CHICAGO--(BUSINESS WIRE)--Lakeview Opportunity Fund, LLC (together with its affiliates, "we†or "Lakeview Investment Group†), a nearly 5% owner, and top 5 shareholder of Quipt Home Medical Corp. ("Quipt†or the "Company†) (NASDAQ: QIPT and TSX: QIPT), today expressed its belief that the Company's Board of Directors (the "Board†) has undermined the best interests of shareholders by failing to engage in good faith with a credible bidder as part of a transparent and viable strategic review. Rather. ...

Core Viewpoint - Quipt Home Medical Corp. (QIPT) has received a Zacks Rank 2 (Buy) upgrade due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, which reflects the changing earnings picture of a company [1][2]. - Changes in earnings estimates are strongly correlated with near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4]. Company Performance and Investor Sentiment - The rising earnings estimates for Quipt Home Medical suggest an improvement in the company's underlying business, which is expected to drive stock appreciation [5]. - Over the past three months, the Zacks Consensus Estimate for Quipt Home Medical has increased by 41.4%, indicating a significant positive revision in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - Quipt Home Medical's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Group 1 - Quipt Home Medical Corp. (NASDAQ:QIPT) is identified as a fundamentally strong penny stock with recent investment interest from Nuveen LLC, which acquired 150,046 shares valued at approximately $350,000, representing nearly 0.35% ownership of the company [1] - The company is enhancing its growth through strategic partnerships, recently completing a venture transaction with three health systems and two hospitals [2] - Quipt's acquisition of Hart Medical Equipment for $17.4 million results in a 60% ownership interest, with the remaining shares held by several health systems, contributing to stabilized revenue and adjusted EBITDA while creating additional growth opportunities [3] Group 2 - Quipt Home Medical Corp. is based in Kentucky and specializes in providing durable and home medical equipment, focusing on high-quality home care solutions such as nebulizers and invasive ventilation [4]

Core Insights - Quipt Home Medical Corp. has successfully closed a joint venture transaction to acquire a 60% ownership interest in Hart Medical Equipment for a total consideration of $17.4 million, funded by senior credit facilities [1][4] - The acquisition is expected to enhance Quipt's presence in the Midwest, particularly in Michigan, and is aligned with the company's long-term growth strategy [1][3] - Hart Medical generated approximately $60 million in annual revenue and $7 million in Adjusted EBITDA for the twelve months ended June 2025, with expectations to generate over $10 million in annual Adjusted EBITDA in the next 6-9 months [4] Transaction Highlights - The joint venture includes three major health systems and two hospitals, collectively holding the remaining 40% interest in Hart [1] - Hart serves over 67,000 patients monthly, providing a stable and recurring revenue stream [4] - Quipt anticipates that Hart's Adjusted EBITDA margins will align with its historical corporate averages within the next 6-9 months [4] Management Commentary - The CEO of Quipt expressed excitement about the acquisition, highlighting Hart's strong health system relationships and regional market leadership as a strategic fit [3] - The CFO emphasized the disciplined approach to acquisitions and the company's ability to maintain a conservative leverage ratio while funding the transaction [3] - Hart's executive noted the importance of scale in the current healthcare environment and expressed confidence in the partnership with Quipt [5] Financial Expectations - Following the acquisition, Quipt's expected annualized run-rate revenue is projected to exceed $300 million, with anticipated Adjusted EBITDA exceeding $65 million post-integration of Hart [4] - The company plans to consolidate Hart's financial results for reporting purposes, reflecting its status as the primary beneficiary of the joint venture [4]

Core Viewpoint - Quipt Home Medical Corp. has received a new unsolicited acquisition proposal from Forager Capital Management, LLC at a price of US$3.10 per share, which follows previous offers that were deemed inadequate by the Company's Board [1][3]. Group 1: Acquisition Proposals - The latest proposal from FCM is a reduction from an earlier offer of US$3.90 per share made in January 2025, which represented a 26% premium over the current offer [2]. - The Board of Directors rejected the January Proposal, citing that it undervalued the Company and did not serve the best interests of shareholders [3]. - FCM has made multiple offers without engaging through the Company's financial advisor, raising concerns about its credibility and intentions [5]. Group 2: Company Developments - Since the January Proposal, the Company has made strategic acquisitions, including a full-service durable medical equipment provider with an unaudited revenue of US$6.6 million and a joint venture for a 60% stake in Hart Medical Equipment, contributing an additional unaudited revenue of US$60 million and US$7 million in Adjusted EBITDA [4]. - The Company aims to enhance shareholder value by expanding its service offerings in in-home monitoring and chronic disease management, focusing on patients with various health conditions [7]. Group 3: Board's Position - The Board, advised by Truist Securities, remains committed to protecting long-term shareholder value and is open to engaging with FCM if it complies with confidentiality agreements [6].

Financial Data and Key Metrics Changes - Revenue for fiscal Q3 2025 was $58.3 million, a decrease of 4.1% compared to $60.8 million in Q3 2024, but a return to positive quarter-over-quarter organic growth of 1.6% from $57.4 million in Q2 2025 [14][18] - Adjusted EBITDA for Q3 2025 was $13.7 million, or 23.5% of revenue, compared to $14.2 million, or 23.4% of revenue for Q3 2024, representing a 3.6% decrease [14][18] - Net loss for Q3 2025 was $3 million, or $0.07 per diluted share, compared to a loss of $1.6 million, or $0.04 per diluted share for Q3 2024 [15] - Cash flow from operations for the nine months ended June 30, 2025, was $27.9 million, compared to $25.4 million for the same period in 2024 [15] Business Line Data and Key Metrics Changes - The customer base decreased modestly to 151,000 unique patients as of June 30, 2025, from 153,000 unique patients as of June 30, 2024 [13] - Unique setups and deliveries totaled 210,000 in Q3 2025, down from 216,000 in Q3 2024 [13] - Respiratory resupply setups totaled 119,000 in Q3 2025, a slight decrease from 120,000 in the prior year quarter [13] Market Data and Key Metrics Changes - The company reported that recurring revenue for Q3 2025 remained strong at 81% of total revenue [14] - The joint venture with Heart Medical Equipment is expected to enhance the company's presence in the Midwest, particularly in Michigan and Ohio, with access to a recurring patient base of over 67,000 patients each month [20][28] Company Strategy and Development Direction - The company is focused on expanding its healthcare system partnerships, as evidenced by the recent transaction with Ballad Health and the joint venture with Heart Medical Equipment [5][19] - The strategic emphasis on respiratory care aligns with macro trends such as an aging population and rising chronic respiratory disease rates, which are expected to drive long-term demand [23][28] - The company aims to deepen referral networks and enhance operational efficiencies to capture a larger share of patient volume at the point of discharge [26][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's operating metrics and the recent healthcare system transactions, indicating a clear roadmap for growth [9][21] - The company anticipates that the integration of recent acquisitions will lead to improved margins and operational efficiencies [42][44] - Management remains focused on maximizing long-term shareholder value while navigating the evolving healthcare landscape [29] Other Important Information - The company has entered into a joint venture to acquire a 60% ownership stake in Heart Medical Equipment, which generated approximately $60 million in revenue and $7 million in adjusted EBITDA as of June 30, 2025 [19][20] - The company reported a net debt to adjusted EBITDA leverage ratio of 1.5x, well within its target range [17] Q&A Session Summary Question: Can you discuss the adjusted EBITDA margin and targets for improvement? - Management expects continued improvements in EBITDA margins, despite patient CapEx being a drag due to investments in replacing ventilators [31][32] Question: How do you plan to increase the EBITDA margin for the Heart joint venture? - Management anticipates that integration will align Heart's cost structures with Quipt's historical averages, leading to margin improvements [34] Question: What types of patients are being discharged from the health centers? - The majority of patients are treated for respiratory conditions, including ventilation and oxygen needs [35] Question: Is there a financial component to the joint venture? - The joint venture involves an equity position, allowing the company to work closely with hospital systems to enhance discharge processes [38][40] Question: What is the current status of the M&A pipeline? - The M&A pipeline remains strong, with ongoing evaluations of strategic fits for future acquisitions [43][44]

Core Insights - Quipt Home Medical Corp. has signed a definitive agreement to acquire a 60% ownership interest in Hart Medical Equipment, marking its entry into the Michigan market and expanding its presence in the Midwest [1][6] - The transaction is expected to add approximately $60 million in revenue and 29 locations, enhancing Quipt's relationships with major health systems [1][6] - The joint venture aims to strengthen Quipt's strategy of integrating with healthcare systems and improving transitional care services [3][7] Transaction Details - Quipt will acquire a 60% stake in Hart Medical, with the remaining 40% held by major health systems including Henry Ford Health and McLaren Health Care [1][6] - Hart Medical generated approximately $60 million in revenue and $7 million in Adjusted EBITDA for the twelve months ending June 2025 [6] - The expected annualized run-rate revenue for Quipt post-transaction will be approximately $300 million [6] Strategic Implications - The joint venture is anticipated to enhance Quipt's ability to serve over 67,000 patients monthly through established relationships with more than 19 hospitals [6][7] - Management expects operational efficiencies and synergies to improve Adjusted EBITDA margins within three quarters post-closing [6][7] - The transaction aligns with Quipt's strategy to expand its service network and create scalable integration models in the evolving healthcare reimbursement environment [6][7] Financial Considerations - Quipt's total consideration for the 60% ownership interest is estimated to be in the range of $17-18 million [6] - The transaction is expected to close by the end of Fiscal Q4, 2025, pending customary closing conditions [6]

[Report Overview](index=1&type=section&id=Report%20Overview) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) Quipt Home Medical will host its earnings conference call on **Tuesday, August 12, 2025, at 10:00 a.m. (ET)**, with webcast access available on the company's investor website - Earnings Conference Call scheduled for **Tuesday, August 12, 2025, at 10:00 a.m. (ET)**[2](index=2&type=chunk) - Live webcast accessible via **www.quipthomemedical.com**, with replay available for at least one year[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Q3 2025 Performance](index=1&type=section&id=Q3%202025%20Performance) Q3 2025 revenue reached **$58.3 million** (down **4.1% YoY**), with **$13.7 million** Adjusted EBITDA and **81% recurring revenue** Q3 2025 Key Financial Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | Q2 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Revenue ($ millions) | $58.3M | $60.8M | -4.1% | $57.4M | +1.6% (organic) | | Adjusted EBITDA ($ millions) | $13.7M | $14.2M | -3.6% | N/A | N/A | | Adjusted EBITDA (% of revenue) | 23.5% | 23.4% | +0.1 pp | N/A | N/A | | Net Income (Loss) ($ millions) | ($3.0M) | ($1.6M) | -87.5% | N/A | N/A | | Diluted EPS ($) | ($0.07) | ($0.04) | -75.0% | N/A | N/A | - Recurring Revenue for Q3 2025 was **81% of total revenue**, indicating **strong recurring business**[5](index=5&type=chunk) [Nine Months Ended June 30, 2025 Performance](index=1&type=section&id=Nine%20Months%20Ended%20June%2030%202025%20Performance) Nine months ended June 30, 2025, revenue decreased **4.1% to $177.0 million**, with **$41 million** Adjusted EBITDA and improved cash flow Nine Months Ended June 30, 2025 Key Financial Metrics | Metric | 9M 2025 | 9M 2024 | Change (YoY) | | :----- | :------ | :------ | :----------- | | Revenue ($ millions) | $177.0M | $184.6M | -4.1% | | Adjusted EBITDA ($ millions) | $41.0M | $44.4M | -7.7% | | Adjusted EBITDA (% of revenue) | 23.2% | 24.1% | -0.9 pp | | Cash flow from operations ($ millions) | $27.9M | $25.4M | +9.8% | [Balance Sheet and Liquidity](index=1&type=section&id=Balance%20Sheet%20and%20Liquidity) As of June 30, 2025, Quipt held **$11.3 million** cash, **$35.3 million** credit, and a **1.5x Net Debt to Adjusted EBITDA Leverage Ratio** Cash on Hand | Metric | As of June 30, 2025 | As of March 31, 2025 | | :----- | :------------------ | :------------------- | | Cash on hand ($ millions) | $11.3M | $17.1M | - Total credit availability of **$35.3 million** as of June 30, 2025, comprising **$14.3 million** on a revolving credit facility and **$21.0 million** on a delayed-draw term loan facility[5](index=5&type=chunk) - Maintained a **conservative balance sheet** with a **Net Debt to Adjusted EBITDA Leverage Ratio** of **1.5x**[5](index=5&type=chunk) [Operational Highlights](index=1&type=section&id=Operational%20Highlights) [Patient and Service Metrics](index=1&type=section&id=Patient%20and%20Service%20Metrics) Quipt served **151,000 unique patients** as of June 30, 2025, with a **1.3% YoY decrease** but **3.4% QoQ increase** Q3 2025 Operational Metrics | Metric | Q3 2025 | Q3 2024 | Change (YoY) | Q2 2025 | Change (QoQ) | | :----- | :------ | :------ | :----------- | :------ | :----------- | | Unique Patients | 151,000 | 153,000 | -1.3% | 146,000 | +3.4% | | Unique Set-ups/Deliveries | 210,000 | 216,000 | -2.8% | 203,000 | +3.5% | | Respiratory Resupply Set-ups/Deliveries | 119,000 | 120,000 | -0.8% | 111,000 | +7.2% | [Subsequent Highlights](index=3&type=section&id=Subsequent%20Highlights) [Ballad Health Acquisition](index=3&type=section&id=Ballad%20Health%20Acquisition) Quipt acquired a DME provider from Ballad Health on July 7, 2025, expanding to **over 12,500 patients** and securing a **Preferred Provider Agreement** - **Acquired 100% of a full-service durable medical equipment (DME) provider from Ballad Health on July 7, 2025**[12](index=12&type=chunk) Ballad Health Acquisition Details | Metric | Value | | :----- | :---- | | Acquired Revenue ($ millions) | $6.6 million | | Expanded Patient Reach | Over 12,500 patients annually | | Expanded Branch Locations | 4 (East Tennessee and Southwest Virginia) | - **Signed a Preferred Provider Agreement (PPA) with Ballad Health**, integrating Quipt into the health system's hospital discharge planning process and gaining access to patient referrals from **20 hospitals** across four states[12](index=12&type=chunk) - Acquisition was funded entirely with **cash on hand at an attractive valuation**, preserving balance sheet flexibility[12](index=12&type=chunk) - **Management expects acquired operations' Adjusted EBITDA margins to align with Quipt's historical range within two quarters**[12](index=12&type=chunk) [Management Commentary](index=3&type=section&id=Management%20Commentary) Management highlighted **positive organic growth**, **stable Adjusted EBITDA margins**, and the strategic fit of the **Ballad Health acquisition** - CEO Greg Crawford noted a return to **positive organic growth** and **clear revenue stabilization**, positioning the company for **sustainable long-term growth**[7](index=7&type=chunk) - CFO Hardik Mehta highlighted **strong and consistent Adjusted EBITDA margins**, demonstrating the **scalability and resiliency of the operating platform**[9](index=9&type=chunk) - Management views the **Ballad Health acquisition as a meaningful milestone**, reinforcing the strategy of **expanding through healthcare system partnerships** and **enhancing geographic footprint and health system relationships**[8](index=8&type=chunk)[9](index=9&type=chunk) [About Quipt Home Medical Corp.](index=3&type=section&id=About%20Quipt%20Home%20Medical%20Corp.) Quipt Home Medical Corp. provides **in-home monitoring and disease management services**, specializing in **respiratory solutions** and chronic disease management - **Provides in-home monitoring and disease management services**, with a focus on **end-to-end respiratory solutions** for patients in the **U.S. healthcare market**[10](index=10&type=chunk) - **Strategic objective is to expand offerings to include management of chronic disease states** (heart/pulmonary disease, sleep disorders, reduced mobility) and **increase shareholder value**[10](index=10&type=chunk) - **Organic growth strategy involves increasing annual revenue per patient** by **offering multiple services and consolidating patient services**[10](index=10&type=chunk) [Reader Advisories](index=3&type=section&id=Reader%20Advisories) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains **forward-looking statements**, subject to various **risks, uncertainties, and assumptions** regarding future events and performance - **Identifies forward-looking statements** using terms like 'may,' 'would,' 'could,' 'should,' 'will,' 'seek,' 'intend,' 'plan,' 'anticipate,' 'believe,' 'estimate,' 'expect,' and 'outlook'[13](index=13&type=chunk)[14](index=14&type=chunk) - Key assumptions include **successful identification and completion of acquisitions**, **maintenance of current operating metrics**, and **absence of further external events like the Medicare 75/25 rate cut or Change Healthcare cybersecurity incident**[14](index=14&type=chunk) - **Risk factors include credit, market, liquidity, operational, reputational, insurance, strategic, regulatory, legal, environmental, and capital adequacy risks**, as well as **challenges in integrating acquired businesses, declining reimbursement rates, and increased competition**[14](index=14&type=chunk) [Non-GAAP Financial Measures](index=5&type=section&id=Non-GAAP%20Financial%20Measures) [Adjusted EBITDA Reconciliation](index=5&type=section&id=Adjusted%20EBITDA%20Reconciliation) This section defines and reconciles **Adjusted EBITDA**, a **non-GAAP financial measure**, to GAAP net loss for Q3 and nine months ended June 30, 2025 and 2024 - **Adjusted EBITDA is a non-GAAP financial measure** used to provide additional information on the Company's performance, calculated by **adjusting net loss for various non-cash and non-operating items**[15](index=15&type=chunk)[16](index=16&type=chunk) Adjusted EBITDA Reconciliation ($ millions) | Metric ($ millions) | 3 months ended June 30, 2025 | 3 months ended June 30, 2024 | 9 months ended June 30, 2025 | 9 months ended June 30, 2024 | | :------------------ | :----------------------------- | :----------------------------- | :----------------------------- | :----------------------------- | | Net loss | (3.0) | (1.6) | (7.2) | (3.8) | | Add back: | | | | | | Depreciation and amortization | 11.2 | 11.1 | 33.6 | 33.0 | | Interest expense, net | 1.5 | 1.6 | 4.6 | 4.9 | | Right-of-use operating lease amortization and interest | 1.6 | 1.7 | 4.8 | 4.6 | | Provision for income taxes | — | — | 0.1 | 0.5 | | Professional fees | 1.3 | 0.7 | 3.1 | 2.2 | | Stock-based compensation | 2.1 | 0.5 | 2.6 | 2.2 | | Acquisition-related costs | 0.1 | 0.2 | 0.2 | 0.4 | | Change in fair value of derivative liability - interest rate swaps | 0.2 | (0.1) | (0.4) | 0.2 | | Gain on disposals of property and equipment | (0.8) | (0.1) | (0.9) | (0.1) | | Loss (gain) on foreign currency transactions | (0.6) | 0.1 | 0.2 | 0.1 | | Share of loss in equity method investment | 0.1 | 0.1 | 0.2 | 0.2 | | **Adjusted EBITDA** | **13.7** | **14.2** | **41.0** | **44.4** | [Recurring Revenue Calculation](index=6&type=section&id=Recurring%20Revenue%20Calculation) This section defines and calculates Recurring Revenue for Q3 2025, which stood at **81% of total revenue** - **Recurring Revenue for Q3 2025 is calculated as rentals of medical equipment ($23.2 million) plus sales of respiratory resupplies ($23.8 million), totaling $47.0 million, divided by total revenues of $58.3 million, resulting in 81%**[17](index=17&type=chunk) [Net Debt to Adjusted EBITDA Leverage Ratio](index=6&type=section&id=Net%20Debt%20to%20Adjusted%20EBITDA%20Leverage%20Ratio) This section defines and reconciles the **Net Debt to Adjusted EBITDA Leverage Ratio**, which was **1.5x as of June 30, 2025** - **Net Debt to Adjusted EBITDA Leverage Ratio is calculated as Net Debt divided by (Adjusted EBITDA for Q3 times four)**[18](index=18&type=chunk) Net Debt to Adjusted EBITDA Leverage Ratio Reconciliation ($ millions) | Metric ($ millions) | As of and for the three months ended June 30, 2025 | | :------------------ | :------------------------------------------------- | | Senior credit facility, principal | $66.0 | | Equipment loans | $10.5 | | Lease liabilities | $16.9 | | Cash | ($11.3) | | **Net Debt** | **$82.1** | | Adjusted EBITDA for Q3 times four | $54.8 | | **Net Debt to Adjusted EBITDA Leverage Ratio** | **1.5x** |

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=Part%20I%20Financial%20Information) This section presents the unaudited condensed consolidated interim financial statements and related notes for Quipt Home Medical Corp [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Quipt Home Medical Corp.'s unaudited condensed consolidated interim financial statements, including position, income, equity, and cash flows [Condensed Consolidated Interim Statements of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Financial%20Position) This statement details the company's assets, liabilities, and shareholders' equity as of June 30, 2025, and September 30, 2024 | ASSETS | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :-------------------------------- | | Cash | $11,250 | $16,174 | | Accounts receivable, net | $27,009 | $29,116 | | Inventory | $23,996 | $20,853 | | Prepaid and other current assets | $6,431 | $6,911 | | **Total current assets** | **$68,686** | **$73,054** | | Property and equipment, net | $36,427 | $37,385 | | Right-of-use assets, net | $15,427 | $16,475 | | Goodwill | $50,733 | $50,733 | | Intangible assets, net | $63,405 | $67,953 | | Equity method investment | $1,066 | $1,311 | | Other assets | $348 | $337 | | **Total long-term assets** | **$167,406** | **$174,194** | | **TOTAL ASSETS** | **$236,092** | **$247,248** | | **LIABILITIES** | | | | Accounts payable and accrued liabilities | $36,814 | $35,363 | | Current portion of equipment loans | $10,525 | $12,804 | | Current portion of lease liabilities | $5,702 | $5,867 | | Current portion of senior credit facility | $3,303 | $3,248 | | Deferred revenue | $3,501 | $3,568 | | **Total current liabilities** | **$59,845** | **$60,850** | | Senior credit facility | $61,651 | $64,545 | | Lease liabilities | $11,159 | $13,283 | | Equipment loans | $13 | $55 | | Derivative liability - interest rate swaps | $680 | $1,122 | | Deferred income taxes | $208 | $202 | | **TOTAL LIABILITIES** | **$133,556** | **$140,057** | | **SHAREHOLDERS' EQUITY** | | | | Additional paid-in capital | $280,258 | $277,762 | | Accumulated deficit | $(177,722) | $(170,571) | | **TOTAL SHAREHOLDERS' EQUITY** | **$102,536** | **$107,191** | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **$236,092** | **$247,248** | [Condensed Consolidated Interim Statements of Income (Loss)](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Income%20%28Loss%29) This statement outlines the company's revenues, expenses, and net loss for the three and nine months ended June 30, 2025 and 2024 | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Revenue | $58,289 | $60,759 | $177,046 | $184,583 | | Cost of inventory sold | $14,873 | $16,694 | $47,776 | $51,260 | | Operating expenses | $31,041 | $30,593 | $91,333 | $91,096 | | Depreciation | $9,758 | $9,573 | $29,061 | $28,474 | | Amortization of intangible assets | $1,481 | $1,519 | $4,548 | $4,570 | | Right-of-use operating lease amortization and interest | $1,585 | $1,660 | $4,753 | $4,612 | | Stock-based compensation | $2,120 | $483 | $2,625 | $2,154 | | Acquisition-related costs | $126 | $188 | $222 | $393 | | Gain on disposals of property and equipment | $(872) | $(51) | $(896) | $(51) | | Operating income (loss) | $(1,823) | $100 | $(2,376) | $2,075 | | Interest expense | $1,595 | $1,770 | $5,025 | $5,366 | | Interest income | $(101) | $(168) | $(383) | $(509) | | Change in fair value of derivative liability - interest rate swaps | $182 | $(105) | $(442) | $170 | | Loss (gain) on foreign currency transactions | $(610) | $128 | $231 | $145 | | Share of loss in equity method investment | $101 | $71 | $245 | $243 | | Loss before taxes | $(2,990) | $(1,596) | $(7,052) | $(3,340) | | Provision for income taxes | $35 | $0 | $99 | $483 | | Net loss | $(3,025) | $(1,596) | $(7,151) | $(3,823) | | Basic loss per share | $(0.07) | $(0.04) | $(0.17) | $(0.09) | | Diluted loss per share | $(0.07) | $(0.04) | $(0.17) | $(0.09) | [Condensed Consolidated Interim Statements of Changes in Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) This statement tracks changes in shareholders' equity, including net loss, share repurchases, and stock-based compensation | Metric | Balance March 31, 2025 (in thousands) | Net Loss (in thousands) | Repurchase of Shares (in thousands) | Stock-based Compensation (in thousands) | Balance June 30, 2025 (in thousands) | | :---------------------- | :------------------------------------ | :---------------------- | :---------------------------------- | :-------------------------------------- | :----------------------------------- | | Additional Paid In Capital | $278,267 | — | $(129) | $2,120 | $280,258 | | Accumulated Deficit | $(174,697) | $(3,025) | — | — | $(177,722) | | Total Shareholders' Equity | $103,570 | $(3,025) | $(129) | $2,120 | $102,536 | | Metric | Balance September 30, 2024 (in thousands) | Net Loss (in thousands) | Repurchase of Shares (in thousands) | Settlement of Restricted Stock Units (in thousands) | Stock-based Compensation (in thousands) | Balance June 30, 2025 (in thousands) | | :---------------------- | :------------------------------------ | :---------------------- | :---------------------------------- | :------------------------------------------------ | :-------------------------------------- | :----------------------------------- | | Additional Paid In Capital | $277,762 | — | $(129) | — | $2,625 | $280,258 | | Accumulated Deficit | $(170,571) | $(7,151) | — | — | — | $(177,722) | | Total Shareholders' Equity | $107,191 | $(7,151) | $(129) | — | $2,625 | $102,536 | [Condensed Consolidated Interim Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Interim%20Statements%20of%20Cash%20Flows) This statement summarizes cash flows from operating, investing, and financing activities for the nine months ended June 30, 2025 and 2024 | Cash Flow Activity | Nine months ended June 30, 2025 (in thousands) | Nine months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net cash flow provided by operating activities | $27,914 | $25,404 | | Net cash flow used in investing activities | $(9,611) | $(6,950) | | Net cash flow used in financing activities | $(22,997) | $(21,115) | | Effect of exchange rate changes on cash held in foreign currencies | $(230) | $(145) | | Net increase (decrease) in cash | $(4,924) | $(2,806) | | Cash, beginning of period | $16,174 | $17,209 | | Cash, end of period | $11,250 | $14,403 | [Notes to Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide detailed context on operations, accounting policies, asset/liability breakdowns, debt, equity, and recent events [1. Nature of operations](index=7&type=section&id=1.%20Nature%20of%20operations) This note describes Quipt Home Medical Corp.'s business, accounting basis, and evaluation of new accounting standards - Quipt Home Medical Corp. was incorporated in 1997 and is headquartered in Wilder, KY. Its interim financial statements are unaudited and prepared under US GAAP[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) - The company is an 'emerging growth company' and has elected to use the extended transition period for new accounting standards, though it has not delayed adoption of most[24](index=24&type=chunk) - The company is currently evaluating the impact of recently issued ASUs on Income Tax Disclosures (ASU 2023-09), Segment Reporting (ASU 2023-07), Compensation-Stock Compensation (ASU 2024-01), and Financial Instruments – Credit Loss (ASC 326)[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [2. Property and equipment and right-of-use assets](index=13&type=section&id=2.%20Property%20and%20equipment%20and%20right-of-use%20assets) This note details changes in property, equipment, and right-of-use assets, including rental equipment transfers and equipment loans | Asset Category | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :-------------------------------- | | Property and equipment, net | $36,427 | $37,385 | | Right-of-use assets, net | $15,427 | $16,475 | - Rental equipment transferred from inventory increased to **$26,897,000** for the nine months ended June 30, 2025, from **$24,467,000** for the same period in 2024[29](index=29&type=chunk) - Equipment loans obtained decreased to **$16,192,000** for the nine months ended June 30, 2025, from **$19,411,000** for the same period in 2024[29](index=29&type=chunk) [3. Goodwill and intangible assets](index=14&type=section&id=3.%20Goodwill%20and%20intangible%20assets) This note covers goodwill impairment testing and the net value and estimated amortization of intangible assets - An interim quantitative impairment test for goodwill was performed due to decreased market capitalization and operational challenges, with no impairment identified[31](index=31&type=chunk) | Intangible Asset Category | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :-------------------------------- | | Intangible assets, net | $63,405 | $67,953 | | Period | Estimated Amortization (in thousands) | | :-------------------------------- | :------------------------------------ | | Three months ending September 30, 2025 | $1,468 | | Year ending September 30, 2026 | $5,776 | | Year ending September 30, 2027 | $5,723 | | Year ending September 30, 2028 | $5,594 | | Year ending September 30, 2029 | $5,587 | | Thereafter | $39,257 | | **Intangible assets, net** | **$63,405** | [4. Accounts payable and accrued liabilities](index=14&type=section&id=4.%20Accounts%20payable%20and%20accrued%20liabilities) This note breaks down the components of accounts payable and accrued liabilities, showing changes over time | Category | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :-------------------------------- | | Accounts payable | $32,717 | $29,310 | | Accrued compensation | $2,505 | $4,576 | | Other | $1,592 | $1,477 | | **Total** | **$36,814** | **$35,363** | [5. Long-term debt](index=16&type=section&id=5.%20Long-term%20debt) This note details the company's senior credit facility, equipment loans, lease liabilities, and interest rate swap arrangements - The company has a **$110 million** senior credit facility, with **$64 million** drawn as of June 30, 2025, and was in compliance with financial covenants[34](index=34&type=chunk) | Debt Category | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :-------------------------- | :----------------------------- | :-------------------------------- | | Senior credit facility (net carrying value) | $64,954 | $67,793 | | Equipment loans (ending balance) | $10,538 | $12,859 | | Lease liabilities (total) | $16,861 | $19,150 | - Interest rate swaps on **$59 million** of the senior credit facility carry a fixed SOFR of **3.4% to 4.4%**, resulting in a weighted combined rate of **6.8%**[36](index=36&type=chunk) [6. Share capital](index=20&type=section&id=6.%20Share%20capital) This note outlines authorized and outstanding shares, share repurchase activity, and stock-based compensation plans - The company repurchased **62,800 shares** for approximately **$129,000** during the three and nine months ended June 30, 2025, under a program that terminated on April 30, 2025[47](index=47&type=chunk)[142](index=142&type=chunk) - In March 2025, the company granted **425,000** stock options and **2,478,753** restricted share units under the 2024 Equity Incentive Plan[48](index=48&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Stock-based compensation expense | $2,120 | $483 | $2,625 | $2,154 | [7. Commitments and contingencies](index=22&type=section&id=7.%20Commitments%20and%20contingencies) This note addresses legal proceedings, including a DOJ civil investigative demand and the conclusion of an SEC investigation - The company received a civil investigative demand (CID) from the DOJ concerning an investigation into potential false claims to government healthcare programs for CPAP equipment[53](index=53&type=chunk) - The SEC concluded its investigation in November 2024 and advised that it did not intend to recommend an enforcement action against the company[54](index=54&type=chunk) [8. Operating expenses](index=23&type=section&id=8.%20Operating%20expenses) This note details the breakdown and changes in operating expenses, highlighting factors like professional fees | Expense Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Payroll and employee benefits | $19,244 | $19,547 | $57,795 | $58,724 | | Facilities | $1,418 | $1,441 | $4,206 | $4,199 | | Billing | $3,116 | $2,734 | $9,132 | $8,138 | | Professional fees | $1,979 | $1,496 | $4,990 | $4,482 | | Outbound freight | $1,405 | $1,383 | $4,129 | $4,115 | | Vehicle fuel and maintenance | $1,257 | $1,233 | $3,445 | $3,515 | | Bank and credit card fees | $649 | $560 | $1,727 | $1,540 | | Technology | $564 | $409 | $1,431 | $1,157 | | Insurance | $334 | $384 | $1,107 | $1,160 | | All other | $1,075 | $1,406 | $3,371 | $4,066 | | **Total operating expenses** | **$31,041** | **$30,593** | **$91,333** | **$91,096** | [9. Income taxes](index=23&type=section&id=9.%20Income%20taxes) This note explains the company's income tax accounting policies and the provision for income taxes - The company follows the asset and liability method for income taxes, recognizing deferred tax assets and liabilities and providing a valuation allowance for unrealized deferred tax assets[57](index=57&type=chunk) | Period | Provision for Income Taxes (in thousands) | | :-------------------------- | :---------------------------------------- | | Three months ended June 30, 2025 | $35 | | Three months ended June 30, 2024 | $0 | | Nine months ended June 30, 2025 | $99 | | Nine months ended June 30, 2024 | $483 | [10. Related party transactions](index=23&type=section&id=10.%20Related%20party%20transactions) This note describes operating lease agreements with a rental company affiliated with the company's CEO - The company has six operating leases with a rental company affiliated with its CEO, with combined monthly payments of approximately **$65,000** for the nine months ended June 30, 2025[58](index=58&type=chunk) - Lease payments increase annually by the greater of CPI-U or **3%**, with one lease expiring in June 2026 and the others in September 2029[58](index=58&type=chunk) [11. Subsequent event](index=23&type=section&id=11.%20Subsequent%20event) This note reports on the acquisition of Mediserve Medical Equipment and the evaluation of the 'One Big Beautiful Bill Act' - On July 1, 2025, the company acquired Mediserve Medical Equipment for approximately **$2.6 million**, comprising **$2.45 million** in cash and **$150,000** in holdback consideration[59](index=59&type=chunk) - The preliminary allocation of the Mediserve purchase price includes **$850,000** for accounts receivable, **$150,000** for inventory, and **$1,600,000** for property and equipment[61](index=61&type=chunk) - The company is evaluating the impact of the 'One Big Beautiful Bill Act' (OBBBA), signed into law on July 4, 2025, which includes provisions for interest deductibility, R&D expensing, and immediate capital expenditure deductions[62](index=62&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, and key factors impacting performance [Loss of Foreign Private Issuer Status](index=26&type=section&id=Loss%20of%20Foreign%20Private%20Issuer%20Status) The company's change from foreign private issuer status to a domestic filer impacts reporting requirements and expenses - Quipt Home Medical Corp. ceased to be a foreign private issuer as of October 1, 2024, due to more than **50%** of its voting securities being held by US residents[66](index=66&type=chunk) - This change requires the company to report on US domestic company forms (10-K, 10-Q, 8-K) and comply with US proxy rules, resulting in increased expenses and management time[66](index=66&type=chunk) - The primary changes in financial reporting due to this status change include a reduction in revenues with corresponding elimination of bad debt expense, and reclassification of right-of-use operating lease amortization and interest, and derivative liability fair value changes[69](index=69&type=chunk) [Overview](index=26&type=section&id=Overview) This overview describes the company's business, market position, and strategic priorities for future growth and profitability - The company provides specialized medical products and services in the US healthcare market, serving over **130 offices** with more than **1,150 personnel**[70](index=70&type=chunk)[71](index=71&type=chunk) - Key priorities for fiscal year 2025 and beyond include driving organic revenue growth, achieving operational net profit, generating positive cash flow, and expanding Adjusted EBITDA[72](index=72&type=chunk) - Strategies involve expanding presence in existing and new markets, leveraging a scalable business platform, optimizing organizational structure, enhancing operational efficiencies, and centralizing back-office processes[72](index=72&type=chunk) [Selected Quarterly and Interim Information](index=28&type=section&id=Selected%20Quarterly%20and%20Interim%20Information) This section provides key operational and financial metrics for the recent quarterly and interim periods | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Number of patients serviced | 151,000 | 153,000 | 271,000 | 270,000 | | Number of equipment set-ups or deliveries | 210,000 | 216,000 | 635,000 | 642,000 | | Respiratory resupply set-ups or deliveries | 119,000 | 120,000 | 354,000 | 359,000 | | Adjusted EBITDA (in thousands) | $13,683 | $14,195 | $41,022 | $44,432 | | Net cash flow provided by operating activities (in thousands) | $9,668 | $10,509 | $27,914 | $25,404 | | Total revenue (in thousands) | $58,289 | $60,759 | $177,046 | $184,583 | | Net loss (in thousands) | $(3,025) | $(1,596) | $(7,151) | $(3,823) | | Net loss per share - basic | $(0.07) | $(0.04) | $(0.17) | $(0.09) | | Net loss per share - diluted | $(0.07) | $(0.04) | $(0.17) | $(0.09) | | Total assets (in thousands) | N/A | N/A | $236,092 | $249,784 | | Total long-term liabilities (in thousands) | N/A | N/A | $73,711 | $76,051 | | Shareholders' equity (in thousands) | N/A | N/A | $102,536 | $109,801 | [Operating results](index=28&type=section&id=Operating%20results) Operational challenges, including Medicare rate changes and a cybersecurity incident, impacted revenue and growth targets - The discontinuance of the Medicare **75/25** blended rate as of January 1, 2024, negatively impacted revenue and operating results[75](index=75&type=chunk) - Challenges included the withdrawal of Medicare Advantage members and the non-renewal of a disposable supply contract in November 2024[76](index=76&type=chunk) - The Change Healthcare cybersecurity incident significantly hindered claims processing and billing, impacting cash flow and collections[77](index=77&type=chunk) - The cumulative impact of these events reduced total revenue by an estimated **$3 million** for the three months and **$7 million** for the nine months ended June 30, 2025, compared to the prior year[78](index=78&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section analyzes revenue, cost of inventory, operating expenses, and other income/loss items for the reporting periods | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Revenue | $58,289 (down 4.1%) | $60,759 | $177,046 (down 4.1%) | $184,583 | | Cost of inventory sold | $14,873 (25.5% of revenue) | $16,694 (27.5% of revenue) | $47,776 (27.0% of revenue) | $51,260 (27.8% of revenue) | | Operating expenses | $31,041 (up 1.5%) | $30,593 | $91,333 (up 0.2%) | $91,096 | | Stock-based compensation | $2,120 (up 339%) | $483 | $2,625 (up 21.9%) | $2,154 | | Gain on disposals of property and equipment | $872 (up 1609%) | $51 | $896 (up 1657%) | $51 | | Interest expense, net | $1,494 (down 6.7%) | $1,602 | $4,642 (down 4.4%) | $4,857 | | Change in fair value of derivative liability - interest rate swaps | $182 (loss) | $(105) (gain) | $(442) (gain) | $170 (loss) | | Loss (gain) on foreign currency transactions | $(610) (gain) | $128 (loss) | $231 (loss) | $145 (loss) | | Net loss | $(3,025) (increased loss) | $(1,596) | $(7,151) (increased loss) | $(3,823) | [Non-GAAP financial measure - Adjusted EBITDA](index=34&type=section&id=Non-GAAP%20financial%20measure%20-%20Adjusted%20EBITDA) Adjusted EBITDA, a non-GAAP measure, is reconciled to net loss and used to assess the company's operational performance - Adjusted EBITDA is a non-GAAP measure used to assess performance, excluding non-cash or unusual items, and is defined as net loss adjusted for various items including interest, depreciation, taxes, professional fees, stock-based compensation, and acquisition costs[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Net loss | $(3,025) | $(1,596) | $(7,151) | $(3,823) | | Add back: Depreciation and amortization | $11,239 | $11,092 | $33,609 | $33,044 | | Add back: Interest expense, net | $1,494 | $1,602 | $4,642 | $4,857 | | Add back: Right-of-use operating lease amortization and interest | $1,585 | $1,660 | $4,753 | $4,612 | | Add back: Provision for income taxes | $35 | $0 | $99 | $483 | | Add back: Professional fees | $1,308 | $723 | $3,085 | $2,205 | | Add back: Stock-based compensation | $2,120 | $483 | $2,625 | $2,154 | | Add back: Acquisition-related costs | $126 | $188 | $222 | $393 | | Add back: Change in fair value of derivative liability - interest rate swaps | $182 | $(105) | $(442) | $170 | | Add back: Gain on disposals of property and equipment | $(872) | $(51) | $(896) | $(51) | | Add back: Loss (gain) on foreign currency transactions | $(610) | $128 | $231 | $145 | | Add back: Share of loss in equity method investment | $101 | $71 | $245 | $243 | | **Adjusted EBITDA** | **$13,683** | **$14,195** | **$41,022** | **$44,432** | [Financial Position](index=38&type=section&id=Financial%20Position) This section summarizes the company's balance sheet, detailing changes in assets, liabilities, and equity | Metric | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :------------------------------------------ | :----------------------------- | :-------------------------------- | | Cash | $11,250 | $16,174 | | Accounts receivable, inventory, and prepaid and other current assets | $57,436 | $56,880 | | Property and equipment, net | $36,427 | $37,385 | | Right-of-use assets, net | $15,427 | $16,475 | | Goodwill, intangible assets, and other non-current assets | $115,552 | $120,334 | | **Total assets** | **$236,092** | **$247,248** | | Accounts payable and other current liabilities | $59,845 | $60,850 | | Long-term debt and other long-term liabilities | $73,711 | $79,207 | | **Total liabilities** | **$133,556** | **$140,057** | | **Shareholders' equity** | **$102,536** | **$107,191** | | **Total liabilities and shareholders' equity** | **$236,092** | **$247,248** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, credit facility availability, and ability to meet financial obligations - As of June 30, 2025, the company had **$11.25 million** in cash on hand and **$14.3 million** in revolving credit availability[107](index=107&type=chunk) - Management believes current liquidity sources are sufficient to fund operations and expected capital expenditures for the next twelve months[107](index=107&type=chunk) [Cash Flows](index=40&type=section&id=Cash%20Flows) This section analyzes cash flows from operating, investing, and financing activities and their impact on overall cash | Cash Flow Activity | Nine months ended June 30, 2025 (in thousands) | Nine months ended June 30, 2024 (in thousands) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net cash flow provided by operating activities | $27,914 (up $2,510) | $25,404 | | Net cash flow used in investing activities | $(9,611) (up $2,661) | $(6,950) | | Net cash flow used in financing activities | $(22,997) (up $1,882) | $(21,115) | | Net increase (decrease) in cash | $(4,924) | $(2,806) | - Operating cash flow improved due to a **$6.48 million** improvement in working capital, partially offset by a **$3.33 million** increase in net loss[109](index=109&type=chunk) - Investing cash outflow increased due to a **$3.89 million** rise in cash portion of rental equipment transferred from inventory[110](index=110&type=chunk) [Capital management](index=40&type=section&id=Capital%20management) This section defines the company's capital, its sources, and management's approach to funding operations and growth - The company's capital consists of shareholders' equity (**$102.54 million**) and its senior credit facility (**$64.95 million** principal amount) as of June 30, 2025[112](index=112&type=chunk) - Capital is primarily raised through credit facilities, long-term debt, and common share issuance to fund working capital and strategic opportunities[113](index=113&type=chunk) | Equity Instruments (in thousands of shares) | June 30, 2025 | September 30, 2024 | | :------------------------------------------ | :------------ | :----------------- | | Common shares | 43,444 | 43,091 | | Options | 3,778 | 3,402 | | Restricted share units | 2,583 | 519 | [Contractual Commitments and Obligations](index=41&type=section&id=Contractual%20Commitments%20and%20Obligations) This section details the company's total contractual obligations, including debt and lease liabilities, and their maturities | Obligation Type | Total (in thousands) | Less than 1 year (in thousands) | 1-3 Years (in thousands) | 3-5 Years (in thousands) | After 5 Years (in thousands) | | :-------------------------- | :------------------- | :------------------------------ | :----------------------- | :----------------------- | :--------------------------- | | Debt | $76,550 | $13,975 | $62,575 | $0 | $0 | | Operating leases | $16,188 | $5,449 | $7,103 | $2,924 | $712 | | Finance leases | $3,032 | $1,235 | $1,517 | $280 | $0 | | Other obligations | $32,717 | $32,717 | $0 | $0 | $0 | | **Total contractual obligations** | **$128,487** | **$53,376** | **$71,195** | **$3,204** | **$712** | [Critical Accounting Principles and Estimates](index=41&type=section&id=Critical%20Accounting%20Principles%20and%20Estimates) This section explains management's use of estimates in financial reporting and confirms no material policy changes - Management makes estimates and assumptions for financial reporting under GAAP, which are reviewed continuously and adjusted prospectively[117](index=117&type=chunk) - There have been no material changes in the company's significant accounting policies compared to the Annual Report on Form 10-K for the year ended September 30, 2024[118](index=118&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section outlines the company's exposure to credit, currency, and interest rate risks and how they are managed - The company is exposed to credit risk, currency risk, and interest rate risk, managed under Board-approved policies[119](index=119&type=chunk) - Credit risk is low, with **17%** of accounts receivable from Medicare and cash held with major financial institutions[120](index=120&type=chunk)[122](index=122&type=chunk) - Currency risk from Canadian dollar cash balances resulted in a **$231,000** foreign currency loss for the nine months ended June 30, 2025; the company does not currently use hedging programs[123](index=123&type=chunk)[124](index=124&type=chunk) - Interest rate risk on the variable-rate credit facility is partially mitigated by interest rate swaps on **$59 million** of principal, leaving **$7.01 million** subject to rate changes (a **1%** increase would add **$70,120** to annual interest expense)[125](index=125&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management assessed the effectiveness of disclosure controls and procedures, confirming their efficacy as of June 30, 2025 - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, providing reasonable assurance for timely and accurate financial reporting[126](index=126&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the three months ended June 30, 2025[128](index=128&type=chunk) [PART II — OTHER INFORMATION](index=45&type=section&id=Part%20II%20Other%20Information) This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Information on legal proceedings is cross-referenced to the commitments and contingencies note in the financial statements - Details on legal proceedings are provided in Note 7, 'Commitments and Contingencies,' of the financial statements[130](index=130&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, including political/economic conditions and activist shareholder actions, impacting the company - Political and economic conditions, including tariffs, trade disputes, and macroeconomic turmoil, could adversely affect the company's revenue, financial condition, and results of operations[132](index=132&type=chunk)[133](index=133&type=chunk)[136](index=136&type=chunk) - The company is subject to risks from proxy contests and activist shareholders, which can be costly, disrupt operations, divert management attention, and potentially impact business opportunities and share price volatility[137](index=137&type=chunk)[144](index=144&type=chunk) - The company entered into cooperation and standstill agreements with certain activist shareholders (Kanen and Forager) to mitigate immediate proxy contest risks[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[141](index=141&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common share repurchases made under a program that terminated on April 30, 2025 | Period | Total Number Of Shares Purchased | Average Price Paid per Share (USD) | Total Number of Shares Purchased as Part of Publicly Announced Programs | | :---------------- | :------------------------------- | :--------------------------------- | :---------------------------------------------------------- | | April 1 - 30, 2025 | 62,800 | $2.06 | 62,800 | | May 1 - 31, 2025 | — | — | — | | June 1 - 30, 2025 | — | — | — | | **Total** | **62,800** | **$2.06** | **62,800** | - The company's share repurchase program, authorizing purchases up to **3,626,845** common shares, terminated on April 30, 2025, with **62,800 shares** repurchased for **$129,000** during the three months ended June 30, 2025[142](index=142&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the current reporting period - This item is not applicable[145](index=145&type=chunk) [Item 4. Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the current reporting period - This item is not applicable[145](index=145&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading plans during the three months ended June 30, 2025 - No directors or officers adopted or terminated Rule 10b5-1 trading plans or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[146](index=146&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents and certifications - Exhibits include organizational documents, a cooperation agreement, CEO and CFO certifications (Sarbanes-Oxley Act Sections 302 and 906), and Inline XBRL documents[150](index=150&type=chunk)

Core Viewpoint - Quipt Home Medical Corp. reported its fiscal third quarter 2025 results, highlighting a return to positive organic growth and a stable revenue environment, despite a year-over-year revenue decline [1][7]. Financial Highlights - Revenue for Q3 2025 was $58.3 million, a 4.1% decrease from $60.8 million in Q3 2024, but a 1.6% increase from $57.4 million in Q2 2025 [6]. - For the nine months ended June 30, 2025, revenue decreased to $177.0 million from $184.6 million in the same period of 2024, also a 4.1% decline [6]. - Recurring revenue for Q3 2025 was strong at 81% of total revenue [6]. - Adjusted EBITDA for Q3 2025 was $13.7 million, representing 23.5% of revenue, compared to $14.2 million (23.4% of revenue) in Q3 2024, marking a 3.6% decrease [6]. - For the nine months ended June 30, 2025, adjusted EBITDA was $41 million (23.2% of revenue), down from $44.4 million (24.1% of revenue) in the same period of 2024, a decrease of 7.7% [6]. - Net loss for Q3 2025 was ($3.0) million, or ($0.07) per diluted share, compared to a loss of ($1.6) million, or ($0.04) per diluted share, in Q3 2024 [6]. - Cash flow from operations for the nine months ended June 30, 2025, was $27.9 million, up from $25.4 million in the same period of 2024 [6]. - As of June 30, 2025, the company had $11.3 million in cash, down from $17.1 million as of March 31, 2025 [6]. Operational Highlights - The customer base decreased by 1.3% year-over-year, serving 151,000 unique patients as of June 30, 2025, compared to 153,000 a year earlier [6]. - The company completed 210,000 unique set-ups/deliveries in Q3 2025, a 2.8% decrease from 216,000 in Q3 2024, but a 3.5% increase from 203,000 in Q2 2025 [6]. - Respiratory resupply set-ups/deliveries were 119,000 in Q3 2025, slightly down from 120,000 in Q3 2024, but up from 111,000 in Q2 2025, reflecting a 7.2% quarter-over-quarter growth [6]. Subsequent Highlights - On July 7, 2025, Quipt announced the acquisition of a full-service durable medical equipment provider, wholly owned by Ballad Health, which reported unaudited revenue of $6.6 million for the fiscal year ended June 30, 2025 [6][8]. - The acquisition is expected to enhance Quipt's reach to over 12,500 patients annually across four branch locations in East Tennessee and Southwest Virginia [6]. - Quipt signed a Preferred Provider Agreement with Ballad Health, embedding the company into the health system's hospital discharge planning process, providing access to patient referrals from 20 hospitals across multiple states [13].