Dr. Carter has 10 years of medical director experience, serving several different hospital organizations.  In addition to his medical oversight duties, he was responsible for overseeing financial operations.  He is responsible for the construction of a new, state of the art sleep disorder center at Martin Army Community Hospital.  He developed a model for improving access to care while reducing costs, and subsequently this model has been used by other medical facilities throughout the Department of Defense.  His immediate success was recognized by the Surgeon General and he was awarded the Army Commendation Medal for his accomplishments.   Dr. Carter currently serves as a director for Providence Medical Group, an independent multispecialty medical group, and serves on the Compensation and Retirement committees, where he is responsible for developing strategies for the Group’s ongoing direction and ensuring its continued financial success.  Dr. Carter also currently serves as medical director for two Kettering Health Network sleep disorder centers, Main campus and Englewood centers, and also serves as Chair of the Sleep council for the Network.

External Auditor Matters

Since the commencement of the Company’s most recently completed financial year, the Company’s directors have not failed to adopt a recommendation of the Audit Committee to nominate or compensate an external auditor and the Company has not relied on the exemptions contained in sections 2.4 or 8 of NI 52-110. Section 2.4 provides an exemption from the requirement that the Audit Committee must pre-approve all non-audit services to be provided by the auditor, where the total amount of fees related to the non-audit services are not expected to exceed 5% of the total fees payable to the auditor in the financial year in which the non-audit services were provided. Part 8 permits a company to apply to a securities regulatory authority for an exemption from the requirements of NI 52-110, in whole or in part. Except as set out in the Charter, the Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services. Subject to the requirements of NI 52-110, the engagement of non-audit services is considered by the Company’s directors and, where applicable, the Audit Committee, on a case-by-case basis.

The following table sets forth, by category, the fees for all services rendered by the Company’s current external auditor, BDO USA, LLP, for the financial years ended September 30, 2022 and September 30, 2021 (including estimates expressed in United States dollars).  

	Financial Year Ending		Financial Year Ending
Fees	September 30, 2022(1)		September 30, 2021(1)
Audit Fees	$	574,759	Nil
Audit Related Fees	$	18,214	Nil
Tax Fees		Nil	Nil
All Other Fees		Nil	Nil

- 36 -

Notes:

(1) BDO USA, LLP was appointed as the auditor of the Company on May 18, 2022.

The following table sets forth, by category, the fees for all services rendered by the Company’s former external auditor, MNP LLP, for the financial years ended September 30, 2022 and September 30, 2021 (expressed in Canadian dollars).

	Financial Year Ending		Financial Year Ending
Fees	September 30, 2022(1)		September 30, 2021
Audit Fees		Nil	C$	770,500
Audit Related Fees	C$	215,350	C$	183,500
Tax Fees		Nil		Nil
All Other Fees		Nil		Nil

Notes:

(1) MNP LLP resigned as the auditor of the Company on May 17, 2022.

In each of the above tables, “Audit fees” are fees billed by the Company’s external auditor for services provided in auditing the Company’s annual financial statements for the subject year. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.

ADDITIONAL INFORMATION

Additional information about the Company may be found on SEDAR at www.sedar.com. Additional financial information is provided in the Company’s audited financial statements for the period ended September 30, 2022 and the accompanying MD&A. Information about remuneration and indebtedness of directors and officers of the Company, principal holders of the Common Shares and securities authorized for issuance under security based compensation of the Company, will be contained in the Company’s information circular for its upcoming annual meeting of security holders that will involve the election of directors.

For copies of the financial statements of the Company and accompanying MD&A and the information circular and proxy statement and additional copies of the AIF (in certain circumstances reasonable fees may apply), please contact: Chief Financial Officer, Quipt Home Medical Corp.; Telephone: (859) 878-2220; Email: investorinfo@myphm.com. Additional information relating to the Company may be found on SEDAR at www.sedar.com.

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SCHEDULE ”A”
AUDIT COMMITTEE CHARTER

QUIPT HOME MEDICAL CORP.

(the “Corporation”)

AUDIT COMMITTEE CHARTER

I. Mandate

The primary function of the audit committee (the “Committee”) is to assist the Board of Directors in fulfilling its financial oversight responsibilities by reviewing the financial reports and other financial information provided by the Corporation to regulatory authorities and shareholders, the Corporation’s systems of internal controls regarding finance and accounting, and the Corporation’s auditing, accounting and financial reporting processes. Consistent with this function, the Committee will encourage continuous improvement of, and should foster adherence to, the Corporation’s policies, procedures and practices at all levels. The Committee’s primary duties and responsibilities are to:

· Serve as an independent and objective party to monitor the Corporation’s accounting, financial reporting and internal control system and review the Corporation’s financial statements.

· Review and appraise the performance of the Corporation’s external auditors, the audit of the Corporation’s financial statements and assess the external auditor’s qualifications and independence.

· Provide an open avenue of communication among the Corporation’s auditors, financial and senior management and the Board of Directors.

· Assist the Board of Directors in fulfilling its responsibilities for general oversight of the Corporation’s compliance with legal and regulatory requirements and risk assessment and risk management.

II. Composition

The Committee shall be comprised of three directors as determined by the Board of Directors. The Committee shall be comprised of such directors as are determined by the Board of Directors and in compliance with National Instrument 52-110 – Audit Committees (“NI 52-110”) of the Canadian Securities Administrators and the Business Corporations Act (British Columbia).

All members of the Committee must have (or should gain within a reasonable period of time after appointment) a working familiarity with basic finance and accounting practices and otherwise be financially literate within the meaning of NI 52-110 (or exempt therefrom).

The members of the Committee shall be elected by the Board of Directors at its first meeting following the annual shareholders’ meeting. The Chair of the Committee shall be elected by the full Board of Directors; otherwise, the members of the Committee may designate a Chair by a majority vote of the full Committee membership.

If, and for so long as, the Corporation is publicly traded on one of the Nasdaq Stock Market exchanges (“Nasdaq”), each member of the Committee must be a non-employee director and qualify as “independent” as defined under applicable Nasdaq (or applicable stock exchange) rules (except as otherwise permitted under such rules). The Committee’s membership shall also comply with the independence standards set forth in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any other requirements pertaining to members of the Committee under applicable laws, rules and regulations, including under the Exchange Act and NASDAQ Rules.

III. Meetings

The Committee shall meet at least quarterly, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee will meet at least annually with management and the external auditors in separate sessions.

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A majority of the Committee members will be a quorum. The action of a majority of those present at a meeting at which a quorum is present will be the act of the Committee. Committee members may participate in meetings by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation will constitute presence in person at such meeting. The Committee may take any action required or permitted hereunder by consent in lieu of a meeting if all Committee members execute, either before or after the action is taken, such consent (either in writing or by electronic transmission) (a “Resolution”), which is subsequently filed with the minutes by the Committee.

The Chair of the Committee will preside at each meeting and will approve the agenda of the items to be addressed at each regularly scheduled meeting. Management may circulate a proposed agenda and support materials for each regular meeting to each Committee member in advance of the meeting. The Committee (with the assistance of management) shall keep a copy of the minutes of its meetings or Resolution in lieu thereof, which minutes/Resolutions shall be filed in the minute book of the Corporation and will make regular reports to the Board of Directors regarding actions taken by the Committee. The Committee will meet regularly in executive session as considered necessary. Any actions taken by the Committee during any period in which one or more members fail for any reason to meet the membership requirements set forth above shall be nonetheless duly authorized actions of the Committee for all corporate purposes. To the extent permitted by law, rule or regulation, the Committee may form and delegate authority to one or more subcommittees (comprised of one or more members of the Committee) or to one or more management committees (comprised of one or more executives of the Corporation). Any such subcommittee or management committee shall regularly report to the Committee on any actions taken pursuant to such delegated authority.

IV. Responsibilities and Duties

To fulfill its responsibilities and duties, the Committee shall:

Documents/Reports Review

1. On an annual basis the Committee shall review and assess the adequacy of this Charter taking into account all applicable legislative and regulatory requirements as well as any best practice guidelines recommended by regulators or stock exchanges with whom the Corporation has a reporting relationship and, if appropriate, recommend changes to the Charter to the Board of Directors for its approval.

2. Review the Corporation’s financial statements, MD&A and any annual and interim earnings and any related press releases before the Corporation publicly discloses this information and any reports or other financial information (including quarterly financial statements), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors.

External Auditors

3. Require the external auditors to report directly to the Committee.

4. Review annually the performance of the external auditors who shall be ultimately accountable to the Board of Directors and the Committee as representatives of the shareholders of the Corporation.

5. Ensure that the external auditor is independent under PCAOB standards by receiving a report annually from the external auditors with respect to their independence, such report to include disclosure of all engagements (and fees related thereto) for non-audit services provided to the Corporation.

6. Review and discuss with the external auditors any disclosed relationships or services that may impact the objectivity and independence of the external auditors.

7. Ensure that the external auditor is in good standing with the Canadian Public Accountability Board by receiving, at least annually, a report by the external auditor on the audit firm’s internal quality control processes and procedures, such report to include any material issues raised by the most recent internal

- 39 -

quality control review, or peer review, of the firm, or any governmental or professional authorities of the firm within the preceding five years, and any steps taken to deal with such issues;

8. Ensure that the external auditor meets the rotation requirements for partners and staff assigned to the Corporation’s annual audit by receiving a report annually from the external auditors setting out the status of each professional with respect to the appropriate regulatory rotation requirements and plans to transition new partners and staff onto the audit engagement as various audit team members’ rotation periods expire.

9. Recommend to the Board of Directors the selection and, where applicable, the replacement of the external auditors nominated annually for shareholder approval and the compensation of the external auditors.

10. Review with management and the external auditors the terms of the external auditors’ engagement letter.

11. Consult with the external auditors, without the presence of management, about the quality of the Corporation’s accounting principles, internal controls and the completeness and accuracy of the Corporation’s financial statements.

12. Review and approve the Corporation’s hiring policies regarding partners, employees and former partners and employees of the present and former external auditors of the Corporation.

13. Review the external auditor’s annual audit plan, fee schedule and any related services proposals (including meeting with the external auditor to discuss any deviations from or changes to the original audit plan, as well as to ensure that no management restrictions have been placed on the scope and extent of the audit examinations by the external auditor or the reporting of their findings to the Audit Committee)

14. Review and pre-approve all audit and audit-related services and the fees and other compensation related thereto, and any non-audit services, provided by the Corporation’s external auditors. The pre-approval requirement is waived with respect to the provision of non-audit services if:

i. the aggregate amount of all such non-audit services provided to the Corporation constitutes not more than five percent (5%) of the total amount of revenues paid by the Corporation to its external auditors during the fiscal year in which the non-audit services are provided;

ii. such services were not recognized by the Corporation at the time of the engagement to be non-audit services; and

iii. such services are promptly brought to the attention of the Committee by the Corporation and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board of Directors to whom authority to grant such approvals has been delegated by the Committee.

Provided the pre-approval of the non-audit services is presented to the Committee’s first scheduled meeting following such approval, such authority may be delegated by the Committee to one or more independent members of the Committee.

Financial Reporting Process

15. Review and discuss with management and the external auditor the annual audited and quarterly unaudited financial statements and related Management Discussion and Analysis ("MD&A"), including the appropriateness of the Corporation’s accounting policies, disclosures (including material transactions with related parties), reserves, key estimates and judgements (including changes or

- 40 -

variations thereto) and obtaining reasonable assurance that the financial statements are presented fairly in accordance with IFRS (International Financial Reporting Standards) or other applicable generally accepted accounting standards if applicable, and the MD&A is in compliance with appropriate regulatory requirements.

16. Review and discuss with management and the external auditor regarding significant accounting policies and financial statement presentation including any significant changes in the selection or application of accounting policies to be observed in the preparation of the financial statements of the Corporation and its subsidiaries.

17. Review and discuss with management and the external auditor the external auditor’s written communications to the Audit Committee in accordance with PCAOB standards and other applicable regulatory requirements arising from the annual audit and quarterly review engagements.

18. Report on and recommending to the Board of Directors the approval of the annual financial statements and the external auditor’s report on those financial statements, the quarterly unaudited financial statements, and the related MD&A and press releases for such financial statements, prior to the dissemination of these documents to shareholders, regulators, analysts and the public.

19. Satisfy itself on a regular basis through reports from management and related reports, if any, from the external auditors, that adequate controls are in place for the review of the Corporation’s disclosure of financial information extracted or derived from the Corporation’s financial statements and accounting records that such information is fairly presented.

20. Following completion of the annual audit, review separately with management and the external auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.

21. Review any significant disagreement among management and the external auditors regarding financial reporting.

22. Review with the external auditors and management the extent to which changes and improvements in financial or accounting practices have been implemented.

23. Oversee the adequacy of the Corporation’s system of internal accounting controls and obtaining from management and the external auditor summaries and recommendations for improvement of such internal controls and processes, together with reviewing management’s remediation of identified weaknesses.

24. Establish procedures for:

i. the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters;

ii. the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters; and

iii. evaluating and communicating fraud or suspected fraud matters.

Other

25. Review management’s policy and review and approve any new or significant changes to the related-party transactions with the officers and Directors of the Corporation.

- 41 -

26. Review annually general business liability insurance coverage and business risk assessment with management.

27. Review with management on a quarterly basis any significant new business matters including, without limitation capital allocation, business acquisitions, stock buyback programs, dividend authorization, debt covenants, etc.

V. Authority

The Committee may:

i. engage independent outside counsel and other advisors as it determines necessary to carry out its duties;

ii. set and pay the compensation for any advisors employed by the Committee; and

iii. communicate directly with the internal and external auditors.

The Committee shall have unrestricted access to the Corporation’s personnel and documents and will be provided with the resources necessary to carry out its responsibilities.

EX-99.2

Exhibit 99.2

Quipt Home Medical Corp.

Consolidated Financial Statements

For the fiscal years ended

September 30, 2022 and 2021

(Expressed in US dollars)

TABLE OF CONTENTS

Consolidated Statements of Financial Position	Page 1
Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)	Page 2
Consolidated Statements of Changes in Shareholders’ Equity	Page 3
Consolidated Statements of Cash Flows	Page 4
Notes to the Consolidated Financial Statements	Pages 5-43

Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Quipt Home Medical Corp.

Wilder, KY

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of financial position of Quipt Home Medical Corp. (the “Company”) as of September 30, 2022, and the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders’ equity, and cash flows the period ended September 30, 2022, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2022, and the results of its consolidated operations and its consolidated cash flows for the year ended September 30, 2022, in conformity International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ BDO USA LLP

We have served as the Company's auditor since 2022.

Cincinnati, Ohio

PCAOB ID: 243

December 23, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Quipt Home Medical Corp. (formerly Protech Home Medical Corp.)

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statement of financial position of Quipt Home Medical Corp. and its subsidiaries (the “Company”) as of September 30, 2021, and the related consolidated statements of income (loss) and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year ended September 30, 2021, and the related notes (collectively referred to as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of September 30, 2021, and the results of its consolidated operations and its consolidated cash flows for the year ended September 30, 2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provide a reasonable basis for our opinion.

Chartered Professional Accountants Licensed Public Accountants

We have served as the Company’s auditor since 2014.

Toronto, Canada

PCAOB ID: 1930

January 26, 2022

Quipt Home Medical Corp.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

		As at		As at
		September 30,		September 30,
	Notes	2022		2021
ASSETS
Current Assets
Cash		$	8,516	$	34,612
Accounts receivable, net	4		16,383		11,938
Inventory	5		15,585		9,253
Prepaid and other current assets			1,052		1,430
Total current assets			41,536		57,233
Long-term assets
Property, equipment, and right of use assets, net	6		33,497		23,506
Goodwill	7		28,208		12,456
Intangible assets, net	7		28,887		14,874
Other assets	11		86		504
Total long-term assets			90,678		51,340
TOTAL ASSETS		$	132,214	$	108,573
LIABILITIES
Current Liabilities
Accounts payable		$	13,841	$	9,842
Accrued liabilities			3,451		3,202
Current portion of equipment loans	11		5,473		6,992
Current portion of lease liabilities	11		3,304		2,981
Current portion of senior credit facility	11		6,857		—
Deferred revenue	9		3,036		2,452
Government grant	8		—		4,885
Purchase price payable	3		5,778		2,383
Total current liabilities			41,740		32,737
Long-term Liabilities
Debentures	11		—		11,784
Equipment loans	11		234		392
Lease liabilities	11		7,195		4,784
Senior credit facility	11		3,378		—
SBA Loan	11		120		121
Purchase price payable	3		—		133
TOTAL LIABILITIES			52,667		49,951
SHAREHOLDERS' EQUITY
Capital stock	12		214,254		202,827
Contributed surplus			26,317		21,001
Shares to be issued	3		—		657
Accumulated deficit			(161,024)		(165,863)
TOTAL SHAREHOLDERS' EQUITY			79,547		58,622
TOTAL LIABILITIES AND EQUITY		$	132,214	$	108,573

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

Page   1

Quipt Home Medical Corp.

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND

COMPREHENSIVE INCOME (LOSS)

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

		Year Ended		Year Ended
		September 30,		September 30,
	Notes	2022		2021
Revenue
Rentals of medical equipment		$	69,192	$	55,338
Sales of medical equipment and supplies			70,670		47,013
Total revenues			139,862		102,351
Cost of inventory sold			33,213		28,172
Operating expenses	14		65,203		44,805
Bad debt expense			12,225		7,957
Depreciation	6		20,453		16,212
Amortization of intangible assets	7		2,587		1,574
Stock-based compensation	12		5,493		4,952
Acquisition-related costs	3		797		233
Loss (gain) on sale of property and equipment			45		(94)
Other income from government grant	8		(4,885)		—
Operating income (loss)			4,731		(1,460)
Financing expenses
Interest expense on leases and loans	11		1,082		927
Interest expense on convertible debenture			609		838
Other interest expense, net	11		388		228
Loss on extinguishment of debt			281		—
Loss on settlement of shares to be issued	3		442		—
Loss on foreign currency transactions			144		173
Change in fair value of warrants	10		—		2,112
Change in fair value of debentures	11		(1,150)		3,591
Income (loss) before taxes			2,935		(9,329)
Recovery of income taxes	15		(1,904)		(3,155)
Net income (loss)		$	4,839		(6,174)
Net income (loss) per share (Note 16)
Basic earnings per share		$	0.14	$	(0.20)
Diluted earnings per share		$	0.13	$	(0.20)
Weighted average number of common shares outstanding:
Basic			33,647		30,438
Diluted			36,302		30,438

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

Page   2

Quipt Home Medical Corp. 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’

EQUITY

(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		—		—		—		—		(6,174)		(6,174)
Stock to be issued from acquisition	12	—		—		—		3,033		—		3,033
Issuance of stock for acquisitions	12	629		2,376		—		(2,376)		—		—
Conversion of debentures	12	777		5,359		—		—		—		5,359
Stock-based compensation		—		—		4,952		—		—		4,952
Stock options exercised	12	117		355		(154)		—		—		201
Compensation options exercised		368		1,718		(316)		—		—		1,402
Exercise of warrants - including transfer of derivative warrant liability of $4,140		3,390		21,614		—		—		—		21,614
Balance September 30, 2021		33,350	$	202,827	$	21,001	$	657	$	(165,863)	$	58,622
Net income		—		—		—		—		4,839		4,839
Cash in lieu of shares to be issued	3	—		—		—		(657)				(657)
Conversion of debentures	11	2,107		10,683		—		—				10,683
Stock-based compensation	11, 12	—		—		5,493		—				5,493
Stock options exercised	12	33		216		(25)		—				191
Compensation options exercised	12	115		528		(152)		—				376
Balance September 30, 2022		35,605	$	214,254	$	26,317	$	—	$	(161,024)	$	79,547

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

Page   3

Quipt Home Medical Corp. 

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

		Year Ended September 30,
	Notes	2022		2021
Operating activities
Net income (loss)		$	4,839	$	(6,174)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	6 7		23,040		17,786
Amortization of financing costs and accretion of purchase price payable	3 11		251		178
Interest expense, net of amortization and accretion	11		1,828		1,815
Cash paid for interest			(2,007)		(1,869)
Loss on foreign currency transactions			144		173
Loss on fair value of warrants	11		—		2,112
Loss (gain) loss on fair value of convertible debentures	11		(1,150)		3,591
Loss (gain) on disposal of property and equipment			45		(94)
Loss on extinguishment of debt	11		281		—
Loss on settlement of shares to be issued	3		442		—
Stock-based compensation	12		5,493		4,952
Other income from government grant			(4,885)		—
Derecognition of purchase price payable			(178)		—
Provision (benefit) for income taxes			(1,904)		(3,155)
Cash paid for income taxes			(653)		(368)
Change in working capital (net of acquisitions):
Increase in accounts receivable			(201)		(868)
Increase in inventory			(2,419)		(89)
Decrease (increase) in prepaid and other current assets			450		(858)
Increase in deferred revenue	9		31		332
Increase in accounts payables and accrued liabilities			2,897		297
Net cash flow provided by operating activities			26,344		17,761
Investing activities
Purchase of property and equipment	6		(9,161)		(5,046)
Cash proceeds from sale of property and equipment			193		98
Cash paid for acquisitions	3		(33,525)		(12,890)
Net cash flow used in investing activities			(42,493)		(17,838)
Financing activities
Repayments of loans	11		(11,900)		(10,416)
Repayments of leases	11		(3,822)		(2,547)
Proceeds from credit facility	11		12,000		—
Issuance costs relating to credit facility	11		(1,779)		—
Proceeds from exercise of warrants	12		—		17,474
Cash in lieu of shares to be issued	3		(1,100)		—
Proceeds from exercise of options			567		1,603
Payments of purchase price payable	3		(3,817)		(1,274)
Net cash flow (used in) provided by financing activities			(9,851)		4,840
Net increase (decrease) in cash			(26,000)		4,763
Effect of exchange rate changes on cash held in foreign currencies			(96)		622
Cash, beginning of year			34,612		29,227
Cash, end of year		$	8,516	$	34,612

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

Page   4

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 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.

2. Basis of Presentation and summary of significant accounting policies

Basis of accounting

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

The consolidated financial statements were authorized for issue by the Board of Directors on December 23, 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.

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 operation.

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated. The Company’s consolidated entities, their functional currencies and ownership percentages are as follows:  

Page   5

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

100 W. Commercial Street, LLC	USD	100%
Acadia Medical Supply, Inc.	USD	100%
Access Respiratory Home Care, L.L.C.	USD	100%
At Home Health Equipment, LLC	USD	100%
Black Bear Medical, Inc.	USD	100%
Black Bear Medical Group, Inc.	USD	100%
Black Bear Medical NH, Inc.	USD	100%
Care Medical Atlanta, LLC	USD	100%
Care Medical of Athens, Inc.	USD	100%
Care Medical of Augusta, LLC	USD	100%
Care Medical of Gainesville, LLC	USD	100%
Care Medical Partners, LLC	USD	100%
Care Medical Savannah, LLC	USD	100%
Central Oxygen, Inc.	USD	100%
Coastal Med-Tech Corp.	USD	100%
Cooley Medical Equipment, Incorporated	USD	100%
Good Night Medical, LLC	USD	100%
Good Night Medical of Ohio, LLC	USD	100%
Good Night Medical of Texas, Inc	USD	100%
Health Technology Resources, LLC	USD	100%
Heckman Healthcare Service & Supplies Inc.	USD	100%
Hometown Medical LLC	USD	100%
Legacy Oxygen and Home Care Equipment, LLC	USD	100%
Mayhugh Drugs, Inc.	USD	100%
Med Supply Center, Inc.	USD	100%
Medical West Healthcare Center, LLC	USD	100%
Metro-Med, Inc.	USD	100%
Metro-Med, Inc. - Los Alamitos	USD	100%
Metro-Med, Inc. - Ventura	USD	100%
NorCal Respiratory, Inc.	USD	100%
Oxygen Plus	USD	100%
Patient Aids, Inc.	USD	100%
Patient Home Monitoring, Inc - discontinued	USD	100%
QHM Holdings, Inc.	USD	100%
Quipt Home Medical, Inc.	USD	100%
Resource Medical, Inc.	USD	100%
Resource Medical Group Charleston, LLC	USD	100%
Resource Medical Group, LLC	USD	100%
Respicare, Inc.	USD	100%
Riverside Medical, Inc.	USD	100%
Semo Drugs - Care Plus of Mo, Inc.	USD	100%
Sleep Health Diagnostics, LLC	USD	100%
Sleepwell, LLC	USD	100%
Southeastern Biomedical Services, LLC	USD	100%
Thrift Home Care, Inc.	USD	100%
Tuscan, Inc.	USD	100%
West Home Healthcare, Inc.	USD	100%

Page   6

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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 estimate 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, the largest of which is Medicare, 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 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 that is billed in advance for periods 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 insurers. 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.

Page   7

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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 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 September 30, 2022 and September 30, 2021 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 reserves 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 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. 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.

Page   8

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

c) Convertible debentures

In accordance with the substance of the contractual arrangement, convertible debentures are compound financial instruments that are accounted for separately by their components: a financial liability and an equity instrument. The identification of convertible debenture components is based on interpretations of the substance of the contractual arrangement and therefore requires judgment from management. The separation of the components affects the initial recognition of the convertible debenture at issuance and the subsequent recognition of interest on the liability component. The determination of the fair value of the liability is also based on a number of assumptions, including contractual future cash flows, discount factors, and the presence of any derivative financial instruments.

d) Property and equipment

Property and equipment are 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
Right-of-use vehicles			5 years
Right-of-use real estate leases	Life of lease 1	-	10 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	-	20 Years

Page   9

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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) Share-based payments and warrants

The amounts used to estimate fair values of stock options and warrants issued are based on estimates of future volatility of the Company’s share price, expected lives of the options and warrants, expected dividends to be paid by the Company and other relevant assumptions. By their nature, these estimates are subject to measurement uncertainty and the effect of changes in such estimates on the consolidated financial statements of future periods could be significant.

g) Income taxes

Significant judgment is required in determining the provision for future income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.  The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law.  For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized.  Utilization of the tax losses depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

h) 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 income (loss) and comprehensive income (loss).

Page   10

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 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, which 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 an 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 liabilities 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 loss and comprehensive loss when incurred.

d) Goodwill impairment

Management has evaluated the recoverable amount for its cash generating unit and applied judgment in the discount rate and other underlying assumptions used in impairment analysis of goodwill.

The Company has ten CGUs with goodwill and reviews the value in use versus the carrying value both in total and for each of the individual assets. The recoverable amount of the CGU was estimated based on an assessment of value in use using a discounted cash flow approach. The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

Page   11

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

e) Segment reporting

International Financial Reporting Standards 8 (“IFRS 8”) requires operating segments to be determined based on the Company’s internal reporting to the Chief Operating Decision Maker (‘CODM’). The CODM has been determined to be the Company’s Chief Executive Officer as he is primarily responsible for the allocation of resources and the assessment of performance. The Company has only one operating segment.

f) Identification of cash-generating unit “CGU”

For the purposes of impairment testing, assets are grouped at the lowest levels of integrated assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets, termed as a CGU. The allocation of assets into a CGU requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, similar exposure to market risks, shared infrastructures and the way in which management monitors the operations.

g) Income (loss) per share

Basic income (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted income (loss) per share is computed similarly to basic income (loss) per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. For the years ended September 30, 2022 and 2021, potentially dilutive common shares issuable upon the exercise of conversion option related to convertible debentures, warrants and options were not included in the computation of income (loss) per share because their effect was anti-dilutive.

Page   12

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

h) Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Company’s entities in their respective functional currency at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date. Exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the weighted average monthly rates of exchange. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that foreign operation is recognized in the statement of loss and comprehensive loss.

i) Valuation of inventories

Inventory is recorded at the lower of cost or net realizable value, using first-in first out weighted average cost method.  Inventory is expensed through cost of inventory sold when shipped to customers or transferred to property and equipment when rented to customers.

Financial instruments

Fair value measurement

Financial instruments 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;

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 is classified as Level 1. The warrant derivative financial liability has been valued using level 3 inputs from the fair value hierarchy. 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

Page   13

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

management under policies promulgated by the Board of Directors. The Company’s overall risk management approach 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 an allowance for bad debts 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 September 30, 2022, the Company has approximately 9% of the Company’s receivables that are 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 September 30, 2022, the Company has $41,936,000 of liabilities that are due within one year but has $41,557,000 of current assets plus revolver borrowing availability of $13,000,000 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. The interest rate on the credit facility into which the Company entered in September 2022 is a variable rate that can be fixed for a maximum of six months. With $12,000,000 of borrowings on this facility at September 30, 2022, each 1% increase would result in an additional $120,000 of annual interest expense. The interest on the Company’s other debt is either imputed or has a fixed rate and is not subject to cash flow interest rate risk.

3. Acquisitions 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 $2,169,000 of which $1,804,000 was paid in cash at closing, with remaining holdbacks due on the six-

Page   14

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

and twelve-month anniversaries of the acquisition discounted at 3.31% for a fair value of $365,000. 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 $26,000 of professional fees in conjunction with the acquisition.

The revenues and net loss for Thrift for the twelve months ended September 30, 2022 was approximately $2,200,000 and $(56,000), respectively.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	452
Accounts receivable		165
Inventory		107
Property, equipment, and right of use assets, net		1,158
Goodwill		802
Intangible assets		770
Accounts payable		(140)
Accrued liabilities		(33)
Deferred revenue		(40)
Deferred tax liability		(262)
Loans and leases		(810)
Net assets acquired	$	2,169
Cash paid at closing	$	1,804
Cash to be paid after closing, included in purchase price payable		365
Consideration paid or payable	$	2,169

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

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 $2,435,000, 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 3.31% for a fair value of $332,000. 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 $28,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for Heckman for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $2,250,000 and $300,000, respectively, of which approximately $2,050,000 and $280,000 were recognized in the period from November 1, 2021 to September 30, 2022.

Page   15

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Cash	$	169
Accounts receivable		170
Inventory		280
Property, equipment, and right of use assets, net		1,165
Goodwill		965
Intangible assets		90
Accounts payable		(159)
Accrued liabilities		(96)
Deferred revenue		(27)
Deferred tax liability		(122)
Net assets acquired	$	2,435
Cash paid at closing	$	2,103
Cash to be paid after closing, included in purchase price payable		332
Consideration paid or payable	$	2,435

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 anniversaries of the acquisition at 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 $18,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for Southeastern Bio for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $2,200,000 and $(50,000), respectively, of which approximately $2,000,000 and $(40,000) were recognized in the period from November 9, 2021 to September 30, 2022.

Page   16

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Accounts receivable	$	112
Inventory		53
Property, equipment, and right of use assets, net		306
Goodwill		225
Intangible assets		270
Accounts payable		(131)
Loans and leases		(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 $13,650,000, of which $11,978,000 was paid in cash at closing, holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $1,288,000, and the collection of certain accounts receivable that totaled $384,000. 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 $32,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for At Home for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $12,800,000 and $230,000, respectively, of which approximately $9,450,000 and $250,000 were recognized in the period from January 1, 2022 to September 30, 2022.

Page   17

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Cash	$	495
Accounts receivable		1,346
Inventory		1,211
Prepaid expenses		71
Property, equipment, and right of use assets, net		2,085
Goodwill		7,868
Intangible assets		4,170
Accounts payable		(600)
Accrued liabilities		(346)
Deferred revenue		(135)
Deferred tax liability		(1,448)
Loans and leases		(1,067)
Net assets acquired	$	13,650
Cash paid at closing	$	11,978
Cash to be paid after closing, included in purchase price payable		1,672
Consideration paid or payable	$	13,650

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

Acquisition of Good Night Medical, LLC

On April 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Good Night Medical, LLC and its subsidiaries (“Good Night”). Good Night is an Ohio-based company in the same industry as the Company. The purchase price was $6,162,000, of which $4,361,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $1,801,000. 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 $55,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for Good Night for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $8,300,000 and $(270,000), respectively, of which approximately $3,100,000 and $(550,000) were recognized in the period from April 1, 2022 to September 30, 2022.

Page   18

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Cash	$	42
Accounts receivable		730
Inventory		369
Property, equipment, and right of use assets, net		696
Goodwill		3,277
Intangible assets		3,470
Accounts payable		(1,200)
Accrued liabilities		(166)
Deferred revenue		(39)
Loans and leases		(1,017)
Net assets acquired	$	6,162
Cash paid at closing	$	4,361
Cash to be paid after closing, included in purchase price payable		1,801
Consideration paid or payable	$	6,162

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

Acquisition of Access Respiratory Home Care, LLC

On June 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Access Respiratory Home Care, LLC (“Access”). Access is a Louisiana-based company in the same industry as the Company. The purchase price was $6,595,000, of which $5,347,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $1,248,000. 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 $98,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for Access for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $6,950,000 and $850,000, respectively, of which approximately $2,600,000 and $300,000 were recognized in the period from June 1, 2022 to September 30, 2022.

Page   19

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Cash	$	417
Accounts receivable		741
Inventory		622
Property, equipment, and right of use assets, net		1,492
Goodwill		1,223
Intangible assets		3,180
Accounts payable		(200)
Accrued liabilities		(319)
Deferred revenue		(90)
Loans and leases		(471)
Net assets acquired	$	6,595
Cash paid at closing	$	5,347
Cash to be paid after closing, included in purchase price payable		1,248
Consideration paid or payable	$	6,595

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

Acquisition of NorCal Respiratory, Inc.

On June 3, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of NorCal Respiratory, Inc (“NorCal”). NorCal is a California-based company in the same industry as the Company. The purchase price was $3,080,000, of which $2,494,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $586,000. 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 $29,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for NorCal for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $3,200,000 and $(150,000), respectively, of which approximately $1,000,000 and $(50,000) were recognized in the period from June 3, 2022 to September 30, 2022.

Page   20

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Cash	$	503
Accounts receivable		315
Inventory		492
Property, equipment, and right of use assets, net		1,044
Goodwill		948
Intangible assets		1,400
Accounts payable		(100)
Accrued liabilities		(67)
Deferred revenue		(93)
Deferred tax liability		(680)
Loans and leases		(682)
Net assets acquired	$	3,080
Cash paid at closing	$	2,494
Cash to be paid after closing, included in purchase price payable		586
Consideration paid or payable	$	3,080

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

Acquisition of Hometown Medical, LLC

On July 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Hometown Medical, LLC (“Hometown”). Hometown is a Mississippi-based company in the same industry as the Company. The purchase price was $5,892,000, of which $4,838,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 5.26% for a fair value of $1,054,000. 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 $22,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for Hometown for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $8,450,000 and $1,100,000, respectively, of which approximately $2,450,000 and $700,000 were recognized in the period from July 1, 2022 to September 30, 2022.

Page   21

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets and liabilities is as follows:

Cash	$	723
Accounts receivable		665
Inventory		778
Property, equipment, and right of use assets, net		2,187
Goodwill		407
Intangible assets		3,250
Accounts payable		(721)
Accrued liabilities		(66)
Deferred revenue		(129)
Loans and leases		(1,202)
Net assets acquired	$	5,892
Cash paid at closing	$	4,838
Cash to be paid after closing, included in purchase price payable		1,054
Consideration paid or payable	$	5,892

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

Prior year acquisitions

Acquisition of Sleepwell, LLC

Effective October 23, 2020, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Sleepwell, Inc. (“Sleepwell”), a Georgia-based company in the same industry as the Company. The purchase price was $9,976,000 of which $6,623,000 was paid in cash at closing, $2,376,000 (629,000 shares at a fair value of $3.78 per share) was paid through the issuance of the Company’s common shares in January 2021, a holdback paid in March 2021 discounted at 3.46% for a fair value of $320,000, and $657,000 (246,000 shares at a fair value of $2.67) originally to be paid in The Company’s common shares in August 2022. The fair value of the Company’s common shares has been discounted by 15% and 25%, respectively, using the Black-Scholes pricing model for put options, to reflect the inability to sell the Company’s common shares for a period and for the time between the date of the acquisition and the dates the Company’s common shares is to be issued. The Company’s common shares were to be issued in August 2022, but, upon mutual agreement of the parties, a cash payment of $1,100,000 was made instead. A loss of $442,000 was recorded as “Loss on settlement of shares to be issued” on the consolidated statements of income (loss) and comprehensive income (loss) for the year ended September 30, 2022. 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 $81,000 of professional fees in conjunction with the acquisition.

Page   22

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets was as follows:

Cash	$	378
Accounts receivable		780
Inventory		769
Prepaid expenses and other current assets		2
Property, equipment, and right of use assets, net		1,273
Goodwill		4,641
Intangible assets		5,410
Accounts payable		(640)
Accrued liabilities		(166)
Deferred revenue		(100)
Loans and Leases		(390)
Deferred tax liability		(1,981)
Net assets acquired	$	9,976
Cash paid at closing	$	6,623
Stock issued in January 2021		2,376
Cash to be paid after closing		320
Stock to be issued after closing, included in shares to be issued		657
Consideration paid or payable	$	9,976

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

Acquisition of Mayhugh Drugs, Inc.

Effective February 1, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Mayhugh Drugs, Inc, dba Mayhugh Medical Equipment (“Mayhugh”). Mayhugh is a Florida-based company in the same industry as the Company. The purchase price was $1,959,000, of which $1,047,000 was paid in cash at closing, holdbacks due on the six- and twelve-month anniversary of the acquisition discounted at 2.39% for a fair value of $662,000, and an earnout valued at $250,000. The earnout could be as high as $750,000 ($250,000 for each of the first three twelve-month periods following the acquisition), and the fair value was based on a Monte Carlo simulation. 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 $54,000 of professional fees in conjunction with the acquisition.

Page   23

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets was as follows:

Cash	$	180
Accounts receivable		474
Inventory		487
Prepaid expenses and other current assets		7
Property, equipment, and right of use assets, net		1,418
Goodwill		1,587
Intangible assets		2,830
Accounts payable		(880)
Accrued liabilities		(14)
Deferred revenue		(84)
US Small Business Association (“SBA”) loan		(119)
Loans and Leases		(2,980)
Deferred tax liability		(947)
Net assets acquired	$	1,959
Cash paid at closing	$	1,047
Cash to be paid after closing, included in purchase price payable		912
Consideration paid or payable	$	1,959

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

Acquisition of Med Supply Center, Inc.

On June 21, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Med Supply Center, Inc. (“Med Supply”). Med Supply is a Mississippi-based company in the same industry as the Company. The purchase price was $1,601,000, of which $1,279,000 was paid in cash at closing, $10,000 to be paid within two months of the acquisition, and holdbacks payable on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $312,000. 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 $26,000 of professional fees in conjunction with the acquisition.

Page   24

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets was as follows:

Cash	$	48
Accounts receivable		180
Inventory		597
Property, equipment, and right of use assets, net		351
Goodwill		766
Intangible assets		370
Accounts payable		(190)
Accrued liabilities		(40)
Deferred revenue		(53)
Deferred tax liability		(304)
Loans and Leases		(124)
Net assets acquired	$	1,601
Cash paid at closing	$	1,279
Cash to be paid after closing, included in purchase price payable		322
Consideration paid or payable	$	1,601

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

Acquisition of Semo Drug-Care Plus of Mo. Inc

On June 23, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Semo Drug-Care Plus of Mo. Inc, dba Care Plus Home Oxygen Therapy (“Care Plus”). Care Plus is a Missouri-based company in the same industry as the Company. The purchase price was $1,626,000, of which $1,440,000 was paid in cash at closing, $10,000 to be paid within two months of the acquisition, and holdbacks payable on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $176,000. 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 $26,000 of professional fees in conjunction with the acquisition.

Page   25

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the acquired assets was as follows:

Cash	$	47
Accounts receivable		292
Inventory		475
Property, equipment, and right of use assets, net		373
Goodwill		482
Intangible assets		530
Accounts payable		(94)
Accrued liabilities		(51)
Deferred tax liability		(377)
Deferred revenue		(51)
Net assets acquired	$	1,626
Cash paid at closing	$	1,440
Cash to be paid after closing, included in purchase price payable		186
Consideration paid or payable	$	1,626

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

Acquisition of Oxygen Plus, Inc.

On June 29, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Oxygen Plus, Inc. (“Oxygen Plus”). Oxygen Plus is a California-based company in the same industry as the Company. The purchase price was $730,000, of which $574,000 was paid in cash at closing and a holdback due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $156,000. 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 $25,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets is as follows:

Cash	$	114
Accounts receivable		60
Inventory		39
Property, equipment, and right of use assets, net		88
Goodwill		327
Intangible assets		560
Accounts payable		(98)
Accrued liabilities		(13)
Deferred tax liability		(180)
Deferred revenue		(12)
Loans and Leases		(155)
Net assets acquired	$	730
Cash paid at closing	$	574
Cash to be paid after closing, included in purchase price payable		156
Consideration paid or payable	$	730

Page   26

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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

Acquisition of Medical West Healthcare Center, LLC

On August 20, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Medical West Healthcare Center, LLC (“Medical West”). Medical West is a Missouri-based company in the same industry as the Company. The purchase price was $2,366,000, of which $1,927,000 was paid in cash at closing and a holdback due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $439,000. 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 $42,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets was as follows:

Cash	$	234
Accounts receivable		195
Inventory		382
Prepaid expenses and other current assets		10
Property, equipment, and right of use assets, net		1,121
Goodwill		795
Intangible assets		1,170
Deposits		2
Accounts payable		(346)
Accrued liabilities		(107)
Deferred tax liability		(11)
Deferred revenue		(16)
Loans and Leases		(1,063)
Net assets acquired	$	2,366
Cash paid at closing	$	1,927
Cash to be paid after closing, included in purchase price payable		439
Consideration paid or payable	$	2,366

The above fair value of the acquired assets was adjusted during the year ended September 30, 2022 to reflect the changes and estimates from what was initially reported in the year ended September 30, 2021. Goodwill and accounts payable both increased by $37,000.

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

Page   27

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

Purchase Price Payable

The purchase price payable included on the consolidated statements of financial position consists of amounts related to prior period acquisitions as well as current fiscal year 2022 acquisitions less payments made to date. Below is the movement in Purchase Price Payable for the year ended September 30, 2022:

Balance, September 30, 2020 (current $857 plus long-term $560)	$	1,417
Addition from acquisitions		2,335
Accretion of interest		38
Payments		(1,274)
Balance, September 30, 2021 (current $2,383 plus long-term $133)	$	2,516
Addition from acquisitions		7,155
Accretion of interest		102
Derecognition of purchase price payable		(178)
Payments		(3,817)
Balance, September 30, 2022 (current $5,778)	$	5,778

4. Accounts Receivable

Accounts receivable represents amounts due from insurance companies and patients:

	As at		As at
	September 30, 2022		September 30, 2021
Gross receivable	$	27,122	$	15,413
Reserve for expected credit losses		(10,739)		(3,475)
	$	16,383	$	11,938

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

	Year ended		Year ended
	September 30,		September 30,
Reserve for expected credit losses	2022		2021
Opening Balance	$	3,475	$	5,036
Bad debt expense		12,225		7,957
Amounts written off		(4,961)		(9,518)
Ending Balance	$	10,739	$	3,475

5. Inventory

	As at September 30,		As at September 30,
	2022		2021
Serialized	$	5,814	$	2,369
Non-serialized		9,854		6,922
Reserve for shrink and slow-moving		(83)		(38)
Total Inventory	$	15,585	$	9,253

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

Page   28

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

6. Property, equipment, and right of use assets

			Office				Buildings and		Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Cost	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	22,568	$	504	$	—	$	1,364	$	2,872	$	4,990	$	32,298
Transfers from inventory		14,988		—		—		—		—		—		14,988
Additions		—		19		—		88		1,385		2,560		4,052
Acquisitions		2,740		3		—		54		302		1,526		4,625
Disposals and write offs		(9,150)		(44)		—		(8)		(384)		(1,326)		(10,912)
Balance September 30, 2021	$	31,146	$	482	$	—	$	1,498	$	4,175	$	7,750	$	45,051
Transfers from inventory		17,797		—		—		—		—		—		17,797
Additions		—		11		20		191		508		2,106		2,836
Acquisitions		3,952		218		140		802		1,274		3,747		10,133
Disposals and write offs		(15,954)		(262)		—		(60)		(1,177)		(1,217)		(18,670)
Balance September 30, 2022	$	36,941	$	449	$	160	$	2,431	$	4,780	$	12,387	$	57,148

			Office					Buildings and	Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Accumulated depreciation	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	12,311	$	335	$	—	$	309	$	1,182	$	1,494	$	15,631
Depreciation		13,213		92		—		131		789		1,987		16,212
Disposals and write offs		(9,105)		(44)		—		(9)		(336)		(804)		(10,298)
Balance September 30, 2021	$	16,419	$	383	$	—	$	431	$	1,635	$	2,677	$	21,545
Depreciation		15,980		66		—		191		1,477		2,738		20,453
Disposals and write offs		(15,954)		(259)		—		(26)		(990)		(1,118)		(18,347)
Balance September 30, 2022	$	16,445	$	190	$	—	$	596	$	2,122	$	4,297	$	23,650

			Office					Buildings and	Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Net Book Value	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	10,257	$	169	$	—	$	1,055	$	1,690	$	3,496	$	16,667
Balance September 30, 2021		14,727		99		—		1,067		2,540		5,073		23,506
Balance September 30, 2022	$	20,496	$	259	$	160	$	1,835	$	2,658	$	8,089	$	33,497

Rental equipment transferred from inventory during the years ended September 30, 2022 and 2021 was $17,797,000 and $14,988,000. For the years ended September 30, 2022 and 2021, the Company obtained equipment loans (Note 11) of $9,602,000 and $10,049,000, respectively, with the balance of $8,195,000 and $4,939,000 paid in cash, respectively.

Page   29

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

7. Goodwill and Intangible Assets

							Sub-total
							intangibles
			Customer		Other		with finite
Cost	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	3,895	$	11,766	$	6,369	$	18,135	$	22,030
Acquisitions		8,561		9,129		1,740		10,869		19,430
Disposals		—		(205)		—		(205)		(205)
Balance September 30, 2021	$	12,456	$	20,690	$	8,109	$	28,799	$	41,255
Acquisitions		15,752		14,210		2,390		16,600		32,352
Disposals		—		(2)		—		(2)		(2)
Balance September 30, 2022	$	28,208	$	34,898	$	10,499	$	45,397	$	73,605

							Sub-total
							intangibles
			Customer		Other		with finite
Accumulation amortization	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	—	$	7,200	$	5,356	$	12,556	$	12,556
Amortization		—		1,272		302		1,574		1,574
Disposals		—		(205)		—		(205)		(205)
Balance September 30, 2021	$	—	$	8,267	$	5,658	$	13,925	$	13,925
Amortization		—		2,080		507		2,587		2,587
Disposals		—		(2)		—		(2)		(2)
Balance September 30, 2022	$	—	$	10,345	$	6,165	$	16,510	$	16,510

							Sub-total
							intangibles
			Customer		Other		with finite
Net carrying amount	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	3,895	$	4,566	$	1,013	$	5,579	$	9,474
Balance September 30, 2021		12,456		12,423		2,451		14,874		27,330
Balance September 30, 2022	$	28,208	$	24,553	$	4,334	$	28,887	$	57,095

Page   30

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

Goodwill Continuity

Balance, September 30, 2020	$	3,895
Acquisition through business combination:
Sleepwell		4,641
Mayhugh		1,587
Med Supply		766
Care Plus		482
Oxygen Plus		327
Medical West		758
Balance, September 30, 2021	$	12,456
Acquisition through business combination:
Medical West		37
Thrift		802
Heckman		965
Southeastern Bio		225
At Home		7,868
Good Night Medical		3,277
Access		1,223
NorCal		948
Hometown		407
Balance, September 30, 2022	$	28,208

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 loans and accrued interest were forgivable if the borrower uses the loan proceeds for eligible purposes and maintained 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 consolidated statements of income (loss) for the year ended September 30, 2022.

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

During the years 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 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 original proceeds were recognized as a liability, which was reduced based on certain related costs incurred. During the years ended September 30, 2022 and 2021, the Company

Page   31

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

reduced the liability by $631,000 and $0, respectively, which was been included in other income in the consolidated statements of income (loss) and comprehensive income (loss).

9. Deferred Revenue

Activity for deferred revenue for the years ended September 30, 2022 and 2021 is as follows:

	For the year ended		For the year ended
	September 30, 2022		September 30, 2021
Beginning balance	$	2,452	$	1,804
Acquisitions		553		316
Net activity from operations		31		332
Ending balance	$	3,036	$	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, 2021, 13,559,300 Warrants for 3,389,825 common shares were exercised, and the remaining 280,113 Warrants for 70,028 common shares expired unexercised 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. The liability was recorded at fair value using the Black-Scholes pricing model. 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.

	As at
	September
	30, 2020
Share price	C$	1.31
Risk-free interest rate		0.23	%
Expected volatility		60.8	%
Expected life of warrant		0.75 years
Expected dividend yield		0	%

Page   32

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

11. Long-term Debt

Senior Credit Facility

In September 2022, the Company entered into a five-year, $110,000,000 senior credit facility (“Facility”) with a group of US banks. The facility consists of a delayed draw term loan facility of $85,000,000, a term loan of $5,000,000 that was drawn at closing, and a $20,000,000 revolving credit facility. The facility amends the $20,000,000 revolving credit facility that was entered into in September 2020. The Facility is secured by substantially all assets of the Company and is subject to certain financial covenants.  

The Facility bears interest at variable rates ranging in length from daily to six months and has fees for unused balances. As of September 30, 2022, the outstanding balances under the Facility totaled $12,000,000, comprised of $5,000,000 on the term loan and $7,000,000 on the revolving credit facility.

As of September 30, 2022, the term loan bears interest at an annual rate of 5.7% and is repayable in quarterly installments of $250,000, with the balance due at maturity. The revolving credit facility bears interest at an annual rate of 7.0% and is payable at maturity. It is classified as a current liability as it is expected to be repaid during the year ended September 30, 2023. Interest expense on the Facility, including the unused fee, was $11,000 for the year ended September 30, 2022. The fair value of the note approximates the carrying value as of September 30, 2022.

The Company incurred $1,779,000 in financing costs to obtain the Facility, which is reflected as a reduction of the outstanding balance and will be amortized as interest expense using the effective interest method over the life of the Facility. During the year ended September 30, 2022, $15,000 of amortization of deferred financing costs was recorded.

A summary of the balances related to the Facility as of September 30, 2022 is as follows:

	As of
	September 30, 2022
Delayed draw term loan	$	—
Term loan		5,000
Revolving credit facility		7,000
Total principal		12,000
Deferred financing costs		(1,765)
Net carrying value	$	10,235
Current portion		6,857
Long-term portion		3,378
Net carrying value	$	10,235

The revolving credit facility that was replaced with the Facility had no borrowings as of September 30, 2021, and incurred interest expense for the years ended September 30, 2022 and 2021 of $126,000 and $38,000, respectively. Issuance costs had been recorded in “deferred financing costs” on the consolidated statements of financial position and were being amortized on a straight-line over the four-year term of the facility for a total of $135,000 and $140,000 for the years ended September 30, 2022 and 2021, with the balance of $281,000 recorded as “loss on extinguishment of long-term debt” on the consolidated statement of income (loss) and comprehensive income (loss) for the year ended September 30, 2022.

Page   33

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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 (US$807) debenture was convertible at the option of the holder into 192.31 common shares. Beginning March 9, 2022, the Company could force conversion of the outstanding principal at a conversion price of C$5.20 per share, if the daily volume weighted average price of the common shares exceeds C$6.48 per share for twenty consecutive trading days. The Company exercised this option during the year ended September 30, 2022. During the years ended September 30, 2022 and 2021, C$10,959,000 and C$4,037,000 of debentures were converted into common shares. The fair value of the debentures on the dates of conversion totaled C$13,665,000 (US$10,683,000) and C$6,766,000 (US$5,359,000) during the years ended September 30, 2022 and 2021, respectively. No debentures remain outstanding as of September 30, 2022.

The debentures contained multiple embedded derivatives including conversion right, forced conversion option and payment in lieu of common shares. Since the Company was unable to measure the fair value of embedded derivatives reliably, it had 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 were valued at fair value using the current trading price of C$137 ($109) per unit as of September 30, 2021. A gain of $1,150,000 and a loss of $3,591,000 was recorded for the years ended September 30, 2022 and 2021, respectively. Following is the movement in these debentures:

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	11,784	$	12,930
Conversion to common shares		(10,683)		(5,359)
Change in fair value		(1,150)		3,591
Change in foreign exchange rate		49		622
Ending Balance	$	—	$	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 for a total of $133,000 using the Black-Scholes pricing model.

Compensation options activity for the year ended September 30, 2021 is provided below:

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

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 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   34

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 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. The Company has assumed equipment loans in conjunction with several of its acquisitions. Those loans were recorded the Company’s incremental borrowing rate of 6%.

There are no covenants with the loans and the carrying value of the equipment that is pledged as security against the loans is $14,949,000 and $6,939,000 for years ended September 30, 2022 and 2021, respectively.

Following is the activity in equipment loans for the years ended September 30, 2022 and 2021:

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	7,384		4,750
Additions:
Acquisitions		1,161		3,001
Operations		9,062		10,049
Repayments		(11,900)		(10,416)
Ending Balance		5,707		7,384
Current portion, less than 1 year		5,473		6,992
Long-term portion, due between 1 and 5 years	$	234	$	392

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 12.0%.

Below is the movement in lease liabilities for the year ended September 30, 2022 and 2021 respectively:

			Real
	Vehicles		estate		Total
Balance, September 30, 2020	$	1,627	$	3,640	$	5,267
Additions during the period:
Acquisitions		109		1,603		1,712
Operations		1,385		2,560		3,945
Lease terminations		—		(612)		(612)
Repayments		(707)		(1,840)		(2,547)
Balance, September 30, 2021	$	2,414	$	5,351	$	7,765
Additions during the period:
Acquisitions		571		3,655		4,226
Operations		347		2,063		2,410
Lease terminations		—		(80)		(80)
Repayments		(1,339)		(2,483)		(3,822)
Balance, September 30, 2022	$	1,993	$	8,506	$	10,499

Page   35

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 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
	September 30, 2022		September 30, 2021
Less than 1 year	$	3,979	$	3,491
Between 1 and 5 years		7,443		5,367
More than five years		1,108		38
Gross lease payments		12,530		8,896
Less: finance charges		(2,031)		(1,131)
Net lease liabilities	$	10,499	$	7,765

SBA Loan

In conjunction with the acquisition of Mayhugh 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 $119,000. The loan is payable in 360 monthly installments of $731 which began in September 2021 and is secured by substantially all the assets of Mayhugh.

Following is the activity in the SBA Loan for the years ended September 30, 2022 and 2021:

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	121	$	—
Additions:
Acquisitions		—		119
Interest expense		7		5
Repayments		(8)		(3)
Ending Balance	$	120	$	121

12. Shareholders’ Equity

The Company considers its capital to be shareholders’ equity, which is comprised of share capital, contributed surplus, shares to be issued, accumulated other comprehensive income (loss), and accumulated deficit, in the amount of $79,547,000 at September 30, 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. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

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.

Page   36

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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 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. Each unit 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. 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.

Warrant activity for the years ended September 30, 2021 is provided below:

	Number	Weighted
	(000s)	average exercise price
Balance, September 30, 2020	3,460	C$	6.40
Exercised	(3,390)		6.40
Expired	(70)		6.40
Balance, September 30, 2021	—	C$	—

The weighted average share price on the dates of exercise in fiscal year 2021 in was C$7.86.

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. Activity for the June 2020 compensation options for the years ended September 30, 2022 and 2021 is as follows:

	Number	Weighted
	(000s)	average exercise price
Balance, September 30, 2020	353	C$	—
Exercised	(238)		4.60
Balance, September 30, 2021	115	C$	4.60
Exercised	(115)		4.60
Balance, September 30, 2022	—	C$	—

Page   37

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The weighted average share price on the dates of exercise during the years ended September 30, 2022 and 2021 was C$5.75 and C$8.27, respectively.

Shares to be issued

As discussed in Note 3, the Company acquired Sleepwell on October 23, 2020, with a portion of the purchase price 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) was 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.

The stock scheduled to be issued in August 2022, was settled, upon mutual agreement of the parties, with a cash payment of $1,100,000 was made instead. A loss of $442,000 was recorded as “Loss on settlement of shares to be issued” on the consolidated statements of income (loss) and comprehensive income (loss).

Employee, Director, and Consultant options

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 year ended September 30, 2022 vest quarterly over eight or twelve quarters.

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	1,396		8.40
Exercised	(117)		2.20
Expired	(65)		3.69
Forfeited	(55)		8.39
Balance, September 30, 2021	3,786	C$	4.15
Issued	195		6.93
Exercised	(33)		0.99
Expired	(55)		2.40
Forfeited	(142)		6.87
Balance, September 30, 2022	3,751	C$	4.24

At September 30, 2022, the Company had 2,907,000 vested stock options with a weighted average exercise price of C$2.98. The weighted average share price on the dates of exercise in fiscal years 2022 and 2021 was C$6.56 and C$8.11, respectively.

Page   38

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

The fair value of the stock options was a range of C$3.33 to C$4.42 for the year ended September 30, 2022 and C$3.27 to C$4.42 for the year ended September 30, 2021 and used the Black-Scholes option pricing model calculated using the following assumptions:

	Year Ended			Year Ended
	September 30,			September 30,
	2022			2021
Share price at grant date	C$6.20	-	C$6.75	C$8.48	-	C$9.76
Risk-free interest rate	1.78	-	3.33%	0.92	-	1.63%
Expected volatility	54.54	-	55.67%	48.96	-	55.08%
Expected life of option			10 years	4.75	-	10 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 August 20, 2021. The shares will be issued on the first business day of each calendar year in an amount equal to the units that vested in the previous calendar year or earlier upon a Change in Control, as defined.

On February 1, 2022, there were 81,340 restricted 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 61,005 restricted stock units being vested as of September 30, 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 stock-based compensation expense to be expensed over the vesting period with an increase to contributed surplus.

A summary of restricted stock units:

		Weighted
	Number of units (000’s)	average exercise price
Balance, September 30, 2020	—	C$	—
Granted	954		8.48
Balance, September 30, 2021	954	C$	8.48
Forfeited	(105)		8.48
Granted	81		6.83
Balance, September 30, 2022	930	C$	8.34

The Company accounts for stock-based compensation using the fair value method as prescribed by International Financial Reporting Standards 2 (“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.

Page   39

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

For the years ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Restricted stock units	$	2,659	$	2,636
Stock options		2,834		2,316
Stock-based compensation expense	$	5,493	$	4,952

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 $73,000 as of September 30, 2022, which are due in less than one year.

Contingencies

The Company was in litigation with Lightwater Long Short Fund (“Lightwater”) during the years ended September 30, 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.

14. Operating expenses

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Payroll and employee benefits	$	41,456	$	29,549
Facilities		3,360		2,101
Billing		6,346		3,887
Professional fees		3,100		2,566
Marketing costs		1,461		1,005
Outbound freight		2,165		1,378
All other		7,315		4,319
Total operating expenses	$	65,203	$	44,805

Page   40

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

15. Income taxes

The Company follows the asset and liability method of accounting for income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current year. Deferred income tax assets and liabilities are recognized for temporary differences between the tax and accounting basis of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes and are measured using the current or substantively enacted tax rates expected to apply when the differences reverse. A deferred tax asset is recognized to the extent that the recoverability of deferred income tax assets is considered probable.

The Company’s recovery of income taxes differs from the amount that is computed by applying the combined federal and state statutory income tax rate of 25.9% and 27.7% for the years ended September 30, 2022 and 2021, respectively, in the US to the Company’s net income (loss) before income tax expense (recovery) as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Income (loss) before taxes	$	2,935	$	(9,329)
Expected income tax expense (recovery) (statutory income tax rate of 25.9% and 27.7%, respectively)		759		(2,586)
Difference in foreign tax rates		(57)		86
Tax rate changes and other adjustments		270		(614)
Stock-based compensation and non-deductible expenses		1,436		2,964
Other income from government grant		(1,101)		—
State taxes - US		609		645
Recognition of deferred tax assets not previously recognized		(3,820)		(3,650)
Recovery of income taxes	$	(1,904)	$	(3,155)

Deferred tax

The following table summarizes the components of deferred tax:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Deferred tax assets:
Net operating losses - US	$	5,403	$	6,312
Lease liabilities - US		2,202		—
Reserve for expected credit losses		2,779		—
Other		171		—
Deferred tax liabilities:
Property, equipment, and right of use assets, net		(8,498)		(6,015)
Intangible assets, net		(2,034)		—
Other		(23)		(297)
Net deferred tax	$	—	$	—

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.

Page   41

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Balance at beginning of year	$	—	$	—
Recognized in consolidated statement of income (loss)		(2,513)		(3,800)
Recognized in goodwill		2,513		3,800
Balance at end of year	$	—	$	—

Unrecognized deferred tax assets

Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying number of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Intangible assets, net - Canada	$	47	$	54
Intangible assets, net - US		—		273
Reserve for expected credit losses - US		—		1,068
Net capital losses carried forward - Canada		130		141
Non-capital losses - US		403		650
Share issuance costs - Canada		292		501
Non-capital losses - Canada		7,139		7,266
Other temporary differences		—		1,787
	$	8,011	$	11,740

The US loss carry-forward of $14,806,000 expires in 2039 whereas the remaining US loss of $7,628,000 can be carried forward indefinitely. A deferred tax asset has been recognized to the extent that it can be utilized to offset taxable income generated by the reversal of deferred tax liabilities. The remaining amount has not been recognized because it is not probable that future profit will be available against which the Company can utilize the benefits therefrom.

The Canadian non-capital loss carry-forwards of $26,439,000 have various expiry dates starting in 2027 through 2042. The net capital losses of $968,000 can be carried forward indefinitely.

16. Gain (loss) per share

Gain (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.

Page   42

Quipt Home Medical Corp. 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2022 AND 2021

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

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

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Net income (loss)	$	4,839	$	(6,174)
Basic weighted average number of shares		33,647		30,438
Diluted weighted average number of shares		36,302		30,438
Total - Basic	$	0.14	$	(0.20)
Total - Diluted	$	0.13	$	(0.20)

The effect of instruments exercisable or convertible to common shares for the year ended September 30, 2021 were excluded from the calculation of diluted loss per share because their effect is anti-dilutive.

17. Related party transactions

The Company has six 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 for the years ended September 30, 2022 and 2021, and increased to approximately $65,000 per month beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

Expense for Board of Directors’ fees were $287,000 and $203,000 for the years ended September 30, 2022 and 2021, respectively. Stock-based compensation for the Board of Directors was $381,000 and $1,067,000 for the years ended September 30, 2022 and 2021, respectively.

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

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Salaries and benefits paid during the year	$	1,030	$	968
Stock-based compensation		2,626		1,036
Total	$	3,656	$	2,004

Page   43

EX-99.3

Exhibit 99.3

Fiscal year 2022
Management’s Discussion and Analysis For the Year ended September 30, 2022	Quipt Home Medical Corp.

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 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., and its subsidiaries (“Quipt” or the “Company”), prepared as of December 23, 2022 and should be read in conjunction with the consolidated financial statements for the  year ended September 30, 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 4	Selected Annual Information
Page 5	About Our Business and Operating Results
Page 13	Financial Position
Page 17	Accounting and Disclosure Matters
Page 20	Financial Instruments and Risk Management
Page 22	Risk Factors

Page | 1

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This Management’s Discussion and Analysis (“MD&A”) contains certain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking ‎statements” within the meaning of applicable securities legislation, including the United States Private Securities ‎Litigation Reform Act of 1995 (collectively, “forward-looking statements”)‎. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are ‎based upon the current beliefs, expectations, and assumptions regarding the future of its business, ‎future plans and strategies, and other future conditions of Quipt Home Medical Corp. (the “Company” or “Quipt”). Forward-looking ‎statements can be identified by the words ‎such as “expect”, “likely”, “may”, “will”,, “would”, “could”, “should”, “continue”, “contemplate”, “intend”, or ‎‎”anticipate”, “believe”, “envision”, “estimate”, “expect”, “plan”, “predict”, “project”, “target”, “potential”, ‎‎”proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or ‎statements that certain events or conditions “may” or “will” happen, or by discussions of strategy. Forward-looking ‎statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other ‎statements that are not statements of fact. Such forward-looking statements are made as of the date of this ‎MD&A.‎

Forward-looking statements in this MD&A therein include, but are not limited to, statements with respect to:‎ operating results; ‎profitability; ‎ financial condition and resources; ‎ anticipated needs for working capital; ‎ liquidity; ‎ capital resources; ‎capital expenditures;‎ milestones; ‎licensing milestones; ‎ information with respect to future growth and growth strategies; ‎ anticipated trends in the industry in with the Company operates; ‎ the Company’s future financing plans; ‎ timelines; ‎ currency fluctuations; ‎ government regulation; ‎ unanticipated expenses; ‎ commercial disputes or claims; ‎limitations on insurance coverage; ‎ availability and expectations regarding of cash flow to fund capital requirements;‎ the product offerings of the Company;‎ the competitive conditions of the industry;‎ the competitive and business strategies of the Company;‎ on-going implications of the novel coronavirus (“COVID-19”);‎ statements relating to the business and future activities of, and developments related to, the Company, ‎including such things as future business strategy, competitive strengths, goals, expansion and growth ‎of the Company’s business, operations and plans; and ‎other events or conditions that may occur in the future.‎

Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of the ‎Company’s management made in light of its experience and its perception of trends, current conditions and ‎expected developments, as well as other factors that management believes to be relevant and reasonable in the ‎circumstances at the date that such statements are made, but which may prove to be incorrect. The Company ‎believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. The ‎material factors and assumptions used to develop the forward-looking statements contained in this MD&A, ‎without limitation:‎ the Company’s ability to successfully execute its growth strategies and business plan;‎ the ability to successfully identify strategic acquisitions;‎ the Company’s ability to realize anticipated benefits, synergies or generate revenue, profits or value from ‎its recent acquisitions into existing operations;‎ management’s perceptions of historical trends, current conditions and expected future developments;‎ the ability of the Company to take market share from competitors; ‎the Company’s ability to attract and retain skill staff;‎ market conditions and competition;‎ the products, services and technology offered by the Company’s competitors;‎ the Company’s ability to generate cash flow from operations the Company’s ability to keep pace with changing regulatory requirements;‎ ongoing ability to conduct business in the regulatory environments in which the Company operates and ‎may operate in the future;‎ that the Company’s ability to maintain strong business relationships with its suppliers, service provides and ‎other third parties will be maintained; ‎COVID-19 and recall related supply chain issues will be resolved within the near future;‎ the Company’s ability to fulfill prescriptions for services and products; ‎ the anticipated growth of the niche market of home equipment and monitoring; the anticipated increase in demand for various medical products and equipment;‎ demand and interest in the Company’s products and services; ‎the ability to deploy up front capital to purchase monitoring and treatment equipment; ‎anticipated and unanticipated costs; ‎ the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses;‎ the general economic, financial market, regulatory and political conditions in which the Company operates ‎and the absence of material adverse changes in the Company’s industry, regulatory

Page | 2

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

environmental or ‎the global economy; and other considerations that management believes to be appropriate in the circumstances.‎

Forward-looking statements speak only as at the date they are made and are based on information currently ‎available and on the then current expectations. Readers are cautioned that forward-‎looking statements are not based on historical facts but instead are based on ‎reasonable assumptions and estimates ‎of management of the Company at the time they were provided ‎or made and involve known and unknown risks, ‎uncertainties and other factors which may cause the ‎actual results, performance or achievements of the Company, ‎as applicable, to be materially different ‎from any future results, performance or achievements expressed or implied ‎by such forward-looking ‎statements, including, but not limited to, known and unknown risks, uncertainties, ‎assumptions and other factors, including those listed under “Risk Factors”, which include: credit risks, market risks ‎‎(including those related to equity, commodity, foreign exchange and interest rate markets), liquidity risks, ‎operational risks (including those related to technology and infrastructure), and risks relating to reputation, ‎insurance, strategy, regulatory matters, legal matters, environmental matters and capital adequacy. Examples of ‎such risk factors include: the Company may be subject to significant capital requirements and operating risks; ‎changes in law, the ability to implement business strategies, growth strategies and pursue business opportunities; ‎state of the capital markets; the availability of funds and resources to pursue operations; 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; competition; difficulty integrating newly ‎acquired businesses; low profit market segments; disruptions in or attacks (including cyber-attacks) on 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; the failure of third parties to comply with their obligations; the ‎impact of new and changes to, or application of, current laws and regulations; the overall difficult litigation ‎environment, including in the United States; risks related to ‎infectious ‎diseases, including the impacts of COVID-19; ‎increased competition; changes in foreign currency rates; loss of foreign private issuer status; risks relating to the ‎deterioration of global economic conditions; increased funding costs and market volatility due to market illiquidity ‎and competition for funding; critical accounting estimates and changes to accounting standards, policies, and ‎methods; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events, ‎as well as other general economic, market and business conditions, amongst others, ‎as well as those risk factors ‎described under the heading “Risk Factors” and elsewhere in this MD&A  and therein and as described from time to time in documents filed by ‎the Company with Canadian securities regulatory authorities including, without limitation, the Company’s audited annual financial statements and the Company’s Annual Information Form (“AIF”). Although the Company has attempted to identify ‎important factors that could cause actual actions, events or results to differ materially from those described in ‎forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, ‎estimated or intended. The Company provides no assurance that forward-looking statements will prove to be ‎accurate, as actual results and future events could differ materially from those anticipated in such statements.‎

Readers are cautioned that the above list of cautionary statements is not exhaustive. A number of factors could ‎cause actual events, performance or results to differ materially from what is projected in forward-looking ‎statements. The purpose of forward-looking statements is to provide the reader with a description of management’s ‎expectations, and such forward-looking statements may not be appropriate for any other purpose. You should not ‎place undue reliance on forward-looking statements contained in this MD&A. Although the Company believes that the expectations ‎reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will ‎prove to have been correct. The Company undertakes no obligation to update or revise any forward-looking ‎statements, whether as a result of new information, future events or otherwise, except as required by applicable law. ‎The forward-looking statements contained in this MD&A are expressly qualified in their entirety by this cautionary statement. ‎

FISCAL YEAR 2022 HIGHLIGHTS

● Increased revenues for the year ended September 30, 2022 to $139.9 million, or 36.6%, from the year ended September 30, 2021.

Page | 3

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

● Completed eight acquisitions during the year ended September 30, 2022.

● Increased the number of equipment set-ups to 516,328 for the year ended September 30, 2022 from 364,367 in the prior year, an increase of 41.7%.

● Increased the number of respiratory resupply set-ups to 231,495 for the year ended September 30, 2022 from 158,072 in the prior year, an increase of 46.4%.

● Generated Adjusted EBITDA of $29.2 million, a 36.5% increase from the prior year, representing 20.9% of revenue.

SELECTED ANNUAL INFORMATION

	For the		For the		For the		For the		For the
	Three months		Three months		Year ended		Year ended		Year ended
	September		September		September		September		September
	30, 2022		30, 2021		30, 2022		30, 2021		30, 2020
Number of patients serviced(1)		95,717		72,378		173,203		140,996		91,650
Number of equipment set-ups or deliveries		143,186		108,878		516,328		364,367		253,113
Respiratory resupply set-ups or deliveries		66,830		46,794		231,495		158,072		61,468
Adjusted EBITDA(2)	$	8,426	$	5,598	$	29,176	$	21,371	$	15,451
Total revenues	$	40,092	$	29,118	$	139,862	$	102,351	$	72,639
Income (loss) from continuing operations	$	1,770	$	(1,379)	$	4,839	$	(6,174)	$	(3,703)
Income (loss) per share - Basic (continuing operations)	$	0.05	$	(0.04)	$	0.14	$	(0.20)	$	(0.16)
Income (loss) per share - Diluted (continuing operations)	$	0.05	$	(0.04)	$	0.13	$	(0.20)	$	(0.16)
Income (loss) per share - Basic (discontinued operations)	$	—	$	—	$	—	$	—	$	(0.04)
Income (loss) per share - Diluted (discontinued operations)	$	—	$	—	$	—	$	—	$	(0.04)
Income (loss) per share - Basic	$	0.05	$	(0.04)	$	0.14	$	(0.20)	$	(0.20)
Income (loss) per share - Diluted	$	0.05	$	(0.04)	$	0.13	$	(0.20)	$	(0.20)
Total assets					$	132,214	$	108,573	$	72,065
Total long term liabilities					$	10,927	$	17,214	$	19,445
Shareholders' equity					$	79,547	$	58,622	$	28,235

(1) The twelve-month periods do not equal the sum of the four respective three-month periods due to some patients being serviced in multiple four-month periods.

(2) Refer to page seven 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.

Page | 4

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

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 is best known for providing products and services that address sleep apnea and pap treatment, home ventilation systems, daily and ambulatory aides, power mobility, respiratory equipment, and oxygen therapy. Quipt seeks to provide an ever-expanding line of products and services over larger geographic regions within the United States using several growth strategies. With over 100 offices, Quipt employs more than 800 personnel in the United States.

Future Outlook

Quipt expects to generate net profit and positive Adjusted EBITDA. Our top priority continues to be the generation of operational net profit, positive cash flow, and growth in EBITDA in fiscal year 2023 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, and our acquisitions, have given us a focus and path towards profitability at each business unit.

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 to maintaining our healthy gross margin while growing revenues by cross selling services to existing and acquired patients.

COVID-19 Pandemic  

In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic. The crisis related to COVID-19 is unprecedented and has had an impact on the Company's employees, customers, and suppliers in 2021 and 2022.

Supply Chain

The Company closely monitors the changing global environment to enable immediate actions to be taken to ensure customer order fulfillment is achieved across the various markets. The shipment of goods from Asia continues to be

Page | 5

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

impacted by COVID-19 disruptions to manufacturing. Global chip shortages continue to impact parts of our business as well.

Demand

Consumer demand for Quipt products and services is strong in most major markets. Brick and mortar retail consumer traffic continues to be affected in some markets with government-imposed restrictions and consumer purchasing behavior. Online and e-commerce channels are active in most countries.

The demand for Quipt products and services were not adversely impacted by COVID-19. Demand for healthcare products and services increased during the pandemic as hospitals, physicians and pharmacies had an increased need to healthcare products and services, especially products and services relating to respiratory health and assistance.

OPERATING RESULTS

Accounting policies and estimates

The consolidated financial statements for the year ended September 30, 2022 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 similar 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 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.

Page | 6

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

● 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.

● 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 until realized upon settlement of the instruments

● 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.

● Other income from government grant may be useful for investors to consider because it is related to the US CARES Act from COVID-19. This income is expected to be non-recurring and is not considered to be a representative component of the day-to-day operating performance of our business

● Loss on extinguishment of debt may be useful for investors to consider because it represents the expense from the extinguishment of the revolving credit facility. This is expected to be a non-recurring financing expense and is not considered to be a representative component of the day-to-day operating performance of our business

● Loss on settlement of shares to be issued may be useful for investors to consider because it represents the difference between the shares expected to be issued in an acquisition but was settled in cash. This is expected to be a non-recurring and is not considered to be a representative component of the day-to-day operating performance of our business

● Acquisition-related costs may be useful for the investors to consider because they are professional fees directly related to completing the various acquisitions. While the costs are expected to be recurring if the Company continues to make acquisitions, they are non-recurring as they relate to the specific acquisition and are incurred prior to the inclusion of such acquisitions in the consolidated revenues of the Company.

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

Page | 7

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

The following table of Adjusted EBITDA shows the Company’s IFRS measures reconciled to EBITDA and Adjusted EBITDA (non-IFRS measures) for the indicated periods. The table of net income (loss) below is also measured based on IFRS. The tables are shown net of discontinued operations.

	Three months		Three months		Year ended		Year ended		Year ended
	September		September		September		September		September
	30, 2022		30, 2021		30, 2022		30, 2021		30, 2020
Net income (loss) from continuing operations	$	1,770	$	(1,379)	$	4,839	$	(6,174)	$	(3,703)
Add back:
Depreciation and amortization		7,205		5,397		23,040		17,786		14,538
Interest expense, net		572		515		2,079		1,853		1,837
(Recovery of) provision for income taxes		(2,362)		(1,214)		(1,904)		(3,155)		128
EBITDA		7,185		3,319		28,054		10,310		12,800
Stock-based compensation		897		3,328		5,493		4,952		171
Acquisition-related costs		105		69		797		233		89
Gain (loss) on foreign currency transactions		62		37		144		173		(454)
Other income from government grant		(631)		—		(4,885)		—		—
Loss on extinguishment of debt		281		—		281		—		—
Loss on settlement of shares to be issued		442		—		442		—		—
Transaction costs		—		—		—		—		210
Change in fair value of debentures and warrants		85		(1,155)		(1,150)		5,703		2,635
Adjusted EBITDA	$	8,426	$	5,598	$	29,176	$	21,371	$	15,451

Page | 8

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

	Three months		Three months		Year ended		Year ended		Year ended
	September 30,		September 30,		September 30,		September 30,		September 30,
	2022		2021		2022		2021		2020
Revenues	$	40,092	$	29,118	$	139,862	$	102,351	$	72,639
Inventory sold		9,294		8,234		33,213		28,172		19,934
Operating expenses		18,606		13,328		65,203		44,805		32,185
Bad debt expense		3,242		1,987		12,225		7,957		6,441
Depreciation		6,294		4,930		20,453		16,212		13,860
Amortization of intangible assets		911		467		2,587		1,574		678
Stock-based compensation		897		3,328		5,493		4,952		171
Acquisition-related costs		574		69		797		233		89
Loss (gain) on sale of property and equipment		55		(29)		45		(94)		(74)
Other income from government grant		(631)		—		(4,885)		—		(1,303)
Interest expense, net		572		515		2,079		1,993		1,842
Loss on extinguishment of debt		281		—		281		—		—
Loss on settlement of shares to be issued		442		—		442		—		—
(Gain) loss on foreign currency transactions		62		37		144		173		(454)
Change in fair value of debentures and warrants		85		(1,155)		(1,150)		5,703		2,635
Transaction costs		—		—		—		—		210
(Recovery of) provision for income taxes		(2,362)		(1,214)		(1,904)		(3,155)		128
Net income (loss) from continuing operations	$	1,770	$	(1,379)	$	4,839	$	(6,174)	$	(3,703)
Income from discontinued operations		—		—		—		—		(869)
Net income (loss)	$	1,770	$	(1,379)	$	4,839	$	(6,174)	$	(4,572)
Income (loss) per share
Basic - continuing operations	$	0.05	$	(0.04)	$	0.14	$	(0.20)	$	(0.16)
Diluted - continuing operations	$	0.05	$	(0.04)	$	0.13	$	(0.20)	$	(0.16)
Income (loss) per share
Basic - discontinued operations	$	—	$	—	$	—	$	—	$	(0.04)
Diluted - discontinued operations	$	—	$	—	$	—	$	—	$	(0.04)
Income (loss) per share
Income (loss) per share - Basic	$	0.05	$	(0.04)	$	0.14	$	(0.20)	$	(0.20)
Income (loss) per share - Diluted	$	0.05	$	(0.04)	$	0.13	$	(0.20)	$	(0.20)

Revenue

For the year ended September 30, 2022, revenue totaled $139,862,000, an increase of $37,511,000, or 36.6%, from the year ended September 30, 2021. This increase is primarily due to the acquisitions during the fiscal years 2022 and 2021.

For the year ended September 30, 2022, sales of medical equipment and supplies totaled $70,670,000, an increase of $23,657,000, or 50.3%, from the year ended September 30, 2021. This increase is due to the acquisitions during the years ended September 30, 2022 and 2021, and the focus on sales of respiratory resupply products.

For the year ended September 30, 2022, rentals of medical equipment totaled $69,192,000, an increase of $13,854,000, or 25% from the year ended September 30, 2021. This increase is primarily due to the acquisitions during the fiscal years 2022 and 2021.

Page | 9

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

For the three months ended September 30, 2022, revenue totaled $40,092,000, an increase of $10,974,000, or 37.7%, from the three months ended September 30, 2021. This increase is primarily due to the acquisitions during the year ended September 30, 2022.

Inventory sold

For the year ended September 30, 2022, inventory sold totaled $33,213,000 versus $28,172,000 for the year ended September 30, 2021. The increase in dollars was due to the growth in revenues but increased by a smaller percentage than revenues due to negotiating better pricing from vendors.

For the three months ended September 30, 2022, inventory sold totaled $9,294,000 versus $8,234,000 for the three months ended September 30, 2021. The increase in dollars was due to the growth in revenues but increased by a smaller percentage than revenues due to negotiating better pricing from vendors.

Operating expenses

For the year ended September 30, 2022, operating expenses were $65,203,000, an increase of $20,398,000 from $44,805,000 for the year ended September 30, 2021. Acquisitions contributed approximately $16,600,000 of the increase, with other increases relating to insurance premiums (particularly directors’ and officers’ liability), professional fees, billing expenses, and inflation in fuel among others.

For the three months ended September 30, 2022, operating expenses were $18,606,000, an increase of $5,278,000 from $13,328,000 for the three months ended September 30, 2021, primarily due to the acquisitions during the year ended September 30, 2022.

Bad debt expense

Bad debt expense increased to $12,225,000, or 8.7% of revenues, for the year ended September 30, 2022 from $7,957,000, or 7.8% of revenues for the year ended September 30, 2021. The increase in dollars was due to the growth in revenues. The slight increase percentage of revenues reflects the fluctuating nature of reimbursement and collection cycles in the US healthcare system.

Bad debt expense increased to $3,242,000, or 8.1% of revenues, for the three months ended September 30, 2022 from $1,987,000, or 6.8% of revenues for the three months ended September 30, 2021. The increase in dollars was due to the growth in revenues. The increase percentage of revenues reflects the fluctuating nature of reimbursement and collection cycles in the US healthcare system.

Depreciation expense

Depreciation expense increased by $4,241,000 to $20,453,000 for the year ended September 30, 2022. This increase is primarily due to the increase in property, equipment, and right of use assets related to the business acquisitions during the years ended September 30, 2022 and 2021.

Depreciation expense increased by $1,364,000 to $6,294,000 for the three months ended September 30, 2022. This increase is primarily due to the increase in property, equipment, and right of use assets related to the business acquisitions during the year ended September 30, 2022.

Page | 10

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

Acquisition-related costs

Acquisition related costs increased by $564,000 to $797,000 for the year ended September 30, 2022. This increase is primarily due to the increase of acquisitions and what expenses were necessary to complete the acquisitions in the year ended September 30, 2022 versus the year ended September 30, 2021.

Acquisition related costs increased by $505,000 to $574,000 for the three months ended September 30, 2022. This increase is primarily due to the increase of acquisitions and what expenses were necessary to complete the acquisitions in the three months ended September 30, 2022.

Stock-based compensation

Stock-based compensation increased by $541,000 to approximately $5,493,000 for the year ended September 30, 2022 due primarily to the grants of restricted stock units and stock options during the years ended September 30, 2022 and 2021.

Stock-based compensation decreased by $2,431,000 to approximately $897,000 for the three months ended September 30, 2022 due to timing of the vesting of the grants of restricted stock units and stock options during the years ended September 30, 2022 and 2021.

Other income from government grant

Other income from government grant of $4,885,000 is comprised of $4,254,000 related to the forgiveness of the Company’s Payroll Protection Plan loan and, for the three months ended September 30, 2022, $631,000 from the use of the Public Health and Social Services Emergency Fund.

Interest expense

Total interest expense for the year ended September 30, 2022 increased slightly to $2,079,000 in the year ended September 30, 2022 from $1,993,000 for the year ended September 30, 2021. This was primarily due to the leases and loans acquired from acquisitions in the year ended September 30, 2022.

Total interest expense for the three months ended September 30, 2022 increased slightly to $572,000 in the year ended September 30, 2022 from $515,000 for the three months ended September 30, 2021. This was primarily due to the leases and loans acquired from acquisitions in the year ended September 30, 2022.

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 convertible debentures issued during 2019 is valued at fair value using the current trading price. The change in fair value for the debenture was a loss of $85,000 for the three months ended September 30, 2022 as compared to a gain of $1,155,000 for the three months ended September 30, 2021.The change in fair value for the debenture was a gain of $1,150,000 for the year ended September 30, 2022 as compared to a loss of $3,591,000 for the year ended September 30, 2021.

Warrants issued with the June 2020 bought deal are valued using the Black-Scholes pricing model, which resulted in a loss of $2,112,000 for the year ended September 30, 2021.

Page | 11

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

Loss on extinguishment of debt

The loss on extinguishment of debt of $281,000 for the three months and year ended September 30, 2022 was related to the refinancing of the 2020 revolving credit facility in September 2022.

Loss on settlement of shares to be issued

Loss on settlement of shares to be issued was an expense of $442,000 for the three months and year ended September 30, 2022. This represents the difference between the shares expected to be issued from Sleepwell and the amount of cash paid to settle the shares in lieu of issuing shares.

Recovery of income taxes

The recovery of income taxes was $2,362,000 and $1,214,000 for the three ended September 30, 2022 and 2021, respectively. The deferred tax liability arising from the purchase price allocations was used in consolidation to support the recognition of previously unrecognized deferred tax assets, primarily tax loss carryforwards, and recorded as a benefit for income taxes.

The recovery of income taxes was $1,904,000 and $3,155,000 for the years ended September 30, 2022 and 2021, respectively. The deferred tax liability arising from the purchase price allocations was used in consolidation to support the recognition of previously unrecognized deferred tax assets, primarily tax loss carryforwards, and recorded as a benefit for income taxes.

Risks or Uncertainties

On November 12, 2021, the Company filed and obtained a receipt for its final short form base shelf prospectus (the ‎‎“Final Shelf Prospectus”) ‎with the securities commissions in each of the provinces and territories of Canada, and a ‎corresponding registration ‎statement on Form F-10 (the “Registration Statement”) with the SEC under the ‎US/Canada Multijurisdictional Disclosure System.‎ The Final Shelf Prospectus and corresponding Registration ‎Statement will allow Quipt to undertake offerings of ‎common shares, preferred shares, debt securities, warrants, ‎subscription receipts and units (collectively, the “Securities”), or any combination thereof, up to an aggregate total ‎of $200,000,000 from time to time during the ‎‎25-month period that the Final Shelf Prospectus remains effective. ‎The Securities may be offered in amounts, at ‎prices and on terms to be determined at the time of sale and, subject ‎to applicable regulations, may include “at-the-‎market” transactions, public offerings, or strategic investments. The ‎specific terms of any offering of Securities, ‎including the use of proceeds from any offering, will be set forth in one ‎or more shelf prospectus supplement(s) to be ‎filed with applicable securities regulators. ‎Among other potential uses, ‎the ‎Company may use the net proceeds from the sale of ‎Securities for general corporate purposes, including ‎funding ‎ongoing operations and/or working capital ‎requirements, to repay indebtedness outstanding from time to ‎time, and ‎to fund capital projects and potential ‎future acquisitions. ‎ As at the date hereof, the Company anticipates ‎using the net proceeds to the Company from ‎any ‎offering of Securities primarily to ‎fund its previously announced ‎acquisition strategy‎. ‎ One or more securityholders of the Company may also offer and sell ‎Securities under the Final ‎Shelf Prospectus and Registration Statement, as applicable, although the Company will not ‎receive any proceeds ‎from any sale of any Securities by any selling securityholder(s).‎

Page | 12

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

FINANCIAL POSITION

	As at		As at		As at
	September 30, 2022		September 30, 2021		September 30, 2020
Cash	$	8,516	$	34,612	$	29,227
Accounts receivable, inventory and prepaid assets		33,020		22,621		16,056
Property and equipment		33,497		23,506		16,667
Other assets		57,181		27,834		10,115
Total assets	$	132,214	$	108,573	$	72,065
Accounts payable and other current liabilities	$	41,740	$	32,737	$	24,385
Long-term debt and other long-term liabilities		10,927		17,214		19,445
Total liabilities		52,667		49,951		43,830
Shareholders’ equity		79,547		58,622		28,235
Total liabilities and shareholders’ equity	$	132,214	$	108,573	$	72,065

Liquidity

The Company’s primary source of liquidity is cash flow from operations and its line of credit availability.

Cash flows from operations could be negatively impacted by decreased demand for the Company’s products, which may result from factors such as adverse economic conditions and changes in public and consumer preferences, the loss of confidence by the Company’s principal customers in the Company and its product lines, or by increased costs associated with manufacturing and distribution of products. The Company expects that cash, future operating cash flows and the amounts available to be drawn against the credit facilities will enable the Company to finance its capital investment program and fund its ongoing business requirements over the next 12 months, including working capital and financial obligations.

As of September 30, 2022, the Company had cash on hand of $8,516,000 and line of credit availability of $13,000,000. 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. The Company will do so by continuously monitoring actual and expected cash flows and monitoring financial market conditions for signs of weakness.

As of September 30, 2022, the Company faces minimal liquidity risk in its current financial obligations as they become due and payable. The Company has $41,740,000 of liabilities that are due within one year but has $41,536,000 of current assets plus revolver borrowing availability of $13,000,000 to meet those obligations.

Capital management

The Company considers its capital to be shareholders’ equity, which is comprised of share capital, contributed surplus, and shares to be issued and deficit, which totaled $81,621,000 at September 30, 2022, along with long-term debt, which totaled $11,976,000 at September 30, 2022.

The Company raises capital, as necessary, to meet its needs such as funding its working capital requirements and take advantage of perceived opportunities and, therefore, does not have a numeric target for its capital structure. Funds are primarily secured through credit facilities and other long-term debt arrangements and equity capital. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

Page | 13

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

The Company maintains all capital that is surplus to its immediate operational needs in cash with major US and Canadian financial institutions.

The Company had the following equity instruments outstanding as of September 30, 2022 and September 30, 2021:

	As at	As at
	September 30, 2022	September 30, 2021
	(000’s)	(000’s)
Common shares	35,605	33,350
Options	3,751	3,786
Restricted stock units	930	954
Compensation options	—	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.

Senior Credit Facility

In September 2022, the Company entered into a five-year, $110,000,000 senior credit facility (“Facility”) with a group of US banks. The facility consists of a delayed draw term loan facility of $85,000,000, a term loan of $5,000,000 that was drawn at closing, and a $20,000,000 revolving credit facility. The facility amends the $20,000,000 revolving credit facility that was entered into in September 2020. The Facility is secured by substantially all assets of the Company, matures in September 2027 and is subject to certain financial covenants.

The Facility bears interest at variable rates ranging in length from daily to six months, at the Company’s option, and has fees for unused balances. As of September 30, 2022, the outstanding balances under the Facility totaled $12,000,000, comprised of $5,000,000 on the term loan and $7,000,000 on the revolving credit facility.

As of September 30, 2022, the term loan bears interest at an annual rate of 5.7% and is repayable in quarterly installments of $62,500, with the balance due at maturity. The revolving credit facility bears interest at a weighted average annual rate of 7.0% and is payable at maturity. It is classified as a current liability as it is expected to be repaid during the year ended September 30, 2023. Interest expense on the Facility, including the unused fee, was $11,000 for the year ended September 30, 2022. The fair value of the note approximates the carrying value as of September 30, 2022.

The Company incurred $1,779,000 in financing costs to obtain the Facility, which includes related legal fees and are recognized as a reduction of the outstanding balance to be amortized as interest expense using the effective interest method of the Facility. During the year ended September 30, 2022, $14,000 of amortization of deferred financing costs was recorded.

Page | 14

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

A summary of the outstanding balances related to the Facility as of September 30, 2022 is as follows:

	As of
	September 30, 2022
Delayed draw term loan	$	—
Term loan		5,000
Revolving credit facility		7,000
Total principal		12,000
Deferred financing costs		(1,765)
Net carrying value	$	10,235
Current portion		6,857
Long-term portion		3,378
Net carrying value	$	10,235

Debentures

On March 7, 2019, the Company issued C$15,000,000 of Convertible Unsecured Debentures. Each C$1,000 (US$807) debenture was convertible at the option of the holder into 192.31 common shares. Beginning March 9, 2022, if the daily volume weighted average price of the common shares exceeded C$6.48 per share for twenty consecutive trading days, the Company could force conversion of the outstanding principal at a conversion price of C$5.20 per share. The Company exercised this option during the year ended September 30, 2022. During the years ended September 30, 2022 and 2021, C$10,959,000 and C$4,037,000, respectively, of principal amount of debentures were converted (both voluntary by the holder and at the Company’s forced conversion in September 2022) into common shares. The fair value of the debentures on the dates of conversion totaled C$13,665,000 (US$10,683,000) and C$6,766,000 (US$5,359,000) during the years ended September 30, 2022 and 2021, respectively. No debentures are outstanding as of September 30, 2022.

Equipment Loans

The Company’s suppliers and the supplier’s designated financial institutions have offered the Company loans, in 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 equal monthly installments. The Company uses a 6% incremental borrowing rate to impute interest on these arrangements.

Future payments on these liabilities are as follows:

Less than 1 year	$	5,593
Between 1 and 5 years		243
Total	$	5,836

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 rate implicit in the lease based

Page | 15

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

on the current value and the estimated residual value of the vehicle, with rates ranging from 1.7% to 12.0%. Future payments on these liabilities are as follows:

Less than 1 year	$	3,979
Between 1 and 5 years		7,443
More than 5 years		1,108
Total		12,530
Less: finance charges		(2,031)
Lease liabilities		10,499
Current portion of lease liabilities		3,304
Long-term portion of lease liabilities	$	7,195

Contingencies

The Company has been in litigation with Lightwater Long Short Fund (“Lightwater”) during the year ended September 30, 2020, and the year ended September 30, 2021. The litigation was settled in December 2021 costing 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.

Quarterly operating results from continuing operations

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 2022.

The following table provides selected historical information and other data, which should be read in conjunction with the financial statements of the Company.

	Quarter ended		Quarter ended		Quarter ended		Quarter ended
	Sep. 30, 2022		Jun. 30, 2022		Mar. 31, 2022		Dec. 31, 2021
Revenue	$	40,092	$	36,692	$	33,553	$	29,525
Net income (loss)		1,770		163		5,037		(2,131)
Net income (loss) per share - basic		0.05		0.00		0.15		(0.06)
Net income (loss) per share - diluted		0.05		0.00		0.14		(0.06)
Total assets	$	132,214	$	130,478	$	110,526	$	107,376

	Quarter ended		Quarter ended		Quarter ended		Quarter ended
	Sep. 30, 2021		Jun. 30, 2021		Mar. 31, 2021		Dec. 31, 2020
Revenue	$	29,118	$	26,238	$	24,240	$	22,755
Net income (loss)		(1,379)		6,329		(12,490)		1,366
Net income (loss) per share - basic		(0.04)		0.23		(0.43)		0.04
Net income (loss) per share - diluted		(0.04)		0.23		(0.43)		0.04
Total assets	$	108,573	$	106,542	$	89,728	$	78,274

Page | 16

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

Related party transactions

The Company has six 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 for the years ended September 30, 2022 and 2021, and increased to approximately $65,000 per month beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

Expense for Board of Directors’ fees were $287,000 and $203,000 for the year ended September 30, 2022 and 2021, respectively. Stock-based compensation for the Board of Directors was $2,626,000 and $1,036,000 for the years ended September 30, 2022 and 2021, respectively.

Key management personnel also participate in the Company’s share option program. The Company paid or accrued compensation to key management personnel the following:

	Year ended		Year ended
	September 30,		September 30,
	2022		2021
Salaries and benefits	$	1,030	$	968
Stock-based compensation		2,626		1,036
Total	$	3,656	$	2,004

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, revenues or expenses results of operations, liquidity, capital expenditures or capital resources.

ACCOUNTING AND DISCLOSURE MATTERS

Internal control over financial reporting

Evaluation of disclosure controls and procedures. Disclosure controls and procedures are designed to ensure that (i) information required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in the Company’s reports filed under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and its Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosure. Based on our assessment as of September 30, 2022, Management concluded that our disclosure controls and procedures were ineffective.  

Management’s report on internal control over financial reporting. Management of the Company is responsible for establishing and maintaining adequate "internal control over financial reporting" (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act). The Company's management, under the supervision of the CEO and CFO, and effected by the Company’s board of directors evaluated the effectiveness of ICFR.  Management has concluded that as of September 30, 2022, internal control over financial reporting was not effective. Specifically, management concluded that the following material weaknesses existed as of September 30, 2022:

● Management did not maintain appropriately designed entity-level controls impacting the control environment, risk assessment procedures, and effective monitoring activities. These deficiencies were attributed to: (i)

Page | 17

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

Management has not finalized the design and implementation, or retained appropriate documentation, of formal accounting policies, procedures and controls across substantially all of the Company’s business processes, (ii) ineffective identification and formal assessment of overall business risks, and (iii) ineffective evaluation and determination as to whether the components of internal control were present and functioning.

● Management did not maintain effective information technology general controls in the areas of user access management and segregation of duties within its systems supporting the Company’s accounting and financial reporting processes. Many of the Company’s manual controls dependent upon the information derived from these information technology systems were also ineffective, as management did not design and implement controls to validate the completeness and accuracy of underlying data utilized in the operation of those manual controls.

● Management did not design and maintain effective controls over certain aspects of its revenue recognition process and related accounts, including controls around the classification of certain contracts as operating leases under IFRS 16.

● Management did not appropriately design and implement management review controls at a sufficient level of precision around complex accounting areas and disclosure including business combinations and forecasts associated with intangible assets. 

Changes in Internal Control over Financial Reporting

During the year ended September 30, 2022, with outside consultants, the Company embarked upon a project to document, review, update, and evaluate internal controls over financial reporting and disclosure controls. While this project is still in process, the impact during the year ended September 30, 2022 caused changes in internal controls. The changes included review, assessment, documentation, and formalization of existing internal controls as well as identifying additional controls to increase risk mitigation and increase accuracy in financial reporting. This internal control project is anchored in the framework and criteria established in Internal Control - Integrated Framework, issued by the 2013 Committee of Sponsoring Organizations of the Treadway Commission.

Critical accounting estimates

The preparation of financial statements in conformity with IFRS requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, related disclosures and the reported amounts of revenues and expenses during the periods covered by the financial statements. 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.

The Company has identified the following accounting policies under which significant judgments, estimates and assumptions are made, where actual results may differ from these estimates under different assumptions and conditions, which may materially affect financial results or the financial position in future periods.

Page | 18

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

Revenue recognition

Revenues are billed to, and collections are received from both third-party insurers, the largest of which is Medicare, 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 historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting estimated revenue as required.

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 reserves 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 reserve for expected 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. 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.

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 the 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.

Critical 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.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 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.

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 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 an 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, acquired liabilities, and the amount allocated to goodwill. These estimates and assumptions may change in the future due to uncertain competitive and economic market ‎conditions or changes in business strategies.‎

The process of determining these fair values requires the Company to make estimates and assumptions of a long-term nature regarding discount rates, projected revenues, royalty rates and margins derived from experience, actual operating results, and budgets. These estimates and assumptions may change in the future due to uncertain competitive and economic market conditions or changes in business strategies.

TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table summarizes the Company’s contractual commitments and obligations as of September 30, 2022 (in thousands), which are primarily for debt, leasing of offices and other obligations. The leases have been entered into with terms of between one and ten years, including optional extensions.

			Less than		1-3		4-5		After 5
	Total		1 year		Years		Years		Years
Debt	$	18,089	$	12,852	$	1,020	$	4,018	$	199
Finance lease obligations		12,530		3,979		6,197		1,246		1,108
Operating leases		73		73		—		—		—
Purchase obligations		—		—		—		—		—
Other obligations		19,619		19,619		—		—		—
Total contractual obligations	$	50,311	$	36,523	$	7,217	$	5,264	$	1,307

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial instrument risk exposure

The Company is exposed to financial risks of varying degrees of significance which would affect its ability to achieve its strategic objectives for growth: 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

Page | 20

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

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 cooperation 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 reserve for expected credit losses based upon any specific payor collection issues that are identified and historical experience.

The Company recorded bad debt expense of $12,225,000 and $7,957,000 for the year ended September 30, 2022 and 2021, respectively. As of September 30, 2022, no one customer represented more than 10% of outstanding accounts receivable. The Company does have more than 9% of receivables through Medicare. As this is a US government federal program, we believe there is very little 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 common shares are denominated in Canadian dollars. Cash is primarily maintained in US dollars, with a small amount in Canadian dollars. Consequently, the Company is exposed to minimal foreign exchange fluctuations. The Company has not employed any 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 is to ensure, to the extent possible, that it will have enough liquidity to meet its liabilities when due, under both normal conditions, by continuously monitoring actual and budgeted cash flows.

As of September 30, 2022, the Company faces minimal liquidity risk in its current financial obligations as they become due and payable. The Company has $41,740,000 of liabilities that are due within one year but has $41,536,000 of current assets plus revolver borrowing availability of $13,000,000 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. The interest rate on the credit facility into which the Company entered in September 2022 is a variable rate that can be fixed for a maximum of six months. With $12,000,000 of borrowings on this facility at September 30, 2022, each 1% increase would result in an additional $120,000 of annual interest expense. The interest on the Company’s other debt is either imputed or has a fixed rate and is not subject to cash flow interest rate risk.

Page | 21

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

Outstanding Share data

The outstanding shares as of December 23, 2022 are 35,605,280 common shares.

RISK FACTORS

An investment in securities of the Company involves significant risks. Investors should carefully consider the risks described below, the other information described elsewhere in this MD&A and those risks set out in the Company's AIF for the year ended September 30, 2022 before deciding to buy securities of the Company. If any of the following or other risks occur, the Company’s business, prospects, financial condition, financial performance, and cash flows could be materially adversely impacted. These factors are also currently, and in the future may be, amplified by the COVID-19 pandemic. In that case, the ability of the Company to make distributions to holders of common shares could be adversely affected, the trading price of securities of the Company could decline and investors could lose all or part of their investment in such securities. There is no assurance that risk management steps taken will avoid future loss due to the occurrence of the below described or other unforeseen risks.

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 Common Shares

The common shares are currently listed and posted for trading on the TSX-V and NASDAQ. 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 industries. ‎‎The price of the common ‎shares is also likely to be significantly affected by short-term changes in cost of goods, or ‎‎in financial condition or ‎results of operations of the Company. Other factors unrelated to the performance of the ‎‎Company that may have an ‎effect on the price of the common 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 ‎‎common shares; the size of the Company’s public float ‎may limit the ability of some institutions to invest in the ‎Company’s securities; a substantial decline in the price of the ‎common 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; adverse changes in general market or ‎industry conditions or economic trends; the ‎COVID-19 pandemic, or a variety of other factors.‎

As a result of any of these factors, the market price of the ‎‎common 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 ‎similar litigation. Securities litigation could result in substantial costs and damages and divert ‎‎management’s attention ‎and resources‎.‎

Future Sales of Shares by Shareholders

Sales of many the ‎‎common shares in the public markets, or the potential for such sales, could decrease ‎‎the ‎trading price of the ‎‎common shares and could impair the Company’s ability to raise capital through future ‎‎sales of the ‎‎‎common shares. The Company cannot predict the effect that future sales of ‎‎common shares or other ‎equity-related ‎securities would have

Page | 22

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

on the market price of the ‎‎common shares. The price ‎could be affected by ‎possible sales of the ‎‎common shares by hedging or arbitrage trading activity. If the Company ‎raises additional funding ‎by issuing additional equity securities, such financing may substantially dilute the interests ‎of shareholders of the ‎Company and reduce the value of their investment. ‎

Dilution

The Company may require additional funds in respect of the further development of the Company’s business. If ‎the Company raises funds by issuing additional equity securities, such financing will dilute the equity interests of its ‎shareholders.‎

Global financial conditions can reduce share prices and limit access to financing

The economic viability of the Company’s business plan is impacted by the Company’s ability to obtain ‎financing. ‎Global economic conditions impact the general availability of financing through public and private debt ‎and equity ‎markets, as well as through other avenues. ‎

Significant political, market and economic events may have wide-reaching effects and, to the extent they are not ‎‎accurately anticipated or priced in markets, may result in sudden periods of market volatility and correction. ‎‎Periods of market volatility and correction may have an adverse impact on economic growth and outlook, as well ‎‎as lending and capital markets activity, all of which may impact the Company’s ability to secure adequate ‎‎financing on favorable terms, or at all.‎

Furthermore, general market, political and economic conditions, including, for example, inflation, interest and ‎‎currency exchange rates, political developments, legislative or regulatory changes, social or labor unrest and ‎stock ‎market trends will affect the Company’s operating environment and its operating costs, profit margins and ‎share ‎price. Uncertainty or adverse changes relating to government regulation, economic and foreign policy ‎matters, and ‎other world events have the potential to adversely affect the performance of and outlook for the ‎Canadian and ‎global economies, which in turn may affect the ability of the Company to access financing on ‎favorable terms or ‎at all. For example, recent uncertainty regarding Canada’s ability to access North American ‎markets via the North ‎American Free Trade Agreement and increased levels of turmoil in certain geopolitical ‎hotspots have the potential ‎to increase uncertainty and volatility in Canadian and global markets, respectively. The ‎occurrence of negative ‎sentiment or events in the Canadian and broader global economy could have a material ‎adverse effect on the ‎Company’s business, financial condition, results of operations, cash flows or prospects.‎

Limited History of Operations

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

Novel Business Model

Home monitoring of patients is a relatively new business, making it difficult to predict market acceptance, ‎development, expansion, and direction. The home monitoring services to be provided by the Company represent a ‎relatively new development in the United States healthcare industry. Accordingly, adoption by patients and ‎physicians can require education, which can result in a lengthy sales cycle. The market may take time to develop. ‎Physicians and/or patients may be slow to adopt new methods. The development of the Company’s home ‎monitoring business is dependent on a number of factors. These factors include: the Company’s ability to ‎differentiate the Company’s services from those of the Company’s competitors; the extent and timing of the ‎acceptance of the Company’s services as a replacement for, or supplement to, traditional methods of servicing and ‎monitoring patients; the effectiveness of the Company’s sales and

Page | 23

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

marketing and engagement efforts with ‎customers and their health plan participants; the Company’s ability to provide quality customer service, as ‎perceived by patients and physicians. ‎

Because the monitoring business is evolving, the Company may not be able to anticipate and adapt to the ‎developing market. Moreover, the Company cannot predict with certainty the future growth rate or the ultimate size ‎of the market.‎

Reimbursement Rates May Decline

Reimbursement for services to be provided by the Company comes primarily from Medicare and private health ‎insurance companies. The reimbursement rates offered are outside the control of the Company. Reimbursement ‎rates in this area, and much of the United States health care market in general, 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.‎

Reductions in reimbursement rates can have a material impact on the Company’s revenue and 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.‎

Loss of Competitive Bids

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. Pursuant to ‎the CMS, beginning in 2021, a ‎new competitive bidding process known as ‎Round 2021 will be launched by the ‎CMS, covering contracts running ‎from January 1, 2021 to December 31, 2023. It is ‎possible that the Company may ‎not be selected in some or all the ‎Competitive Bidding Area (“CBA”) that is has bid ‎for. It is also possible that the ‎Company may not be selected for ‎some or all of the product categories that it has bid ‎more. Non-selection for CBA ‎and/or product category may ‎result in loss of revenue and referral sources.‎

Dependence Upon Relationships with Key Suppliers

There are few manufacturers of equipment which can be used for home use of patients. There is the possibility that ‎a new meter will encounter difficulties or “bugs” when first sent to market, and that initial technical support costs ‎may be higher than for more well-established meters. Even if the Company switches to other competing meters, ‎they may also encounter technical difficulties or regulatory issues. The emerging nature of the market 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. The industry is ‎subject to a high level of regulatory scrutiny, and government or manufacturer recalls could adversely affect the ‎Company’s ability to provide services and achieve revenue targets. ‎

Inadequate supply could 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. Several equipment ‎manufacturers are pursuing a strategy of vertical integration, and should the Company ever need to order ‎equipment from those manufacturers, such equipment may not be available on favorable terms. ‎

Reliance Upon Few Payers

The Company earns revenues by seeking reimbursement from Medicare and private health insurance companies, ‎with the Medicare program of the United States government being the primary entity making payments. If the ‎Medicare program

Page | 24

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

were to slow payments of the Company 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 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. There is no guarantee that the Company will meet these conditions.‎

The Company is subject to regulation from United States federal and state authorities. Regulatory action could ‎disrupt the Company’s 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 operation. 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.‎

CMS policies of health insurance for Medicare in the United States may affect the amount of revenue the ‎Company receives. The Company is subject to risk that reimbursement rates for its services from both federal and ‎private payers will decline over time. Reimbursement from federal programs is subject to constant regulatory review ‎and increasing audits by federal authorities, the effect of which may be to increase costs of service and delay or ‎affect reimbursement, which could negatively impact cash flow and/or revenue. Audits may be costly and time ‎consuming, and could delay cash flow, even if the Company acted properly in all respects.‎

The policies of health insurance carriers in the United States may affect the amount of revenue the Company ‎receives.‎

Healthcare Reform Legislation ‎

Healthcare reform laws significantly affect the US healthcare services industry. In recent years, many legislative ‎proposals have been introduced or proposed in Congress and in some state legislatures that would affect major ‎changes in the healthcare system, either nationally or at the state level. At the federal level, Congress has continued ‎to propose or consider healthcare budgets that substantially reduce payments under the Medicare and Medicaid ‎programs. The ultimate content, timing or effect of any healthcare reform legislation and the impact of potential ‎legislation on us is uncertain and difficult, if not impossible, to predict. That impact may be material to the ‎Company’s business, financial condition or results of operations.‎

‎ ‎Highly Competitive Market

The industry in which the Company operates is a highly competitive market and may become more competitive ‎as new players enter. Certain competitors will be subsidiaries or divisions of larger, much better capitalized ‎companies. Certain

Page | 25

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

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.‎

Low Profit Market Segments

Where the Company provides services to a patient who does not use provide rental equipment often or for an ‎extended period of time, profitability may be unlikely in respect of that patient. In these cases, the Company may ‎not have a rental equipment with the patient long enough to recoup costs. Where the Company owns the rental ‎equipment, the failure of the patient to return the equipment to the Company may impact profitability. Legal costs ‎of bringing an action to obtain return of equipment may exceed the value of the equipment, leading to losses with ‎certain patient populations even under a favorable reimbursement environment.‎

Foreign Subsidiaries

The Company conducts all its operations through its United States subsidiaries. Therefore, to the extent of these ‎holdings, the Company (directly and indirectly) is 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.‎

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 Company may also ‎encounter difficulties in obtaining and maintaining suitably qualified staff. 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 their employment with the Company or that replacement personnel with ‎comparable skills can be found. The Company is dependent on the services of key executives, including the Board ‎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. ‎

Growth Management

The Company may have difficulty identifying or acquiring suitable acquisition targets and maintaining the organic ‎growth which is a significant aspect of its business model. If it is unable to manage growth, the Company may be ‎unable to achieve its expansion strategy, which could adversely impact its earnings per share and its revenue and ‎profits. ‎

Dividends

The Company has never declared or paid any dividends on its Common Shares. The Company intends, for the ‎‎foreseeable future, to retain its future earnings, if any, to finance the Company’s business activities. The payment ‎of future dividends, ‎if any, will be reviewed periodically by the Board of Directors and will depend upon, among other things, ‎‎conditions then

Page | 26

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

existing including earnings, financial conditions, cash on hand, financial requirements to fund ‎business ‎activities, development and growth, and other factors that the Board of Directors may consider appropriate in the ‎‎circumstances. ‎

Discretion in the Use of Available Funds

Management has broad discretion concerning the use of the Company’s available funds as well as the timing of ‎expenditures. As a result, shareholders and investors will be relying on the judgment of management for the ‎application of the 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 the available funds are ‎uncertain. If the available funds are not applied effectively, the Company’s results of operations may suffer.‎

Potential Conflicts of Interest

There are potential conflicts of interest to which some of the directors and officers of the Company may be subject ‎in connection with the operations of the Company and situations may arise where the directors and officers may be ‎in direct competition with the Company. Conflicts of interest, if any, which arise may be subject to and be governed ‎by procedures prescribed by the Business Corporations Act (British Columbia) (the “BCBCA”)‎ 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 BCBCA. 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 is subject to a number of 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 subject to product liability and medical malpractice claims, which may adversely affect its ‎operations. The industry in which the Company operates is highly regulated, and it 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 maintains 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. The initial primary source of funding available to the Company consists of equity financing. There can be no ‎assurance that additional capital

Page | 27

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

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 Exchange Act, ‎‎‎as amended, the Company is currently exempt from certain of the provisions of the US ‎‎‎federal securities laws. For example, an issuer with total assets in excess of US$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 12g3-2(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 March 31, 2022 (the ‎‎‎last business day of the Company’s second fiscal quarter), the Company estimates that approximately 36% ‎of ‎the ‎Company’s outstanding voting securities are 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 US domestic companies, such as Forms 10-K, 10-Q and 8-K. ‎‎It could ‎also become subject to US 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 US Securities Act, 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. ‎

United States Operations and Exchange Rate Fluctuations

All of the Company’s revenue is generated from operations in the United States. The Company is subject to a ‎number of 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 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 is exposed to foreign exchange risk as a result of substantially all of its revenue ‎generating operations taking place in the United States and thus, revenues and expenses being earned and paid in ‎United States dollars while the Company reports its financial statements in Canadian dollars. If the Canadian dollar ‎appreciates relative to the United States dollar, the Company’s Canadian dollar expenses and revenues will ‎decrease when translated from United States dollars for financial reporting purposes. Conversely, if the Canadian ‎dollar depreciates relative to the United States

Page | 28

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

dollar, the Company’s Canadian dollar expenses and revenues will ‎increase when translated from United States dollars for financial reporting purposes. In addition, exchange rate ‎fluctuations may affect the costs that the Company incurs in its operations. The appreciation of non-United States ‎dollar currencies against the United States dollar can increase the cost of operations in United States dollar terms. ‎Foreign exchange rate fluctuations may materially affect the Company’s financial condition and results of ‎operations in future periods.‎

The Company will continue to translate the assets and liabilities of its United States dollar functional currency ‎subsidiaries into Canadian dollars using exchange rates in effect at the end of each period. Revenue and expenses ‎for these subsidiaries are translated using average exchange rates that approximate those in effect during the ‎period. The Company will 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.‎

Global Economy ‎

Recent market events and conditions, including disruptions in the international credit markets and other financial ‎systems and the deterioration of global economic conditions, could impede the Company’s access to capital or ‎increase the cost of capital. Notwithstanding various actions by the United States and foreign governments, ‎concerns about the general condition of the capital markets, financial instruments, banks, investment banks, ‎insurers and other financial institutions caused the broader credit markets to deteriorate and stock markets to ‎fluctuate substantially.‎

These disruptions in the current credit and financial markets have had a significant material adverse impact on a ‎number of financial institutions and have limited access to capital and credit for many companies. These ‎disruptions could, among other things, make it more difficult for the Company to obtain, or increase its cost of ‎obtaining, capital and financing for its operations. Access to additional capital may not be available to the ‎Company on terms acceptable to it, or at all.‎

Cybersecurity

The Company relies on digital and internet technologies to conduct and expand its operations, including reliance on ‎information technology to process, transmit and store sensitive and confidential data, including protected health ‎information, personally identifiable information, and proprietary and confidential business performance data. As a ‎result, the Company and/or its customers are exposed to risks related to cybersecurity. Such risks may include ‎unauthorized access, use, or disclosure of sensitive information, corruption or destruction of data, or operational ‎disruption resulting from system impairment (e.g., malware). The Company’s operations depend, in part, on how ‎well it protects networks, equipment, information technology systems and software against damage from a number ‎of threats, including, but not limited to damage to hardware, computer viruses, hacking and theft. The Company’s ‎operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, information ‎technology systems and software, as well as pre‐emptive expenses to mitigate the risks of failures. A compromise of ‎the Company’s information technology or confidential information, or that of the Company’s patients and third ‎parties with whom the Company interacts, may result in negative consequences, including the inability to process ‎patient transactions, reputational harm affecting patient and/or investor confidence, potential liability under ‎privacy, security, consumer protection or other applicable laws, regulatory penalties and additional regulatory ‎scrutiny, any of which could have a material adverse effect on the Company’s business, financial position, results ‎of operations or cash flows. As the Company has access to sensitive and confidential information, including ‎personal information and personal health information, and since the Company may be vulnerable to material ‎security breaches, theft, misplaced, lost or corrupted data, programming errors, employee errors and/or malfeasance ‎‎(including misappropriation by departing employees), there is a risk that sensitive and confidential information, ‎including personal information and personal health information, may be disclosed through improper use of ‎Company systems, software solutions or networks or that there may be unauthorized access, use, disclosure, ‎modification or destruction of such information. The Company’s ongoing risk and exposure to these matters is ‎partially attributable to the evolving nature of these threats. As a result, cybersecurity and the continued ‎development and enhancement of controls, processes and

Page | 29

MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

practices designed to protect systems, computers, ‎software, data and networks from attack, damage, malfunction, human error, technological error or unauthorized ‎access is a priority. As cyber threats continue to evolve, the Company may be required to expend additional ‎resources to continue to modify or enhance protective measures or to investigate and remediate any security ‎vulnerabilities.‎

COVID-19 Pandemic‎

On March 11, 2020, the World Health Organization declared the outbreak of a novel strain of coronavirus ‎‎(“COVID-19”) a global pandemic. In response to the outbreak, governmental authorities in the United States and ‎internationally have introduced various recommendations and measures to try to limit the pandemic, including ‎travel restrictions, border closures, non-essential business closures, quarantines, self-isolations, shelters-in-place, and ‎social distancing. The COVID-19 outbreak and the response of governmental authorities to try to limit it are having ‎a significant impact on the private sector and individuals, including unprecedented business, employment, and ‎economic disruptions.‎

The continued spread of COVID-19 nationally and globally could have an adverse impact on the Company’s ‎business, operations and financial results, including through disruptions in the Company’s labor inputs, supply ‎chains and sales channels. In response to COVID-19, the United States’ guidelines issued on March 16, 2020 ‎specifically noted that healthcare services were a critical infrastructure industry as defined by the Department of ‎Homeland Security and employees of companies in this industry have a social responsibility to maintain a normal ‎work schedule to meet service demands. In response to the COVID-19 pandemic, the Company has modified its ‎current policies and implemented the instructions provided by the Centers for Disease Control and Prevention in ‎order to best protect its employees and patient network. In addition, the Company accelerated inventory purchases ‎to safeguard against any potential future supply chain weaknesses and meet potential increased demand. These ‎measures and similar measures taken by other businesses may adversely impact the Company’s labor ‎productivity and its supply chains. ‎

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 for the Company’s products, as well as a deterioration of ‎general economic conditions including a possible national or global recession. Due to the speed with which the ‎COVID-19 situation is developing and the uncertainty of its magnitude, outcome, and duration, it is not possible to ‎estimate its impact on the Company’s business, operations, financial results and position or prospects at this time. ‎

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.‎

Finally, the actual and threatened spread of COVID-19 globally could adversely affect global economies and ‎financial markets, resulting in a prolonged economic downturn and a decline in the value of the Company’s share ‎price. The extent to which COVID19 (or any other disease, epidemic, or pandemic) impacts business activity or ‎financial results, and the duration of any such negative impact, will depend on future developments, which are ‎highly uncertain and cannot be predicted, including new information which may emerge concerning COVID-19 and ‎the actions required to contain or treat its impact, among others.‎

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

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MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

prospects. On June 14, 2021, Royal Philips (“Philips”) initiated a voluntary recall notification with ‎‎the US 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 in the past have used, 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. ‎

Risks of Litigation and Governmental Proceedings

The Company is, and in the future may be, subject to legal and governmental proceedings and claims. The parties ‎in such legal actions may seek amounts from us that may not be covered in whole or in part by insurance. ‎Defending against such legal actions could result in significant costs and could require a substantial amount of time ‎and effort by the Company’s management team. The Company cannot predict the outcome of litigation or ‎governmental proceedings to which it is a

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MANAGEMENT’S DISCUSSION AND ANALYSIS

September 30, 2022 and 2021

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

party or whether it will be subject to future legal action. As a result, the ‎potential costs associated with legal actions against the Company could adversely affect its business, financial ‎condition, results of operations, cash flows or prospects.‎

Forward-Looking Statements May Prove to be Inaccurate

Readers are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking ‎‎statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and ‎‎specific nature, that could cause actual results to differ materially from those suggested by the forward-looking ‎‎statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially ‎‎inaccurate. Additional information on the risks, assumptions and uncertainties are found in this MD&A and in ‎certain ‎of the documents incorporated by reference herein under the heading “Caution Regarding ‎Forward-Looking ‎Statements”.‎

Page | 32

EX-99.4

Exhibit 99.4

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory Crawford, Chief Executive Officer of Quipt Home Medical Corp., certify that:

1.I have reviewed this annual report on Form 40-F of- Quipt Home Medical Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: December 23, 2022	/s/ Gregory Crawford
	Gregory Crawford
	Chief Executive Officer

EX-99.5

Exhibit 99.5

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Hardik Mehta, Chief Financial Officer of Quipt Home Medical Corp., certify that:

1.I have reviewed this annual report on Form 40-F of- Quipt Home Medical Corp.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined by Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: December 23, 2022	/s/ Hardik Mehta
	Hardik Mehta
	Chief Financial Officer

EX-99.6

Exhibit 99.6

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 40-F of Quipt Home Medical Corp. (the “Company”) for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Gregory Crawford, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Gregory Crawford
Dated: December 23, 2022	Gregory Crawford
	Chief Executive Officer
	(Principal Executive Officer)

EX-99.7

Exhibit 99.7

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 40-F of Quipt Home Medical Corp. (the “Company”) for the period ended September 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Hardik Mehta, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ Hardik Mehta
Dated: December 23, 2022	Hardik Mehta
	Chief Financial Officer
	(Principal Accounting and Financial Officer)

EX-99.8

Exhibit 99.8

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Annual Report on Form 40-F (the “Annual Report”) of Quipt Home Medical Corp. of our report dated December 23, 2022, relating to the consolidated financial statements for the year ended September 30, 2022, which is included in exhibit 99.2. We also consent to the incorporation by reference in the Registration Statement on Form F-10 (No. 333-260363) and Form S-8 (File No. 333-257940) of Quipt Home Medical Corp. of our report dated December 23, 2022 referred to above.

We also consent to reference to us under the heading “Interest of Experts,” which appears in the Annual Information Form included in Exhibit 99.1 of this Form 40-F, and which is incorporated by reference in such Registration Statements referred to above.

/s/BDO USA, LLP

Cincinnati, Ohio

December 23, 2022

EX-99.9

Exhibit 99.9

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Annual Report on Form 40-F (the “Annual Report”) of Quipt Home Medical Corp. (the “Company”) of our report dated January 26, 2022, relating to the Company’s audited annual consolidated financial statements for the year ended September 30, 2021, incorporated by reference in the Annual Report which is filed as an exhibit to the Annual Report.

We also consent to the incorporation by reference in the Registration Statements on Form F-10 (No. 333-260363) and Form S-8 (No. 333-257940) of Quipt Home Medical Corp. of our report dated January 26, 2022 referred to above and to the reference to us under the heading “Interests of Experts”, which appears in the Annual Information Form included in Exhibit 99.1 of Quipt Home Medical Corp.’s Annual Report on Form 40-F, which is incorporated by reference in such Registration Statements.

Chartered Professional AccountantsToronto, Ontario, CanadaDecember 23, 2022

XML

Document and Entity Information - shares	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Entity Addresses [Line Items]
Document Type	40-F
Document Registration Statement	false
Document Annual Report	true
Document Period End Date	Sep. 30, 2022
Entity File Number	001-40413
Entity Registrant Name	Quipt Home Medical Corp.
Entity Incorporation, State or Country Code	A1
Entity Tax Identification Number	98-1508109
Entity Address, Address Line One	1019 Town Drive
Entity Address, City or Town	Wilder
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	41076
City Area Code	859
Local Phone Number	878-2220
Entity Primary SIC Number	3841
Title of 12(b) Security	Common Shares
Trading Symbol	QIPT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Entity Central Index Key	0001540013
Amendment Flag	false
Audited Annual Financial Statements	true
Annual Information Form	true
ICFR Auditor Attestation Flag	false
Entity Common Stock, Shares Outstanding	35,605,280
Auditor Name	BDO USA LLP	MNP LLP
Auditor Location	Cincinnati, Ohio	Toronto, Canada
Auditor Firm ID	243	1930
Business Contact [Member]
Entity Addresses [Line Items]
Entity Address, Address Line One	1015 15th Street N.W., Suite 1000
Entity Address, City or Town	Washington
Entity Address, State or Province	DC
Entity Address, Postal Zip Code	20005
City Area Code	202
Local Phone Number	572-3133
Contact Personnel Name	CT Corporation System

XML

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Current Assets
Cash	$ 8,516	$ 34,612
Accounts receivable, net	16,383	11,938
Inventory	15,585	9,253
Prepaid and other current assets	1,052	1,430
Total current assets	41,536	57,233
Long-term assets
Property, equipment, and right of use assets, net	33,497	23,506
Goodwill	28,208	12,456
Intangible assets, net	28,887	14,874
Other assets	86	504
Total long-term assets	90,678	51,340
TOTAL ASSETS	132,214	108,573
Current Liabilities
Accounts payable	13,841	9,842
Accrued liabilities	3,451	3,202
Current portion of equipment loans	5,473	6,992
Current portion of lease liabilities	3,304	2,981
Current portion of senior credit facility	6,857
Deferred revenue	3,036	2,452
Government grant		4,885
Purchase price payable	5,778	2,383
Total current liabilities	41,740	32,737
Long-term Liabilities
Debentures		11,784
Equipment loans	234	392
Lease liabilities	7,195	4,784
Senior credit facility	3,378
SBA Loan	120	121
Purchase price payable		133
TOTAL LIABILITIES	52,667	49,951
SHAREHOLDERS' EQUITY
Capital stock	214,254	202,827
Contributed surplus	26,317	21,001
Shares to be issued		657
Accumulated deficit	(161,024)	(165,863)
TOTAL SHAREHOLDERS' EQUITY	79,547	58,622
TOTAL LIABILITIES AND EQUITY	$ 132,214	$ 108,573

XML

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Revenue
Rentals of medical equipment	$ 69,192,000	$ 55,338,000
Sales of medical equipment and supplies	70,670,000	47,013,000
Total revenues	139,862,000	102,351,000
Cost of inventory sold	33,213,000	28,172,000
Operating expenses	65,203,000	44,805,000
Bad debt expense	12,225,000	7,957,000
Depreciation	20,453,000	16,212,000
Amortization of intangible assets	2,587,000	1,574,000
Stock-based compensation	5,493,000	4,952,000
Acquisition-related costs	797,000	233,000
Loss (gain) on sale of property and equipment	45,000	(94,000)
Other income from government grant	(4,885,000)
Operating income (loss)	4,731,000	(1,460,000)
Financing expenses
Interest expense on leases and loans	1,082,000	927,000
Interest expense on convertible debenture	609,000	838,000
Other interest expense, net	388,000	228,000
Loss on extinguishment of debt	281,000
Loss on settlement of shares to be issued	442,000
Loss on foreign currency transactions	144,000	173,000
Change in fair value of warrants		2,112,000
Change in fair value of debentures	(1,150,000)	3,591,000
Income (loss) before taxes	2,935,000	(9,329,000)
Recovery of income taxes	(1,904,000)	(3,155,000)
Net income (loss)	$ 4,839,000	$ (6,174,000)
Net income (loss) per share (Note 16)
Basic earnings per share	$ 0.14	$ (0.20)
Diluted earnings per share	$ 0.13	$ (0.20)
Weighted average number of common shares outstanding:
Basic	33,647	30,438
Diluted	36,302	30,438

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Capital stock	Contributed surplus	Shares to be issued	Accumulated deficit	Total
Balance at beginning of period at Sep. 30, 2020	$ 171,405	$ 16,519		$ (159,689)	$ 28,235
Balance at beginning of period (in shares) at Sep. 30, 2020	28,069
Net income (loss)				(6,174)	(6,174)
Stock to be issued from acquisition			$ 3,033		3,033
Issuance of stock for acquisitions	$ 2,376		(2,376)
Issuance of stock for acquisitions (in shares)	629
Conversion of debentures	$ 5,359				5,359
Conversion of debentures (in shares)	777
Stock-based compensation		4,952			4,952
Stock options exercised	$ 355	(154)			201
Stock options exercised (in shares)	117
Compensation options exercised	$ 1,718	(316)			1,402
Compensation options exercised (in shares)	368
Exercise of warrants - including transfer of derivative warrant liability of $4,140	$ 21,614				21,614
Exercise of warrants - including transfer of derivative warrant liability of $4,140 (in shares)	3,390
Balance at end of period at Sep. 30, 2021	$ 202,827	21,001	657	(165,863)	58,622
Balance at end of period (in shares) at Sep. 30, 2021	33,350
Net income (loss)				4,839	4,839
Cash in lieu of shares to be issued			$ (657)		(657)
Conversion of debentures	$ 10,683				10,683
Conversion of debentures (in shares)	2,107
Stock-based compensation		5,493			5,493
Stock options exercised	$ 216	(25)			191
Stock options exercised (in shares)	33
Compensation options exercised	$ 528	(152)			376
Compensation options exercised (in shares)	115
Balance at end of period at Sep. 30, 2022	$ 214,254	$ 26,317		$ (161,024)	$ 79,547
Balance at end of period (in shares) at Sep. 30, 2022	35,605

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands	12 Months Ended
	Sep. 30, 2021 USD ($)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Transfer of derivative warrant liability	$ 4,140

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating activities
Net income (loss)	$ 4,839,000	$ (6,174,000)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	23,040,000	17,786,000
Amortization of financing costs and accretion of purchase price payable	251,000	178,000
Interest expense, net of amortization and accretion	1,828,000	1,815,000
Cash paid for interest	(2,007,000)	(1,869,000)
Loss on foreign currency transactions	144,000	173,000
Loss on fair value of warrants		2,112,000
Loss (gain) loss on fair value of convertible debentures	(1,150,000)	3,591,000
Loss (gain) on disposal of property and equipment	45,000	(94,000)
Loss on extinguishment of debt	281,000
Loss on settlement of shares to be issued	442,000
Stock-based compensation	5,493,000	4,952,000
Other income from government grant	(4,885,000)
Derecognition of purchase price payable	(178,000)
Provision (benefit) for income taxes	(1,904,000)	(3,155,000)
Cash paid for income taxes	(653,000)	(368,000)
Change in working capital (net of acquisitions):
Increase in accounts receivable	(201,000)	(868,000)
Increase in inventory	(2,419,000)	(89,000)
Decrease (increase) in prepaid and other current assets	450,000	(858,000)
Increase in deferred revenue	31,000	332,000
Increase in accounts payables and accrued liabilities	2,897,000	297,000
Net cash flow provided by operating activities	26,344,000	17,761,000
Investing activities
Purchase of property and equipment	(9,161,000)	(5,046,000)
Cash proceeds from sale of property and equipment	193,000	98,000
Cash paid for acquisitions	(33,525,000)	(12,890,000)
Net cash flow used in investing activities	(42,493,000)	(17,838,000)
Financing activities
Repayments of loans	(11,900,000)	(10,416,000)
Repayments of leases	(3,822,000)	(2,547,000)
Proceeds from credit facility	12,000,000
Issuance costs relating to credit facility	(1,779,000)
Proceeds from exercise of warrants		17,474,000
Cash in lieu of shares to be issued	(1,100,000)
Proceeds from exercise of options	567,000	1,603,000
Payments of purchase price payable	(3,817,000)	(1,274,000)
Net cash flow (used in) provided by financing activities	(9,851,000)	4,840,000
Net increase (decrease) in cash	(26,000,000)	4,763,000
Effect of exchange rate changes on cash held in foreign currencies	(96,000)	622,000
Cash, beginning of year	34,612,000	29,227,000
Cash, end of year	$ 8,516,000	$ 34,612,000

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Nature of operations

12 Months Ended

Sep. 30, 2022

Nature of operations

Nature of operations

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.

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Basis of Presentation and summary of significant accounting policies

12 Months Ended

Sep. 30, 2022

Basis of Presentation and summary of significant accounting policies

Basis of Presentation and summary of significant accounting policies

2. Basis of Presentation and summary of significant accounting policies

Basis of accounting

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

The consolidated financial statements were authorized for issue by the Board of Directors on December 23, 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.

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 operation.

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated. The Company’s consolidated entities, their functional currencies and ownership percentages are as follows:  

100 W. Commercial Street, LLC	USD	100%
Acadia Medical Supply, Inc.	USD	100%
Access Respiratory Home Care, L.L.C.	USD	100%
At Home Health Equipment, LLC	USD	100%
Black Bear Medical, Inc.	USD	100%
Black Bear Medical Group, Inc.	USD	100%
Black Bear Medical NH, Inc.	USD	100%
Care Medical Atlanta, LLC	USD	100%
Care Medical of Athens, Inc.	USD	100%
Care Medical of Augusta, LLC	USD	100%
Care Medical of Gainesville, LLC	USD	100%
Care Medical Partners, LLC	USD	100%
Care Medical Savannah, LLC	USD	100%
Central Oxygen, Inc.	USD	100%
Coastal Med-Tech Corp.	USD	100%
Cooley Medical Equipment, Incorporated	USD	100%
Good Night Medical, LLC	USD	100%
Good Night Medical of Ohio, LLC	USD	100%
Good Night Medical of Texas, Inc	USD	100%
Health Technology Resources, LLC	USD	100%
Heckman Healthcare Service & Supplies Inc.	USD	100%
Hometown Medical LLC	USD	100%
Legacy Oxygen and Home Care Equipment, LLC	USD	100%
Mayhugh Drugs, Inc.	USD	100%
Med Supply Center, Inc.	USD	100%
Medical West Healthcare Center, LLC	USD	100%
Metro-Med, Inc.	USD	100%
Metro-Med, Inc. - Los Alamitos	USD	100%
Metro-Med, Inc. - Ventura	USD	100%
NorCal Respiratory, Inc.	USD	100%
Oxygen Plus	USD	100%
Patient Aids, Inc.	USD	100%
Patient Home Monitoring, Inc - discontinued	USD	100%
QHM Holdings, Inc.	USD	100%
Quipt Home Medical, Inc.	USD	100%
Resource Medical, Inc.	USD	100%
Resource Medical Group Charleston, LLC	USD	100%
Resource Medical Group, LLC	USD	100%
Respicare, Inc.	USD	100%
Riverside Medical, Inc.	USD	100%
Semo Drugs - Care Plus of Mo, Inc.	USD	100%
Sleep Health Diagnostics, LLC	USD	100%
Sleepwell, LLC	USD	100%
Southeastern Biomedical Services, LLC	USD	100%
Thrift Home Care, Inc.	USD	100%
Tuscan, Inc.	USD	100%
West Home Healthcare, Inc.	USD	100%

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 estimate 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, the largest of which is Medicare, 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 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 that is billed in advance for periods 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 insurers. 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 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 September 30, 2022 and September 30, 2021 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 reserves 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 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. 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) Convertible debentures

In accordance with the substance of the contractual arrangement, convertible debentures are compound financial instruments that are accounted for separately by their components: a financial liability and an equity instrument. The identification of convertible debenture components is based on interpretations of the substance of the contractual arrangement and therefore requires judgment from management. The separation of the components affects the initial recognition of the convertible debenture at issuance and the subsequent recognition of interest on the liability component. The determination of the fair value of the liability is also based on a number of assumptions, including contractual future cash flows, discount factors, and the presence of any derivative financial instruments.

d) Property and equipment

Property and equipment are 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
Right-of-use vehicles			5 years
Right-of-use real estate leases	Life of lease 1	-	10 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	-	20 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) Share-based payments and warrants

The amounts used to estimate fair values of stock options and warrants issued are based on estimates of future volatility of the Company’s share price, expected lives of the options and warrants, expected dividends to be paid by the Company and other relevant assumptions. By their nature, these estimates are subject to measurement uncertainty and the effect of changes in such estimates on the consolidated financial statements of future periods could be significant.

g) Income taxes

Significant judgment is required in determining the provision for future income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.  The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law.  For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized.  Utilization of the tax losses depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

h) 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 income (loss) and comprehensive income (loss).

Critical accounting judgements

The following are the critical judgments, apart from those involving estimations, which 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 an 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 liabilities 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 loss and comprehensive loss when incurred.

d) Goodwill impairment

Management has evaluated the recoverable amount for its cash generating unit and applied judgment in the discount rate and other underlying assumptions used in impairment analysis of goodwill.

The Company has ten CGUs with goodwill and reviews the value in use versus the carrying value both in total and for each of the individual assets. The recoverable amount of the CGU was estimated based on an assessment of value in use using a discounted cash flow approach. The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

e) Segment reporting

International Financial Reporting Standards 8 (“IFRS 8”) requires operating segments to be determined based on the Company’s internal reporting to the Chief Operating Decision Maker (‘CODM’). The CODM has been determined to be the Company’s Chief Executive Officer as he is primarily responsible for the allocation of resources and the assessment of performance. The Company has only one operating segment.

f) Identification of cash-generating unit “CGU”

For the purposes of impairment testing, assets are grouped at the lowest levels of integrated assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets, termed as a CGU. The allocation of assets into a CGU requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, similar exposure to market risks, shared infrastructures and the way in which management monitors the operations.

g) Income (loss) per share

Basic income (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted income (loss) per share is computed similarly to basic income (loss) per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. For the years ended September 30, 2022 and 2021, potentially dilutive common shares issuable upon the exercise of conversion option related to convertible debentures, warrants and options were not included in the computation of income (loss) per share because their effect was anti-dilutive.

h) Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Company’s entities in their respective functional currency at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date. Exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the weighted average monthly rates of exchange. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that foreign operation is recognized in the statement of loss and comprehensive loss.

i) Valuation of inventories

Inventory is recorded at the lower of cost or net realizable value, using first-in first out weighted average cost method.  Inventory is expensed through cost of inventory sold when shipped to customers or transferred to property and equipment when rented to customers.

Financial instruments

Fair value measurement

Financial instruments 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;

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 is classified as Level 1. The warrant derivative financial liability has been valued using level 3 inputs from the fair value hierarchy. 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 approach 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 an allowance for bad debts 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 September 30, 2022, the Company has approximately 9% of the Company’s receivables that are 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 September 30, 2022, the Company has $41,936,000 of liabilities that are due within one year but has $41,557,000 of current assets plus revolver borrowing availability of $13,000,000 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. The interest rate on the credit facility into which the Company entered in September 2022 is a variable rate that can be fixed for a maximum of six months. With $12,000,000 of borrowings on this facility at September 30, 2022, each 1% increase would result in an additional $120,000 of annual interest expense. The interest on the Company’s other debt is either imputed or has a fixed rate and is not subject to cash flow interest rate risk.

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Acquisitions of businesses and purchase accounting

12 Months Ended

Sep. 30, 2022

Acquisitions of businesses and purchase accounting

Acquisitions of businesses and purchase accounting

3. Acquisitions 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 $2,169,000 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 3.31% for a fair value of $365,000. 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 $26,000 of professional fees in conjunction with the acquisition.

The revenues and net loss for Thrift for the twelve months ended September 30, 2022 was approximately $2,200,000 and $(56,000), respectively.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	452
Accounts receivable		165
Inventory		107
Property, equipment, and right of use assets, net		1,158
Goodwill		802
Intangible assets		770
Accounts payable		(140)
Accrued liabilities		(33)
Deferred revenue		(40)
Deferred tax liability		(262)
Loans and leases		(810)
Net assets acquired	$	2,169
Cash paid at closing	$	1,804
Cash to be paid after closing, included in purchase price payable		365
Consideration paid or payable	$	2,169

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

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 $2,435,000, 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 3.31% for a fair value of $332,000. 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 $28,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for Heckman for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $2,250,000 and $300,000, respectively, of which approximately $2,050,000 and $280,000 were recognized in the period from November 1, 2021 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	169
Accounts receivable		170
Inventory		280
Property, equipment, and right of use assets, net		1,165
Goodwill		965
Intangible assets		90
Accounts payable		(159)
Accrued liabilities		(96)
Deferred revenue		(27)
Deferred tax liability		(122)
Net assets acquired	$	2,435
Cash paid at closing	$	2,103
Cash to be paid after closing, included in purchase price payable		332
Consideration paid or payable	$	2,435

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 anniversaries of the acquisition at 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 $18,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for Southeastern Bio for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $2,200,000 and $(50,000), respectively, of which approximately $2,000,000 and $(40,000) were recognized in the period from November 9, 2021 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Accounts receivable	$	112
Inventory		53
Property, equipment, and right of use assets, net		306
Goodwill		225
Intangible assets		270
Accounts payable		(131)
Loans and leases		(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 $13,650,000, of which $11,978,000 was paid in cash at closing, holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $1,288,000, and the collection of certain accounts receivable that totaled $384,000. 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 $32,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for At Home for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $12,800,000 and $230,000, respectively, of which approximately $9,450,000 and $250,000 were recognized in the period from January 1, 2022 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	495
Accounts receivable		1,346
Inventory		1,211
Prepaid expenses		71
Property, equipment, and right of use assets, net		2,085
Goodwill		7,868
Intangible assets		4,170
Accounts payable		(600)
Accrued liabilities		(346)
Deferred revenue		(135)
Deferred tax liability		(1,448)
Loans and leases		(1,067)
Net assets acquired	$	13,650
Cash paid at closing	$	11,978
Cash to be paid after closing, included in purchase price payable		1,672
Consideration paid or payable	$	13,650

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

Acquisition of Good Night Medical, LLC

On April 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Good Night Medical, LLC and its subsidiaries (“Good Night”). Good Night is an Ohio-based company in the same industry as the Company. The purchase price was $6,162,000, of which $4,361,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $1,801,000. 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 $55,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for Good Night for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $8,300,000 and $(270,000), respectively, of which approximately $3,100,000 and $(550,000) were recognized in the period from April 1, 2022 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	42
Accounts receivable		730
Inventory		369
Property, equipment, and right of use assets, net		696
Goodwill		3,277
Intangible assets		3,470
Accounts payable		(1,200)
Accrued liabilities		(166)
Deferred revenue		(39)
Loans and leases		(1,017)
Net assets acquired	$	6,162
Cash paid at closing	$	4,361
Cash to be paid after closing, included in purchase price payable		1,801
Consideration paid or payable	$	6,162

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

Acquisition of Access Respiratory Home Care, LLC

On June 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Access Respiratory Home Care, LLC (“Access”). Access is a Louisiana-based company in the same industry as the Company. The purchase price was $6,595,000, of which $5,347,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $1,248,000. 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 $98,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for Access for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $6,950,000 and $850,000, respectively, of which approximately $2,600,000 and $300,000 were recognized in the period from June 1, 2022 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	417
Accounts receivable		741
Inventory		622
Property, equipment, and right of use assets, net		1,492
Goodwill		1,223
Intangible assets		3,180
Accounts payable		(200)
Accrued liabilities		(319)
Deferred revenue		(90)
Loans and leases		(471)
Net assets acquired	$	6,595
Cash paid at closing	$	5,347
Cash to be paid after closing, included in purchase price payable		1,248
Consideration paid or payable	$	6,595

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

Acquisition of NorCal Respiratory, Inc.

On June 3, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of NorCal Respiratory, Inc (“NorCal”). NorCal is a California-based company in the same industry as the Company. The purchase price was $3,080,000, of which $2,494,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 3.41% for a fair value of $586,000. 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 $29,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net loss for NorCal for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $3,200,000 and $(150,000), respectively, of which approximately $1,000,000 and $(50,000) were recognized in the period from June 3, 2022 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	503
Accounts receivable		315
Inventory		492
Property, equipment, and right of use assets, net		1,044
Goodwill		948
Intangible assets		1,400
Accounts payable		(100)
Accrued liabilities		(67)
Deferred revenue		(93)
Deferred tax liability		(680)
Loans and leases		(682)
Net assets acquired	$	3,080
Cash paid at closing	$	2,494
Cash to be paid after closing, included in purchase price payable		586
Consideration paid or payable	$	3,080

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

Acquisition of Hometown Medical, LLC

On July 1, 2022, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Hometown Medical, LLC (“Hometown”). Hometown is a Mississippi-based company in the same industry as the Company. The purchase price was $5,892,000, of which $4,838,000 was paid in cash at closing, with remaining holdbacks due on the six- and twelve-month anniversaries of the acquisition discounted at 5.26% for a fair value of $1,054,000. 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 $22,000 of professional fees in conjunction with the acquisition.

The pro forma revenues and net income for Hometown for the twelve months ended September 30, 2022 as if the acquisition had occurred on October 1, 2021 was approximately $8,450,000 and $1,100,000, respectively, of which approximately $2,450,000 and $700,000 were recognized in the period from July 1, 2022 to September 30, 2022.

The fair value of the acquired assets and liabilities is as follows:

Cash	$	723
Accounts receivable		665
Inventory		778
Property, equipment, and right of use assets, net		2,187
Goodwill		407
Intangible assets		3,250
Accounts payable		(721)
Accrued liabilities		(66)
Deferred revenue		(129)
Loans and leases		(1,202)
Net assets acquired	$	5,892
Cash paid at closing	$	4,838
Cash to be paid after closing, included in purchase price payable		1,054
Consideration paid or payable	$	5,892

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

Prior year acquisitions

Acquisition of Sleepwell, LLC

Effective October 23, 2020, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Sleepwell, Inc. (“Sleepwell”), a Georgia-based company in the same industry as the Company. The purchase price was $9,976,000 of which $6,623,000 was paid in cash at closing, $2,376,000 (629,000 shares at a fair value of $3.78 per share) was paid through the issuance of the Company’s common shares in January 2021, a holdback paid in March 2021 discounted at 3.46% for a fair value of $320,000, and $657,000 (246,000 shares at a fair value of $2.67) originally to be paid in The Company’s common shares in August 2022. The fair value of the Company’s common shares has been discounted by 15% and 25%, respectively, using the Black-Scholes pricing model for put options, to reflect the inability to sell the Company’s common shares for a period and for the time between the date of the acquisition and the dates the Company’s common shares is to be issued. The Company’s common shares were to be issued in August 2022, but, upon mutual agreement of the parties, a cash payment of $1,100,000 was made instead. A loss of $442,000 was recorded as “Loss on settlement of shares to be issued” on the consolidated statements of income (loss) and comprehensive income (loss) for the year ended September 30, 2022. 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 $81,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets was as follows:

Cash	$	378
Accounts receivable		780
Inventory		769
Prepaid expenses and other current assets		2
Property, equipment, and right of use assets, net		1,273
Goodwill		4,641
Intangible assets		5,410
Accounts payable		(640)
Accrued liabilities		(166)
Deferred revenue		(100)
Loans and Leases		(390)
Deferred tax liability		(1,981)
Net assets acquired	$	9,976
Cash paid at closing	$	6,623
Stock issued in January 2021		2,376
Cash to be paid after closing		320
Stock to be issued after closing, included in shares to be issued		657
Consideration paid or payable	$	9,976

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

Acquisition of Mayhugh Drugs, Inc.

Effective February 1, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Mayhugh Drugs, Inc, dba Mayhugh Medical Equipment (“Mayhugh”). Mayhugh is a Florida-based company in the same industry as the Company. The purchase price was $1,959,000, of which $1,047,000 was paid in cash at closing, holdbacks due on the six- and twelve-month anniversary of the acquisition discounted at 2.39% for a fair value of $662,000, and an earnout valued at $250,000. The earnout could be as high as $750,000 ($250,000 for each of the first three twelve-month periods following the acquisition), and the fair value was based on a Monte Carlo simulation. 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 $54,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets was as follows:

Cash	$	180
Accounts receivable		474
Inventory		487
Prepaid expenses and other current assets		7
Property, equipment, and right of use assets, net		1,418
Goodwill		1,587
Intangible assets		2,830
Accounts payable		(880)
Accrued liabilities		(14)
Deferred revenue		(84)
US Small Business Association (“SBA”) loan		(119)
Loans and Leases		(2,980)
Deferred tax liability		(947)
Net assets acquired	$	1,959
Cash paid at closing	$	1,047
Cash to be paid after closing, included in purchase price payable		912
Consideration paid or payable	$	1,959

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

Acquisition of Med Supply Center, Inc.

On June 21, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Med Supply Center, Inc. (“Med Supply”). Med Supply is a Mississippi-based company in the same industry as the Company. The purchase price was $1,601,000, of which $1,279,000 was paid in cash at closing, $10,000 to be paid within two months of the acquisition, and holdbacks payable on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $312,000. 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 $26,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets was as follows:

Cash	$	48
Accounts receivable		180
Inventory		597
Property, equipment, and right of use assets, net		351
Goodwill		766
Intangible assets		370
Accounts payable		(190)
Accrued liabilities		(40)
Deferred revenue		(53)
Deferred tax liability		(304)
Loans and Leases		(124)
Net assets acquired	$	1,601
Cash paid at closing	$	1,279
Cash to be paid after closing, included in purchase price payable		322
Consideration paid or payable	$	1,601

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

Acquisition of Semo Drug-Care Plus of Mo. Inc

On June 23, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Semo Drug-Care Plus of Mo. Inc, dba Care Plus Home Oxygen Therapy (“Care Plus”). Care Plus is a Missouri-based company in the same industry as the Company. The purchase price was $1,626,000, of which $1,440,000 was paid in cash at closing, $10,000 to be paid within two months of the acquisition, and holdbacks payable on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $176,000. 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 $26,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets was as follows:

Cash	$	47
Accounts receivable		292
Inventory		475
Property, equipment, and right of use assets, net		373
Goodwill		482
Intangible assets		530
Accounts payable		(94)
Accrued liabilities		(51)
Deferred tax liability		(377)
Deferred revenue		(51)
Net assets acquired	$	1,626
Cash paid at closing	$	1,440
Cash to be paid after closing, included in purchase price payable		186
Consideration paid or payable	$	1,626

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

Acquisition of Oxygen Plus, Inc.

On June 29, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Oxygen Plus, Inc. (“Oxygen Plus”). Oxygen Plus is a California-based company in the same industry as the Company. The purchase price was $730,000, of which $574,000 was paid in cash at closing and a holdback due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $156,000. 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 $25,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets is as follows:

Cash	$	114
Accounts receivable		60
Inventory		39
Property, equipment, and right of use assets, net		88
Goodwill		327
Intangible assets		560
Accounts payable		(98)
Accrued liabilities		(13)
Deferred tax liability		(180)
Deferred revenue		(12)
Loans and Leases		(155)
Net assets acquired	$	730
Cash paid at closing	$	574
Cash to be paid after closing, included in purchase price payable		156
Consideration paid or payable	$	730

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

Acquisition of Medical West Healthcare Center, LLC

On August 20, 2021, the Company, through PHM Logistics Corporation, entered into a purchase agreement to acquire all the shares of Medical West Healthcare Center, LLC (“Medical West”). Medical West is a Missouri-based company in the same industry as the Company. The purchase price was $2,366,000, of which $1,927,000 was paid in cash at closing and a holdback due on the six- and twelve-month anniversaries of the acquisition discounted at 2.39% for a fair value of $439,000. 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 $42,000 of professional fees in conjunction with the acquisition.

The fair value of the acquired assets was as follows:

Cash	$	234
Accounts receivable		195
Inventory		382
Prepaid expenses and other current assets		10
Property, equipment, and right of use assets, net		1,121
Goodwill		795
Intangible assets		1,170
Deposits		2
Accounts payable		(346)
Accrued liabilities		(107)
Deferred tax liability		(11)
Deferred revenue		(16)
Loans and Leases		(1,063)
Net assets acquired	$	2,366
Cash paid at closing	$	1,927
Cash to be paid after closing, included in purchase price payable		439
Consideration paid or payable	$	2,366

The above fair value of the acquired assets was adjusted during the year ended September 30, 2022 to reflect the changes and estimates from what was initially reported in the year ended September 30, 2021. Goodwill and accounts payable both increased by $37,000.

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

Purchase Price Payable

The purchase price payable included on the consolidated statements of financial position consists of amounts related to prior period acquisitions as well as current fiscal year 2022 acquisitions less payments made to date. Below is the movement in Purchase Price Payable for the year ended September 30, 2022:

Balance, September 30, 2020 (current $857 plus long-term $560)	$	1,417
Addition from acquisitions		2,335
Accretion of interest		38
Payments		(1,274)
Balance, September 30, 2021 (current $2,383 plus long-term $133)	$	2,516
Addition from acquisitions		7,155
Accretion of interest		102
Derecognition of purchase price payable		(178)
Payments		(3,817)
Balance, September 30, 2022 (current $5,778)	$	5,778

XML

Accounts Receivable

12 Months Ended

Sep. 30, 2022

Accounts Receivable

Accounts Receivable

4. Accounts Receivable

Accounts receivable represents amounts due from insurance companies and patients:

	As at		As at
	September 30, 2022		September 30, 2021
Gross receivable	$	27,122	$	15,413
Reserve for expected credit losses		(10,739)		(3,475)
	$	16,383	$	11,938

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

	Year ended		Year ended
	September 30,		September 30,
Reserve for expected credit losses	2022		2021
Opening Balance	$	3,475	$	5,036
Bad debt expense		12,225		7,957
Amounts written off		(4,961)		(9,518)
Ending Balance	$	10,739	$	3,475

XML

Inventory

12 Months Ended

Sep. 30, 2022

Inventory

Inventory

5. Inventory

	As at September 30,		As at September 30,
	2022		2021
Serialized	$	5,814	$	2,369
Non-serialized		9,854		6,922
Reserve for shrink and slow-moving		(83)		(38)
Total Inventory	$	15,585	$	9,253

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

XML

Property, equipment, and right of use assets

12 Months Ended

Sep. 30, 2022

Property, equipment, and right of use assets

Property, equipment, and right of use assets

6. Property, equipment, and right of use assets

			Office				Buildings and		Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Cost	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	22,568	$	504	$	—	$	1,364	$	2,872	$	4,990	$	32,298
Transfers from inventory		14,988		—		—		—		—		—		14,988
Additions		—		19		—		88		1,385		2,560		4,052
Acquisitions		2,740		3		—		54		302		1,526		4,625
Disposals and write offs		(9,150)		(44)		—		(8)		(384)		(1,326)		(10,912)
Balance September 30, 2021	$	31,146	$	482	$	—	$	1,498	$	4,175	$	7,750	$	45,051
Transfers from inventory		17,797		—		—		—		—		—		17,797
Additions		—		11		20		191		508		2,106		2,836
Acquisitions		3,952		218		140		802		1,274		3,747		10,133
Disposals and write offs		(15,954)		(262)		—		(60)		(1,177)		(1,217)		(18,670)
Balance September 30, 2022	$	36,941	$	449	$	160	$	2,431	$	4,780	$	12,387	$	57,148

			Office					Buildings and	Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Accumulated depreciation	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	12,311	$	335	$	—	$	309	$	1,182	$	1,494	$	15,631
Depreciation		13,213		92		—		131		789		1,987		16,212
Disposals and write offs		(9,105)		(44)		—		(9)		(336)		(804)		(10,298)
Balance September 30, 2021	$	16,419	$	383	$	—	$	431	$	1,635	$	2,677	$	21,545
Depreciation		15,980		66		—		191		1,477		2,738		20,453
Disposals and write offs		(15,954)		(259)		—		(26)		(990)		(1,118)		(18,347)
Balance September 30, 2022	$	16,445	$	190	$	—	$	596	$	2,122	$	4,297	$	23,650

			Office					Buildings and	Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Net Book Value	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	10,257	$	169	$	—	$	1,055	$	1,690	$	3,496	$	16,667
Balance September 30, 2021		14,727		99		—		1,067		2,540		5,073		23,506
Balance September 30, 2022	$	20,496	$	259	$	160	$	1,835	$	2,658	$	8,089	$	33,497

Rental equipment transferred from inventory during the years ended September 30, 2022 and 2021 was $17,797,000 and $14,988,000. For the years ended September 30, 2022 and 2021, the Company obtained equipment loans (Note 11) of $9,602,000 and $10,049,000, respectively, with the balance of $8,195,000 and $4,939,000 paid in cash, respectively.

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Goodwill and Intangible Assets

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets

Goodwill and Intangible Assets

7. Goodwill and Intangible Assets

							Sub-total
							intangibles
			Customer		Other		with finite
Cost	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	3,895	$	11,766	$	6,369	$	18,135	$	22,030
Acquisitions		8,561		9,129		1,740		10,869		19,430
Disposals		—		(205)		—		(205)		(205)
Balance September 30, 2021	$	12,456	$	20,690	$	8,109	$	28,799	$	41,255
Acquisitions		15,752		14,210		2,390		16,600		32,352
Disposals		—		(2)		—		(2)		(2)
Balance September 30, 2022	$	28,208	$	34,898	$	10,499	$	45,397	$	73,605

							Sub-total
							intangibles
			Customer		Other		with finite
Accumulation amortization	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	—	$	7,200	$	5,356	$	12,556	$	12,556
Amortization		—		1,272		302		1,574		1,574
Disposals		—		(205)		—		(205)		(205)
Balance September 30, 2021	$	—	$	8,267	$	5,658	$	13,925	$	13,925
Amortization		—		2,080		507		2,587		2,587
Disposals		—		(2)		—		(2)		(2)
Balance September 30, 2022	$	—	$	10,345	$	6,165	$	16,510	$	16,510

							Sub-total
							intangibles
			Customer		Other		with finite
Net carrying amount	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	3,895	$	4,566	$	1,013	$	5,579	$	9,474
Balance September 30, 2021		12,456		12,423		2,451		14,874		27,330
Balance September 30, 2022	$	28,208	$	24,553	$	4,334	$	28,887	$	57,095

Goodwill Continuity

Balance, September 30, 2020	$	3,895
Acquisition through business combination:
Sleepwell		4,641
Mayhugh		1,587
Med Supply		766
Care Plus		482
Oxygen Plus		327
Medical West		758
Balance, September 30, 2021	$	12,456
Acquisition through business combination:
Medical West		37
Thrift		802
Heckman		965
Southeastern Bio		225
At Home		7,868
Good Night Medical		3,277
Access		1,223
NorCal		948
Hometown		407
Balance, September 30, 2022	$	28,208

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Government Grant

12 Months Ended

Sep. 30, 2022

Government Grant

Government Grant

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 loans and accrued interest were forgivable if the borrower uses the loan proceeds for eligible purposes and maintained 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 consolidated statements of income (loss) for the year ended September 30, 2022.

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

During the years 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 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 original proceeds were recognized as a liability, which was reduced based on certain related costs incurred. During the years ended September 30, 2022 and 2021, the Company

reduced the liability by $631,000 and $0, respectively, which was been included in other income in the consolidated statements of income (loss) and comprehensive income (loss).

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Deferred Revenue

12 Months Ended

Sep. 30, 2022

Deferred Revenue

Deferred Revenue

9. Deferred Revenue

Activity for deferred revenue for the years ended September 30, 2022 and 2021 is as follows:

	For the year ended		For the year ended
	September 30, 2022		September 30, 2021
Beginning balance	$	2,452	$	1,804
Acquisitions		553		316
Net activity from operations		31		332
Ending balance	$	3,036	$	2,452

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Derivative warrant liability

12 Months Ended

Sep. 30, 2022

Derivative warrant liability.

Derivative warrant liability

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, 2021, 13,559,300 Warrants for 3,389,825 common shares were exercised, and the remaining 280,113 Warrants for 70,028 common shares expired unexercised 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. The liability was recorded at fair value using the Black-Scholes pricing model. 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.

	As at
	September
	30, 2020
Share price	C$	1.31
Risk-free interest rate		0.23	%
Expected volatility		60.8	%
Expected life of warrant		0.75 years
Expected dividend yield		0	%

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Long-term Debt

12 Months Ended

Sep. 30, 2022

Long-term Debt

Long-term Debt

11. Long-term Debt

Senior Credit Facility

In September 2022, the Company entered into a five-year, $110,000,000 senior credit facility (“Facility”) with a group of US banks. The facility consists of a delayed draw term loan facility of $85,000,000, a term loan of $5,000,000 that was drawn at closing, and a $20,000,000 revolving credit facility. The facility amends the $20,000,000 revolving credit facility that was entered into in September 2020. The Facility is secured by substantially all assets of the Company and is subject to certain financial covenants.  

The Facility bears interest at variable rates ranging in length from daily to six months and has fees for unused balances. As of September 30, 2022, the outstanding balances under the Facility totaled $12,000,000, comprised of $5,000,000 on the term loan and $7,000,000 on the revolving credit facility.

As of September 30, 2022, the term loan bears interest at an annual rate of 5.7% and is repayable in quarterly installments of $250,000, with the balance due at maturity. The revolving credit facility bears interest at an annual rate of 7.0% and is payable at maturity. It is classified as a current liability as it is expected to be repaid during the year ended September 30, 2023. Interest expense on the Facility, including the unused fee, was $11,000 for the year ended September 30, 2022. The fair value of the note approximates the carrying value as of September 30, 2022.

The Company incurred $1,779,000 in financing costs to obtain the Facility, which is reflected as a reduction of the outstanding balance and will be amortized as interest expense using the effective interest method over the life of the Facility. During the year ended September 30, 2022, $15,000 of amortization of deferred financing costs was recorded.

A summary of the balances related to the Facility as of September 30, 2022 is as follows:

	As of
	September 30, 2022
Delayed draw term loan	$	—
Term loan		5,000
Revolving credit facility		7,000
Total principal		12,000
Deferred financing costs		(1,765)
Net carrying value	$	10,235
Current portion		6,857
Long-term portion		3,378
Net carrying value	$	10,235

The revolving credit facility that was replaced with the Facility had no borrowings as of September 30, 2021, and incurred interest expense for the years ended September 30, 2022 and 2021 of $126,000 and $38,000, respectively. Issuance costs had been recorded in “deferred financing costs” on the consolidated statements of financial position and were being amortized on a straight-line over the four-year term of the facility for a total of $135,000 and $140,000 for the years ended September 30, 2022 and 2021, with the balance of $281,000 recorded as “loss on extinguishment of long-term debt” on the consolidated statement of income (loss) and comprehensive income (loss) for the year ended September 30, 2022.

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 (US$807) debenture was convertible at the option of the holder into 192.31 common shares. Beginning March 9, 2022, the Company could force conversion of the outstanding principal at a conversion price of C$5.20 per share, if the daily volume weighted average price of the common shares exceeds C$6.48 per share for twenty consecutive trading days. The Company exercised this option during the year ended September 30, 2022. During the years ended September 30, 2022 and 2021, C$10,959,000 and C$4,037,000 of debentures were converted into common shares. The fair value of the debentures on the dates of conversion totaled C$13,665,000 (US$10,683,000) and C$6,766,000 (US$5,359,000) during the years ended September 30, 2022 and 2021, respectively. No debentures remain outstanding as of September 30, 2022.

The debentures contained multiple embedded derivatives including conversion right, forced conversion option and payment in lieu of common shares. Since the Company was unable to measure the fair value of embedded derivatives reliably, it had 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 were valued at fair value using the current trading price of C$137 ($109) per unit as of September 30, 2021. A gain of $1,150,000 and a loss of $3,591,000 was recorded for the years ended September 30, 2022 and 2021, respectively. Following is the movement in these debentures:

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	11,784	$	12,930
Conversion to common shares		(10,683)		(5,359)
Change in fair value		(1,150)		3,591
Change in foreign exchange rate		49		622
Ending Balance	$	—	$	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 for a total of $133,000 using the Black-Scholes pricing model.

Compensation options activity for the year ended September 30, 2021 is provided below:

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

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 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. The Company has assumed equipment loans in conjunction with several of its acquisitions. Those loans were recorded the Company’s incremental borrowing rate of 6%.

There are no covenants with the loans and the carrying value of the equipment that is pledged as security against the loans is $14,949,000 and $6,939,000 for years ended September 30, 2022 and 2021, respectively.

Following is the activity in equipment loans for the years ended September 30, 2022 and 2021:

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	7,384		4,750
Additions:
Acquisitions		1,161		3,001
Operations		9,062		10,049
Repayments		(11,900)		(10,416)
Ending Balance		5,707		7,384
Current portion, less than 1 year		5,473		6,992
Long-term portion, due between 1 and 5 years	$	234	$	392

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 12.0%.

Below is the movement in lease liabilities for the year ended September 30, 2022 and 2021 respectively:

			Real
	Vehicles		estate		Total
Balance, September 30, 2020	$	1,627	$	3,640	$	5,267
Additions during the period:
Acquisitions		109		1,603		1,712
Operations		1,385		2,560		3,945
Lease terminations		—		(612)		(612)
Repayments		(707)		(1,840)		(2,547)
Balance, September 30, 2021	$	2,414	$	5,351	$	7,765
Additions during the period:
Acquisitions		571		3,655		4,226
Operations		347		2,063		2,410
Lease terminations		—		(80)		(80)
Repayments		(1,339)		(2,483)		(3,822)
Balance, September 30, 2022	$	1,993	$	8,506	$	10,499

Future payments pursuant to lease liabilities are as follows:

	As at		As at
	September 30, 2022		September 30, 2021
Less than 1 year	$	3,979	$	3,491
Between 1 and 5 years		7,443		5,367
More than five years		1,108		38
Gross lease payments		12,530		8,896
Less: finance charges		(2,031)		(1,131)
Net lease liabilities	$	10,499	$	7,765

SBA Loan

In conjunction with the acquisition of Mayhugh 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 $119,000. The loan is payable in 360 monthly installments of $731 which began in September 2021 and is secured by substantially all the assets of Mayhugh.

Following is the activity in the SBA Loan for the years ended September 30, 2022 and 2021:

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	121	$	—
Additions:
Acquisitions		—		119
Interest expense		7		5
Repayments		(8)		(3)
Ending Balance	$	120	$	121

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Shareholders' Equity

12 Months Ended

Sep. 30, 2022

Shareholders' Equity

Shareholders' Equity

12. Shareholders’ Equity

The Company considers its capital to be shareholders’ equity, which is comprised of share capital, contributed surplus, shares to be issued, accumulated other comprehensive income (loss), and accumulated deficit, in the amount of $79,547,000 at September 30, 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. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

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 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. Each unit 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. 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.

Warrant activity for the years ended September 30, 2021 is provided below:

	Number	Weighted
	(000s)	average exercise price
Balance, September 30, 2020	3,460	C$	6.40
Exercised	(3,390)		6.40
Expired	(70)		6.40
Balance, September 30, 2021	—	C$	—

The weighted average share price on the dates of exercise in fiscal year 2021 in was C$7.86.

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. Activity for the June 2020 compensation options for the years ended September 30, 2022 and 2021 is as follows:

	Number	Weighted
	(000s)	average exercise price
Balance, September 30, 2020	353	C$	—
Exercised	(238)		4.60
Balance, September 30, 2021	115	C$	4.60
Exercised	(115)		4.60
Balance, September 30, 2022	—	C$	—

The weighted average share price on the dates of exercise during the years ended September 30, 2022 and 2021 was C$5.75 and C$8.27, respectively.

Shares to be issued

As discussed in Note 3, the Company acquired Sleepwell on October 23, 2020, with a portion of the purchase price 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) was 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.

The stock scheduled to be issued in August 2022, was settled, upon mutual agreement of the parties, with a cash payment of $1,100,000 was made instead. A loss of $442,000 was recorded as “Loss on settlement of shares to be issued” on the consolidated statements of income (loss) and comprehensive income (loss).

Employee, Director, and Consultant options

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 year ended September 30, 2022 vest quarterly over eight or twelve quarters.

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	1,396		8.40
Exercised	(117)		2.20
Expired	(65)		3.69
Forfeited	(55)		8.39
Balance, September 30, 2021	3,786	C$	4.15
Issued	195		6.93
Exercised	(33)		0.99
Expired	(55)		2.40
Forfeited	(142)		6.87
Balance, September 30, 2022	3,751	C$	4.24

At September 30, 2022, the Company had 2,907,000 vested stock options with a weighted average exercise price of C$2.98. The weighted average share price on the dates of exercise in fiscal years 2022 and 2021 was C$6.56 and C$8.11, respectively.

The fair value of the stock options was a range of C$3.33 to C$4.42 for the year ended September 30, 2022 and C$3.27 to C$4.42 for the year ended September 30, 2021 and used the Black-Scholes option pricing model calculated using the following assumptions:

	Year Ended			Year Ended
	September 30,			September 30,
	2022			2021
Share price at grant date	C$6.20	-	C$6.75	C$8.48	-	C$9.76
Risk-free interest rate	1.78	-	3.33%	0.92	-	1.63%
Expected volatility	54.54	-	55.67%	48.96	-	55.08%
Expected life of option			10 years	4.75	-	10 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 August 20, 2021. The shares will be issued on the first business day of each calendar year in an amount equal to the units that vested in the previous calendar year or earlier upon a Change in Control, as defined.

On February 1, 2022, there were 81,340 restricted 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 61,005 restricted stock units being vested as of September 30, 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 stock-based compensation expense to be expensed over the vesting period with an increase to contributed surplus.

A summary of restricted stock units:

		Weighted
	Number of units (000’s)	average exercise price
Balance, September 30, 2020	—	C$	—
Granted	954		8.48
Balance, September 30, 2021	954	C$	8.48
Forfeited	(105)		8.48
Granted	81		6.83
Balance, September 30, 2022	930	C$	8.34

The Company accounts for stock-based compensation using the fair value method as prescribed by International Financial Reporting Standards 2 (“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 years ended September 30, 2022 and 2021, the Company recorded stock-based compensation expense as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Restricted stock units	$	2,659	$	2,636
Stock options		2,834		2,316
Stock-based compensation expense	$	5,493	$	4,952

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Commitments and contingencies

12 Months Ended

Sep. 30, 2022

Commitments and contingencies

Commitments and contingencies

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 $73,000 as of September 30, 2022, which are due in less than one year.

Contingencies

The Company was in litigation with Lightwater Long Short Fund (“Lightwater”) during the years ended September 30, 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.

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Operating expenses

12 Months Ended

Sep. 30, 2022

Operating expenses

Operating expenses

14. Operating expenses

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Payroll and employee benefits	$	41,456	$	29,549
Facilities		3,360		2,101
Billing		6,346		3,887
Professional fees		3,100		2,566
Marketing costs		1,461		1,005
Outbound freight		2,165		1,378
All other		7,315		4,319
Total operating expenses	$	65,203	$	44,805

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Income taxes

12 Months Ended

Sep. 30, 2022

Income taxes

Income taxes

15. Income taxes

The Company follows the asset and liability method of accounting for income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current year. Deferred income tax assets and liabilities are recognized for temporary differences between the tax and accounting basis of assets and liabilities as well as for the benefit of losses available to be carried forward to future years for tax purposes and are measured using the current or substantively enacted tax rates expected to apply when the differences reverse. A deferred tax asset is recognized to the extent that the recoverability of deferred income tax assets is considered probable.

The Company’s recovery of income taxes differs from the amount that is computed by applying the combined federal and state statutory income tax rate of 25.9% and 27.7% for the years ended September 30, 2022 and 2021, respectively, in the US to the Company’s net income (loss) before income tax expense (recovery) as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Income (loss) before taxes	$	2,935	$	(9,329)
Expected income tax expense (recovery) (statutory income tax rate of 25.9% and 27.7%, respectively)		759		(2,586)
Difference in foreign tax rates		(57)		86
Tax rate changes and other adjustments		270		(614)
Stock-based compensation and non-deductible expenses		1,436		2,964
Other income from government grant		(1,101)		—
State taxes - US		609		645
Recognition of deferred tax assets not previously recognized		(3,820)		(3,650)
Recovery of income taxes	$	(1,904)	$	(3,155)

Deferred tax

The following table summarizes the components of deferred tax:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Deferred tax assets:
Net operating losses - US	$	5,403	$	6,312
Lease liabilities - US		2,202		—
Reserve for expected credit losses		2,779		—
Other		171		—
Deferred tax liabilities:
Property, equipment, and right of use assets, net		(8,498)		(6,015)
Intangible assets, net		(2,034)		—
Other		(23)		(297)
Net deferred tax	$	—	$	—

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Balance at beginning of year	$	—	$	—
Recognized in consolidated statement of income (loss)		(2,513)		(3,800)
Recognized in goodwill		2,513		3,800
Balance at end of year	$	—	$	—

Unrecognized deferred tax assets

Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying number of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Intangible assets, net - Canada	$	47	$	54
Intangible assets, net - US		—		273
Reserve for expected credit losses - US		—		1,068
Net capital losses carried forward - Canada		130		141
Non-capital losses - US		403		650
Share issuance costs - Canada		292		501
Non-capital losses - Canada		7,139		7,266
Other temporary differences		—		1,787
	$	8,011	$	11,740

The US loss carry-forward of $14,806,000 expires in 2039 whereas the remaining US loss of $7,628,000 can be carried forward indefinitely. A deferred tax asset has been recognized to the extent that it can be utilized to offset taxable income generated by the reversal of deferred tax liabilities. The remaining amount has not been recognized because it is not probable that future profit will be available against which the Company can utilize the benefits therefrom.

The Canadian non-capital loss carry-forwards of $26,439,000 have various expiry dates starting in 2027 through 2042. The net capital losses of $968,000 can be carried forward indefinitely.

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Gain (loss) per share

12 Months Ended

Sep. 30, 2022

Gain (loss) per share

Gain (loss) per share

16. Gain (loss) per share

Gain (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 gain (loss) per share computations:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Net income (loss)	$	4,839	$	(6,174)
Basic weighted average number of shares		33,647		30,438
Diluted weighted average number of shares		36,302		30,438
Total - Basic	$	0.14	$	(0.20)
Total - Diluted	$	0.13	$	(0.20)

The effect of instruments exercisable or convertible to common shares for the year ended September 30, 2021 were excluded from the calculation of diluted loss per share because their effect is anti-dilutive.

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Related party transactions

12 Months Ended

Sep. 30, 2022

Related party transactions

Related party transactions

17. Related party transactions

The Company has six 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 for the years ended September 30, 2022 and 2021, and increased to approximately $65,000 per month beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

Expense for Board of Directors’ fees were $287,000 and $203,000 for the years ended September 30, 2022 and 2021, respectively. Stock-based compensation for the Board of Directors was $381,000 and $1,067,000 for the years ended September 30, 2022 and 2021, respectively.

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

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Salaries and benefits paid during the year	$	1,030	$	968
Stock-based compensation		2,626		1,036
Total	$	3,656	$	2,004

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Basis of Presentation and summary of significant accounting policies (Policies)

12 Months Ended

Sep. 30, 2022

Basis of Presentation and summary of significant accounting policies

Basis of accounting

Basis of accounting

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

The consolidated financial statements were authorized for issue by the Board of Directors on December 23, 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.

Basis of measurement

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 operation.

Principles of consolidation

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions have been eliminated. The Company’s consolidated entities, their functional currencies and ownership percentages are as follows:  

100 W. Commercial Street, LLC	USD	100%
Acadia Medical Supply, Inc.	USD	100%
Access Respiratory Home Care, L.L.C.	USD	100%
At Home Health Equipment, LLC	USD	100%
Black Bear Medical, Inc.	USD	100%
Black Bear Medical Group, Inc.	USD	100%
Black Bear Medical NH, Inc.	USD	100%
Care Medical Atlanta, LLC	USD	100%
Care Medical of Athens, Inc.	USD	100%
Care Medical of Augusta, LLC	USD	100%
Care Medical of Gainesville, LLC	USD	100%
Care Medical Partners, LLC	USD	100%
Care Medical Savannah, LLC	USD	100%
Central Oxygen, Inc.	USD	100%
Coastal Med-Tech Corp.	USD	100%
Cooley Medical Equipment, Incorporated	USD	100%
Good Night Medical, LLC	USD	100%
Good Night Medical of Ohio, LLC	USD	100%
Good Night Medical of Texas, Inc	USD	100%
Health Technology Resources, LLC	USD	100%
Heckman Healthcare Service & Supplies Inc.	USD	100%
Hometown Medical LLC	USD	100%
Legacy Oxygen and Home Care Equipment, LLC	USD	100%
Mayhugh Drugs, Inc.	USD	100%
Med Supply Center, Inc.	USD	100%
Medical West Healthcare Center, LLC	USD	100%
Metro-Med, Inc.	USD	100%
Metro-Med, Inc. - Los Alamitos	USD	100%
Metro-Med, Inc. - Ventura	USD	100%
NorCal Respiratory, Inc.	USD	100%
Oxygen Plus	USD	100%
Patient Aids, Inc.	USD	100%
Patient Home Monitoring, Inc - discontinued	USD	100%
QHM Holdings, Inc.	USD	100%
Quipt Home Medical, Inc.	USD	100%
Resource Medical, Inc.	USD	100%
Resource Medical Group Charleston, LLC	USD	100%
Resource Medical Group, LLC	USD	100%
Respicare, Inc.	USD	100%
Riverside Medical, Inc.	USD	100%
Semo Drugs - Care Plus of Mo, Inc.	USD	100%
Sleep Health Diagnostics, LLC	USD	100%
Sleepwell, LLC	USD	100%
Southeastern Biomedical Services, LLC	USD	100%
Thrift Home Care, Inc.	USD	100%
Tuscan, Inc.	USD	100%
West Home Healthcare, Inc.	USD	100%

Critical accounting estimates

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 estimate and assumption uncertainties that have a significant risk of resulting in a material adjustment within the next financial year:

Revenue recognition

a) Revenue recognition

Revenues are billed to, and collections are received from both third-party insurers, the largest of which is Medicare, 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 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 that is billed in advance for periods 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 insurers. 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 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 September 30, 2022 and September 30, 2021 relating to sale of medical equipment and supplies.

Valuation of accounts receivable

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 reserves 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 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. 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.

Convertible debentures

c) Convertible debentures

In accordance with the substance of the contractual arrangement, convertible debentures are compound financial instruments that are accounted for separately by their components: a financial liability and an equity instrument. The identification of convertible debenture components is based on interpretations of the substance of the contractual arrangement and therefore requires judgment from management. The separation of the components affects the initial recognition of the convertible debenture at issuance and the subsequent recognition of interest on the liability component. The determination of the fair value of the liability is also based on a number of assumptions, including contractual future cash flows, discount factors, and the presence of any derivative financial instruments.

Property and equipment

d) Property and equipment

Property and equipment are 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
Right-of-use vehicles			5 years
Right-of-use real estate leases	Life of lease 1	-	10 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.

Intangible assets

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	-	20 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.

Share based payments and warrants

f) Share-based payments and warrants

The amounts used to estimate fair values of stock options and warrants issued are based on estimates of future volatility of the Company’s share price, expected lives of the options and warrants, expected dividends to be paid by the Company and other relevant assumptions. By their nature, these estimates are subject to measurement uncertainty and the effect of changes in such estimates on the consolidated financial statements of future periods could be significant.

Income taxes

g) Income taxes

Significant judgment is required in determining the provision for future income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.  The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law.  For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same taxable entity against which the unused tax losses can be utilized.  Utilization of the tax losses depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

Lease liabilities

h) 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 income (loss) and comprehensive income (loss).

Functional currency

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.

Business combinations

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 an 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 liabilities and the amount allocated to goodwill.

Recognition and initial measurement

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 loss and comprehensive loss when incurred.

Goodwill impairment

d) Goodwill impairment

Management has evaluated the recoverable amount for its cash generating unit and applied judgment in the discount rate and other underlying assumptions used in impairment analysis of goodwill.

The Company has ten CGUs with goodwill and reviews the value in use versus the carrying value both in total and for each of the individual assets. The recoverable amount of the CGU was estimated based on an assessment of value in use using a discounted cash flow approach. The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

Segment reporting

e) Segment reporting

International Financial Reporting Standards 8 (“IFRS 8”) requires operating segments to be determined based on the Company’s internal reporting to the Chief Operating Decision Maker (‘CODM’). The CODM has been determined to be the Company’s Chief Executive Officer as he is primarily responsible for the allocation of resources and the assessment of performance. The Company has only one operating segment.

Identification of cash-generating unit "CGU"

f) Identification of cash-generating unit “CGU”

For the purposes of impairment testing, assets are grouped at the lowest levels of integrated assets that generate identifiable cash inflows that are largely independent of the cash inflows of other assets or groups of assets, termed as a CGU. The allocation of assets into a CGU requires significant judgment and interpretations with respect to the integration between assets, the existence of active markets, similar exposure to market risks, shared infrastructures and the way in which management monitors the operations.

Income (loss) per share

g) Income (loss) per share

Basic income (loss) per share is computed by dividing the net income (loss) available to common shareholders by the weighted average number of shares outstanding during the reporting period. Diluted income (loss) per share is computed similarly to basic income (loss) per share except that the weighted average number of shares outstanding is increased to include additional shares for the assumed exercise of stock options and warrants, if dilutive. The average number of shares is calculated by assuming that outstanding conversions were exercised and that the proceeds from such exercises were used to acquire common shares at the average market price during the reporting period. For the years ended September 30, 2022 and 2021, potentially dilutive common shares issuable upon the exercise of conversion option related to convertible debentures, warrants and options were not included in the computation of income (loss) per share because their effect was anti-dilutive.

Foreign currency transactions

h) Foreign currency transactions

Transactions in foreign currencies are initially recorded by the Company’s entities in their respective functional currency at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date. Exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the weighted average monthly rates of exchange. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that foreign operation is recognized in the statement of loss and comprehensive loss.

Valuation of inventories

i) Valuation of inventories

Inventory is recorded at the lower of cost or net realizable value, using first-in first out weighted average cost method.  Inventory is expensed through cost of inventory sold when shipped to customers or transferred to property and equipment when rented to customers.

Financial instruments

Financial instruments

Fair value measurement

Financial instruments 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;

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 is classified as Level 1. The warrant derivative financial liability has been valued using level 3 inputs from the fair value hierarchy. 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 approach 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 an allowance for bad debts 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 September 30, 2022, the Company has approximately 9% of the Company’s receivables that are 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 September 30, 2022, the Company has $41,936,000 of liabilities that are due within one year but has $41,557,000 of current assets plus revolver borrowing availability of $13,000,000 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. The interest rate on the credit facility into which the Company entered in September 2022 is a variable rate that can be fixed for a maximum of six months. With $12,000,000 of borrowings on this facility at September 30, 2022, each 1% increase would result in an additional $120,000 of annual interest expense. The interest on the Company’s other debt is either imputed or has a fixed rate and is not subject to cash flow interest rate risk.

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Basis of Presentation and summary of significant accounting policies (Tables)

12 Months Ended

Sep. 30, 2022

Basis of Presentation and summary of significant accounting policies

Schedule of subsidiaries

100 W. Commercial Street, LLC	USD	100%
Acadia Medical Supply, Inc.	USD	100%
Access Respiratory Home Care, L.L.C.	USD	100%
At Home Health Equipment, LLC	USD	100%
Black Bear Medical, Inc.	USD	100%
Black Bear Medical Group, Inc.	USD	100%
Black Bear Medical NH, Inc.	USD	100%
Care Medical Atlanta, LLC	USD	100%
Care Medical of Athens, Inc.	USD	100%
Care Medical of Augusta, LLC	USD	100%
Care Medical of Gainesville, LLC	USD	100%
Care Medical Partners, LLC	USD	100%
Care Medical Savannah, LLC	USD	100%
Central Oxygen, Inc.	USD	100%
Coastal Med-Tech Corp.	USD	100%
Cooley Medical Equipment, Incorporated	USD	100%
Good Night Medical, LLC	USD	100%
Good Night Medical of Ohio, LLC	USD	100%
Good Night Medical of Texas, Inc	USD	100%
Health Technology Resources, LLC	USD	100%
Heckman Healthcare Service & Supplies Inc.	USD	100%
Hometown Medical LLC	USD	100%
Legacy Oxygen and Home Care Equipment, LLC	USD	100%
Mayhugh Drugs, Inc.	USD	100%
Med Supply Center, Inc.	USD	100%
Medical West Healthcare Center, LLC	USD	100%
Metro-Med, Inc.	USD	100%
Metro-Med, Inc. - Los Alamitos	USD	100%
Metro-Med, Inc. - Ventura	USD	100%
NorCal Respiratory, Inc.	USD	100%
Oxygen Plus	USD	100%
Patient Aids, Inc.	USD	100%
Patient Home Monitoring, Inc - discontinued	USD	100%
QHM Holdings, Inc.	USD	100%
Quipt Home Medical, Inc.	USD	100%
Resource Medical, Inc.	USD	100%
Resource Medical Group Charleston, LLC	USD	100%
Resource Medical Group, LLC	USD	100%
Respicare, Inc.	USD	100%
Riverside Medical, Inc.	USD	100%
Semo Drugs - Care Plus of Mo, Inc.	USD	100%
Sleep Health Diagnostics, LLC	USD	100%
Sleepwell, LLC	USD	100%
Southeastern Biomedical Services, LLC	USD	100%
Thrift Home Care, Inc.	USD	100%
Tuscan, Inc.	USD	100%
West Home Healthcare, Inc.	USD	100%

Schedule of depreciation on Property and Equipment Using the Straight Line Method

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
Right-of-use vehicles			5 years
Right-of-use real estate leases	Life of lease 1	-	10 years

Schedule of estimated Useful Lives of Intangible Assets

Description	Estimated Useful Life
Non-compete agreements			5 Years
Trademarks			10 Years
Customer contracts			2 Years
Customer relationships	10	-	20 Years

XML

Acquisitions of businesses and purchase accounting (Tables)

12 Months Ended

Sep. 30, 2022

Acquisition of businesses and purchase accounting

Schedule of purchase price allocation

Balance, September 30, 2020 (current $857 plus long-term $560)	$	1,417
Addition from acquisitions		2,335
Accretion of interest		38
Payments		(1,274)
Balance, September 30, 2021 (current $2,383 plus long-term $133)	$	2,516
Addition from acquisitions		7,155
Accretion of interest		102
Derecognition of purchase price payable		(178)
Payments		(3,817)
Balance, September 30, 2022 (current $5,778)	$	5,778

Thrift Home Care, Inc.

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	452
Accounts receivable		165
Inventory		107
Property, equipment, and right of use assets, net		1,158
Goodwill		802
Intangible assets		770
Accounts payable		(140)
Accrued liabilities		(33)
Deferred revenue		(40)
Deferred tax liability		(262)
Loans and leases		(810)
Net assets acquired	$	2,169
Cash paid at closing	$	1,804
Cash to be paid after closing, included in purchase price payable		365
Consideration paid or payable	$	2,169

Heckman Healthcare Services & Supplies, Inc.

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	169
Accounts receivable		170
Inventory		280
Property, equipment, and right of use assets, net		1,165
Goodwill		965
Intangible assets		90
Accounts payable		(159)
Accrued liabilities		(96)
Deferred revenue		(27)
Deferred tax liability		(122)
Net assets acquired	$	2,435
Cash paid at closing	$	2,103
Cash to be paid after closing, included in purchase price payable		332
Consideration paid or payable	$	2,435

Southeastern Biomedical Services, LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Accounts receivable	$	112
Inventory		53
Property, equipment, and right of use assets, net		306
Goodwill		225
Intangible assets		270
Accounts payable		(131)
Loans and leases		(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

At Home Health Equipment, LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	495
Accounts receivable		1,346
Inventory		1,211
Prepaid expenses		71
Property, equipment, and right of use assets, net		2,085
Goodwill		7,868
Intangible assets		4,170
Accounts payable		(600)
Accrued liabilities		(346)
Deferred revenue		(135)
Deferred tax liability		(1,448)
Loans and leases		(1,067)
Net assets acquired	$	13,650
Cash paid at closing	$	11,978
Cash to be paid after closing, included in purchase price payable		1,672
Consideration paid or payable	$	13,650

Good Night Medical, LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	42
Accounts receivable		730
Inventory		369
Property, equipment, and right of use assets, net		696
Goodwill		3,277
Intangible assets		3,470
Accounts payable		(1,200)
Accrued liabilities		(166)
Deferred revenue		(39)
Loans and leases		(1,017)
Net assets acquired	$	6,162
Cash paid at closing	$	4,361
Cash to be paid after closing, included in purchase price payable		1,801
Consideration paid or payable	$	6,162

Access Respiratory Home Care, LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	417
Accounts receivable		741
Inventory		622
Property, equipment, and right of use assets, net		1,492
Goodwill		1,223
Intangible assets		3,180
Accounts payable		(200)
Accrued liabilities		(319)
Deferred revenue		(90)
Loans and leases		(471)
Net assets acquired	$	6,595
Cash paid at closing	$	5,347
Cash to be paid after closing, included in purchase price payable		1,248
Consideration paid or payable	$	6,595

NorCal Respiratory, Inc.

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	503
Accounts receivable		315
Inventory		492
Property, equipment, and right of use assets, net		1,044
Goodwill		948
Intangible assets		1,400
Accounts payable		(100)
Accrued liabilities		(67)
Deferred revenue		(93)
Deferred tax liability		(680)
Loans and leases		(682)
Net assets acquired	$	3,080
Cash paid at closing	$	2,494
Cash to be paid after closing, included in purchase price payable		586
Consideration paid or payable	$	3,080

Hometown Medical LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	723
Accounts receivable		665
Inventory		778
Property, equipment, and right of use assets, net		2,187
Goodwill		407
Intangible assets		3,250
Accounts payable		(721)
Accrued liabilities		(66)
Deferred revenue		(129)
Loans and leases		(1,202)
Net assets acquired	$	5,892
Cash paid at closing	$	4,838
Cash to be paid after closing, included in purchase price payable		1,054
Consideration paid or payable	$	5,892

Sleepwell, LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	378
Accounts receivable		780
Inventory		769
Prepaid expenses and other current assets		2
Property, equipment, and right of use assets, net		1,273
Goodwill		4,641
Intangible assets		5,410
Accounts payable		(640)
Accrued liabilities		(166)
Deferred revenue		(100)
Loans and Leases		(390)
Deferred tax liability		(1,981)
Net assets acquired	$	9,976
Cash paid at closing	$	6,623
Stock issued in January 2021		2,376
Cash to be paid after closing		320
Stock to be issued after closing, included in shares to be issued		657
Consideration paid or payable	$	9,976

Mayhugh Drugs, Inc.

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	180
Accounts receivable		474
Inventory		487
Prepaid expenses and other current assets		7
Property, equipment, and right of use assets, net		1,418
Goodwill		1,587
Intangible assets		2,830
Accounts payable		(880)
Accrued liabilities		(14)
Deferred revenue		(84)
US Small Business Association (“SBA”) loan		(119)
Loans and Leases		(2,980)
Deferred tax liability		(947)
Net assets acquired	$	1,959
Cash paid at closing	$	1,047
Cash to be paid after closing, included in purchase price payable		912
Consideration paid or payable	$	1,959

Med Supply Center, Inc.

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	48
Accounts receivable		180
Inventory		597
Property, equipment, and right of use assets, net		351
Goodwill		766
Intangible assets		370
Accounts payable		(190)
Accrued liabilities		(40)
Deferred revenue		(53)
Deferred tax liability		(304)
Loans and Leases		(124)
Net assets acquired	$	1,601
Cash paid at closing	$	1,279
Cash to be paid after closing, included in purchase price payable		322
Consideration paid or payable	$	1,601

Semo Drug-Care Plus of Mo. Inc

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	47
Accounts receivable		292
Inventory		475
Property, equipment, and right of use assets, net		373
Goodwill		482
Intangible assets		530
Accounts payable		(94)
Accrued liabilities		(51)
Deferred tax liability		(377)
Deferred revenue		(51)
Net assets acquired	$	1,626
Cash paid at closing	$	1,440
Cash to be paid after closing, included in purchase price payable		186
Consideration paid or payable	$	1,626

Oxygen Plus, Inc.

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	114
Accounts receivable		60
Inventory		39
Property, equipment, and right of use assets, net		88
Goodwill		327
Intangible assets		560
Accounts payable		(98)
Accrued liabilities		(13)
Deferred tax liability		(180)
Deferred revenue		(12)
Loans and Leases		(155)
Net assets acquired	$	730
Cash paid at closing	$	574
Cash to be paid after closing, included in purchase price payable		156
Consideration paid or payable	$	730

Medical West Healthcare. Center, LLC

Acquisition of businesses and purchase accounting

Schedule of fair value of the acquired assets and liabilities

Cash	$	234
Accounts receivable		195
Inventory		382
Prepaid expenses and other current assets		10
Property, equipment, and right of use assets, net		1,121
Goodwill		795
Intangible assets		1,170
Deposits		2
Accounts payable		(346)
Accrued liabilities		(107)
Deferred tax liability		(11)
Deferred revenue		(16)
Loans and Leases		(1,063)
Net assets acquired	$	2,366
Cash paid at closing	$	1,927
Cash to be paid after closing, included in purchase price payable		439
Consideration paid or payable	$	2,366

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Accounts Receivable (Tables)

12 Months Ended

Sep. 30, 2022

Accounts Receivable

Schedule of accounts receivable

	As at		As at
	September 30, 2022		September 30, 2021
Gross receivable	$	27,122	$	15,413
Reserve for expected credit losses		(10,739)		(3,475)
	$	16,383	$	11,938

Schedule of movement in the reserve for expected credit losses

	Year ended		Year ended
	September 30,		September 30,
Reserve for expected credit losses	2022		2021
Opening Balance	$	3,475	$	5,036
Bad debt expense		12,225		7,957
Amounts written off		(4,961)		(9,518)
Ending Balance	$	10,739	$	3,475

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Inventory (Tables)

12 Months Ended

Sep. 30, 2022

Inventory

Schedule of inventory

	As at September 30,		As at September 30,
	2022		2021
Serialized	$	5,814	$	2,369
Non-serialized		9,854		6,922
Reserve for shrink and slow-moving		(83)		(38)
Total Inventory	$	15,585	$	9,253

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Property, equipment, and right of use assets (Tables)

12 Months Ended

Sep. 30, 2022

Property, equipment, and right of use assets

Schedule of property, equipment, and right of use assets

			Office				Buildings and		Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Cost	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	22,568	$	504	$	—	$	1,364	$	2,872	$	4,990	$	32,298
Transfers from inventory		14,988		—		—		—		—		—		14,988
Additions		—		19		—		88		1,385		2,560		4,052
Acquisitions		2,740		3		—		54		302		1,526		4,625
Disposals and write offs		(9,150)		(44)		—		(8)		(384)		(1,326)		(10,912)
Balance September 30, 2021	$	31,146	$	482	$	—	$	1,498	$	4,175	$	7,750	$	45,051
Transfers from inventory		17,797		—		—		—		—		—		17,797
Additions		—		11		20		191		508		2,106		2,836
Acquisitions		3,952		218		140		802		1,274		3,747		10,133
Disposals and write offs		(15,954)		(262)		—		(60)		(1,177)		(1,217)		(18,670)
Balance September 30, 2022	$	36,941	$	449	$	160	$	2,431	$	4,780	$	12,387	$	57,148

			Office					Buildings and	Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Accumulated depreciation	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	12,311	$	335	$	—	$	309	$	1,182	$	1,494	$	15,631
Depreciation		13,213		92		—		131		789		1,987		16,212
Disposals and write offs		(9,105)		(44)		—		(9)		(336)		(804)		(10,298)
Balance September 30, 2021	$	16,419	$	383	$	—	$	431	$	1,635	$	2,677	$	21,545
Depreciation		15,980		66		—		191		1,477		2,738		20,453
Disposals and write offs		(15,954)		(259)		—		(26)		(990)		(1,118)		(18,347)
Balance September 30, 2022	$	16,445	$	190	$	—	$	596	$	2,122	$	4,297	$	23,650

			Office					Buildings and	Right of use		Right of use
	Rental		furniture and				Leasehold		assets –		assets – Real
Net Book Value	equipment		fixtures		Land		improvements		Vehicles		estate		Total
Balance September 30, 2020	$	10,257	$	169	$	—	$	1,055	$	1,690	$	3,496	$	16,667
Balance September 30, 2021		14,727		99		—		1,067		2,540		5,073		23,506
Balance September 30, 2022	$	20,496	$	259	$	160	$	1,835	$	2,658	$	8,089	$	33,497

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Goodwill and Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2022

Goodwill and Intangible Assets

Schedule of goodwill and intangible assets

							Sub-total
							intangibles
			Customer		Other		with finite
Cost	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	3,895	$	11,766	$	6,369	$	18,135	$	22,030
Acquisitions		8,561		9,129		1,740		10,869		19,430
Disposals		—		(205)		—		(205)		(205)
Balance September 30, 2021	$	12,456	$	20,690	$	8,109	$	28,799	$	41,255
Acquisitions		15,752		14,210		2,390		16,600		32,352
Disposals		—		(2)		—		(2)		(2)
Balance September 30, 2022	$	28,208	$	34,898	$	10,499	$	45,397	$	73,605

							Sub-total
							intangibles
			Customer		Other		with finite
Accumulation amortization	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	—	$	7,200	$	5,356	$	12,556	$	12,556
Amortization		—		1,272		302		1,574		1,574
Disposals		—		(205)		—		(205)		(205)
Balance September 30, 2021	$	—	$	8,267	$	5,658	$	13,925	$	13,925
Amortization		—		2,080		507		2,587		2,587
Disposals		—		(2)		—		(2)		(2)
Balance September 30, 2022	$	—	$	10,345	$	6,165	$	16,510	$	16,510

							Sub-total
							intangibles
			Customer		Other		with finite
Net carrying amount	Goodwill		relationships		Intangibles		lives		Total
Balance September 30, 2020	$	3,895	$	4,566	$	1,013	$	5,579	$	9,474
Balance September 30, 2021		12,456		12,423		2,451		14,874		27,330
Balance September 30, 2022	$	28,208	$	24,553	$	4,334	$	28,887	$	57,095

Schedule of goodwill, Acquisition through business combination

Balance, September 30, 2020	$	3,895
Acquisition through business combination:
Sleepwell		4,641
Mayhugh		1,587
Med Supply		766
Care Plus		482
Oxygen Plus		327
Medical West		758
Balance, September 30, 2021	$	12,456
Acquisition through business combination:
Medical West		37
Thrift		802
Heckman		965
Southeastern Bio		225
At Home		7,868
Good Night Medical		3,277
Access		1,223
NorCal		948
Hometown		407
Balance, September 30, 2022	$	28,208

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Deferred Revenue (Tables)

12 Months Ended

Sep. 30, 2022

Deferred Revenue

Schedule of Deferred Revenue

	For the year ended		For the year ended
	September 30, 2022		September 30, 2021
Beginning balance	$	2,452	$	1,804
Acquisitions		553		316
Net activity from operations		31		332
Ending balance	$	3,036	$	2,452

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Derivative warrant liability (Tables)

12 Months Ended

Sep. 30, 2022

Derivative warrant liability.

Schedule of change in fair value of warrants

	As at
	September
	30, 2020
Share price	C$	1.31
Risk-free interest rate		0.23	%
Expected volatility		60.8	%
Expected life of warrant		0.75 years
Expected dividend yield		0	%

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Long-term Debt (Tables)

12 Months Ended

Sep. 30, 2022

Long-term Debt

Schedule of compensation options activity

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

Schedule of lease liabilities

			Real
	Vehicles		estate		Total
Balance, September 30, 2020	$	1,627	$	3,640	$	5,267
Additions during the period:
Acquisitions		109		1,603		1,712
Operations		1,385		2,560		3,945
Lease terminations		—		(612)		(612)
Repayments		(707)		(1,840)		(2,547)
Balance, September 30, 2021	$	2,414	$	5,351	$	7,765
Additions during the period:
Acquisitions		571		3,655		4,226
Operations		347		2,063		2,410
Lease terminations		—		(80)		(80)
Repayments		(1,339)		(2,483)		(3,822)
Balance, September 30, 2022	$	1,993	$	8,506	$	10,499

Schedule of future payments of lease liabilities

	As at		As at
	September 30, 2022		September 30, 2021
Less than 1 year	$	3,979	$	3,491
Between 1 and 5 years		7,443		5,367
More than five years		1,108		38
Gross lease payments		12,530		8,896
Less: finance charges		(2,031)		(1,131)
Net lease liabilities	$	10,499	$	7,765

Senior credit facility

Long-term Debt

Schedule of borrowings

	As of
	September 30, 2022
Delayed draw term loan	$	—
Term loan		5,000
Revolving credit facility		7,000
Total principal		12,000
Deferred financing costs		(1,765)
Net carrying value	$	10,235
Current portion		6,857
Long-term portion		3,378
Net carrying value	$	10,235

Convertible unsecured debentures

Long-term Debt

Schedule of borrowings

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	11,784	$	12,930
Conversion to common shares		(10,683)		(5,359)
Change in fair value		(1,150)		3,591
Change in foreign exchange rate		49		622
Ending Balance	$	—	$	11,784

Equipment loans

Long-term Debt

Schedule of borrowings

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	7,384		4,750
Additions:
Acquisitions		1,161		3,001
Operations		9,062		10,049
Repayments		(11,900)		(10,416)
Ending Balance		5,707		7,384
Current portion, less than 1 year		5,473		6,992
Long-term portion, due between 1 and 5 years	$	234	$	392

SBA loan

Long-term Debt

Schedule of borrowings

	Year Ended		Year Ended
	September 30, 2022		September 30, 2021
Beginning Balance	$	121	$	—
Additions:
Acquisitions		—		119
Interest expense		7		5
Repayments		(8)		(3)
Ending Balance	$	120	$	121

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Shareholders' Equity (Tables)

12 Months Ended

Sep. 30, 2022

Stockholder's Equity

Schedule of warrants activity

	Number	Weighted
	(000s)	average exercise price
Balance, September 30, 2020	3,460	C$	6.40
Exercised	(3,390)		6.40
Expired	(70)		6.40
Balance, September 30, 2021	—	C$	—

Summary of options activity

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

Schedule of fair value of the stock options

	Year Ended			Year Ended
	September 30,			September 30,
	2022			2021
Share price at grant date	C$6.20	-	C$6.75	C$8.48	-	C$9.76
Risk-free interest rate	1.78	-	3.33%	0.92	-	1.63%
Expected volatility	54.54	-	55.67%	48.96	-	55.08%
Expected life of option			10 years	4.75	-	10 years
Expected dividend yield			Nil			Nil

Summary of restricted stock units

		Weighted
	Number of units (000’s)	average exercise price
Balance, September 30, 2020	—	C$	—
Granted	954		8.48
Balance, September 30, 2021	954	C$	8.48
Forfeited	(105)		8.48
Granted	81		6.83
Balance, September 30, 2022	930	C$	8.34

Schedule of stock-based compensation expense

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Restricted stock units	$	2,659	$	2,636
Stock options		2,834		2,316
Stock-based compensation expense	$	5,493	$	4,952

Compensation options to underwriters

Stockholder's Equity

Summary of options activity

	Number	Weighted
	(000s)	average exercise price
Balance, September 30, 2020	353	C$	—
Exercised	(238)		4.60
Balance, September 30, 2021	115	C$	4.60
Exercised	(115)		4.60
Balance, September 30, 2022	—	C$	—

Stock options

Stockholder's Equity

Summary of options activity

		Weighted
	Number of options (000’s)	average exercise price
Balance, September 30, 2020	2,627	C$	1.99
Granted	1,396		8.40
Exercised	(117)		2.20
Expired	(65)		3.69
Forfeited	(55)		8.39
Balance, September 30, 2021	3,786	C$	4.15
Issued	195		6.93
Exercised	(33)		0.99
Expired	(55)		2.40
Forfeited	(142)		6.87
Balance, September 30, 2022	3,751	C$	4.24

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Operating expenses (Tables)

12 Months Ended

Sep. 30, 2022

Operating expenses

Schedule of operating expenses

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Payroll and employee benefits	$	41,456	$	29,549
Facilities		3,360		2,101
Billing		6,346		3,887
Professional fees		3,100		2,566
Marketing costs		1,461		1,005
Outbound freight		2,165		1,378
All other		7,315		4,319
Total operating expenses	$	65,203	$	44,805

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Income taxes (Tables)

12 Months Ended

Sep. 30, 2022

Income taxes

Schedule of Company's provision for (recovery of) income taxes differs from the amount that is computed by applying the combined federal and state statutory income tax rate

The Company’s recovery of income taxes differs from the amount that is computed by applying the combined federal and state statutory income tax rate of 25.9% and 27.7% for the years ended September 30, 2022 and 2021, respectively, in the US to the Company’s net income (loss) before income tax expense (recovery) as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Income (loss) before taxes	$	2,935	$	(9,329)
Expected income tax expense (recovery) (statutory income tax rate of 25.9% and 27.7%, respectively)		759		(2,586)
Difference in foreign tax rates		(57)		86
Tax rate changes and other adjustments		270		(614)
Stock-based compensation and non-deductible expenses		1,436		2,964
Other income from government grant		(1,101)		—
State taxes - US		609		645
Recognition of deferred tax assets not previously recognized		(3,820)		(3,650)
Recovery of income taxes	$	(1,904)	$	(3,155)

Summary of components of deferred tax

The following table summarizes the components of deferred tax:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Deferred tax assets:
Net operating losses - US	$	5,403	$	6,312
Lease liabilities - US		2,202		—
Reserve for expected credit losses		2,779		—
Other		171		—
Deferred tax liabilities:
Property, equipment, and right of use assets, net		(8,498)		(6,015)
Intangible assets, net		(2,034)		—
Other		(23)		(297)
Net deferred tax	$	—	$	—

Schedule of Deferred tax assets and liabilities offset related to income taxes

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Balance at beginning of year	$	—	$	—
Recognized in consolidated statement of income (loss)		(2,513)		(3,800)
Recognized in goodwill		2,513		3,800
Balance at end of year	$	—	$	—

Schedule of Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying number of assets and liabilities

Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying number of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Intangible assets, net - Canada	$	47	$	54
Intangible assets, net - US		—		273
Reserve for expected credit losses - US		—		1,068
Net capital losses carried forward - Canada		130		141
Non-capital losses - US		403		650
Share issuance costs - Canada		292		501
Non-capital losses - Canada		7,139		7,266
Other temporary differences		—		1,787
	$	8,011	$	11,740

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Gain (loss) per share (Tables)

12 Months Ended

Sep. 30, 2022

Gain (loss) per share

Schedule of earnings and share data used in the basic and diluted gain (loss) per share computation

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Net income (loss)	$	4,839	$	(6,174)
Basic weighted average number of shares		33,647		30,438
Diluted weighted average number of shares		36,302		30,438
Total - Basic	$	0.14	$	(0.20)
Total - Diluted	$	0.13	$	(0.20)

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Related party transactions (Tables)

12 Months Ended

Sep. 30, 2022

Related party transactions

Schedule of compensation to key management personnel

	Year Ended		Year Ended
	September 30,		September 30,
	2022		2021
Salaries and benefits paid during the year	$	1,030	$	968
Stock-based compensation		2,626		1,036
Total	$	3,656	$	2,004

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Nature of operations (Details)	May 13, 2021
Nature of operations
Reverse stock split	0.25

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Basis of Presentation and summary of significant accounting policies - Principles of consolidation (Details)	12 Months Ended
	Sep. 30, 2022
100 W. Commercial Street, LLC
Principles of consolidation
Ownership percentages	100.00%
Acadia Medical Supply, Inc.
Principles of consolidation
Ownership percentages	100.00%
Access Respiratory Home Care, LLC
Principles of consolidation
Ownership percentages	100.00%
At Home Health Equipment, LLC
Principles of consolidation
Ownership percentages	100.00%
Black Bear Medical, Inc.
Principles of consolidation
Ownership percentages	100.00%
Black Bear Medical Group, Inc.
Principles of consolidation
Ownership percentages	100.00%
Black Bear Medical NH, Inc.
Principles of consolidation
Ownership percentages	100.00%
Care Medical Atlanta, LLC
Principles of consolidation
Ownership percentages	100.00%
Care Medical of Athens, Inc.
Principles of consolidation
Ownership percentages	100.00%
Care Medical of Augusta, LLC
Principles of consolidation
Ownership percentages	100.00%
Care Medical of Gainesville, LLC
Principles of consolidation
Ownership percentages	100.00%
Care Medical Partners, LLC
Principles of consolidation
Ownership percentages	100.00%
Care Medical Savannah, LLC
Principles of consolidation
Ownership percentages	100.00%
Central Oxygen, Inc.
Principles of consolidation
Ownership percentages	100.00%
Coastal Med-Tech Corp.
Principles of consolidation
Ownership percentages	100.00%
Cooley Medical Equipment, Incorporated
Principles of consolidation
Ownership percentages	100.00%
Good Night Medical, LLC
Principles of consolidation
Ownership percentages	100.00%
Good Night Medical of Ohio, LLC
Principles of consolidation
Ownership percentages	100.00%
Good Night Medical of Texas, Inc
Principles of consolidation
Ownership percentages	100.00%
Health Technology Resources, LLC
Principles of consolidation
Ownership percentages	100.00%
Heckman Healthcare Service & Supplies Inc.
Principles of consolidation
Ownership percentages	100.00%
Hometown Medical LLC
Principles of consolidation
Ownership percentages	100.00%
Legacy Oxygen and Home Care Equipment, LLC
Principles of consolidation
Ownership percentages	100.00%
Mayhugh Drugs, Inc.
Principles of consolidation
Ownership percentages	100.00%
Med Supply Center, Inc
Principles of consolidation
Ownership percentages	100.00%
Medical West Healthcare Center, LLC
Principles of consolidation
Ownership percentages	100.00%
Metro-Med, Inc.
Principles of consolidation
Ownership percentages	100.00%
Metro-Med, Inc. - Los Alamitos
Principles of consolidation
Ownership percentages	100.00%
Metro-Med, Inc. - Ventura
Principles of consolidation
Ownership percentages	100.00%
NorCal Respiratory, Inc.
Principles of consolidation
Ownership percentages	100.00%
Oxygen Plus
Principles of consolidation
Ownership percentages	100.00%
Patient Aids, Inc.
Principles of consolidation
Ownership percentages	100.00%
Patient Home Monitoring, Inc - discontinued
Principles of consolidation
Ownership percentages	100.00%
QHM Holdings, Inc
Principles of consolidation
Ownership percentages	100.00%
Quipt Home Medical, Inc.
Principles of consolidation
Ownership percentages	100.00%
Resource Medical, Inc.
Principles of consolidation
Ownership percentages	100.00%
Resource Medical Group Charleston, LLC
Principles of consolidation
Ownership percentages	100.00%
Resource Medical Group, LLC
Principles of consolidation
Ownership percentages	100.00%
Respicare, Inc.
Principles of consolidation
Ownership percentages	100.00%
Riverside Medical, Inc.
Principles of consolidation
Ownership percentages	100.00%
Semo Drugs - Care Plus of Mo, Inc.
Principles of consolidation
Ownership percentages	100.00%
Sleep Health Diagnostics, LLC
Principles of consolidation
Ownership percentages	100.00%
Sleepwell, LLC
Principles of consolidation
Ownership percentages	100.00%
Southeastern Biomedical Services, LLC
Principles of consolidation
Ownership percentages	100.00%
Thrift Home Care, Inc.
Principles of consolidation
Ownership percentages	100.00%
Tuscan, Inc.
Principles of consolidation
Ownership percentages	100.00%
West Home Healthcare, Inc.
Principles of consolidation
Ownership percentages	100.00%

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Basis of Presentation and summary of significant accounting policies - Revenue recognition (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021
Basis of Presentation and summary of significant accounting policies
Contract liabilities sale of medical equipment and supplies	$ 0	$ 0

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Basis of Presentation and summary of significant accounting policies - Property and equipment (Details)	12 Months Ended
	Sep. 30, 2022
Rental equipment | Minimum
Property and equipment
Useful economic life	1 year
Rental equipment | Maximum
Property and equipment
Useful economic life	5 years
Computer equipment | Minimum
Property and equipment
Useful economic life	3 years
Computer equipment | Maximum
Property and equipment
Useful economic life	5 years
Office furniture and fixtures | Minimum
Property and equipment
Useful economic life	5 years
Office furniture and fixtures | Maximum
Property and equipment
Useful economic life	10 years
Leasehold improvements | Minimum
Property and equipment
Useful economic life	1 year
Leasehold improvements | Maximum
Property and equipment
Useful economic life	7 years
Right-of-use vehicles
Property and equipment
Useful economic life	5 years
Right of use real estate leases | Minimum
Property and equipment
Useful economic life	1 year
Right of use real estate leases | Maximum
Property and equipment
Useful economic life	10 years

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Basis of Presentation and summary of significant accounting policies - Intangible assets (Details)	12 Months Ended
	Sep. 30, 2022
Non-compete agreements
Intangible assets
Useful economic life	5 years
Trademarks
Intangible assets
Useful economic life	10 years
Customer contracts
Intangible assets
Useful economic life	2 years
Customer relationships | Minimum
Intangible assets
Useful economic life	10 years
Customer relationships | Maximum
Intangible assets
Useful economic life	20 years

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Basis of Presentation and summary of significant accounting policies - Goodwill impairment (Details)	12 Months Ended
	Sep. 30, 2022 item
Basis of Presentation and summary of significant accounting policies
Number of cash generating units	10
Projected cash flows period	5 years

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Basis of Presentation and summary of significant accounting policies - Segment reporting (Details)	12 Months Ended
	Sep. 30, 2022 segment
Basis of Presentation and summary of significant accounting policies
Number of operating segment	1

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Basis of Presentation and summary of significant accounting policies - Credit risk & Liquidity risk (Details) - USD ($)	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Credit risk & Liquidity risk
Liabilities that are due within one year	$ 41,740,000	$ 32,737,000
Current assets	41,536,000	57,233,000
Revolving credit facility
Credit risk & Liquidity risk
Revolver borrowing availability	7,000,000	$ 0
Liquidity risk
Credit risk & Liquidity risk
Liabilities that are due within one year	41,936,000
Current assets	41,557,000
Liquidity risk | Revolving credit facility
Credit risk & Liquidity risk
Revolver borrowing availability	$ 13,000,000
Medicare | Credit risk
Credit risk & Liquidity risk
Receivables are due from Medicare, percentage	9.00%

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Basis of Presentation and summary of significant accounting policies - Interest rate risk (Details) - Interest rate risk	12 Months Ended
	Sep. 30, 2022 USD ($)
Disclosure of risk management strategy related to hedge accounting [line items]
Borrowings	$ 12,000,000
Percentage of increase	1.00%
Annual interest expense	$ 120,000

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Acquisitions of businesses and purchase accounting - Thrift Home Care, Inc. - Narratives (Details) - Thrift Home Care Inc - USD ($)		12 Months Ended
	Oct. 01, 2021	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 2,169,000
Cash consideration	$ 1,804,000	$ 365,000
Discount rate	3.31%
Fair value of holdback consideration	$ 365,000
Professional fees in conjunction with the acquisition	$ 26,000
Revenue of acquiree since acquisition date		2,200,000
Profit (loss) of acquiree since acquisition date		$ (56,000)

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Acquisitions of businesses and purchase accounting - Thrift Home Care, Inc. - Asset and Liabilities (Details) - Thrift Home Care Inc - USD ($)	Sep. 30, 2022	Oct. 01, 2021
Disclosure of detailed information about business combination [line items]
Cash		$ 452,000
Accounts receivable		165,000
Inventory		107,000
Property, equipment, and right of use assets, net		1,158,000
Goodwill		802,000
Intangible assets		770,000
Accounts payable		(140,000)
Accrued liabilities		(33,000)
Deferred revenue		(40,000)
Deferred tax liability		(262,000)
Loans and Leases		(810,000)
Net assets acquired		2,169,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 365,000	1,804,000
Consideration paid or payable		2,169,000
Goodwill deductible for tax purposes		$ 0

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Acquisitions of businesses and purchase accounting - Heckman Healthcare Services & Supplies, Inc. - Narratives (Details) - Heckman Healthcare Services & Supplies, Inc - USD ($)		11 Months Ended	12 Months Ended
	Nov. 01, 2021	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 2,435,000
Cash consideration	$ 2,103,000	$ 332,000	$ 332,000
Discount rate	3.31%
Fair value of holdback consideration	$ 332,000
Professional fees in conjunction with the acquisition	$ 28,000
Revenue of combined entity as if combination occurred at beginning of period			2,250,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ 300,000
Revenue of acquiree since acquisition date		2,050,000
Profit (loss) of acquiree since acquisition date		$ 280,000

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Acquisitions of businesses and purchase accounting - Heckman Healthcare Services & Supplies, Inc. - Asset and Liabilities (Details) - Heckman Healthcare Services & Supplies, Inc - USD ($)	Sep. 30, 2022	Nov. 01, 2021
Disclosure of detailed information about business combination [line items]
Cash		$ 169,000
Accounts receivable		170,000
Inventory		280,000
Property, equipment, and right of use assets, net		1,165,000
Goodwill		965,000
Intangible assets		90,000
Accounts payable		(159,000)
Accrued liabilities		(96,000)
Deferred revenue		(27,000)
Deferred tax liability		(122,000)
Net assets acquired		2,435,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 332,000	2,103,000
Consideration paid or payable		2,435,000
Goodwill deductible for tax purposes		$ 0

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Acquisitions of businesses and purchase accounting - Southeastern Biomedical Services, LLC - Narratives (Details) - Southeastern Biomedical Services, LLC - USD ($)		11 Months Ended	12 Months Ended
	Nov. 09, 2021	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 697,000
Cash consideration	600,000	$ 97,000	$ 97,000
Fair value of holdback consideration	97,000
Professional fees in conjunction with the acquisition	$ 18,000
Revenue of combined entity as if combination occurred at beginning of period			2,200,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ (50,000)
Revenue of acquiree since acquisition date		2,000,000
Profit (loss) of acquiree since acquisition date		$ (40,000)

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Acquisitions of businesses and purchase accounting - Southeastern Biomedical Services, LLC - Asset and Liabilities (Details) - Southeastern Biomedical Services, LLC - USD ($)	Sep. 30, 2022	Nov. 09, 2021
Disclosure of detailed information about business combination [line items]
Accounts receivable		$ 112,000
Inventory		53,000
Property, equipment, and right of use assets, net		306,000
Goodwill		225,000
Intangible assets		270,000
Accounts payable		(131,000)
Loans and Leases		(138,000)
Net assets acquired		697,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 97,000	600,000
Consideration paid or payable		$ 697,000

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Acquisitions of businesses and purchase accounting - At Home Health Equipment, LLC - Narratives (Details) - At Home Health Equipment, LLC - USD ($)		9 Months Ended	12 Months Ended
	Jan. 01, 2022	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 13,650,000
Cash consideration	$ 11,978,000	$ 1,672,000	$ 1,672,000
Discount rate	3.41%
Fair value of holdback consideration	$ 1,288,000
Collection of certain accounts receivable	384,000
Professional fees in conjunction with the acquisition	$ 32,000
Revenue of combined entity as if combination occurred at beginning of period			12,800,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ 230,000
Revenue of acquiree since acquisition date		9,450,000
Profit (loss) of acquiree since acquisition date		$ 250,000

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Acquisitions of businesses and purchase accounting - At Home Health Equipment, LLC - Asset and Liabilities (Details) - At Home Health Equipment, LLC - USD ($)	Sep. 30, 2022	Jan. 01, 2022
Disclosure of detailed information about business combination [line items]
Cash		$ 495,000
Accounts receivable		1,346,000
Inventory		1,211,000
Prepaid expenses		71,000
Property, equipment, and right of use assets, net		2,085,000
Goodwill		7,868,000
Intangible assets		4,170,000
Accounts payable		(600,000)
Accrued liabilities		(346,000)
Deferred revenue		(135,000)
Deferred tax liability		(1,448,000)
Loans and Leases		(1,067,000)
Net assets acquired		13,650,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 1,672,000	11,978,000
Consideration paid or payable		13,650,000
Goodwill deductible for tax purposes		$ 0

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Acquisitions of businesses and purchase accounting - Good Night Medical, LLC - Narratives (Details) - Good Night Medical, LLC - USD ($)		6 Months Ended	12 Months Ended
	Apr. 01, 2022	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 6,162,000
Cash consideration	$ 4,361,000	$ 1,801,000	$ 1,801,000
Discount rate	3.41%
Fair value of holdback consideration	$ 1,801,000
Professional fees in conjunction with the acquisition	$ 55,000
Revenue of combined entity as if combination occurred at beginning of period			8,300,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ (270,000)
Revenue of acquiree since acquisition date		3,100,000
Profit (loss) of acquiree since acquisition date		$ (550,000)

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Acquisitions of businesses and purchase accounting - Good Night Medical, LLC - Asset and Liabilities (Details) - Good Night Medical, LLC - USD ($)	Sep. 30, 2022	Apr. 01, 2022
Disclosure of detailed information about business combination [line items]
Cash		$ 42,000
Accounts receivable		730,000
Inventory		369,000
Property, equipment, and right of use assets, net		696,000
Goodwill		3,277,000
Intangible assets		3,470,000
Accounts payable		(1,200,000)
Accrued liabilities		(166,000)
Deferred revenue		(39,000)
Loans and Leases		(1,017,000)
Net assets acquired		6,162,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 1,801,000	4,361,000
Consideration paid or payable		$ 6,162,000

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Acquisitions of businesses and purchase accounting - Access Respiratory Home Care, LLC - Narratives (Details) - Access Respiratory Home Care, LLC - USD ($)		4 Months Ended	12 Months Ended
	Jun. 01, 2022	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 6,595,000
Cash consideration	$ 5,347,000	$ 1,248,000	$ 1,248,000
Discount rate	3.41%
Fair value of holdback consideration	$ 1,248,000
Professional fees in conjunction with the acquisition	$ 98,000
Revenue of combined entity as if combination occurred at beginning of period			6,950,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ 850,000
Revenue of acquiree since acquisition date		2,600,000
Profit (loss) of acquiree since acquisition date		$ 300,000

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Acquisitions of businesses and purchase accounting - Access Respiratory Home Care, LLC - Asset and Liabilities (Details) - Access Respiratory Home Care, LLC - USD ($)	Sep. 30, 2022	Jun. 01, 2022
Disclosure of detailed information about business combination [line items]
Cash		$ 417,000
Accounts receivable		741,000
Inventory		622,000
Property, equipment, and right of use assets, net		1,492,000
Goodwill		1,223,000
Intangible assets		3,180,000
Accounts payable		(200,000)
Accrued liabilities		(319,000)
Deferred revenue		(90,000)
Loans and Leases		(471,000)
Net assets acquired		6,595,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 1,248,000	5,347,000
Consideration paid or payable		$ 6,595,000

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Acquisitions of businesses and purchase accounting - NorCal Respiratory, Inc. - Narratives (Details) - NorCal Respiratory, Inc. - USD ($)		4 Months Ended	12 Months Ended
	Jun. 03, 2022	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 3,080,000
Cash consideration	$ 2,494,000	$ 586,000	$ 586,000
Discount rate	3.41%
Fair value of holdback consideration	$ 586,000
Professional fees in conjunction with the acquisition	$ 29,000
Revenue of combined entity as if combination occurred at beginning of period			3,200,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ (150,000)
Revenue of acquiree since acquisition date		1,000,000
Profit (loss) of acquiree since acquisition date		$ (50,000)

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Acquisitions of businesses and purchase accounting - NorCal Respiratory, Inc. - Asset and Liabilities (Details) - NorCal Respiratory, Inc. - USD ($)	Sep. 30, 2022	Jun. 03, 2022
Disclosure of detailed information about business combination [line items]
Cash		$ 503,000
Accounts receivable		315,000
Inventory		492,000
Property, equipment, and right of use assets, net		1,044,000
Goodwill		948,000
Intangible assets		1,400,000
Accounts payable		(100,000)
Accrued liabilities		(67,000)
Deferred revenue		(93,000)
Deferred tax liability		(680,000)
Loans and Leases		(682,000)
Net assets acquired		3,080,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 586,000	2,494,000
Consideration paid or payable		3,080,000
Goodwill deductible for tax purposes		$ 0

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Acquisitions of businesses and purchase accounting - Hometown Medical, LLC - Narratives (Details) - Hometown - USD ($)		3 Months Ended	12 Months Ended
	Jul. 01, 2022	Sep. 30, 2022	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 5,892,000
Cash consideration	$ 4,838,000	$ 1,054,000	$ 1,054,000
Discount rate	5.26%
Fair value of holdback consideration	$ 1,054,000
Professional fees in conjunction with the acquisition	$ 22,000
Revenue of combined entity as if combination occurred at beginning of period			8,450,000
Profit (loss) of combined entity as if combination occurred at beginning of period			$ 1,100,000
Revenue of acquiree since acquisition date		2,450,000
Profit (loss) of acquiree since acquisition date		$ 700,000

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Acquisitions of businesses and purchase accounting - Hometown Medical, LLC - Asset and Liabilities (Details) - Hometown - USD ($)	Sep. 30, 2022	Jul. 01, 2022
Disclosure of detailed information about business combination [line items]
Cash		$ 723,000
Accounts receivable		665,000
Inventory		778,000
Property, equipment, and right of use assets, net		2,187,000
Goodwill		407,000
Intangible assets		3,250,000
Accounts payable		(721,000)
Accrued liabilities		(66,000)
Deferred revenue		(129,000)
Loans and Leases		(1,202,000)
Net assets acquired		5,892,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 1,054,000	4,838,000
Consideration paid or payable		$ 5,892,000

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Acquisitions of businesses and purchase accounting - Sleepwell, LLC - Narratives (Details)		1 Months Ended			12 Months Ended
	Oct. 23, 2020 USD ($)	Aug. 31, 2022 USD ($) EquityInstruments $ / shares	Mar. 31, 2021 USD ($)	Jan. 31, 2021 USD ($) EquityInstruments $ / shares	Sep. 30, 2022 USD ($)
Acquisition of businesses and purchase accounting
Loss on settlement of shares to be issued					$ 442,000
Sleepwell, LLC
Acquisition of businesses and purchase accounting
Purchase price	$ 9,976,000
Cash consideration	$ 6,623,000	$ 1,100,000			$ 320,000
Consideration in shares (Value)		$ 657,000	$ 657,000	$ 2,376,000
Consideration in shares (Shares) | EquityInstruments		246,000		629,000
Issue price per share | $ / shares		$ 2.67		$ 3.78
Fair value of holdback consideration			$ 320,000
Discount rate	15.00%		3.46%	15.00%	25.00%
Professional fees in conjunction with the acquisition	$ 81,000
Loss on settlement of shares to be issued					$ 442,000

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Acquisitions of businesses and purchase accounting - Sleepwell, LLC - Asset and Liabilities (Details) - Sleepwell, LLC - USD ($)	Sep. 30, 2022	Aug. 31, 2022	Mar. 31, 2021	Jan. 31, 2021	Oct. 23, 2020
Acquisition of businesses and purchase accounting
Cash					$ 378,000
Accounts receivable					780,000
Inventory					769,000
Prepaid expenses and other current assets					2,000
Property, equipment, and right of use assets, net					1,273,000
Goodwill					4,641,000
Intangible assets					5,410,000
Accounts payable					(640,000)
Accrued liabilities					(166,000)
Deferred revenue					(100,000)
Loans and Leases					(390,000)
Deferred tax liability					(1,981,000)
Net assets acquired					9,976,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 320,000	$ 1,100,000			6,623,000
Equity interests of acquirer		$ 657,000	$ 657,000	$ 2,376,000
Consideration paid or payable					9,976,000
Goodwill deductible for tax purposes					$ 0

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Acquisitions of businesses and purchase accounting - Mayhugh Drugs, Inc. - Narratives (Details) - Mayhugh Drugs, Inc. - USD ($)	Feb. 01, 2021	Sep. 30, 2021
Acquisition of businesses and purchase accounting
Purchase price	$ 1,959,000
Cash consideration	1,047,000	$ 912,000
Holdback consideration	$ 662,000
Discount rate	2.39%
Earnout value	$ 250,000
Professional fees in conjunction with the acquisition	54,000
Maximum
Acquisition of businesses and purchase accounting
Earnout value	$ 750,000

XML

Acquisitions of businesses and purchase accounting - Mayhugh Drugs, Inc. - Asset and Liabilities (Details) - Mayhugh Drugs, Inc. - USD ($)	Sep. 30, 2021	Feb. 01, 2021
Acquisition of businesses and purchase accounting
Cash		$ 180,000
Accounts receivable		474,000
Inventory		487,000
Prepaid expenses and other current assets		7,000
Property, equipment, and right of use assets, net		1,418,000
Goodwill		1,587,000
Intangible assets		2,830,000
Accounts payable		(880,000)
Accrued liabilities		(14,000)
Deferred revenue		(84,000)
U.S. Small Business Association ("SBA") loan		(119,000)
Loans and Leases		(2,980,000)
Deferred tax liability		(947,000)
Net assets acquired		1,959,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 912,000	1,047,000
Consideration paid or payable		1,959,000
Goodwill deductible for tax purposes		$ 0

XML

Acquisitions of businesses and purchase accounting - Med Supply Center, Inc. - Narratives (Details) - Med Supply Center, Inc. - USD ($)	Jun. 21, 2021	Sep. 30, 2022
Acquisition of businesses and purchase accounting
Purchase price	$ 1,601,000
Cash consideration	1,279,000	$ 322,000
Consideration to be paid	$ 10,000
Discount rate	2.39%
Holdback consideration	$ 312,000
Professional fees in conjunction with the acquisition	$ 26,000

XML

Acquisitions of businesses and purchase accounting - Med Supply Center, Inc. - Asset and Liabilities acquired (Details) - Med Supply Center, Inc. - USD ($)	Sep. 30, 2022	Jun. 21, 2021
Acquisition of businesses and purchase accounting
Cash		$ 48,000
Accounts receivable		180,000
Inventory		597,000
Property, equipment, and right of use assets, net		351,000
Goodwill		766,000
Intangible assets		370,000
Accounts payable		(190,000)
Accrued liabilities		(40,000)
Deferred revenue		(53,000)
Deferred tax liability		(304,000)
Loans and Leases		(124,000)
Net assets acquired		1,601,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 322,000	1,279,000
Consideration paid or payable		1,601,000
Goodwill deductible for tax purposes		$ 0

XML

Acquisitions of businesses and purchase accounting - Semo Drug - Care Plus of Mo. Inc - Narratives (Details) - Semo Drug-Care Plus of Mo. Inc - USD ($)	Jun. 23, 2021	Sep. 30, 2021
Acquisition of businesses and purchase accounting
Purchase price	$ 1,626,000
Cash consideration	1,440,000	$ 186,000
Consideration to be paid	$ 10,000
Discount rate	2.39%
Holdback consideration	$ 176,000
Professional fees in conjunction with the acquisition	$ 26,000

XML

Acquisitions of businesses and purchase accounting - Semo Drug-Care Plus of Mo. Inc - Asset and Liabilities acquired (Details) - Semo Drug-Care Plus of Mo. Inc - USD ($)	Sep. 30, 2021	Jun. 23, 2021
Acquisition of businesses and purchase accounting
Cash		$ 47,000
Accounts receivable		292,000
Inventory		475,000
Property, equipment, and right of use assets, net		373,000
Goodwill		482,000
Intangible assets		530,000
Accounts payable		(94,000)
Accrued liabilities		(51,000)
Deferred tax liability		(377,000)
Deferred revenue		(51,000)
Net assets acquired		1,626,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 186,000	1,440,000
Consideration paid or payable		1,626,000
Goodwill deductible for tax purposes		$ 0

XML

Acquisitions of businesses and purchase accounting - Oxygen Plus, Inc. - Narratives (Details) - Oxygen Plus - USD ($)	Jun. 29, 2021	Sep. 30, 2022
Acquisition of businesses and purchase accounting
Purchase price	$ 730,000
Cash consideration	$ 574,000	$ 156,000
Discount rate	2.39%
Holdback consideration	$ 156,000
Professional fees in conjunction with the acquisition	$ 25,000

XML

Acquisitions of businesses and purchase accounting - Oxygen Plus, Inc. - Asset and Liabilities acquired (Details) - Oxygen Plus - USD ($)	Sep. 30, 2022	Jun. 29, 2021
Acquisition of businesses and purchase accounting
Cash		$ 114,000
Accounts receivable		60,000
Inventory		39,000
Property, equipment, and right of use assets, net		88,000
Goodwill		327,000
Intangible assets		560,000
Accounts payable		(98,000)
Accrued liabilities		(13,000)
Deferred tax liability		(180,000)
Deferred revenue		(12,000)
Loans and Leases		(155,000)
Net assets acquired		730,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 156,000	574,000
Consideration paid or payable		730,000
Goodwill deductible for tax purposes		$ 0

XML

Acquisitions of businesses and purchase accounting - Medical West Healthcare. Center, LLC- Narratives (Details) - Medical West Healthcare. Center, LLC - USD ($)	Aug. 20, 2021	Sep. 30, 2022
Disclosure of detailed information about business combination [line items]
Purchase price	$ 2,366,000
Cash transferred	$ 1,927,000	$ 439,000
Discount rate	2.39%
Holdback consideration	$ 439,000
Professional fees in conjunction with the acquisition	42,000
Goodwill and accounts payable	$ 37,000

XML

Acquisitions of businesses and purchase accounting - Medical West Healthcare. Center, LLC - Asset and Liabilities acquired (Details) - Medical West Healthcare. Center, LLC - USD ($)	Sep. 30, 2022	Aug. 20, 2021
Acquisition of businesses and purchase accounting
Cash		$ 234,000
Accounts receivable		195,000
Inventory		382,000
Prepaid expenses and other current assets		10,000
Property, equipment, and right of use assets, net		1,121,000
Goodwill		795,000
Intangible assets		1,170,000
Deposits		2,000
Accounts payable		(346,000)
Accrued liabilities		(107,000)
Deferred tax liability		(11,000)
Deferred revenue		(16,000)
Loans and Leases		(1,063,000)
Net assets acquired		2,366,000
Cash paid at closing / to be paid after closing, included in purchase price payable	$ 439,000	1,927,000
Consideration paid or payable		2,366,000
Goodwill deductible for tax purposes		$ 0

XML

Acquisitions of businesses and purchase accounting - Purchase Price Payable (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Acquisitions of businesses and purchase accounting
Beginning Balance	$ 2,516	$ 1,417
Addition from acquisitions	7,155	2,335
Accretion of interest	102	38
Derecognition of purchase price payable	(178)
Payments	(3,817)	(1,274)
Ending Balance	5,778	2,516
Contingent consideration, Current	$ 5,778	2,383	$ 857
Contingent consideration, Non-Current		$ 133	$ 560

XML

Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Accounts Receivable
Net receivables	$ 16,383	$ 11,938
Gross receivable
Accounts Receivable
Net receivables	27,122	15,413
Reserve for expected credit losses.
Accounts Receivable
Net receivables	$ 10,739	$ 3,475

XML

Accounts Receivable - Movement in reserve for expected credit losses (Details) - Trade Receivables - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of changes in allowance account for credit losses of financial assets [abstract]
Opening Balance	$ 3,475	$ 5,036
Bad debt expense	12,225	7,957
Amounts written off	(4,961)	(9,518)
Ending Balance	$ 10,739	$ 3,475

XML

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Inventory
Serialized	$ 5,814	$ 2,369
Non-serialized	9,854	6,922
Reserve for shrink and slow-moving	(83)	(38)
Total Inventory	$ 15,585	$ 9,253

XML

Property, equipment, and right of use assets (Details) - USD ($)	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Property and equipment
Property, plant and equipment at beginning of period	$ 23,506,000	$ 16,667,000
Transfers from inventory	17,797,000	14,988,000
Property, plant and equipment at end of period	33,497,000	23,506,000
Payment made in cash to acquire rental equipment	9,161,000	5,046,000
Gross receivable
Property and equipment
Property, plant and equipment at beginning of period	45,051,000	32,298,000
Transfers from inventory	17,797,000	14,988,000
Additions	2,836,000	4,052,000
Acquisitions	10,133,000	4,625,000
Disposals and write offs	(18,670,000)	(10,912,000)
Property, plant and equipment at end of period	57,148,000	45,051,000
Accumulated depreciation/amortization
Property and equipment
Property, plant and equipment at beginning of period	(21,545,000)	(15,631,000)
Depreciation	20,453,000	16,212,000
Disposals and write offs	18,347,000	10,298,000
Property, plant and equipment at end of period	(23,650,000)	(21,545,000)
Rental equipment
Property and equipment
Property, plant and equipment at beginning of period	14,727,000	10,257,000
Property, plant and equipment at end of period	20,496,000	14,727,000
Rental equipment | Equipment loans
Property and equipment
Equipment loans obtained to acquire rental equipment	9,602,000	10,049,000
Payment made in cash to acquire rental equipment	8,195,000	4,939,000
Rental equipment | Gross receivable
Property and equipment
Property, plant and equipment at beginning of period	31,146,000	22,568,000
Transfers from inventory	17,797,000	14,988,000
Acquisitions	3,952,000	2,740,000
Disposals and write offs	(15,954,000)	(9,150,000)
Property, plant and equipment at end of period	36,941,000	31,146,000
Rental equipment | Accumulated depreciation/amortization
Property and equipment
Property, plant and equipment at beginning of period	(16,419,000)	(12,311,000)
Depreciation	15,980,000	13,213,000
Disposals and write offs	15,954,000	9,105,000
Property, plant and equipment at end of period	(16,445,000)	(16,419,000)
Office furniture and fixtures
Property and equipment
Property, plant and equipment at beginning of period	99,000	169,000
Property, plant and equipment at end of period	259,000	99,000
Office furniture and fixtures | Gross receivable
Property and equipment
Property, plant and equipment at beginning of period	482,000	504,000
Additions	11,000	19,000
Acquisitions	218,000	3,000
Disposals and write offs	(262,000)	(44,000)
Property, plant and equipment at end of period	449,000	482,000
Office furniture and fixtures | Accumulated depreciation/amortization
Property and equipment
Property, plant and equipment at beginning of period	(383,000)	(335,000)
Depreciation	66,000	92,000
Disposals and write offs	259,000	44,000
Property, plant and equipment at end of period	(190,000)	(383,000)
Land
Property and equipment
Property, plant and equipment at end of period	160,000
Land | Gross receivable
Property and equipment
Additions	20,000
Acquisitions	140,000
Property, plant and equipment at end of period	160,000
Leasehold improvements
Property and equipment
Property, plant and equipment at beginning of period	1,067,000	1,055,000
Property, plant and equipment at end of period	1,835,000	1,067,000
Leasehold improvements | Gross receivable
Property and equipment
Property, plant and equipment at beginning of period	1,498,000	1,364,000
Additions	191,000	88,000
Acquisitions	802,000	54,000
Disposals and write offs	(60,000)	(8,000)
Property, plant and equipment at end of period	2,431,000	1,498,000
Leasehold improvements | Accumulated depreciation/amortization
Property and equipment
Property, plant and equipment at beginning of period	(431,000)	(309,000)
Depreciation	191,000	131,000
Disposals and write offs	26,000	9,000
Property, plant and equipment at end of period	(596,000)	(431,000)
Right of use assets, Vehicles
Property and equipment
Property, plant and equipment at beginning of period	2,540,000	1,690,000
Property, plant and equipment at end of period	2,658,000	2,540,000
Right of use assets, Vehicles | Gross receivable
Property and equipment
Property, plant and equipment at beginning of period	4,175,000	2,872,000
Additions	508,000	1,385,000
Acquisitions	1,274,000	302,000
Disposals and write offs	(1,177,000)	(384,000)
Property, plant and equipment at end of period	4,780,000	4,175,000
Right of use assets, Vehicles | Accumulated depreciation/amortization
Property and equipment
Property, plant and equipment at beginning of period	(1,635,000)	(1,182,000)
Depreciation	1,477,000	789,000
Disposals and write offs	990,000	336,000
Property, plant and equipment at end of period	(2,122,000)	(1,635,000)
Right of use assets, Real estate
Property and equipment
Property, plant and equipment at beginning of period	5,073,000	3,496,000
Property, plant and equipment at end of period	8,089,000	5,073,000
Right of use assets, Real estate | Gross receivable
Property and equipment
Property, plant and equipment at beginning of period	7,750,000	4,990,000
Additions	2,106,000	2,560,000
Acquisitions	3,747,000	1,526,000
Disposals and write offs	(1,217,000)	(1,326,000)
Property, plant and equipment at end of period	12,387,000	7,750,000
Right of use assets, Real estate | Accumulated depreciation/amortization
Property and equipment
Property, plant and equipment at beginning of period	(2,677,000)	(1,494,000)
Depreciation	2,738,000	1,987,000
Disposals and write offs	1,118,000	804,000
Property, plant and equipment at end of period	$ (4,297,000)	$ (2,677,000)

XML

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	$ 27,330	$ 9,474
Goodwill and intangible assets, ending balance	57,095	27,330
Gross receivable
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	41,255	22,030
Acquisitions	32,352	19,430
Disposals	(2)	(205)
Goodwill and intangible assets, ending balance	73,605	41,255
Accumulated depreciation/amortization
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	(13,925)	(12,556)
Amortization	(2,587)	(1,574)
Disposals	2	205
Goodwill and intangible assets, ending balance	(16,510)	(13,925)
Goodwill
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	12,456	3,895
Goodwill and intangible assets, ending balance	28,208	12,456
Goodwill | Gross receivable
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	12,456	3,895
Acquisitions	15,752	8,561
Goodwill and intangible assets, ending balance	28,208	12,456
Sub-total intangibles with finite lives
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	14,874	5,579
Goodwill and intangible assets, ending balance	28,887	14,874
Sub-total intangibles with finite lives | Gross receivable
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	28,799	18,135
Acquisitions	16,600	10,869
Disposals	(2)	(205)
Goodwill and intangible assets, ending balance	45,397	28,799
Sub-total intangibles with finite lives | Accumulated depreciation/amortization
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	(13,925)	(12,556)
Amortization	(2,587)	(1,574)
Disposals	2	205
Goodwill and intangible assets, ending balance	(16,510)	(13,925)
Customer relationships
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	12,423	4,566
Goodwill and intangible assets, ending balance	24,553	12,423
Customer relationships | Gross receivable
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	20,690	11,766
Acquisitions	14,210	9,129
Disposals	(2)	(205)
Goodwill and intangible assets, ending balance	34,898	20,690
Customer relationships | Accumulated depreciation/amortization
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	(8,267)	(7,200)
Amortization	(2,080)	(1,272)
Disposals	2	205
Goodwill and intangible assets, ending balance	(10,345)	(8,267)
Other Intangibles
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	2,451	1,013
Goodwill and intangible assets, ending balance	4,334	2,451
Other Intangibles | Gross receivable
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	8,109	6,369
Acquisitions	2,390	1,740
Goodwill and intangible assets, ending balance	10,499	8,109
Other Intangibles | Accumulated depreciation/amortization
Reconciliation of changes in intangible assets and goodwill [abstract]
Goodwill and intangible assets, beginning balance	(5,658)	(5,356)
Amortization	(507)	(302)
Goodwill and intangible assets, ending balance	$ (6,165)	$ (5,658)

XML

Goodwill and Intangible Assets - Acquisition Through Business Combination: (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Acquisition through business combination
Goodwill at beginning of period	$ 12,456	$ 3,895
Goodwill at end of period	28,208	12,456
Sleepwell, LLC
Acquisition through business combination
Goodwill, acquisitions through business combinations		4,641
Mayhugh Drugs, Inc.
Acquisition through business combination
Goodwill, acquisitions through business combinations		1,587
Med Supply Center, Inc.
Acquisition through business combination
Goodwill, acquisitions through business combinations		766
Semo Drug-Care Plus of Mo. Inc
Acquisition through business combination
Goodwill, acquisitions through business combinations		482
Oxygen Plus
Acquisition through business combination
Goodwill, acquisitions through business combinations		327
Medical West Healthcare.
Acquisition through business combination
Goodwill, acquisitions through business combinations	37	$ 758
Heckman Healthcare Services & Supplies, Inc.
Acquisition through business combination
Goodwill, acquisitions through business combinations	965
Southeastern Bio
Acquisition through business combination
Goodwill, acquisitions through business combinations	225
At Home
Acquisition through business combination
Goodwill, acquisitions through business combinations	7,868
Thrift
Acquisition through business combination
Goodwill, acquisitions through business combinations	802
Good Night Medical
Acquisition through business combination
Goodwill, acquisitions through business combinations	3,277
Access
Acquisition through business combination
Goodwill, acquisitions through business combinations	1,223
NorCal
Acquisition through business combination
Goodwill, acquisitions through business combinations	948
Hometown
Acquisition through business combination
Goodwill, acquisitions through business combinations	$ 407

XML

Government Grant - Payroll Protection Plan (Details)		12 Months Ended
	Mar. 23, 2022 USD ($)	Sep. 30, 2020 item	Apr. 16, 2020 USD ($)
Government Grants
Number of provisions | item		2
Payroll Protection Plan
Government Grants
Principal amount			$ 4,254,000
Income Due to Loan Forgiven	$ 4,254,000

XML

Government Grant - Relief Fund (Details) - Public health and Social Services Emergency Fund - USD ($)	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2020	Sep. 30, 2021
Government Grants
Amount of public health and social services emergency fund		$ 1,797,000
Amount of expenses related to PPP	$ 0
Other expense (income)
Government Grants
Amount of reduction in the liability	$ 631,000		$ 0

XML

Deferred Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Deferred Revenue
Beginning balance	$ 2,452	$ 1,804
Acquisitions	553	316
Net activity from operations	31	332
Ending balance	$ 3,036	$ 2,452

XML

Derivative warrant liability (Details) - $ / shares			12 Months Ended
	Jun. 29, 2021	Jun. 29, 2020	Sep. 30, 2021
Derivative warrant liability.
Number of units issued		27,678,826
Number of common share per unit		1
Number of warrants per unit		0.5
Number of warrants		13,839,413
Number of common share exercisable by each warrant		1
Term of warrants		12 months
Exercise price of warrants		$ 6.40
Number of warrants exercised			13,559,300
Number of common shares equivalent to warrants exercised			3,389,825
Number of warrants expired	280,113
Number of common shares equivalent to warrants expired	70,028

XML

Derivative warrant liability - Black-Scholes pricing model (Details) - Derivative warrant liability - Black-Scholes pricing model	Sep. 30, 2020 Y $ / shares
Share price
Derivative warrant liability
Derivative warrant liability | $ / shares	1.31
Risk-free interest rate
Derivative warrant liability
Derivative warrant liability	0.23
Expected volatility
Derivative warrant liability
Derivative warrant liability	60.8
Expected life of warrant
Derivative warrant liability
Derivative warrant liability | Y	0.75
Expected dividend yield
Derivative warrant liability
Derivative warrant liability	0

XML

Long-term Debt - Senior Credit Facility (Details) - USD ($)	1 Months Ended	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Long-term Debt
Quarterly installments		$ 250,000
Interest expense on facility		609,000	$ 838,000
Financing costs		1,779,000
Loss on extinguishment of debt		281,000
Senior credit facility
Long-term Debt
Term of debt	5 years
Principal amount	$ 110,000,000	110,000,000
Borrowings	$ 12,000,000	$ 12,000,000
Interest rate	5.70%	5.70%
Interest expense on facility		$ 11,000
Amortization of deferred financing costs		15,000
Senior credit facility | Maximum
Long-term Debt
Period of variable interest rate adjustment	6 months
Delayed draw term loan facility
Long-term Debt
Principal amount	$ 85,000,000	85,000,000
Term loan
Long-term Debt
Principal amount	5,000,000	5,000,000
Borrowings	5,000,000	$ 5,000,000
Revolving credit facility
Long-term Debt
Term of debt		4 years
Principal amount	20,000,000	$ 20,000,000		$ 20,000,000
Borrowings	$ 7,000,000	$ 7,000,000	0
Interest rate	7.00%	7.00%
Amortization of deferred financing costs		$ 135,000	140,000
Interest expense		$ 126,000	$ 38,000

XML

Long-term Debt - balances related to the Facility (Details) - USD ($)	Sep. 30, 2022	Sep. 30, 2021
Term loan
Long-term Debt
Borrowings	$ 5,000,000
Revolving credit facility
Long-term Debt
Borrowings	7,000,000	$ 0
Senior credit facility
Long-term Debt
Borrowings	12,000,000
Deferred financing costs	(1,765,000)
Net carrying value	10,235,000
Current portion	6,857,000
Long-term portion	$ 3,378,000

XML

Long-term Debt - Debentures (Details) - Convertible unsecured debentures				12 Months Ended
	Mar. 09, 2022 $ / shares	Mar. 07, 2019 USD ($)	Mar. 07, 2019 CAD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 CAD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2021 CAD ($)	Sep. 30, 2021 USD ($) $ / item	Sep. 30, 2021 USD ($) $ / item	Sep. 30, 2022 CAD ($)	Sep. 30, 2021 CAD ($)	Sep. 30, 2020 USD ($)
Long-term Debt
Principal amount			$ 15,000,000
Interest rate			8.00%
Principal amount denomination for conversion to common stock		$ 807	$ 1,000
Conversion ratio		0.19231	0.19231
Amount of debt converted					$ 10,959,000		$ 4,037,000
Fair value of debentures				$ 10,683,000		$ 5,359,000		$ 5,359,000	$ 5,359,000	$ 13,665,000	$ 6,766,000
Conversion price of mandated conversion | $ / shares	$ 5.20
Stock price trigger | $ / shares	$ 6.48
Threshold consecutive trading days	20 days
Borrowings				0		11,784,000		$ 11,784,000	$ 11,784,000			$ 12,930,000
Trading price per unit								137	109
Gains (losses) on change in the fair value				$ (1,150,000)		$ 3,591,000

XML

Long-term Debt - Movement in Debentures (Details) - USD ($)	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Long-term Debt
Change in foreign exchange rate	$ (144,000)	$ (173,000)
Convertible unsecured debentures
Long-term Debt
Beginning Balance	11,784,000	12,930,000
Conversion to common shares	(10,683,000)	(5,359,000)
Change in fair value	(1,150,000)	3,591,000
Change in foreign exchange rate	49,000	622,000
Ending Balance	$ 0	$ 11,784,000

XML

Long-term Debt - Compensation options (Details) $ / shares in Units, EquityInstruments in Thousands	12 Months Ended
	Sep. 30, 2022 USD ($) EquityInstruments $ / shares	Sep. 30, 2022 USD ($) EquityInstruments $ / shares	Sep. 30, 2021 EquityInstruments $ / shares
Long-term Debt
Balance (in shares)			130,000
Exercised (in shares)			(130,000)
Balance (in dollars per share)			$ 5.20
Exercised (in dollars per share)			$ 5.20
Compensation options to underwriters
Long-term Debt
Issued (in shares)	129,808	129,808
Exercise price	$ 5.20
Contractual term	2 years	2 years
Fair value of options, per share		$ 1.02
Fair value of options | $	$ 133,000	$ 133,000
Balance (in shares) | EquityInstruments	115	115	353
Exercised (in shares) | EquityInstruments	(115)	(115)	(238)
Balance (in shares) | EquityInstruments			115
Balance (in dollars per share)	$ 4.60
Exercised (in dollars per share)	$ 4.60		$ 4.60
Balance (in dollars per share)			$ 4.60

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Long-term Debt - Equipment Loans (Details)	12 Months Ended
	Sep. 30, 2022 USD ($) installment	Sep. 30, 2021 USD ($)
Additions:
Repayments	$ (11,900,000)	$ (10,416,000)
Equipment loans
Long-term Debt
Equipment pledged as security	14,949,000	6,939,000
Beginning Balance	7,384,000	4,750,000
Additions:
Acquisitions	1,161,000	3,001,000
Operations	9,062,000	10,049,000
Repayments	(11,900,000)	(10,416,000)
Ending Balance	5,707,000	7,384,000
Current portion, less than 1 year	5,473,000	6,992,000
Long-term portion, due between 1 and 5 years	$ 234,000	$ 392,000
Equipment loans | Repayment in twelve months
Long-term Debt
Interest rate	0.00%
Number of equal monthly installments | installment	12
Incremental borrowing rate	6.00%

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Long-term Debt - Leases Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Lease liabilities
Balance	$ 7,765	$ 5,267
Additions during the period:
Acquisitions	4,226	1,712
Operations	2,410	3,945
Lease Terminations	(80)	(612)
Repayments of leases	(3,822)	(2,547)
Balance	10,499	7,765
Gross lease payments	12,530	8,896
Less: finance charges	(2,031)	(1,131)
Net lease liabilities	10,499	7,765
Less than 1 year
Additions during the period:
Gross lease payments	3,979	3,491
Between 1 and 5 years
Additions during the period:
Gross lease payments	7,443	5,367
More than five years
Additions during the period:
Gross lease payments	1,108	38
Vehicle lease
Lease liabilities
Balance	2,414	1,627
Additions during the period:
Acquisitions	571	109
Operations	347	1,385
Repayments of leases	(1,339)	(707)
Balance	1,993	2,414
Net lease liabilities	$ 1,993	2,414
Vehicle lease | Minimum
Lease liabilities
Incremental borrowing rate	1.70%
Vehicle lease | Maximum
Lease liabilities
Incremental borrowing rate	12.00%
Real estate lease
Lease liabilities
Incremental borrowing rate	8.00%
Balance	$ 5,351	3,640
Additions during the period:
Acquisitions	3,655	1,603
Operations	2,063	2,560
Lease Terminations	(80)	(612)
Repayments of leases	(2,483)	(1,840)
Balance	8,506	5,351
Net lease liabilities	$ 8,506	$ 5,351

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Long-term Debt - SBA loan (Details)		12 Months Ended
	Feb. 01, 2021 USD ($) installment	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Long-term Debt
Monthly payments		$ 250,000
Additions:
Repayments		(11,900,000)	$ (10,416,000)
SBA loan
Long-term Debt
Principal amount	$ 150,000
Interest rate	3.75%
Incremental borrowing rate	6.00%
Fair value of debt	$ 119,000
Number of equal monthly installments | installment	360
Monthly payments	$ 731
Beginning Balance		121,000
Additions:
Acquisitions			119,000
Interest expense		7,000	5,000
Repayments		(8,000)	(3,000)
Ending Balance		$ 120,000	$ 121,000

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Shareholders' Equity (Details)					12 Months Ended
	May 13, 2021	Jun. 30, 2020 item $ / shares shares	Jun. 29, 2020 $ / shares shares	Dec. 31, 2018 item	Sep. 30, 2021 USD ($) shares	Sep. 30, 2021 CAD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2020 $ / shares
Stockholder's Equity
Share capital | $							$ 79,547,000
Number of classes of common stock outstanding | item				1
Reverse stock split	0.25
Number of shares issued for each warrant			1
Term of warrants			12 months
Exercise price of warrants | $ / shares			$ 6.40
Number of warrants exercised					13,559,300	13,559,300
Proceeds from exercise of warrants | $					$ 17,474,000
Private Placement
Stockholder's Equity
Number of pre-consolidation common share in each unit			1
Number of warrants in each unit			0.5
Number of common share warrants			13,839,413
Number of warrants exercised | item		4
Number of shares issued for each warrant		1
Term of warrants		12 months
Exercise price of warrants | $ / shares		$ 6.40						$ 6.40
Number of warrants exercised					13,559,300	13,559,300
Common shares exercised					3,389,825	3,389,825
Proceeds from exercise of warrants					$ 17,473,000	$ 21,695,000

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Shareholders' Equity - Warrants activity (Details) - $ / shares		12 Months Ended
	Jun. 29, 2021	Sep. 30, 2021
Warrant activity
Expired (in shares)	(280,113)
Private Placement
Warrant activity
Beginning balance (in shares)		3,460,000
Exercised		(3,389,825)
Expired (in shares)		(70,000)
Beginning balance (in dollars per share)		$ 6.40
Exercised (in dollars per share)		6.40
Expired (in dollars per share)		6.40
Weighted average share price		$ 7.86

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Shareholders' Equity - Issuance Costs (Details) - Compensation options to underwriters	12 Months Ended
	Sep. 30, 2022 EquityInstruments $ / shares
Stockholder's Equity
Issued (in shares)	129,808
Exercise price	$ 5.20
Contractual term	2 years
Private Placement
Stockholder's Equity
Issued (in shares) | EquityInstruments	367,826
Exercise price	$ 4.60
Contractual term	2 years

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Shareholders' Equity - Compensation options activity (Details) Unit_Standard_pure_lYdVegJ_HkmGJo29SHdSWg in Thousands, EquityInstruments in Thousands	12 Months Ended
	Sep. 30, 2022 EquityInstruments $ / shares	Sep. 30, 2021 EquityInstruments $ / shares
Stockholder's Equity
Balance (in shares)		130
Exercised (in shares)		(130)
Balance (in dollars per share)		$ 5.20
Exercised (in dollars per share)		$ 5.20
Compensation options to underwriters
Stockholder's Equity
Balance (in shares) | EquityInstruments	115	353
Exercised (in shares) | EquityInstruments	(115)	(238)
Balance (in shares) | EquityInstruments		115
Balance (in dollars per share)	$ 4.60
Exercised (in dollars per share)	4.60	$ 4.60
Balance (in dollars per share)		4.60
Weighted average share price	$ 5.75	$ 8.27

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Shareholders' Equity - Shares issued on acquisition (Details)	1 Months Ended		12 Months Ended
	Aug. 31, 2022 USD ($) EquityInstruments $ / shares	Jan. 31, 2021 USD ($) EquityInstruments $ / shares	Sep. 30, 2022 USD ($)	Mar. 31, 2021 USD ($)	Oct. 23, 2020 USD ($)
Stockholder's Equity
Loss on settlement of shares to be issued			$ 442,000
Sleepwell, LLC
Stockholder's Equity
Consideration in shares (Value)	$ 657,000	$ 2,376,000		$ 657,000
Consideration in shares (Shares) | EquityInstruments	246,000	629,000
Issue price per share | $ / shares		$ 3.78
Discount rate		15.00%	25.00%	3.46%	15.00%
Cash consideration	$ 1,100,000		$ 320,000		$ 6,623,000
Loss on settlement of shares to be issued			$ 442,000
Futures contract
Stockholder's Equity
Consideration in shares (Value)	$ 657,000
Consideration in shares (Shares) | EquityInstruments	246,000
Issue price per share | $ / shares	$ 2.67
Discount rate	25.00%

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Shareholders' Equity - Stock option activity (Details) Unit_Standard_pure_lYdVegJ_HkmGJo29SHdSWg in Thousands, EquityInstruments in Thousands	12 Months Ended
	Sep. 30, 2022 EquityInstruments item $ / shares shares	Sep. 30, 2021 EquityInstruments $ / shares
Stockholder's Equity
Balance (in shares)		130
Exercised (in shares)		(130)
Balance (in dollars per share)		$ 5.20
Exercised (in dollars per share)		5.20
Maximum
Stockholder's Equity
Fair value of stock options	$ 4.42	4.42
Minimum
Stockholder's Equity
Fair value of stock options	$ 3.33	$ 3.27
Stock options
Stockholder's Equity
Balance (in shares) | EquityInstruments	3,786	2,627
Granted (in shares) | EquityInstruments	195	1,396
Exercised (in shares) | EquityInstruments	(33)	(117)
Expired (in shares) | EquityInstruments	(55)	(65)
Forfeited (in shares) | EquityInstruments	(142)	(55)
Balance (in shares) | EquityInstruments	3,751	3,786
Balance (in dollars per share)	$ 4.15	$ 1.99
Granted (in dollars per share)	6.93	8.40
Exercised (in dollars per share)	0.99	2.20
Expired (in dollars per share)	2.40	3.69
Forfeited (in dollars per share)	6.87	8.39
Balance (in dollars per share)	$ 4.24	4.15
Vested (in shares) | shares	2,907,000
Vested (in dollars per share)	$ 2.98
Weighted average share price	$ 6.56	$ 8.11
Stock options | Maximum
Stockholder's Equity
Contractual term	10 years
Number of quarters in vesting period | item	12
Stock options | Minimum
Stockholder's Equity
Number of quarters in vesting period | item	8

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Shareholders' Equity - Fair value of options (Details) - Stock options	12 Months Ended
	Sep. 30, 2022 CAD ($) Y $ / shares	Sep. 30, 2021 CAD ($) Y $ / shares
Stockholder's Equity
Expected life of option	10
Expected dividend yield | $
Minimum
Stockholder's Equity
Share price at grant date | $ / shares	$ 6.20	$ 8.48
Risk-free interest rate	1.78%	0.92%
Expected volatility	54.54%	48.96%
Expected life of option		4.75
Maximum
Stockholder's Equity
Share price at grant date | $ / shares	$ 6.75	$ 9.76
Risk-free interest rate	3.33%	1.63%
Expected volatility	55.67%	55.08%
Expected life of option		10

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Shareholders' Equity - Restricted stock units (Details) - Restricted stock units			12 Months Ended
	Feb. 01, 2022 EquityInstruments installment shares	May 20, 2021 EquityInstruments shares	Sep. 30, 2022 EquityInstruments	Sep. 30, 2021 EquityInstruments
Stockholder's Equity
Granted (in shares)		953,750	81,000	954,000
Number of common shares for each unit | shares	1	1
Vesting period		2 years
Vesting Percentage		12.50%
Vesting frequency within vesting period		3 months
Number of Installments for Vesting | installment	4
Restricted stock units being vested			61,005
Officers
Stockholder's Equity
Granted (in shares)	81,340

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Shareholders' Equity - Restricted stock units activity (Details) - Restricted stock units		12 Months Ended
	May 20, 2021 EquityInstruments	Sep. 30, 2022 EquityInstruments $ / shares	Sep. 30, 2021 EquityInstruments $ / shares
Stockholder's Equity
Balance at beginning (in shares) | EquityInstruments		954,000
Granted (in shares) | EquityInstruments	953,750	81,000	954,000
Forfeited (in shares) | EquityInstruments		(105,000)
Balance at ending (in shares) | EquityInstruments		930,000	954,000
Balance at beginning (in dollars per share) | $ / shares		$ 8.48
Granted (in dollars per share) | $ / shares		6.83	$ 8.48
Forfeited (in dollars per share) | $ / shares		8.48
Balance at ending (in dollars per share) | $ / shares		$ 8.34	$ 8.48

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Shareholders' Equity - Stock-based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Stockholder's Equity
Stock-based compensation expense	$ 5,493	$ 4,952
Restricted stock units
Stockholder's Equity
Stock-based compensation expense	2,659	2,636
Stock options
Stockholder's Equity
Stock-based compensation expense	$ 2,834	$ 2,316

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Commitments and contingencies (Details) - USD ($)	12 Months Ended
	Sep. 30, 2021	Sep. 30, 2022
Commitments and contingencies
Litigation expenses settled, included in operating expenses.	$ 150,000
Less than 1 year
Commitments and contingencies
Future payments pursuant to the leases		$ 73,000

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Operating expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Operating expenses
Payroll and employee benefits	$ 41,456	$ 29,549
Facilities	3,360	2,101
Billing	6,346	3,887
Professional fees	3,100	2,566
Marketing costs	1,461	1,005
Outbound freight	2,165	1,378
All other	7,315	4,319
Total operating expenses	$ 65,203	$ 44,805

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Income taxes - Reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Income taxes
Federal and state statutory income tax rate	25.90%	27.70%
Reconciliation
Income (loss) before taxes	$ 2,935	$ (9,329)
Expected income tax expense (recovery) (statutory income tax rate of 25.9% and 27.7%, respectively)	759	(2,586)
Difference in foreign tax rates	(57)	86
Tax rate changes and other adjustments	270	(614)
Stock-based compensation and non-deductible expenses	1,436	2,964
Other income from government grant	(1,101)
State taxes - US	609	645
Recognition of deferred tax assets not previously recognized	(3,820)	(3,650)
Recovery of income taxes	$ (1,904)	$ (3,155)

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Income taxes - Deferred tax assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2020
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Net deferred tax	$ 0	$ 0	$ 0
Net operating losses - US
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	5,403	6,312
Lease Liabilities - US
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	2,202
Property, equipment, and right of use assets, net
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(8,498)	(6,015)
Intangible assets, net
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax liabilities	(2,034)
Other
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	171
Deferred tax liabilities	(23)	$ (297)
Reserve for expected credit losses
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Deferred tax assets	$ 2,779

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Income taxes - Deferred tax assets and liabilities offset (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Income taxes
Balance at beginning of year	$ 0	$ 0
Recognized in consolidated statement of income (loss)	(2,513)	(3,800)
Recognized in goodwill	2,513	3,800
Balance at end of year	$ 0	$ 0

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Income taxes - Unrecognized deferred tax assets (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits	$ 8,011	$ 11,740
Intangible assets, net | UNITED STATES
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits		273
Intangible assets, net | CANADA
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits	47	54
Reserve for expected credit losses | UNITED STATES
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits		1,068
Net capital losses carried forward | CANADA
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits	130	141
Non-capital losses | UNITED STATES
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits	403	650
Non-capital losses | CANADA
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits	7,139	7,266
Share issuance costs | CANADA
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits	$ 292	501
Other
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Unrecognized tax benefits		$ 1,787

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Income taxes - Non-capital income tax losses (Details)	Sep. 30, 2022 USD ($)
UNITED STATES
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Operating loss carryforwards, not subject to expiration	$ 7,628,000
UNITED STATES | 2039
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Operating loss carryforwards, subject to expiration	14,806,000
CANADA
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Operating loss carryforwards, not subject to expiration	968,000
CANADA | 2027
Disclosure of temporary difference, unused tax losses and unused tax credits [line items]
Operating loss carryforwards, subject to expiration	$ 26,439,000

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Gain (loss) per share - Basic and diluted gain (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Gain (loss) per share
Net income (loss)	$ 4,839	$ (6,174)
Basic weighted average number of shares	33,647	30,438
Diluted weighted average number of shares	36,302	30,438
Total - Basic	$ 0.14	$ (0.20)
Total - Diluted	$ 0.13	$ (0.20)

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Related party transactions - Narrative (Details)	1 Months Ended	12 Months Ended
	Oct. 31, 2022 USD ($)	Sep. 30, 2022 USD ($) ft² lease	Sep. 30, 2021 USD ($)
Chief Executive Officer
Related party transactions
Number of leases | lease		6
Lease area | ft²		74,520
Lease payments		$ 52,000	$ 52,000
Increased lease rent per month	$ 65,000
Percentage of Increase in annual lease rent	3.00%
Chief Executive Officer | Lease expiring June 2026
Related party transactions
Number of leases | lease		1
Chief Executive Officer | Lease expiring September 2029
Related party transactions
Number of leases | lease		5
Director
Related party transactions
Fees for directors		$ 287,000	203,000
Stock-based compensation for Directors		$ 381,000	$ 1,067,000

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Related party transactions - Compensation to key management personnel (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Related party transactions
Salaries and benefits paid during the year	$ 1,030	$ 968
Stock-based compensation	2,626	1,036
Total	$ 3,656	$ 2,004