AKUMIN INC. - Annual Report: 2021 (Form 10-K)

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

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Ontario		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Shares, no par value		AKU		The Nasdaq Stock Market
Common Shares, no par value		AKU		The Toronto Stock Exchange

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☒
				Emerging growth company		☒

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PART I
Item 1.		Business			2
Item 1A.		Risk Factors			15
Item 1B.		Unresolved Staff Comments			40
Item 2.		Properties			40
Item 3.		Legal Proceedings			40
Item 4.		Mine Safety Disclosures			41
PART II
Item 5.		Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities			41
Item 6.		Reserved			45
Item 7.		Management’s Discussion and Analysis of Financial Condition and Results of Operation			46
Item 7A.		Quantitative and Qualitative Disclosures About Market Risk			57
Item 8.		Financial Statements and Supplementary Data			57
Item 9.		Changes in and Disagreements with Accountants on Accounting and Financial Disclosure			99
Item 9A.		Controls and Procedures			99
Item 9B.		Other Information			101
Item 9C.		Disclosure regarding Foreign Jurisdictions that Prevent Inspections			101
PART III
Item 10.		Directors, Executive Officers and Corporate Governance			101
Item 11.		Executive Compensation			101
Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			101
Item 13.		Certain Relationships and Related Transactions, and Director Independence			101
Item 14.		Principal Accounting Fees and Services			102
PART IV
Item 15.		Exhibits and Financial Statement Schedules			102
Item 16.		Form 10–K Summary			103
Signatures

This Annual Report on Form and the information incorporated by reference in this Annual Report on Form contain or incorporate by reference “forward-looking information” or “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, that involve substantial risks and uncertainties. Forward-looking statements describe Akumin Inc.’s (together with its subsidiaries, the “Company”) future plans, strategies, expectations and objectives, and are generally identifiable by use of the words “may”, “will”, “should”, “continue”, “expect”, “anticipate”, “estimate”, “believe”, “intend”, “plan” or “project” or the negative of these words or other variations on these words or comparable terminology. Forward-looking statements include, but are not limited to, statements about:

The existence of creates a unique environment in which to consider the likelihood of forward-looking statements being accurate, and given the evolving circumstances surrounding it is difficult to predict how significant the adverse impact of the pandemic will be on the global and domestic economy and the business, operations and financial position of the Company.

Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. Those assumptions and factors are based on information currently available to us, including information obtained from third-party industry analysts and other third-party sources. In some instances, material assumptions and factors are presented or discussed elsewhere in this Annual Report on Form in connection with the statements or disclosure containing the forward-looking information. The reader is cautioned that the following list of material factors and assumptions is not exhaustive. The factors and assumptions include, but are not limited to:

We qualify all the forward-looking statements contained in this Annual Report on Form and the information incorporated by reference in this Annual Report on Form by the foregoing cautionary statements.

Akumin Inc. (together with its subsidiaries, “we”, “us”, “our” or the “Company”) is a corporation existing under the  (the “OBCA”). Akumin was formed on August 12, 2015 through an amalgamation of two companies incorporated under the OBCA.

With the Alliance Acquisition, we provide fixed-site outpatient diagnostic imaging services through a network of approximately 200 owned and/or operated imaging locations; and outpatient radiology and oncology services and solutions to approximately 1,000 hospitals and health systems across 46 states. Our imaging procedures include magnetic resonance imaging (“MRI”), computerized tomography (“CT”), positron emission tomography (“PET” and “PET/CT”), ultrasound, diagnostic radiology mammography, and other related procedures. Akumin’s cancer care services include a full suite of radiation therapy and related offerings.

In diagnostic radiology, the typical patient journey includes (i) a referral from a physician, who orders an exam to assist with diagnosing or treating a condition, (ii) the procurement of the diagnostic image, usually carried out by a technologist specialized in the particular procedure or modality, and (iii) an interpretation from a radiologist who reads and interprets the images and produces a report of their findings and recommendations, which is provided back to the referring physician for use in the next step of the patient’s care. The referring physician often consults with the radiologist to choose the appropriate modality, which could include advanced imaging techniques such as MRI, CT, and PET, or routine imaging techniques such as mammography, ultrasound, fluoroscopy, or nuclear medicine.

Medical imaging technologies continue to evolve and play a critical role in cost-effective patient diagnosis and treatment. While are the most common imaging procedure, more sophisticated and higher reimbursement procedures, such as MRI, CT and PET scans, are the fastest growing.

Radiology exams can be performed at a hospital’s main radiology department or in an outpatient setting, including hospital outpatient departments, physician offices or independent diagnostic testing facilities. Outpatient diagnostic imaging centers are primarily used to provide medical imaging services to patients who are ambulatory (meaning, they are not in the ER or inpatient) and who have been referred by a third-party physician. Standard offerings include routine screening and diagnostic imaging procedures such as mammography and ultrasound along with more advanced, complex and costly services, such as MRI, CT and PET, in addition to other diagnostic and interventional radiology procedures.

Outpatient diagnostic imaging is generally more cost effective compared to imaging performed in the traditional inpatient or hospital setting. We believe that this dynamic, combined with the convenience of outpatient care for patients, will result in outpatient imaging growth outpacing the overall radiology market. The gap in pricing between traditional hospital facilities and freestanding outpatient facilities has been a significant area of focus for government and third-party payors, who in an effort to curtail costs, have adopted over time a number of policies to drive price transparent, site-neutral reimbursements for advanced outpatient imaging procedures, and steerage to lower-cost, outpatient entities. Payors have also increased requirements for of advanced diagnostic procedures in an effort to ensure the medical necessity of those procedures. We anticipate that these trends will continue to drive procedure volume toward outpatient settings, both freestanding and hospital-outpatient. We believe these trends will drive a need for hospitals and health systems to engage service providers such as us to provide services and support to build their outpatient radiology capabilities.

There are a number of different Medicare payment methodologies for radiation therapy based on the site of service. Sites operating as an integrated department of the hospital are reimbursed under the Hospital Outpatient Prospective Payment System (“HOPPS”). Freestanding outpatient radiation therapy providers are reimbursed under the Medicare Physician Fee Schedule (“MPFS”). Reimbursement rates are typically higher for procedures performed at a hospital outpatient department (“HOPD”), which are outpatient centers that are clinically and financially integrated with the hospital. In recent years, there has been a shift towards site-neutral payments by lowering payments to HOPDs. In the 2019 Medicare HOPPS final rule, CMS set reimbursement rates for certain HOPD centers equal to 40% of HOPPS beginning in 2020 with an exception for certain HOPD centers that billed under HOPPS prior to November 2, 2015.

Our oncology segment derives revenue from both HOPPS and MPFS. Approximately of revenue is billed to the health system or hospital partner under contractual arrangements and the remaining of revenue is billed directly to the payor. For sites that are contracted with hospitals or health systems, the majority of centers fall under HOPPS. These centers are not subject to some of the recent developments despite the shift to site neutrality since these centers have either been “grandfathered in” (as have been billing under HOPPS since prior to 2015) or are located on the hospital property. For sites that bill payors directly, the vast majority of sites bill under MPFS.

Radiation therapy reimbursement has generally remained stable across our key areas of service, while site neutrality rules are expected to have minimal impact. In December 2015, Congress passed the Patient Access and Medicare Protection Act, which sought to develop an episodic alternative payment model for radiation therapy services. This resulted in the Radiation Oncology (“RO”) model, which aims to improve the quality of care for patients while moving towards a simplified and predictable payment system. The model will reimburse providers based on prospective, site neutral, episode-based payments for episodes. Participants will be paid in two installments per episode (beginning and end) with reimbursement split into professional (fee for physician services) and technical components (fee for use of the facility). The program also includes the reporting of performance on quality measures, clinical data, and patient experience, which will be factored into payments. The Protecting Medicare and American Farmers from Sequester Cuts Act was enacted on December 10, 2021 and included a provision that prohibited implementation of the RO model prior to January 1, 2023. Congress or CMS may act to delay implementation again, or may revise the model before implementation. We believe our focus on clinical quality, operational efficiency, and value-based care, as well as our integrated service line approach, position us well for the new reimbursement model.

We are well positioned to take advantage of many of the long-term trends in healthcare. In recent years, there has been an enhanced focus on patient experience and customer service. We pride ourselves on a commitment to excellence and patient satisfaction, including offering quality service, short wait and turnaround times, compassionate care and convenience to all patients. Our scale and operational expertise enable us to access the latest advances in technology and information systems and to offer hospital-level expertise within a local setting. Other trends in healthcare that will benefit us include an increased focus on early detection, strict standards for clinical quality, measurable patient satisfaction, and clinical care productivity and efficiency. Our ability to offer both radiology and oncology services puts us in a unique position to help detect and accurately diagnose cancer, and to guide and deliver more targeted, efficient and effective treatments. In addition, our proven approach to improving operational performance infrastructure allows us to deliver care efficiently with high productivity.

We are well positioned to take advantage of the continued shift in care delivery from inpatient to outpatient locations as payors and patients increase their focus on increasing access and convenience and reducing costs. Our longstanding, shared focus on outpatient care delivery in both hospital and freestanding facilities offers unique expertise for hospitals, health systems and physician groups. As pressure to move to lower-cost sites of care increases for hospitals, our ability to assist them with both on solutions will be impactful, as well as our ability to provide freestanding expertise in convenient locations, with shorter wait times, increased likelihood of subspecialty interpretations and faster turnaround times.

We benefit from a well-diversified stream of revenues that spans multiple service offerings, geographies, modality offerings, and physician networks. We believe that our diversified service offerings enable us to better serve our health system and hospital partners and administrators charged with finding better outsourced solutions.

Where we bill payors directly, we are substantially all of our commercial payors and believe we are the ideal partner for payors who seek to provide high quality care to patients at a low cost. By partnering with the vast majority of all major payors in our geographic footprint, we are able to provide significant savings to our payor partners by ensuring patients stay within their networks using our system of conveniently located facilities. Payor reimbursement levels are negotiated via contracts with each individual payor. These contracts allow for separate reimbursement schedules for each of the payor’s respective clients, depending on the member’s individual coverage plan.

Within our radiology segment, we leverage a large network of radiologists, with some radiologists others working remotely. Given our vast network of radiologists and dynamic IT platform, we do not rely heavily on any single radiologist to drive business. Our scale and density within selected geographies allows us to create close, long-term relationships with local radiology groups and referring physicians. In addition, our multimodality imaging offering provides patients and referring physicians.

We have developed deep, long-standing relationships with approximately 1,000 hospitals and healthcare providers across the country. We are partnered with 25 of the 30 largest U.S. health systems. Our customers are health systems and hospitals to enable a capital efficient network and to expand their U.S. essential outpatient radiology and oncology services.

We provide a consistent patient experience, standardized through technology and investments in our people and processes. All patient facing employees are trained on delivering our brand promises by way of our intentional values, as well as our policies and procedures. Our brand strategy is focused on aligning our position in the market for the needs of our patients and partners, so that we are of outpatient diagnostic imaging and/or radiation therapy services to patients in our service areas. We strive to provide shorter waiting times, convenient locations, competitive pricing, compassionate and high-quality clinical care, quality equipment and software, concise interpretations by subspecialty radiologists and consistency.

To ensure continuous engagement with the community — including consumers, patients and their loved ones — we deploy a number of market-specific, marketing and communications strategies, focused largely on digital outreach (e.g., websites, search engine optimization, online reputation management, digital advertising and social media) and addressing consumers’ most critical questions: how to decide, what to expect, how to prepare, what they will pay and what will happen next. Our marketing strategies and tactics are coordinated through centralized resources with expertise in specific areas and on a shared platform to ensure compliance with healthcare marketing regulations.

Within our radiology segment, in markets with robust demand, we will consider adding modalities in centers that are currently only single or dual modality centers. Multi-modality centers help diversify risk while contributing positively to our margins and provide referring physicians with a shop” for their patients. To attain growth and offer a competitive differentiator in key markets, we will also consider replacing or adding new technologies and equipment. While reimbursement rates may not change with newer equipment, we believe this strategy, particularly in competitive markets, will offer us a market advantage which will ultimately lead to increased volumes. An example of this is our investment in 3D digital mammography, which is preferred by many women who can self-refer for mammography, and is now being reimbursed by many of the large national insurance payors in addition to Medicare.

We have significant experience in acquiring and integrating business into our platform, improving the operational performance of those businesses, and realizing synergies. Our acquisition strategy is led by our Chairman and Executive Officer, Riadh Zine. Mr. Zine has grown Akumin through a carefully executed, highly acquisitive, strategy based on a distinct set of criteria: (i) market density, (ii) market growth potential, (iii) operational integration potential, (iv) assets and compliance assessment and (v) attractive valuation multiples. We look to acquire individual or portfolios of centers that have a meaningful presence in their respective market and a high potential for organic growth.

In many of the states in which we operate, a lay person or any entity other than a professional corporation or other similar professional organization is not allowed to practice medicine, including by employing professional persons or by having any ownership interest or profit participation in or control over any medical professional practice. The laws of such states also prohibit a lay person or a entity from exercising control over the medical judgments or decisions of physicians and from engaging in certain financial arrangements, such as splitting professional fees with physicians. We structure our relationships with the radiology practices, including the purchase of diagnostic imaging centers, in a manner that we believe keeps us from engaging in the practice of medicine, exercising control over the medical judgments or decisions of the radiology practices or their physicians, or violating the prohibitions against

The Anti-kickback Statute is broad, and it prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. Voluntary statutory exceptions and regulatory safe harbors protect certain business transactions and arrangements that are structured to comply fully with an applicable safe harbor. Although full compliance with these provisions ensures against prosecution under the federal Antikickback Statute, transactions and arrangements that do not satisfy all elements of a relevant safe harbor do not necessarily violate the law. When an arrangement does not satisfy a safe harbor, the arrangement must be evaluated on a basis in light of the parties’ intent and the arrangement’s potential for abuse.

Under the Stark Law, radiology and certain other imaging services and radiation therapy services and supplies are considered designated health services subject to the self-referral prohibition. Such services include the professional and technical components of any diagnostic test or procedure using ultrasound or other imaging services, CT, MRI, radiation therapy and diagnostic mammography services (but not screening mammography services). PET and nuclear medicine procedures are also included as designated health services under the Stark Law.

We believe that, other than self-referred patients, all of the services covered by the Stark Law provided by the contracted radiology practices and by radiation oncologists who are invested in our cancer centers derive from requests for consultation by physicians. Therefore, we believe that the Stark Law is not implicated by the financial relationships between our operations and the contracted radiology practices or the radiation oncologists who are invested in our cancer centers. In addition, we believe that we have structured our acquisitions of the assets of existing practices, and we intend to structure any future acquisitions, so as not to violate the Anti-kickback Statute, Stark Law and the regulations related to these laws. Specifically, we believe the consideration paid by us to physicians to acquire the tangible and intangible assets associated with their practices is consistent with fair market value in arms’ length transactions and is not intended to induce the referral of patients or other business generated by such physicians. Should any such practice be deemed to constitute an arrangement designed to induce the referral of Medicare or Medicaid patients, then our acquisitions could be viewed as possibly violating the Anti-kickback Statute. Determination of liability under any such laws could have a material adverse effect on our business, financial condition and results of operations.

CMS uses a perceived equipment utilization rate to allocate the cost of equipment for purposes of determining physician service practice expenses, which influence the calculation of payment for physician services. In regulations promulgated in November 2009, CMS set the utilization rate at 90% for certain diagnostic equipment. Healthcare reform legislation enacted in 2010 required CMS to use a presumed equipment utilization rate of 75% in computing physician practice expense relative value units for advanced diagnostic imaging services (such as MRI, CT and PET). Excluded from the adjustment is imaging modalities such as ultrasound, and fluoroscopy. Raising the assumed equipment utilization rate changes the calculation in such a way that the per unit technical payment for each service is decreased. The higher utilization rate was fully implemented beginning in 2011. This utilization rate was further increased to 90% by the American Taxpayer Relief Act of 2012 (“ATRA”), effective January 1, 2014.

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Tax Act”). Among numerous changes to the tax code, the Tax Act repealed the individual mandate tax penalty (the “Individual Mandate”), a PPACA provision that required individuals to pay additional taxes if he or she was uninsured during the year. This change ultimately spurred several legal challenges to the Affordable Care Act, including the case, which was decided by the US Supreme Court in June 2021. Plaintiffs in the case argued, among other things, that the PPACA must fall in whole or in part because the constitutional basis authorizing congressional enactment of the law no longer was available. The Supreme Court ultimately upheld the healthcare reform law, even without the tax penalty on individuals.

Repeal of the Individual Mandate may lead to more people being uninsured, and could raise premium rates for insured persons. Such a development could affect reimbursement, coverage, and utilization of diagnostic imaging services in ways that are currently unpredictable. The American Rescue Plan, enacted in March 2021, expanded the availability of advanced premium tax credits (APTCs) to eligible to moderate-income individuals who purchase insurance in the federal and state exchange marketplaces. As a result of this financial support, among other factors, health insurance enrollments through the exchange marketplaces hit highs in 2021. These subsidies are available only for 2021 and 2022, and will expire without further congressional action. If Congress allows the subsidies to expire or be reduced, it is possible that fewer people may be insured in future years. Such a development could affect reimbursement, coverage, and utilization of diagnostic imaging services in ways that are currently unpredictable. Other changes to the PPACA (whether through legislation or judicial action), including further rollbacks or full repeal of the PPACA being sought by congressional and state members, or expansion of the PPACA (including, but not limited to, the development of a “public option” that would compete with private insurers to offer coverage to both individuals and those with employer sponsored insurance) being sought by the Biden Administration, could have similarly unpredictable effects.

The FDA has issued the requisite approval for all of the MRI and CT systems we use.

Our mammography systems are regulated by the FDA pursuant to the Mammography Quality Standards Act of 1992, as amended by the Mammography Quality Standards Reauthorization Acts of 1998 and 2004 (collectively, the “MQSA”). All mammography facilities are required to meet the applicable MQSA requirements, including quality standards, be accredited by an approved accreditation body or state agency and certified by the FDA or an certifying state agency. Pursuant to the accreditation process, each facility providing mammography services must comply with certain standards that include, among other things, annual inspection of the facility’s equipment, personnel (interpreting physicians, technologists and medical physicists) and practices.

We derive a substantial portion of our revenue from direct billings to governmental healthcare programs, such as Medicare and Medicaid, and private health insurance companies and/or health plans, including but not limited to those participating in the Medicare Advantage program. As a result, any negative changes in governmental capitation or rates or methods of reimbursement for the services we provide could have a significant adverse impact on our revenue and financial results.

These cost containment measures, and other market changes in insurance plans, have generally restricted our ability to recover, or shift to payors, any increased costs that we experience. Our integrated care business and financial operations may be materially affected by these developments.

This Annual Report on our quarterly reports on or our current reports on or and any amendments to these reports are filed, or will be filed, as appropriate, with the SEC and the Canadian Securities Administrators (“CSA”). These reports are available free of charge on our website,, as soon as reasonably practicable after we electronically file such reports with or furnish such reports to the SEC and the CSA. Our code of ethics is also available free of charge on our website. Information contained on, or accessible through, our website is not a part of this Annual Report on and the inclusion of our website address in this document is an inactive textual reference.

Additionally, filings with the SEC may be accessed through the SEC’s website at and our filings with the CSA may be accessed through the CSA’s System for Electronic Document Analysis and Retrieval at .

We are providing the following summary of the risk factors contained in this Annual Report on Form to enhance the readability and accessibility of our risk factor disclosures. We encourage you to carefully review the full risk factors contained in this Annual Report on Form in their entirety for additional information regarding the material factors that make an investment in our securities speculative or risky. These risks and uncertainties include, but are not limited to, the following:

On January 31, 2020, the Secretary of U.S. Department of Health and Human Services (“HHS”) declared a national public health emergency due to a novel strain of coronavirus (“COVID-19”). On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. This disease continues to circulate throughout the United States and globally. The pandemic is significantly affecting our employees, patients, facilities, communities and business operations, as well as the U.S. and Canadian economy and financial markets.

Labor shortages resulting from the pandemic, including burnout and attrition, may lead to increased difficulty in hiring and retaining staff as well as increased labor costs. Our inability to attract and retain qualified personnel could significantly harm our operations, business, and ability to compete. The pandemic has also resulted in widespread global supply chain disruptions to vendors including critical supply shortages, significant material cost inflation and extended lead times for items that are required for our operations. In addition, as of October 2021, the U.S. was widely reported to be experiencing serious supply chain disruptions as a result of substantial backlogs of container ships seeking to unload cargo at major ports on both the west and east coasts, with delays caused or exacerbated by port and trucking labor shortages, railway logistics issues, and a shortage of warehouse space in close proximity to the affected ports. Widespread shortages of supplies and consumer goods resulting from these supply chain disruptions are expected to continue. Any such interruptions to our supply chain caused by these backlogs could increase our costs and could limit the availability of products critical to our operations. While we have not been significantly impacted by these backlogs to date, if not resolved, these backlogs and related logistics issues could result in material delays and increased costs for our operations and the U.S. economy generally.

As continues to evolve, the full extent to which will impact our business, results of operations, financial condition and liquidity will depend on future developments that are highly uncertain and cannot be accurately predicted. For example, we are not able to predict or control the severity or duration of the pandemic, including whether there will be additional periods of increases in the number in areas in which we operate, the timing and availability of effective medical treatments and vaccines or the efficacy of public health controls. At this stage, we have no certainty as to how long the pandemic, or a more limited epidemic, will last, what regions will be most affected or to what extent containment measures will be applied. Imaging and oncology centers are healthcare facilities and as such are generally considered an essential service and expected to continue to operate during any epidemic or pandemic. However, there is potential that actions taken by government, or referring physicians or individual actions, in response to containment or avoidance of this coronavirus could impact a patient’s ability or decision to seek medical services at a given time which could have a significant impact on volume at our centers leading to temporary or prolonged staff layoffs, reduced hours, closures and other cost containment efforts. Further, there is potential that certain services which are not urgent and can be deferred without significant harm to a patient’s health may be delayed, either by us in response to local laws, recommendations from public health authorities or voluntarily by the patient. In addition, there is potential that the pandemic could impact supply chains, including our supply of personal protective equipment, and lead to personnel shortages, each of which could impact our ability to safely perform imaging and oncology services. It is also possible social distancing efforts and sanitization and decontamination procedures could cause delays in the performance of imaging and oncology services. Depending on the severity and duration of the pandemic, there is potential for us to incur incremental credit losses beyond what is currently expected and potential reduction in revenue and income and asset impairments.

changes in patient behavior related to illness, pandemic fears and market downturns, and restrictions intended to slow the spread of including quarantines, government-mandated actions, stay at home orders and other restrictions, have led to disruption of our business and volatility in the global capital markets. The U.S. government has taken steps to attempt to mitigate some of the more severe anticipated economic effects of including the passage of the United States Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Additionally, we have received certain funding and other relief under the CARES Act, as described more fully in the Company’s public disclosure. Nonetheless, we have no assurance that such types of measures and funding whether already enacted or to be enacted will be effective or achieve their desired results in a timely fashion, including as it relates to our business operations. Moreover, while we believe we are in compliance with the applicable terms and conditions of funding under the CARES Act, compliance-related guidance for the program remains in development, and we may face enforcement risk if we are found to have failed to comply with such terms and conditions.

If significant portions of our workforce are unable to work effectively as a result of the pandemic, including because of illness, quarantines, facility closures, ineffective remote work arrangements, supply chain disruptions or technology failures or other limitations, our operations would be adversely impacted. We have already incurred and will continue to incur additional costs related to protecting the health and well-being and meeting the needs of our patients, employees, medical staff members and contractors. We expect to continue to incur additional costs, which may be significant, as we continue to implement operational changes in response to this pandemic. We may also face liability to the extent we receive claims from our employees, customers or related third-parties alleging exposure connection with our operations or at one of our facilities. In addition, we may be subject to a governmental enforcement action if we fail to comply with applicable health and safety regulations.

Our results of operations have been and will be negatively impacted by these developments. In addition, changes to statutes, regulations, or regulatory policies or practices as a result of, or in response affect us in substantial and unpredictable ways. Although social contact restrictions have eased across the U.S. and most states have lifted moratoriums some restrictions remain in place, and some states restrictions due to increasing rates as new variants emerge. Further, additional closings and restrictions on hours and services may occur for an unpredictable amount of time. Due to the concentration of our facilities in Texas and Florida, we are particularly sensitive to the increase in those states, where the pandemic could have a disproportionate effect on our business. Given the many uncertainties and far reaching consequences of potential developments, we cannot ensure that and the many related impacts will not require extended or additional imaging center closures and other disruptions to our business or will not materially and adversely affect our business, results of operations and financial condition in the period beyond December 31, 2021.

Broad economic factors resulting from the including high unemployment and underemployment rates and reduced consumer spending and confidence, also affect our service mix, revenue mix payor mix and patient volumes, as well as our ability to collect outstanding receivables. Business closings and layoffs in the areas where we operate may lead to increases in the uninsured and underinsured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services rendered. Any increase in the amount or deterioration in the collectability of patient accounts receivable will adversely affect our cash flows and results of operations, requiring an increased level of working capital. In addition, our results and financial condition may be adversely affected by federal, state or local laws, regulations, orders, or other governmental or regulatory actions addressing the or the U.S. health care system, which could result in direct or indirect restrictions to our business, financial condition, results of operations and cash flow. Evolving factors such as the level and timing of the distribution of efficacious vaccines across the world and the extent of any resurgences of the virus or emergence of new variants of the virus, such as the Delta variant and the Omicron variant, may impact the stability of economic recovery and growth.

Cybersecurity threats and incidents have increased in recent years, and we may be subject to heightened cyber-related risks in part due to the extended period of remote work arrangements due to the pandemic. Recent cyberattacks purportedly originated by Russian controlled entities have exacerbated in the wake of Russia’s invasion of Ukraine and our systems may be infiltrated by foreign actors. Our business depends on the proper functioning and availability of our information technology platform, including communications and data processing systems and our proprietary systems. We are also required to effect electronic transmissions with third parties. We cannot guarantee that the controls and procedures we or third parties have in place to protect or recover our systems and information will be effective, successful or sufficiently rapid to avoid harm to our business.

We expect to incur costs to achieve the expected cost-savings in connection with the Acquisition, which may be significant and may be ongoing for the foreseeable future. In addition, we expect to incur a number associated with combining our operations with those of Alliance, which cannot be estimated accurately at this time. Additional unanticipated costs may be incurred as we integrate our business with that of Alliance. Although we expect the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of our operations with those of Alliance, may offset incremental transaction and transaction-related costs over time, this net benefit may not be achieved in the near term, or at all. There can be no assurance we will be successful in our integration efforts.

If our Common Shares were no longer listed on the Nasdaq Stock Market or the Toronto Stock Exchange, investors might only be able to trade on one of the markets, including the OTC Bulletin Board or in the Pink Sheets (a quotation medium operated by Pink Sheets LLC). This would impair the liquidity of our Common Shares not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity, but also through delays in the timing of transactions and reduction in media coverage. In addition, we could face significant material adverse consequences, including:

We rely on third-party manufacturers for the medical equipment used in connection with our imaging procedures, including MRI, CT, PET, ultrasound, diagnostic radiology, mammography, and other interventional procedures and our and radiation therapy procedures. Any disruption to our supply chain, even for a relatively short period of time, could cause a loss of revenue, which could adversely affect our operating results. Such a disruption could occur as a result of any number of events, including, but not limited to: an extended closure of or any slowdown at our manufacturers’ plants or shipping delays due to efforts to limit the spread of market shortages due to the surge in demand from other purchasers for critical components, increases in prices, labor stoppages, transportation delays or failures affecting the supply chain and shipment of materials and finished goods, cyberattacks, the unavailability of raw materials, severe weather conditions, adverse effects of climate change, natural disasters, geopolitical developments, war or terrorism and disruptions in utilities and other services.

A significant reduction in physician referrals would have a negative impact on our business. We derive substantially all of our net revenue, directly or indirectly, from fees charged for the diagnostic imaging and oncology services performed at our centers. We depend on referrals of patients from unaffiliated physicians and other third parties who have no contractual obligations to refer patients to us for a substantial portion of the services we perform. If a sufficiently large number of these physicians and other third parties were to discontinue referring patients to us, including in connection with voluntary or involuntary closures of physician offices in connection with the current, or the delay of other elective procedures for which our imaging services are required, our scan volume could decrease, which would reduce our net revenue and operating margins. Further, commercial third-party payors have implemented programs that could limit the ability of physicians to refer patients to us. For example, prepaid healthcare plans, such as health maintenance organizations, sometimes contract directly with providers and require their enrollees to obtain these services exclusively from those providers. Some insurance companies and self-insured employers also limit these services to contracted providers. These “closed panel” systems are now common in the managed care environment. Other systems create an economic disincentive for referrals to providers outside the system’s designated panel of providers. If we are unable to compete successfully for these managed care contracts, our results and prospects for growth could be adversely affected.

We are exposed to liquidity risk mainly with respect to our credit facilities. Although we seek to ensure that there is sufficient liquidity to meet our short-term business requirements, taking into account our anticipated cash flows from operations and our holdings of cash, there is no assurance sufficient liquidity is maintained. If our actual cash flows from operations differ significantly from our anticipated cash flows for these purposes, such as a result of we may have insufficient liquidity to meet our financial commitments.

In addition to our debt service obligations, our operations require material expenditures on a continuing basis. Our ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund capital necessary to maintain the condition of our operating assets and properties, as well as to provide capacity for the growth of our business, depends on our financial and operating performance. General economic conditions and financial, business and other factors affect our operations and our future performance. Many of these factors are beyond our control. We may not be able to generate sufficient cash flows to pay the interest on our debt, and future working capital, borrowings or equity financing may not be available to pay or refinance such debt.

has negatively impacted, and we expect will continue to negatively impact, our cash flow and liquidity profile. If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek to obtain additional equity capital or restructure our debt. In the future, our cash flows and capital resources may not be sufficient for payments of interest on and principal of our debt, and such alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations.

Despite the implementation of security measures, our facilities and systems, and those of our third-party service providers, may be vulnerable to privacy and security incidents, cyberattacks, acts of vandalism or theft, computer viruses, coordinated attacks by activist entities, emerging cybersecurity risks, misplaced or lost data, programming and/or human errors, or other similar events that could result in unauthorized access to, use or disclosure of, corruption of, or loss of sensitive and/or proprietary data, including personal information or PHI. Emerging and advanced security threats, including coordinated attacks, require additional layers of security which may disrupt or impact efficiency of operations. Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. As a result of we may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Further, due to the political uncertainty involving Russia’s invasion of Ukraine, there is an increased likelihood that escalation of tensions could result in cyberattacks that could either directly or indirectly impact our operations.

Our outpatient diagnostic imaging and oncology centers are located in regions which are vulnerable to a variety of natural disasters, including hurricanes, earthquakes, flooding, wildfires, etc. We cannot ensure that our centers in these markets would survive a future hurricane, earthquake, flood, wildfire or other natural disaster. Similarly, we cannot ensure that we will be able to procure insurance for such losses in meaningful amounts or at affordable rates in the future. If a natural disaster or other event with a significant economic impact occurs in a region where we operate, such disaster or event could negatively affect the profitability of our business. A local, regional, national or international outbreak of a contagious disease, including East Respiratory Syndrome, Severe Acute Respiratory Syndrome, H1N1 influenza virus, avian flu or any other similar illness, or a fear of any of the foregoing, and changes to laws and other government actions implemented in response to such an illness, could decrease the willingness or ability of customers to patronize our centers, cause shortages of employees to staff our centers, interrupt certain supplies from third parties upon which we rely, restrict our ability to offer certain services and otherwise have a material adverse effect on our business, financial condition and results of operations. Such adverse effect could be rapid and unexpected and it is unknown whether and how we may be affected if such an epidemic persists for an extended period of time.

Current global economic or financial conditions have been subject to continued volatility. Trade wars, import tariffs, Brexit, public protests, rising consumer debt levels, epidemics, pandemics, or outbreaks of new infectious diseases or viruses (including, most the risk of sovereign debt defaults in many countries have caused and continue to cause significant uncertainties in the markets. Although we take appropriate measures and safeguards to protect our staff from infection, these events can result in volatility and disruption to our operations which may be beyond our control, and which could adversely affect the availability of supplies and materials, labor, interest rates, credit ratings, credit risk, inflation, business operations, financial markets, exchange rates and other factors material to us.

We may be subject to market risk through the risk of loss of value in our portfolios resulting from changes in interest rates, foreign exchange rates, credit spreads, and equity prices. We are required to mark to market our held for trading investments at the end of each reporting period, to the extent we own any such investments. This process could result in significant write-downs of our investments over one or more reporting periods, particularly during periods of overall market instability, including the extreme market volatility in connection with the which could have a significant unfavorable effect on our financial position.

We are highly dependent on qualified managerial personnel. Our anticipated growth will require additional expertise and the addition of new qualified personnel. There is intense competition for qualified personnel in the radiology, medical imaging, radiation oncology and cancer treatment fields. Therefore, we may not be able to attract and retain the qualified personnel necessary for the development of our business. The loss of the services of existing personnel, as well as the failure to recruit additional key managerial personnel in a timely manner, would harm our business development programs and ability to attract collaboration partners, attract and retain other employees and generate revenues. We may not maintain key personal life insurance on any of our employees.

Some of our healthcare provider customers do not have significant financial resources, liquidity or access to capital. If these customers experience financial difficulties or if there arises a contractual or other legal dispute to which they are party, they may be unable to pay us for the equipment and services that we provide. A significant deterioration in general or local economic conditions, including in connection with could have a material adverse effect on the financial health of certain of our healthcare provider customers. As a result, we may have to increase the amounts of accounts receivable that would adversely affect our financial condition and results of operations.

The transportation aspect of our business is subject to legislative and regulatory changes that can affect our operations and financial performance. Our trucking operations and those of the trucking companies and independent contractors with whom we engage are subject to regulation by the Department of Transportation (the “DOT”), and various state, local, and foreign governmental agencies, which govern activities such as authorization to engage in motor carrier operations, handling of hazardous materials, safety ratings, insurance requirements, vehicle weight and size, and emissions restrictions. We are also periodically audited by the DOT and other state and federal authorities to ensure that we comply with safety, required truck regulations, and other rules and regulations.

Our sales and marketing practices with physicians and other financial relationships within the Akumin organization, including amounts paid under our management services agreements, interpretation services agreements, joint venture agreements between Akumin and physicians or physician groups and all other financial arrangements involving Akumin, its intermediaries and potential referral sources or recipients may, notwithstanding our policies and procedures otherwise, result in violations of these laws. Our financial arrangements and our sales and marketing practice have been subject to regulatory scrutiny in the past and could again be in the future. We may be subject to private “qui tam” actions brought by individual whistleblowers on behalf of the federal or state governments, with potential liability under the federal False Claims Act, including mandatory treble damages and While our management services agreements, services agreements and operational policies and procedures, including our compliance program, mandate compliance with applicable law, we cannot assure you that we will be successful in preventing our managed practices, contractors, employees or other agents from taking actions in violation of these laws or regulations or that we will not otherwise be deemed to have failed to comply with such laws.

We have a variety of financial relationships with hospitals and physicians, including joint ventures and provider-based “under arrangements”, which are governed by the federal Anti-Kickback Statute, the Stark Law and similar state laws. The federal Anti-Kickback Statute prohibits the payment or receipt of anything of value in return for referrals of patients or services covered by governmental health care programs, such as Medicare. The federal Anti-Kickback Statute includes statutory exceptions and regulatory safe harbors that protect certain arrangements. These exceptions and safe harbors are voluntary. Business transactions and arrangements that are structured to comply fully with an applicable safe harbor do not violate the federal Anti-Kickback Statute. While we endeavor to comply with applicable exceptions and safe harbors, certain of our arrangements, including our joint ventures and financial relationships with physicians, hospitals and other referral sources, do not qualify for safe harbor protection. When an arrangement does not satisfy a safe harbor, the arrangement must be evaluated on a basis in light of the parties’ intent and the arrangement’s potential for abuse. Arrangements that do not satisfy a safe harbor may be subject to greater scrutiny by enforcement agencies.

The healthcare industry has seen numerous ongoing investigations related to compliance, supervision and billing practices. From time to time, we detect issues federal healthcare laws pertaining to claims submission and reimbursement payment practices, including compliance with supervision requirements, financial relationships with physicians, billing and coding practices, documentation of services, adhering to payor rules applicable to Medicare, Medicaid, TRICARE and commercial payors. We avail ourselves of various mechanisms to address potential overpayments arising out of these issues, including repayment of claims, rebilling of claims, and participation in voluntary disclosure protocols offered by CMS and the OIG. Under the federal False Claims Act, private parties have the right to bring qui tam, or “whistleblower,” suits against healthcare facilities that submit false claims for payments to, or improperly retain overpayments from, governmental payors. Some states have adopted similar state whistleblower and false claims provisions. Qui tam or “whistleblower” actions initiated under the civil False Claims Act may be pending but placed under seal by the court to comply with the False Claims Act’s requirements for filing such suits. As a result, they could lead to preliminary proceedings and governmental involvement occurring without our knowledge.

Penalties for violations of these laws vary. For instance, a single breach incident can result in findings of violations of multiple HIPAA provisions. Penalties for failure to comply with a requirement of HIPAA vary significantly and include civil monetary penalties for each provision of HIPAA that is violated and, in certain circumstances, criminal penalties, including imprisonment and/or additional fines. A person who knowingly obtains or discloses individually identifiable health information in violation of HIPAA may face additional fines and up The criminal penalties increase if the wrongful conduct involves false pretenses or the intent to sell, transfer, or use identifiable health information for commercial advantage, personal gain, or malicious harm. We have from time to time been subject to investigations by the Department of Health and Human Services Office of Civil Rights with respect to our HIPAA compliance. Responding to government investigations regarding alleged violations of these and other laws and regulations, even if ultimately concluded with no findings of violations or no penalties imposed, can consume company resources and impact our business and, if made public, harm our reputation. State attorneys general also have the right to prosecute HIPAA violations committed against residents of their states. While HIPAA does not create a private right of action that would allow individuals to sue in civil court for HIPAA violations, its standards have been used as the basis for the duty of care in state civil suits, such as those for negligence or recklessness in misusing individuals’ health information.

Our revenue is derived from a diverse mix of third-party payors, including private, managed care, capitated, and government payors. We derive a substantial portion of our revenue from direct billings to governmental healthcare programs, such as Medicare and Medicaid, and private health insurance companies and/or health plans, including, but not limited to, those participating in the Medicare Advantage program. For services for which we bill Medicare directly or indirectly, including through contracted radiologists, we are paid under the Medicare Physician Fee Schedule. Medicare reimbursement rates are subject to annual updates, which can result in significant reimbursement cuts and changes to coverage criteria. Changes to Medicare reimbursement rates for outpatient services provided by our hospital partners can negatively impact the contractual fees that we can charge for our services. Because governmental healthcare programs generally reimburse on a fee schedule basis rather than on a charge-related basis, we generally cannot increase our revenues from these programs by increasing the amount of charges for services. Any negative changes in governmental capitation or methods of reimbursement for the services we provide could have a significant adverse impact on our revenue and financial results.

Generally, commercial insurance companies reimburse us, directly or indirectly, including through contracted radiology or radiation oncology practices elsewhere, on the basis of agreed upon rates. These rates are negotiated and may differ materially from rates set forth in the Medicare Physician Fee Schedule for the particular service. The patients may be responsible for deductibles.

Government and private payors have taken and may continue to take steps to control the cost, eligibility for, use, and delivery of healthcare services, including diagnostic imaging and oncology services, as a result of budgetary constraints, cost containment pressures and other reasons. For example, reimbursement by government payors for a number of diagnostic imaging procedures, including many that we or our managed radiology practices perform, has been materially reduced over the last number of years before restabilizing more recently. Certain private payors have followed suit and reduced reimbursement for certain diagnostic imaging procedures. Given the recent history, we expect that reimbursement for certain diagnostic imaging services that we or our managed radiology practices provide, may be reduced in the future, which would adversely impact our business. For example, the payment penalty phase of the Appropriate Use Criteria (“AUC”) program will begin on the later of January 1, 2023, or the January 1 that follows the end of the public health emergency. The AUC program requires the use of qualified Clinical Decision Support Mechanism to increase the rate of appropriate advanced imaging services provided to Medicare beneficiaries. Additionally, CMS and other payors are seeking to shift from a primarily fee for service reimbursement paradigm to a more value based model. We cannot predict what such changes will ultimately look like or how they may ultimately impact our business or financial performance, which creates significant uncertainty for our business. The Medicare RO model, a mandatory payment model for radiation oncology services provided to Medicare beneficiaries, was scheduled to begin on January 1, 2022, but was recently delayed until January 1, 2023. Congress or CMS may act to delay implementation again, or may revise the model before implementation. The model was expected to reduce payments overall, although the actual impact would vary by site of service.

When we acquired the assets of our independent fixed site imaging centers in Pennsylvania and Delaware on April 21, 2016, we also agreed to indemnify the physician-owned radiology practices that serviced those centers pursuant to management services agreements with those entities. We have not insured against risks acquisition of those centers and, as a result, we could be liable, without the benefit of insurance proceeds, for damages suffered as a result of complaints or other proceedings against those physician-owned radiology practices relating to events that transpired prior to April 21, 2016. These complaints could include actions for medical malpractice or wrongful death.

Since its enactment, there have been judicial and Congressional efforts to modify or repeal the ACA. For example, the Tax Cuts and Jobs Act of 2017 includes a provision that entered into effect on January 1, 2019, that repealed responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate.” In December 2018, a U.S. district court held that the individual mandate was unconstitutional, which was upheld by the U.S. Court of Appeals for the Fifth Circuit. On June 17, 2021, the U.S. Supreme Court dismissed the case without specifically ruling on the constitutionality of the Affordable Care Act.

Furthermore, recently there has been heightened governmental scrutiny over the manner in which healthcare providers set their charges, which has resulted in proposed and enacted regulations designed to bring transparency to charges and reduce the cost of products and services. For example, on January 1, 2022, the No Surprises Act (“NSA”) became effective, which imposes numerous requirements on providers and facilities, including us, in addition to related requirements under state law. One component of the NSA requires most providers and facilities to provide uninsured (or individuals with a good faith estimate (“GFE”) of expected charges in advance of scheduled items or services or upon request, including (beginning January 1, 2023) expected charges for items and services provided in conjunction with the scheduled items or services. The failure to comply with GFE requirement of the NSA may expose us to significant penalties under federal law and any applicable state law.

The NSA prohibits providers and facilities from balance billing patients for emergency services. providers are also prohibited from balance billing patients who receive services in connection with a visit at facilities, with the exception of certain limited services for which a patient receives advance notice of and voluntarily provides consent to be balance billed. The NSA requires providers and facilities to post certain disclosure notices advising patients of their rights under the NSA and any applicable state law balance billing prohibitions.

The NSA also requires plans and issuers to develop a methodology for setting the patient cost-sharing amounts and provider reimbursement rates, both of which defer to applicable state law, and may result in payments below amounts that we would have received prior to the implementation of the NSA. These lower payment amounts may have a material impact on our business and financial condition. Furthermore, the NSA and similar transparency laws could hinder our ability to enter into contracts with payors at historical rates and under similar terms, as payors have been attempting to pursue lower rates for providers as a result of the NSA. This could result in health insurers terminating contracts with us for refusing to accept the proposed lower rates, further affecting our business and financial condition.

In addition to licensure and certification at the facility level, the radiologists and radiation oncologists providing professional medical services at our facilities are subject to licensing and related regulations by the states in which they provide services. As a result, we require the physician groups with which we contract to require their physicians to have and maintain appropriate licensure. clinical personnel may also be required to secure licenses or certifications and must operate within their scope of practice. Failure to secure or maintain required licenses, certifications and accreditations can prevent us from receiving reimbursement. Further, credentialing of physicians is required by our payors prior to commencing payment. We have experienced a slowdown in the credentialing of our physicians over the last several years which has lengthened our billing and collection cycle and could negatively impact our ability to collect revenue from patients covered by Medicare.

State laws in certain of the states in which we operate prohibit us from owning physician practices, from exercising control over the clinical judgment of physicians and/or from engaging in certain financial arrangements, such as splitting professional fees with physicians. These laws vary by state and are enforced by state courts and regulatory authorities, each with broad discretion, and often with limited precedent as to how challenges under these laws may turn out. A component of our business has been to enter into management services agreements with physician practices. We provide management, administrative, technical and other services to the physician practices in exchange for a service fee typically based on a percentage of the practice’s revenue. We structure our relationships with these physician practices, including those managed following an acquisition by us of in a manner that we believe keeps us from engaging in the practice of medicine or exercising control over the medical judgments or decisions of the medical practices or their physicians, or violating prohibitions can be no assurance that our present arrangements with physicians providing medical services and medical supervision at our owned or managed diagnostic imaging and oncology centers will not be challenged, and, if challenged, that they will not be found to violate applicable laws, thus subjecting us to potential damages, injunction and/or civil and criminal penalties or require us to restructure our arrangements in a way that would affect the control or quality of our services and/or change the amounts we receive from the operation of these centers and locations. Any of these results could jeopardize our business. We have structured the fees payable to our subsidiaries by our affiliated practice groups in such a manner that we believe complies with applicable federal, state and local laws. Although the relevant laws have been subject to limited judicial and regulatory interpretation, we believe that we are in compliance with applicable state laws in relation to the corporate practice of medicine. However, regulatory authorities or other parties may assert that despite these management arrangements between our subsidiaries and affiliated physician groups, we or our manager subsidiaries are engaged in the corporate practice of medicine or that the contractual arrangements with the affiliated physician groups constitute unlawful fee splitting or another violation of corporate practice of medicine rules. Should such an event occur, we or our affiliated physician groups could be subject to administrative, civil or criminal remedies or penalties, our management services contracts could be found to be legally invalid and unenforceable, in whole or in part, or we could be required to restructure our contractual arrangements with our affiliated physician groups.

Anti-bribery laws and regulations generally prohibit companies and their intermediaries from making improper payments employees or any other persons acting in an official capacity for any government entity to any political party or official thereof or to any candidate for political office for the purpose of obtaining or retaining business. While our management services agreements, services agreements and operational policies and procedures, including our compliance program, mandate compliance with applicable law, we cannot assure you that we will be successful in preventing our contractors, employees or other agents from taking actions in violation of these laws or regulations or that we will not otherwise be deemed to have failed to comply with such laws. Such violations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our financial condition, results of operations and cash flows.

The information required by Item 201(d) of Regulation is provided under “Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information”, incorporated herein by reference.

Notwithstanding the foregoing, in certain circumstances, common shares could be deemed to be “taxable Canadian property.” 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes that appear in Item 8 of this Annual Report on Form In addition to historical information, the following discussion contains forward-looking statements that are subject to risks and uncertainties. Actual results may differ substantially and adversely from those referred to herein due to a number of factors, including, but not limited to, those described below and in Item 1A “Risk Factors” and elsewhere in this Annual Report on Form

On September 1, 2021, we acquired all of the issued and outstanding common stock of Thaihot Investment Company US Limited, which owns 100% of the common stock of Alliance HealthCare Services, Inc. (“Alliance”), through our wholly owned indirect subsidiary Akumin Corp. (the “Alliance Acquisition”). Alliance is a leading national provider of radiology and oncology solutions to hospitals, health systems and physician groups. With the acquisition of Alliance, we provide fixed-site outpatient diagnostic imaging services through a network of approximately 200 owned and/or operated imaging locations; and outpatient radiology and oncology services and solutions to approximately 1,000 hospitals and health systems across 46 states. Our imaging procedures include magnetic resonance imaging (“MRI”), computerized tomography (“CT”), positron emission tomography (“PET” and “PET/CT”), ultrasound, diagnostic radiology mammography and other related procedures. Our cancer care services include a full suite of radiation therapy and related offerings.

Our multi-modality imaging offering provides a for patients and referring physicians and diversifies our revenue sources. Our scalable and integrated operating platform is expected to create value from future acquisitions, cost efficiencies and organic growth.

Commencing during the first quarter of 2020 and continuing through the present, a pandemic relating to the novel coronavirus known as occurred causing significant financial market disruption and social dislocation. The pandemic is dynamic, with various cities, counties, states and countries around the world responding or having responded in different ways to address and contain the outbreak, including the declaration of a global pandemic by the World Health Organization, a National State of Emergency in the United States, and state and local executive orders and ordinances forcing the closure of businesses and persons not employed in or using essential services to “stay at home” or “shelter in place.” At this stage, while there are signs of improvement, we are uncertain as to how long the pandemic, or a more limited epidemic, will last, what regions will be most affected, to what extent containment measures will be applied, or the nature and timing of possible vaccinations. Imaging and radiation therapy centers are healthcare facilities and are generally considered an essential service with the expectation that they continue to operate during the pandemic.

We instituted several realignment and cost containment measures to respond to the drop in volume that resulted from the pandemic and related government orders. Our cost containment measures included the temporary closure of certain of our imaging centers to consolidate volume to nearby centers and reduced operating hours at the remainder of our imaging centers, with the highest number of centers closed in 2020. At that same time, we furloughed or laid off a portion of our workforce, reduced work hours for our hourly personnel and reduced salaries of employees, as well as negotiated deferral of certain costs due to landlords and other vendors.

In light of the improving business environment, we gradually increased our workforce during 2021. Effective January 1, 2021, all reduced salaries had been returned to normal levels. Clinical operations have resumed to normal operating hours as patient volumes allow and substantially all of the clinics that had temporarily closed due to the pandemic have resumed normal operations. If the future economic or legislative environment related to the pandemic again leads to weakened business volume, we might cost containment measures similar to those described above in order to preserve our liquidity.

		December 31,
		2021				2020
ASSETS
Current assets:
Cash and cash equivalents		$	48,419			$	44,396
Accounts receivable			121,525				62,259
Prepaid expenses			8,196				2,996
Other current assets			7,025				1,435
Total current assets			185,165				111,086
Property and equipment, net			259,122				63,714
Operating lease right-of-use assets			194,565				127,062
Goodwill			840,353				351,610
Other intangible assets, net			414,146				6,748
Other assets			25,475				4,832
Total assets		$	1,918,826			$	665,052
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Current liabilities:
Accounts payable		$	34,326			$	16,213
Current portion of long-term debt			14,789				406
Current portion of obligations under finance leases			6,460				3,265
Current portion of obligations under operating leases			20,794				9,345
Other accrued liabilities			87,813				22,771
Total current liabilities			164,182				52,000
Long-term debt, net of current portion			1,197,596				389,580
Obligations under finance leases, net of current portion			15,951				12,309
Obligations under operating leases, net of current portion			184,375				122,954
Other liabilities			35,574				3,039
Total liabilities			1,597,678				579,882
Redeemable noncontrolling interests			37,469				—
Shareholders’ equity:
Common stock, no par value; unlimited number of shares authorized; 89,026,997 and 70,178,428 shares issued and outstanding as of December 31, 2021 and 2020, respectively			228,595				160,965
Accumulated other comprehensive income			18				—
Accumulated deficit			(123,424	)			(80,133	)
Total shareholders’ equity			105,189				80,832
Noncontrolling interests			178,490				4,338
Total equity			283,679				85,170
Total liabilities, redeemable noncontrolling interests and equity		$	1,918,826			$	665,052

		Year Ended December 31,
		2021				2020
Revenues		$	421,079			$	245,626
Operating expenses:
Cost of operations, excluding depreciation and amortization			359,735				205,635
Depreciation and amortization			44,895				17,060
Stock-based compensation			2,792				2,084
Other operating losses (gains)			583				(4,130	)
Total operating expenses			408,005				220,649
Income from operations			13,074				24,977
Other expense (income):
Interest expense			62,575				32,781
Acquisition-related costs			20,233				1,079
Settlement and related costs (recoveries)			(539	)			2,324
Other non-operating losses (gains)			(3,990	)			22,387
Total other expense, net			78,279				58,571
Loss before income taxes			(65,205	)			(33,594	)
Income tax expense (benefit)			(30,391	)			562
Net loss			(34,814	)			(34,156	)
Less: Net income attributable to noncontrolling interests			8,477				2,585
Net loss attributable to common shareholders		$	(43,291	)		$	(36,741	)
Comprehensive loss, net of taxes:
Net loss		$	(34,814	)		$	(34,156	)
Other comprehensive income:
Unrealized loss on hedging transactions, net of taxes			(10	)			—
Reclassification adjustment for losses included in net loss, net of taxes			28				—
Other comprehensive income			18				—
Comprehensive loss, net of taxes			(34,796	)			(34,156	)
Less: Comprehensive income attributable to noncontrolling interests			8,477				2,585
Comprehensive loss attributable to common shareholders		$	(43,273	)		$	(36,741	)
Net loss per share attributable to common shareholders:
Basic and diluted		$	(0.56	)		$	(0.52	)

		Common Stock								Accumulated Other Comprehensive Income				Accumulated Deficit				Total Shareholders’ Equity				Noncontrolling Interests				Total Equity
		Shares				Amount
Balance, December 31, 2019			69,840,928			$	158,881			$	—			$	(43,392	)		$	115,489			$	3,500			$	118,989
Net income (loss)			—				—				—				(36,741	)			(36,741	)			2,585				(34,156	)
Issuance of common stock under stock-based awards			337,500				—				—				—				—				—				—
Stock-based compensation			—				2,084				—				—				2,084				—				2,084
Distributions paid to noncontrolling interests			—				—				—				—				—				(1,747	)			(1,747	)
Balance, December 31, 2020			70,178,428				160,965				—				(80,133	)			80,832				4,338				85,170
Net income (loss) , net of the net income attributable to redeemable noncontrolling interests			—				—				—				(43,291	)			(43,291	)			7,715				(35,576	)
Issuance of common stock:
Acquisition consideration			15,198,569				33,878				—				—				33,878				—				33,878
Other issuance			3,500,000				10,000				—				—				10,000				—				10,000
Warrants issued			—				21,014				—				—				21,014				—				21,014
Stock options exercised			150,000				75				—				—				75				—				75
Stock-based compensation			—				2,792				—				—				2,792				—				2,792
Other comprehensive income			—				—				18				—				18				—				18
Acquisition of noncontrolling interests			—				—				—				—				—				174,976				174,976
Distributions paid to noncontrolling interests			—				—				—				—				—				(9,969	)			(9,969	)
Other equity transactions			—				(129	)			—				—				(129	)			1,430				1,301
Balance, December 31, 2021			89,026,997			$	228,595			$	18			$	(123,424	)		$	105,189			$	178,490			$	283,679