Segment Information

3 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Segment Information

16. Segment Information

The Company allocates resources based on two business operating segments: durable medical equipment and investment management, with general corporate representing unallocated costs and activity to arrive at consolidated operations. Activity not allocated to the segments include, but are not limited to, certain investment and financing activities, professional fees, costs associated with being a public company, acquisition costs and costs associated with executive and corporate management departments, including compensation, benefits, rent and insurance. All operations and assets are based in the United States.

The following tables summarize results of operations by segment:

	For the three months ended September 30, 2022
(in thousands)	Durable Medical Equipment			Investment Management			General Corporate			Intercompany Eliminations(1)			Consolidated Total
Revenue:
Total revenue	$	16,719		$	1,860		$	203		$	(203	)	$	18,579
Operating costs and expenses:
Cost of durable medical equipment sold and services		(4,340	)		-			-			-			(4,340	)
Cost of durable medical equipment rentals		(2,050	)		-			-			-			(2,050	)
Depreciation and amortization		(387	)		(294	)		-			-			(681	)
Non-cash compensation(2)		-			(477	)		(464	)		-			(941	)
Other selling, general and administrative		(9,062	)		(1,557	)		(1,136	)		203			(11,552	)
Total operating expenses		(15,839	)		(2,328	)		(1,600	)		203			(19,564	)
Other income (expense):
Interest expense		(1,106	)		(136	)		(1,839	)		1,085			(1,996	)
Other income (expense)		6,984			(5,427	)		(5,834	)		(1,085	)		(5,362	)
Total other income (expense), net		5,878			(5,563	)		(7,673	)		-			(7,358	)
Total income (loss) before income taxes	$	6,758		$	(6,031	)	$	(9,070	)	$	-		$	(8,343	)

	For the three months ended September 30, 2021
(in thousands)	Durable Medical Equipment			Investment Management			General Corporate			Intercompany Eliminations(1)			Consolidated Total
Revenue:
Total revenue	$	15,555		$	983		$	243		$	(243	)	$	16,538
Operating costs and expenses:
Cost of durable medical equipment sold and services		(4,060	)		-			-			-			(4,060	)
Cost of durable medical equipment rentals		(1,850	)		-			-			-			(1,850	)
Depreciation and amortization		(453	)		(109	)		-			-			(562	)
Non-cash compensation(2)		-			(396	)		(372	)		-			(768	)
Transaction costs(3)		(97	)		-			(184	)		-			(281	)
Other selling, general and administrative		(6,286	)		(843	)		(1,130	)		243			(8,016	)
Total operating expenses		(12,746	)		(1,348	)		(1,686	)		243			(15,537	)
Other income (expense):
Interest expense		(1,287	)		(24	)		(1,269	)		1,218			(1,362	)
Other income (expense)		560			249			875			(1,218	)		466
Total other income (expense), net		(727	)		225			(394	)		-			(896	)
Total income (loss) before income taxes	$	2,082		$	(140	)	$	(1,837	)	$	-		$	105

(1)The Company’s wholly-owned subsidiary, DME Manager, provides advisory services to HC LLC (formerly to DME Inc.) and receives consulting fees for those services. DME Manager is considered part of the general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding expense to HC LLC and revenue to DME Manager are eliminated in consolidation. Beginning December 29, 2020, DME Manager also provides advisory services to Forest and receives a consulting fee from Forest for those services. Both DME Manager and Forest are part of general corporate operations, and the corresponding revenue and expense are eliminated in consolidation. Additionally, Forest owns Series A-1 Preferred Stock (excluding shares held by VHG) and Series A-2 Preferred Stock of HC LLC. Forest is part of general corporate operations while HC LLC is part of the durable medical equipment segment. The corresponding interest expense to HC LLC and interest income to Forest are eliminated in consolidation.

(2)Non-cash compensation includes stock-based compensation and compensation in the form of stock in portfolio companies held by the Company. Non-cash compensation attributable to the investment management segment is included in investment management expenses in the condensed consolidated statements of operations. Non-cash compensation attributable to the general corporate segment is included in selling, general and administrative expense in the condensed consolidated statements of operations.

(3)Transaction costs, which consist of legal and other professional services, are included in selling, general and administrative expense in the condensed consolidated statements of operations.

The following tables summarize assets by segment:

	As of September 30, 2022
(in thousands)	Durable Medical Equipment		Investment Management		General Corporate		Total
Fixed assets, net	$	8,397	$	29	$	-	$	8,426
Identifiable intangible assets, net		5,633		12,959		-		18,592
Goodwill		52,463		-		-		52,463
Other assets		11,226		44,824		22,747		78,797
Total	$	77,719	$	57,812	$	22,747	$	158,278
	As of June 30, 2022
(in thousands)	Durable Medical Equipment		Investment Management		General Corporate		Total
Fixed assets, net	$	8,025	$	17	$	-	$	8,042
Identifiable intangible assets, net		5,921		13,250		-		19,171
Goodwill		52,463		-		-		52,463
Other assets		11,616		54,520		22,275		88,411
Total	$	78,025	$	67,787	$	22,275	$	168,087