10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark one)

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

For the Fiscal Year Ended September 30, 2024

OR

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

For the transition period from   to

Commission File No. ‎001-40413

QUIPT HOME MEDICAL CORP.

(Exact name of registrant as specified in its charter)

British Columbia, Canada	N/A
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

1019 Town Drive

Wilder, Kentucky 41076

‎(Address of principal executive offices, including zip code)‎

Telephone (859) 878-2220

‎(Registrant’s telephone number, including area code)‎

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

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Shares, without Par Value	QIPT	The Nasdaq Capital Market

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☑

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☐ No ☑

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

The aggregate market value of the voting and non-voting ‎ common shares ‎ held by non-affiliates of the registrant computed as of March 28, 2024 (the last business day of the registrant’s most recently completed second fiscal quarter) based on the closing price of the registrant’s common shares on the Nasdaq Capital Market was $153,207,393.‎

There were ‎43,091,273 common ‎ shares of the registrant outstanding as of December 11, 2024.

Documents Incorporated by Reference

Portions of the Proxy Statement for the 2025 Annual Meeting of Shareholders, which will be filed within one hundred and twenty days of the fiscal year ended September 30, 2024 (2025 Proxy Statement), are incorporated by reference into Part III of this report to the extent described herein.

FORM 10-K TABLE OF CONTENTS

			Page
PART I	Item 1.	Business	6
	Item 1A.	Risk Factors	8
	Item 1B.	Unresolved Staff Comments	31
	Item 1C.	Cybersecurity	31
	Item 2.	Properties	32
	Item 3.	Legal Proceedings	33
	Item 4.	Mine Safety Disclosure	33
PART II	Item 5.	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	34
	Item 6.	[Reserved]	34
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
	Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	51
	Item 8.	Financial Statements and Supplementary Data	53
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	83
	Item 9A.	Controls and Procedures	83
	Item 9B.	Other Information	84
	Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	84
PART III	Item 10.	Directors, Executive Officers and Corporate Governance	85
	Item 11.	Executive Compensation	85
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	85
	Item 13.	Certain Relationships and Related Transactions and Director Independence	85
	Item 14.	Principal Accountant Fees and Services	85
PART IV	Item 15.	Exhibits and Financial Statement Schedules	86
	Item 16.	Form 10-K Summary	88
		Signatures	89

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K, including Management’s Discussion and Analysis (“MD&A”) in Item 7, contains certain “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking ‎statements” within the meaning of applicable securities legislation, including the US Private Securities ‎Litigation Reform Act of 1995 (collectively, “forward-looking statements”)‎. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are ‎based upon the current beliefs, expectations, and assumptions regarding the future of its business, ‎future plans and strategies, and other future conditions of the Company. Forward-looking ‎statements can be identified by the words ‎such as “expect”, “likely”, “may”, “will”, “would”, “could”, “should”, “continue”, “contemplate”, “intend”, or ‎‎”anticipate”, “believe”, “envision”, “estimate”, “expect”, “plan”, “predict”, “project”, “target”, “potential”, ‎‎”proposed”, “estimate” and other similar words, including negative and grammatical variations thereof, or ‎statements that certain events or conditions “may” or “will” happen, or by discussions of strategy. Forward-looking ‎statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance, or other ‎statements that are not statements of fact. Such forward-looking statements are made as of the date of this ‎MD&A.‎

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

Forward-looking statements are based on the reasonable assumptions, estimates, analysis and opinions of the ‎Company’s management made in light of its experience and its perception of trends, current conditions and ‎expected developments, as well as other factors that management believes to be relevant and reasonable in the ‎circumstances at the date that such statements are made, but which may prove to be incorrect. The Company ‎believes that the assumptions and expectations reflected in such forward-looking statements are reasonable. The ‎material factors and assumptions used to develop the forward-looking statements include, ‎without limitation:‎ the ‎Company successfully identifying, ‎‎‎negotiating and ‎completing additional acquisitions; operating and other ‎financial metrics maintaining their ‎‎current trajectories, the Company not being impacted by any further external ‎and unique events like the Medicare ‎‎75/25 rate cut and the Change Healthcare cybersecurity incident for the ‎remainder of the calendar year and in 2025; the ‎Company not being subject to a material change to it cost ‎structure‎; the Company’s ability to successfully execute its growth strategies and business plan;‎ the ability to successfully identify strategic acquisitions;‎ the Company’s ability to realize anticipated benefits, synergies or generate revenue, profits or value from ‎its recent acquisitions into existing operations;‎ management’s perceptions of historical trends, current conditions and expected future developments;‎ the ability of the Company to take market share from competitors; ‎the Company’s ability to attract and retain skilled staff;‎ market conditions and competition;‎ the products, services and technology offered by the Company’s competitors;‎ the Company’s ability to generate cash flow from operations; the Company’s ability to keep pace with changing regulatory requirements;‎ the ongoing ability to conduct business in the regulatory environments in which the Company operates and ‎may operate in the future;‎ that the Company’s ability to maintain strong business relationships with its suppliers, service provides and ‎other third parties will be maintained; the Company’s ability to fulfill prescriptions for services and products; ‎ the anticipated growth of the niche market of home equipment and monitoring; the anticipated increase in demand for various medical products and equipment;‎ demand and interest in the Company’s products and services; ‎the ability to deploy up front capital to purchase monitoring and treatment equipment; ‎anticipated and unanticipated costs; ‎ the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses;‎ the general economic, financial market, regulatory and political conditions in which the Company operates ‎and the absence of material adverse changes in the Company’s industry, regulatory environment or ‎the global economy; and other considerations that management believes to be appropriate in the circumstances.‎

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Forward-looking statements speak only as at the date they are made and are based on information currently ‎available and on the then current expectations. A number of factors could cause actual events, performance, or results to differ materially from what is projected in the forward-looking statements. Readers are cautioned that forward-‎looking statements are not based on historical facts but instead are based on ‎reasonable assumptions and estimates ‎of management of the Company at the time they were provided ‎or made and involve known and unknown risks, ‎uncertainties and other factors which may cause the ‎actual results, performance or achievements of the Company, ‎as applicable, to be materially different ‎from any future results, performance or achievements expressed or implied ‎by such forward-looking ‎statements, including, but not limited to, known and unknown risks, uncertainties, ‎assumptions and other factors, including those listed under “Risk Factors”, which include: credit risks, market risks ‎‎(including those related to equity, commodity, foreign exchange and interest rate markets), liquidity risks, ‎operational risks (including those related to technology and infrastructure), and risks relating to reputation, ‎insurance, strategy, regulatory matters, legal matters, environmental matters and capital adequacy. Examples of ‎such risk factors include: significant capital requirements and operating risks; ‎changes in law; the ability to implement business strategies, growth strategies and pursue business opportunities; ‎state of the capital markets; the availability of funds and resources to pursue operations; decline of reimbursement ‎rates; dependence on few payors; possible new drug discoveries; a novel business model; dependence on key ‎suppliers; granting of permits and licenses in a highly regulated business; competition; difficulty integrating newly ‎acquired businesses; low profit market segments; disruptions in or attacks (including cyber-attacks) on information ‎technology, internet, network access or other voice or data communications systems or services; the evolution of ‎various types of fraud or other criminal behavior; the failure of third parties to comply with their obligations; the ‎impact of new and changes to, or application of, current laws and regulations; the overall litigation ‎environment, including as it relates to the CID (defined below) ‎received from the DOJ (defined below)‎; ‎increased competition; changes in foreign currency rates; risks relating to the ‎deterioration of global economic conditions; increased funding costs and market volatility due to market illiquidity ‎and competition for funding; critical accounting estimates and changes to accounting standards, policies, and ‎methods; and the occurrence of natural and unnatural catastrophic events and claims resulting from such events, ‎as well as other general economic, market and business conditions, among others, ‎as well as those risk factors ‎described under the heading “Risk Factors” elsewhere in this Annual Report on Form 10-K, and as described from time to time in documents filed by ‎the Company with US and Canadian securities regulatory authorities. Although the Company has attempted to identify ‎important factors that could cause actual actions, events or results to differ materially from those described in ‎forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, ‎estimated or intended. The Company provides no assurance that forward-looking statements will prove to be ‎accurate, as actual results and future events could differ materially from those anticipated in such statements.‎

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

SUMMARY OF RISK FACTORS

The below summary of risk factors provides an overview of many of the risks we are exposed to in the normal course of our business activities. As a result, the below summary risks do not contain all of the information that may be important to you, and you should read the summary risks together with the more detailed discussion of risks set forth following this section under the heading “Risk Factors,” as well as elsewhere in this Annual Report on Form 10-K. Additional risks, beyond those summarized below or discussed elsewhere in this Annual Report on Form 10-K, may apply to our activities or operations as currently conducted or as we may conduct them in the future or in the markets in which we operate or may in the future operate. Consistent with the foregoing, we are exposed to a variety of risks, including risks associated with the following:

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Risks Related to Our Business and Industry

● Reliance on relatively few suppliers for the majority of Quipt’s patient service equipment and supplies could adversely affect its ability to operate.

● Supply chain disruptions and economy-wide labor shortages in the U.S. have negatively impacted, and may continue to negatively impact, Quipt’s businesses.

● Quipt has been negatively impacted by inflation and rising interest rates.

● Quipt’s business depends on its information systems, including software licensed from or hosted by third parties, and any failure or significant disruption or effective cyber-attack on any of these systems, security breaches or improper disclosure of or loss of data could materially affect our business, results of operations and financial condition.

● Quipt’s financial performance is affected by continuing efforts by private third-party payors to control their costs, and if Quipt agrees to lower its reimbursement rates due to pricing pressures from such private third-party payors, Quipt’s financial condition and results of operations would likely deteriorate.

● Quipt’s payor contracts are subject to renegotiation or termination, which could result in a decrease in Quipt’s revenue or profits.

● Changes made by payors to the way they cover products supplied by Quipt could have an adverse impact on Quipt’s revenue and operations.

● Changes in governmental or private payor supply replenishment schedules could adversely affect Quipt.

● If Quipt fails to manage the complex and lengthy reimbursement process, its revenue, financial condition and results of operations could suffer.

● Quipt may be adversely affected by consolidation among health insurers and other industry participants.

● Quipt may be adversely affected if it is unable to maintain current levels of collectability and by the deterioration of the financial condition of Quipt’s payors and disputes with third parties could have a significant negative impact on its financial condition and results of operations.

● If Quipt is unable to maintain or develop relationships with patient referral sources, its growth and profitability could be adversely affected.

● Quipt experiences competition from numerous other sleep therapy equipment, home respiratory, and mobility equipment providers, and this competition could adversely affect its revenues and its business.

● Changes in medical equipment technology and development of new treatments may cause Quipt’s current equipment or services to become obsolete.

● Quipt’s operations involve the transport of compressed and liquid oxygen, which carries an inherent risk of rupture or other accidents with the potential to cause substantial loss and have involved the operation of medical gas facilities that are subject to federal and state regulations, which requires significant compliance oversight and expenses.

● Quipt currently outsources, and from time to time in the future may outsource, a portion of its internal business functions to third-party providers, which has significant risks, and Quipt’s failure to manage these risks successfully could materially adversely affect its business, results of operations, and financial condition.

● Quipt’s ability to successfully operate its business is largely dependent upon the efforts of key personnel of Quipt, including senior management, the loss of any of whom could negatively impact Quipt’s operations and financial results.

● Quipt’s strategic growth plan, which has historically involved the acquisition of other companies, may not succeed.

● Political and economic conditions, including significant global or regional developments such as economic and political events, international conflicts (including the ongoing war in Ukraine and in the Middle East), natural disasters and public health crises that are out of Quipt’s control, could adversely affect its revenue, financial condition and results of operations.

● Quipt’s current insurance program is expensive to maintain and may expose it to unexpected costs and negatively affect its business, financial condition and results of operations, particularly if it incurs losses not covered by its insurance or if claims or losses differ from its estimates.

● Potential conflicts of interest may arise.

● Quipt conducts all of its operations through foreign subsidiaries.

● Quipt’s revenue is generated from operations in the US and exposed to foreign exchange risk, which may negatively affect Quipt’s results of operations.

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Risks Related to Regulation

● Quipt’s revenue could be impacted by federal and state changes to reimbursement and other Medicaid and Medicare policies.

● Quipt is subject to US federal and state healthcare fraud and abuse and false claims laws and regulations, the prosecutions under which have increased in recent years and Quipt may become subject to such litigation, and if Quipt is unable to comply or has not fully complied with such laws, it could face substantial penalties.

● Failure by Quipt to successfully design, modify and implement technology-based and other process changes to maximize productivity and ensure compliance could ultimately have a significant negative impact on Quipt’s financial condition, reputation and results of operations.

● If the Centers for Medicare & Medicaid Services (“CMS”) requires prior authorization or implements changes in documentation necessary for Quipt’s products, Quipt’s revenue, financial condition and results of operations could be negatively impacted.

● Reimbursement claims are subject to audits by various governmental and private payor entities from time to time and such audits may negatively affect Quipt’s revenue, financial condition and results of operations.

● Significant reimbursement reductions and/or exclusion from markets or product lines could adversely affect Quipt.

● Failure by Quipt to maintain required licenses, permits and accreditation could impact its operations.

● Legislative action or changes could adversely affect Quipt’s business, results of operations and financial condition.

● Healthcare reform legislation could have a material impact on Quipt’s business, results of operations and financial condition.

● Actual or perceived failures to comply with applicable data protection, privacy and security, and consumer protection laws, regulations, standards and other requirements could adversely affect Quipt’s business, results of operations and financial condition.

● Quipt may be adversely affected by global climate change or by legal, regulatory or market responses to such change.

Risks Related to Our Financial Condition

● If Quipt were required to write down all or part of its goodwill, its net earnings and net worth could be materially adversely affected.

● Quipt may not be able to generate sufficient cash flow to cover required payments or comply with financial and operating covenants under its long-term debt and long-term operating leases.

● Quipt may need additional capital to fund its operating subsidiaries and finance its growth, and Quipt may not be able to obtain it on acceptable terms, or at all, which may limit its ability to grow.

● We will continue to incur significant increased expenses and administrative burdens as a result of being a public company, which could have a material adverse effect on Quipt’s business, financial condition and results of operations.

Risks Related to Our Securities

● We may not be able to effectively maintain controls and procedures required by Section 404 of the Sarbanes-Oxley Act that are applicable to us.

● We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies may make our Common Shares less attractive to investors.

● The change from foreign private issuer to U.S. domestic issuer effective as of October 1, 2024 may result in significant additional costs and expenses to us.

● Fluctuations in the price of Quipt’s securities could contribute to the loss of all or part of your investment.

● Because Quipt has no current plans to pay cash dividends on its Common Shares for the foreseeable future, you may not receive any return on investment unless you sell your Common Shares for a price greater than that which you paid for them.

● Quipt’s normal course issuer bid program may have an impact that is not fully reflected in the current share valuation.

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● Provisions in our constating documents and under British Columbia law could make an acquisition of us, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current management.

● Forward-looking statements may prove to be inaccurate which could have a material adverse effect on Quipt’s business, financial condition and results of operations.

PART I

Item 1. Business.

Company Overview

Quipt Home Medical Corp. and its subsidiaries (“Quipt” or the “Company”), is a provider of durable medical equipment (“DME”) / home medical equipment (“HME”) in the United States (“US”). The Company specializes in delivering effective in-home treatments for managing various chronic conditions, with a primary focus on respiratory diseases. The Company’s comprehensive solutions support patients dealing with heart and pulmonary diseases, sleep apnea, reduced mobility, and other chronic health challenges. Currently, the Company serves patients across 26 states in the US.

Quipt’s primary business objective is to create shareholder value by becoming one of the largest providers of in-home respiratory solutions in the US. This will be achieved through a dual strategy of driving organic growth in its core business and expanding its geographical footprint via strategic acquisitions of DME/HME providers. Quipt’s growth plan focuses on aggregating patients in existing or complementary markets, both through acquisitions and by capturing market share from competitors. Leveraging compliance technology, the company enhances patient compliance with ongoing training and follow-up, while streamlining the delivery and setup of equipment and devices to improve speed and ease for patients. Quipt expects to continue to be a solution to the rising healthcare costs in the US by offering more cost-effective home-based solutions while increasing the quality of life for patients dealing with respiratory diseases.

Quipt is an acquisitive company that follows a disciplined capital allocation strategy. The Company’s mergers and acquisitions (“M&A”) strategy is based on acquiring additional DME/HME providers that are synergistic to Quipt economies of scale. The Company generally seeks to acquire cash generating companies which lead to increased cash flows that are then re-invested to make additional new cash generating acquisitions. Quipt generally operates under a shared services model which results in obtaining cost efficiencies, technology improvements and synergies across the acquisitions and the various business units where possible. The Company is focused on the implementation of technology solutions for the acquired subsidiaries.

Corporate Information

Quipt was incorporated under the Business Corporations Act (Alberta) on March 5, 1997. Pursuant to a reverse take-over transaction completed on June 1, 2010 by way of a three-cornered amalgamation, the Company acquired all of the issued and outstanding shares in the capital of PHM DME Healthcare Inc. and changed its name to Patient Home Monitoring Corp. On December 30, 2013, pursuant to a Certificate of Continuance, the Company changed its jurisdiction of governance by continuing from Alberta into British Columbia. On December 21, 2017, pursuant to an arrangement under the provisions of Division 5 of Part 9 of the Business Corporations Act (British Columbia) (the “BCBCA”) involving the Company, Viemed Healthcare, Inc. and the securityholders of the Company, the Company completed a spin-out of Viemed Healthcare, Inc. and its operating businesses. In addition, on December 21, 2017, the Company completed an amalgamation, by way of vertical shortform amalgamation under the BCBCA, with its wholly owned subsidiary and the amalgamating company continuing as Patient Home Monitoring Corp. On May 4, 2018, the Company changed its name to Protech Home Medical Corp. On May 13, 2021, the Company changed its name from Protech Home Medical Corp. to Quipt Home Medical Corp. The Company’s head office is located at 1019 Town Drive, Wilder, Kentucky 41076, and its registered office is located at Suite 2700, 1133 Melville Street, Vancouver, British Columbia V6E 4E5. The Company’s common shares (“Common Shares”) are listed for trading on the Nasdaq Capital Market (“Nasdaq”) and the Toronto Stock Exchange (“TSX”), both under the symbol “QIPT”.‎ Our website address is located at quipthomemedical.com and our investor ‎relations website is located at quipthomemedical.com/investors. We file electronically with the U.S. Securities and ‎Exchange Commission (the “SEC”) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports

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‎on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange ‎Act. We make available on our website, free of charge, copies of these reports and other information as soon as ‎reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The reports are also ‎available at www.sec.gov.‎

Specialized Skills and Knowledge

The Company requires some of its employees to have specific skills, knowledge, and background to perform some key tasks and functions, such as patient care, patient set-up, etc. For example, the Company employs a team of respiratory therapists to provide these services. Each respiratory therapist is required to be state licensed, either as a Registered Respiratory Therapist and/or a Certified Respiratory Therapist. Additionally, the Company’s clinical team manages patients that use its services that range from nebulizers to invasive ventilation.

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

As the company is a US healthcare provider, it also requires employees in its revenue cycle management team to have specialized knowledge regarding processing claims and getting reimbursement for the products that the Company provides.

Competitive Conditions

The Company has physical operations in 26 states. The Company participates in a highly competitive market, which may become more competitive as new DME providers enter or existing DME providers merge with others. Certain competitors have vertically integrated manufacturing and services sectors of the market. Several large, national companies have operations and products and services offerings, as well as an acquisitive strategy similar to the Company, such as Lincare, Apria, Rotech, and Adapt Healthcare. Apart from the large national DME providers, the Company also faces competition from regional and local family-owned DME providers. While the Company is one of the top ten providers of DME/HME products and related services in the US, its current competitors may gain market share, and any new entrants, with greater financial and technical resources, may provide additional competition. Accordingly, there can be no assurance that the Company will be able to grow its operations organically to meet the competitive environment.

New Products

The Company continually explores and considers additional products and services that would complement the products and services already offered by its subsidiaries that would serve the current patient population and/or help the Company expand and enter into new segments and serve new patients in its existing service areas.

Significant Customers

For the years ended September 30, 2024 and 2023, the Company had no customers that accounted for 10% or more of its consolidated revenue. The Company earns revenues by seeking reimbursement from government agencies (such as Medicare and Medicaid) and private health insurance companies. With the Medicare program of the US government being the primary entity making payments for a significant portion of revenue, if the Medicare program were to slow payments of the Company receivables for any reason, the Company would be adversely impacted.

Changes to Contracts

CMS policies of health insurance for Medicare in the US may affect the amount of revenue the Company receives. Apart from Medicare reimbursement, the majority of the Company’s revenues are derived from the fee-for-service pricing guidelines set by numerous payors like private health insurance companies and other governmental agencies like Medicaid that it contracts with. These pricing guidelines are subject to change at the discretion of these payor contracts.

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Employees

As of September 30, 2024, the Company had a total of approximately 1,200 employees. In addition, the Company has staff augmentation arrangements with global partners.

Foreign Operations

As at the date hereof, the Company conducts all of its operations through its subsidiaries, which operate exclusively in the US.

Item 1A. Risk Factors

We operate in a rapidly changing environment that involves a number of risks. The following discussion highlights some of these risks and others are discussed elsewhere in this report. These and other risks could materially adversely affect our business, revenue, financial condition and results of operations. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. See also “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K.

Risks Related to Our Business and Industry

Reliance on relatively few suppliers for the majority of Quipt’s patient service equipment and supplies could adversely affect its ability to operate.

Quipt currently relies on a relatively small number of suppliers to provide it with the majority of its patient service equipment and supplies. Significant price increases, or disruptions in the ability to obtain such equipment and supplies from existing suppliers, may force Quipt to use alternative suppliers. Additionally, any new tariffs, taxes, or other costs imposed on manufacturers of certain medical equipment could be passed on to customers, such as Quipt. Such manufacturers may be forced to make other changes to their products or manufacturing processes that are unacceptable to Quipt, resulting in a need to change suppliers. Any change in suppliers Quipt uses could cause delays in the delivery of such products and possible losses in revenue, which could adversely affect Quipt’s results of operations. In addition, alternative suppliers may not be available or may not provide their products and services at similar or favorable prices. The emerging nature of the market presents risks that suppliers may not be able to provide equipment to satisfy ‎demand. Demand may outstrip supply, leading to equipment shortages. ‎If Quipt cannot obtain the patient service equipment and supplies it currently uses, or alternatives at similar or favorable prices, Quipt’s ability to provide such products may be severely impacted, which could have an adverse effect on its business, financial condition, results of operations, cash flow, capital resources and liquidity. Conversely, incorrect demand forecasting could lead to excess inventory. The industry is subject to a high level of ‎regulatory scrutiny, and government or manufacturer recalls could adversely affect Quipt’s ability to provide ‎services and achieve revenue targets.‎

Inadequate supply could impair Quipt’s ability to attract new business and could create upward pricing pressure ‎on equipment and supplies, adversely affecting margins for Quipt. Several equipment manufacturers are ‎pursuing a strategy of vertical integration and should Quipt ever need to order equipment from those ‎manufacturers, such equipment may not be available on favorable terms.‎

Supply chain disruptions and economy-wide labor shortages in the U.S. could negatively impact Quipt’s businesses.

Supply chain disruptions, such as materials and equipment shortages, shipping, logistics and other delays, might make it more difficult and costly for Quipt to obtain products or services from third parties. If these types of disruptions occur, they could have a material adverse effect on Quipt’s business, financial condition, results of operations and cash flows. Labor shortages may lead to a significant increase in competition throughout the industry to attract and retain talent and lead to increased labor costs.

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Quipt’s failure to recruit and retain qualified employees, or to control its labor costs, could have a material adverse effect on its business, financial position, results of operations, and cash flows.

While Quipt seeks to mitigate any cost increases, labor impacts and supply chain delays and shortages, these efforts may not be successful and Quipt could experience adverse impacts due to such factors. Quipt cannot predict the extent of these factors or other future increases in operating costs. To the extent such costs continue to increase, Quipt may be prevented, in whole or in part, from passing such cost increases through to its existing and prospective customers, or Quipt’s customers may seek other competitive sources due to supply chain delays, which could have a material adverse impact on Quipt’s business, financial position, results of operations and cash flows.

Quipt has been negatively impacted by inflation and rising interest rates.

Increases in inflation have had, and may continue to have, an adverse effect on Quipt. Current and future inflationary effects may be driven by, among other things, general inflationary cost increases, supply chain disruptions and governmental stimulus or fiscal policies. The cost to manufacture and distribute the equipment and products that Quipt provides to patients is influenced by the cost of materials, labor, and transportation, including fuel costs. Quipt continues to experience inflationary pressure and higher costs as a result of the increasing cost of materials, labor and transportation. The increase in the cost of equipment and products is due in part to a shortage in the availability of certain products, the higher cost of shipping, and general inflationary cost increases. Additionally, it is not certain that Quipt will be able to pass increased costs onto customers to offset inflationary pressures. Continuing increases in inflation could impact the overall demand for Quipt’s products and services, its costs for labor, equipment and products, and the margins it is able to realize on its products, all of which could have an adverse impact on Quipt’s business, financial position, results of operations and cash flows. In addition, future volatility of general price inflation and the impact of inflation on costs and availability of materials, costs for shipping and warehousing, workforce wage pressure, and other operational overhead could adversely affect Quipt’s financial results. Although there have been recent increases in inflation, Quipt cannot predict whether these trends will continue.

Inflationary increases may result in higher interest rates, which in turn may result in higher interest expense related to variable rate indebtedness. Future increases in inflation may result in higher interest rates which could increase interest expense related to Quipt’s variable rate indebtedness and any borrowings it may undertake to refinance existing fixed rate indebtedness. Higher interest rates also impact the discount rate used in the valuation of intangible assets, including goodwill, and the impact on the discount rate could result in additional impairment charges for such assets. In addition, there can be no assurance that we will be able to refinance our credit facility upon maturity, or that any such refinancing would be on terms as favorable as the terms of the existing facility. If we are unable to refinance the term loan at maturity or are only able to do so at higher interest rates, our interest expense would increase, and the amount of our cash flow and our financial condition could be adversely affected.

Quipt’s business depends on its information systems, including software licensed from or hosted by third parties, and any failure or significant disruption or effective cyber-attack on any of these systems, security breaches or improper disclosure of or loss of data could materially affect our business, results of operations and financial condition.

Quipt’s business depends on the proper functioning and availability of its computer systems and networks. Quipt relies on an external service provider to provide continual maintenance, upgrading and enhancement of various information systems used by Quipt for its operational needs. Quipt licenses third-party software that supports intake, personnel scheduling and other human resources functions, office clinical and centralized billing and receivables management in an integrated database, enabling Quipt to standardize the care delivered across its network of locations and monitor its performance and consumer outcomes. Quipt also uses various third-party software providers for its order processing and inventory management platform. To the extent that its third-party providers fail to support, maintain and upgrade such software or systems, or if Quipt loses its licenses with third-party providers, the efficiency of Quipt’s operations could be disrupted or reduced.

The risk of a security breach or disruption, particularly through cyber-attacks or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. In addition, the prevalent use of

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mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information or other intellectual property. Quipt or its third-party vendors may experience cybersecurity and other breach incidents, including such incidents that remain undetected for an extended period. A cybersecurity attack or other incident that bypasses Quipt’s or its third-party vendors’ information systems security could cause a security breach that may lead to a material disruption to Quipt’s information systems infrastructure or business and/or involve a significant loss of business or patient health or other protected data or information. If a cybersecurity attack or another unauthorized attempt to access Quipt’s or its third-party vendors’ systems or facilities were to be successful, it could result in the theft, destruction, loss, misappropriation or release of confidential information or intellectual property, and could cause operational or business delays that may materially impact Quipt’s ability to provide various healthcare services.

Even when a security breach is detected, the full extent of the breach may not be determined immediately. If Quipt experiences a reduction in the performance, reliability, or availability of its information systems, its operations and ability to process transactions and produce timely and accurate reports could be materially adversely affected. If Quipt experiences difficulties with the transition and integration of information systems or is unable to implement, maintain, or expand its systems properly, Quipt could suffer from, among other things, operational disruptions, delays, cessation of service, regulatory problems, increases in administrative expenses and other harm to its business and competitive position. For example, in February 2024, Quipt learned that one of its third-party software providers who interfaces with UnitedHealth Group’s Change Healthcare (“Change Healthcare”) information technology systems in connection with Quipt’s claims processing activity had a cybersecurity threat actor gain access to some of the Change Healthcare information technology systems. UnitedHealth Group isolated the impacted systems upon learning of this threat and Change Healthcare suspended its claims processing activity with Quipt’s third-party software provider. Although claims processing has resumed, the full impact of this incident has yet to be determined, and it could have an adverse effect on Quipt’s business and results of operations.

There can be no assurance that Quipt’s and its third-party software providers’ safety and security measures and disaster recovery plans will prevent damage, interruption, breach of their information systems and operations or data loss. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect, Quipt and its third-party software providers’ may be unable to anticipate these techniques or implement adequate preventive measures. In addition, hardware, software or applications Quipt develops or procures from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise the security of its information systems. Unauthorized parties may attempt to gain access to Quipt’s systems or facilities, or those of third parties with whom Quipt does business, including its confidential managed file transfer software providers, through fraud or other forms of deceiving its employees or contractors. Costs and potential problems and interruptions associated with any such unauthorized access or the implementation of new or upgraded systems and technology or with maintenance or adequate support of existing systems and technology, including systems and technology intended to protect against unauthorized access, also could disrupt or reduce the efficiency of Quipt’s operations.

Any successful cybersecurity attack or other unauthorized access to Quipt’s, Quipt’s third-party vendors’, or any of its or their acquisition targets’ systems, facilities or patient health information also could result in negative publicity, which could damage Quipt’s reputation or brand with its patients, referral sources, payors or other third parties and could subject Quipt to substantial penalties under HIPAA and other federal and state data protection laws, in addition to costs and potential damages associated with private litigation related to those affected. Failure to maintain the security and functionality of Quipt’s information systems and related software or to contract with third parties, or a failure to defend a cybersecurity attack or other attempt to gain unauthorized access to Quipt’s, Quipt’s third-party vendors’, or any of its or their acquisition targets’ systems, facilities or patient health information, could expose Quipt to a number of adverse consequences, the vast majority of which are not insurable, including, but not limited to, disruptions in Quipt’s operations, regulatory and other civil and criminal penalties, fines, investigations and enforcement actions (including, but not limited to, those arising from the SEC, Canadian securities regulatory authorities, FTC, the Office of Inspector General or state attorneys general), private litigation with those affected by the data breach, loss of customers, disputes with payors and increased operating expense, all or any of which could adversely impact Quipt’s financial condition and results of operations.

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Quipt’s financial performance is affected by continuing efforts by private third-party payors to control their costs, and if Quipt agrees to lower its reimbursement rates due to pricing pressures from such private third-party payors, Quipt’s financial condition and results of operations would likely deteriorate.

Quipt derived approximately 27% of its net revenue for each of the years ended September 30, 2024 and 2023, by seeking reimbursement from Medicare. If the Medicare program were to slow payments of Quipt receivables for any reason, Quipt would be ‎adversely impacted. In addition, Medicare, private health insurance companies,‎ and third-party private payors ‎continually seek to control the cost of providing healthcare services through direct contracts with healthcare providers, increased oversight and greater enrollment of patients in managed care programs and preferred provider organizations. These private payors are increasingly demanding discounted fee structures, including setting reimbursement rates based on Medicare fee schedules or requiring healthcare providers or suppliers to assume a greater degree of financial risk related to patient care. Reimbursement rates under private payor programs may not remain at current levels and may not be sufficient to cover the costs of caring for patients enrolled in such programs, and Quipt may experience a deterioration in pricing flexibility, changes in payor mix and growth in operating expenses in excess of increases in payments by private third-party payors. Quipt may be compelled to lower its prices due to increased pricing pressures, which could adversely impact Quipt’s financial condition and results of operations. A reduction in reimbursement may be unrelated to any concurrent decline in the cost of operations, thereby resulting in ‎reduced profitability. Quipt’s costs of operations could increase, but the cost increases may not be passed on to ‎customers because reimbursement rates are set without regard to the cost of service.‎

Quipt’s payor contracts are subject to renegotiation or termination, which could result in a decrease in Quipt’s revenue or profits.

The majority of Quipt’s payor contracts are subject to unilateral termination by either party on between 30 and 90 days’ prior written notice. Such contracts are routinely amended (sometimes by unilateral action by payors regarding payment policy), renegotiated, subjected to a bidding process with Quipt’s competitors, or terminated altogether. Sometimes in the renegotiation process, certain lines of business may not be renewed, or a payor may enlarge its provider network or otherwise change the way it conducts its business in a way that adversely impacts Quipt’s revenue. In other cases, a payor may reduce its provider network in exchange for lower payment rates. Quipt’s revenue from a payor may also be adversely affected if the payor alters its utilization management expectations and/or administrative procedures for payments and audits, changes its order of preference among the providers to which it refers business or imposes a third-party administrator, network manager or other intermediary. Payors may also decide to refer business to their owned provider subsidiaries, such as specialty pharmaceuticals and/or home medical equipment networks owned by such payors or by third-party management companies. Any of these activities could materially reduce Quipt’s revenue from these payors.

Changes made by payors to the way they cover products supplied by Quipt could have an adverse impact on Quipt’s revenue and operations.

Payors that provide coverage for products supplied by Quipt can make changes to their plans and benefit designs that can have an adverse impact on Quipt’s revenue and operations. The impact of changing the benefit can include changes to the types of providers that can provide products, increased competition, changes to covered amounts, and changes to patient deductibles.

Changes in governmental or private payor supply replenishment schedules could adversely affect Quipt.

A significant amount of our revenue comes from the sale of various products, such as masks and tubing and rental of medical equipment, such as CPAPs, oxygen concentrators, and ventilators. Medicare, Medicaid and private payors limit the number of times per year that patients may purchase such supplies or the number of months that equipment can be rented. To the extent that any governmental or private payor revises their guidelines to reduce the number of times such supplies can be purchased or the number of months that equipment can be rented, such reductions could adversely impact Quipt’s revenue, financial condition and results of operations.

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If Quipt fails to manage the complex and lengthy reimbursement process, its revenue, financial condition and results of operations could suffer.

Because Quipt depends upon reimbursement from Medicare, Medicaid and third-party payors for a significant majority of its revenues, Quipt’s revenue, financial condition and results of operations may be affected by the reimbursement process, which in the healthcare industry is complex and can involve lengthy delays between the time that services are rendered and the time that the reimbursement amounts are settled. Depending on the payor, Quipt may be required to obtain certain payor-specific documentation from physicians and other healthcare providers before submitting claims for reimbursement. Certain payors have filing deadlines and will not pay claims submitted after such deadlines. Quipt cannot ensure that it will be able to effectively manage the reimbursement process and collect payments for its equipment and services promptly.

Quipt may be adversely affected by consolidation among health insurers and other industry participants.

In recent years, there has been a continuing trend of health insurers merging or increasing efforts to consolidate with other non-governmental payors. Insurers are also increasingly pursuing alignment initiatives with healthcare providers. Consolidation within the health insurance industry may result in insurers having increased negotiating leverage and competitive advantages, such as greater access to performance and pricing data. Quipt’s ability to negotiate prices and favorable terms with health insurers in certain markets could be affected negatively as a result of this consolidation. In addition, the shift toward value-based payment models could be accelerated if larger insurers, including those engaging in consolidation activities, find these models to be financially beneficial. There can be no assurance that Quipt will be able to negotiate favorable terms with payors and otherwise respond effectively to the impact of increased consolidation in the payor industry or vertical integration efforts.

Quipt may be adversely affected if it is unable to maintain current levels of collectability and by the deterioration of the financial condition of Quipt’s payors and disputes with third parties could have a significant negative impact on its financial condition and results of operations.

The collection of accounts receivable requires constant focus and involvement by management and ongoing enhancements to information systems and billing center operating procedures. There can be no assurance that Quipt will be able to improve upon or maintain its current levels of collectability and days sales outstanding in future periods. Further, some of Quipt’s payors and/or patients may experience financial difficulties, or may otherwise not pay accounts receivable when due, resulting in increased write-offs. If Quipt is unable to properly bill and collect its accounts receivable, its financial condition and results of operations will be adversely affected. In addition, from time to time, Quipt is involved in disputes with various parties, including its payors and their intermediaries regarding their performance of various contractual or regulatory obligations. These disputes sometimes lead to legal and other proceedings and cause Quipt to incur costs or experience delays in collections, increases in its accounts receivable or loss of revenue. In addition, in the event such disputes are not resolved in Quipt’s favor or cause Quipt to terminate its relationships with such parties, there may be an adverse impact on its financial condition and results of operations.

If Quipt is unable to maintain or develop relationships with patient referral sources, its growth and profitability could be adversely affected.

Quipt’s growth and profitability depend in large part on referrals from acute care hospitals, sleep laboratories, pulmonologist and endocrinologist offices, skilled nursing facilities, hospice operators and other patient referral sources in the communities served by Quipt, its ability to establish and maintain close working relationships with such patient referral sources and to increase awareness and acceptance of the benefits of inpatient rehabilitation, home health, and hospice care by its referral sources and their patients. By law, referral sources cannot be contractually obligated to refer patients to any specific provider. In addition, Quipt’s relationships with referral sources are subject to federal and state healthcare laws such as the federal Anti-Kickback Statute and the Stark Law to the extent these services provide a financial benefit to or relieve a financial burden for a potential referral source, or are subsequently found not to be for fair market value. However, there can be no assurance that other market participants will not attempt to steer patients to competing post-acute providers or otherwise limit Quipt’s access to potential referrals. The establishment of joint ventures or networks between referral sources, such as acute care hospitals, and other post-acute providers may hinder patient referrals to Quipt.

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Quipt’s loss of, or failure to maintain, existing relationships or its failure to develop new relationships with referral sources could adversely affect its ability to grow its business and operate profitably.

Quipt experiences competition from numerous other sleep therapy equipment, home respiratory, and mobility equipment providers, and this competition could adversely affect its revenues and its business.

The sleep therapy equipment, home respiratory, and mobility equipment markets are highly competitive and include a large number of providers, some of which are national providers, but most of which are either regional or local providers, including hospital systems, physician specialists and sleep labs. The primary competitive factors are quality considerations such as responsiveness, access to payor contracts, the technical ability of the professional staff and the ability to provide comprehensive services. These markets are very fragmented. Some of Quipt’s competitors may now or in the future have greater financial resources or more effective sales and marketing activities. The rest of the homecare market in the US consists of regional providers and product-specific providers, as well as numerous local organizations. Hospitals and health systems are routinely looking to provide coverage and better control of post-acute healthcare services, including homecare services of the types Quipt provides. These trends may continue as new payment models evolve, including bundled payment models, shared savings programs, value-based purchasing and other payment systems.

New entrants to the sleep therapy equipment, home respiratory/home medical equipment and mobility equipment markets could have a material adverse effect on Quipt’s business, results of operations and financial condition. A number of manufacturers of home respiratory equipment currently provide equipment directly to patients on a limited basis. Such manufacturers have the ability to provide their equipment at prices below those charged by Quipt, and there can be no assurance that such direct-to-patient sales efforts will not increase in the future or that such manufacturers will not seek reimbursement contracts directly with Quipt’s third-party payors, who could seek to provide equipment directly to patients from the manufacturer. In addition, pharmacy benefit managers could enter the home medical equipment market and compete with Quipt. Large technology companies, such as Amazon.com, Inc. and Alphabet Inc., have disrupted other supply businesses and have entered the healthcare market. In the event such companies enter the home medical equipment market, Quipt may experience a loss of referrals or revenue.

Changes in medical equipment technology and development of new treatments may cause Quipt’s current equipment or services to become obsolete.

Quipt evaluates changes in home medical equipment technology and treatments on an ongoing basis for purposes of determining the feasibility of replacing or supplementing items currently included in the patient service equipment inventory and services that Quipt offers patients. Quipt’s selection of medical equipment and services is formulated on the basis of a variety of factors, including overall quality, functional reliability, availability of supply, payor reimbursement policies, product features, labor costs associated with the technology, acquisition, repair and ownership costs and overall patient and referral source demand, as well as patient therapeutic and lifestyle benefits. Manufacturers continue to invest in research and development to introduce new products to the marketplace. It is possible that major changes in available technology, payor benefit or coverage policies related to those changes, or the preferences of patients and referral sources may cause Quipt’s current product offerings to become less competitive or obsolete, and it will be necessary to adapt to those changes. Unanticipated changes could cause Quipt to incur increased capital expenditures and accelerated equipment write-offs, and could force Quipt to alter its sales, operations and marketing strategies.

In addition, the development and commercialization of new drugs to address obesity may limit the prospects for Quipt’s current equipment or services. A number of new glucagon-like peptide (GLP-1) receptor agonist drugs, including Mounjaro, Wegovy, and Ozempic, have entered the market. The long-term effect of these drugs on Quipt’s business is uncertain. However, these drugs may have a significant impact on obesity rates over time, which may result in reduced demand for our current equipment or services, and we may not be able to adapt to those changes to stay competitive.

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Quipt’s operations involve the transport of compressed and liquid oxygen, which carries an inherent risk of rupture or other accidents with the potential to cause substantial loss and have involved the operation of medical gas facilities that are subject to federal and state regulations, which requires significant compliance oversight and expenses.

Quipt’s operations are subject to the many hazards inherent in the transportation of medical gas products and compressed and liquid oxygen, including ruptures, leaks and fires. These risks could result in substantial losses due to personal injury or loss of life, severe damage to and destruction of property and equipment and pollution or other environmental damage and may result in curtailment or suspension of Quipt’s related operations. If a significant accident or event occurs, it could adversely affect Quipt’s business, financial position and results of operations. Additionally, corrective action plans, fines or other sanctions may be levied by government regulators who oversee transportation of hazardous materials such as compressed or liquid oxygen.

Quipt provides a significant number of patients with oxygen-based therapy, and from time to time, Quipt has operated medical gas facilities in several states subject to federal and state regulatory requirements. Quipt’s medical gas facilities and operations are subject to extensive regulation by the Food and Drug Administration (“FDA”) and other federal and state authorities. The FDA regulates medical gases, including medical oxygen, pursuant to its authority under the federal Food, Drug and Cosmetic Act. Among other requirements, the FDA’s current Good Manufacturing Practice (“cGMP”) regulations impose certain quality control, documentation and record keeping requirements on the receipt, processing and distribution of medical gas. Further, in each such state, its medical gas facilities would be subject to regulation under state health and safety laws, which vary from state to state. The FDA and state authorities conduct periodic, unannounced inspections at medical gas facilities to assess compliance with the cGMP and other regulations, and Quipt expends significant time, money and resources in an effort to achieve substantial compliance with the cGMP regulations and other federal and state law requirements at each of its medical gas facilities. Quipt also complies with the FDA’s requirement for medical gas providers to register their sites with the agency. There can be no assurance, however, that these efforts will be successful and that Quipt’s medical gas facilities will maintain compliance with federal and state law regulations. Failure by Quipt to maintain regulatory compliance at its medical gas facilities could result in enforcement action, including warning letters, fines, product recalls or seizures, temporary or permanent injunctions, or suspensions in operations at one or more locations, and civil or criminal penalties which could materially harm its business, financial condition, results of operations, cash flow, capital resources and liquidity.

Quipt currently outsources, and from time to time in the future may outsource, a portion of its internal business functions to third-party providers, which has significant risks, and Quipt’s failure to manage these risks successfully could materially adversely affect its business, results of operations, and financial condition.

Quipt currently outsources, and from time to time in the future may outsource, portions of its internal business functions, including billing and administrative functions relating to revenue cycle management and accounts payable, to third-party providers in India and the Philippines, and utilizes third-party managed file transfer software providers to transfer its sensitive and protected customer data. These third-party providers may not comply on a timely basis with all of Quipt’s requirements or may not provide Quipt with an acceptable level of service or may not protect properly Quipt’s and its customers’ confidential or protected data. This could result in significant disruptions in Quipt’s operations and significantly increase costs to undertake Quipt’s operations, either of which could damage Quipt’s relationships with its customers. In addition, Quipt’s outsourced functions may be negatively impacted by any number of factors, including: political unrest; public health crises; social unrest; cyber-attacks; terrorism; war; vandalism; currency fluctuations; changes to the laws of India, the Philippines, the US or any other jurisdictions in which Quipt does business or outsources operations; or increases in the cost of labor and supplies in India and the Philippines or any other jurisdiction in which Quipt outsources any portion of its internal or other business functions. Quipt’s outsourced operations may also be affected by trade restrictions, such as tariffs or other trade controls. As a result of its outsourcing activities, it may also be more difficult for Quipt to recruit and retain qualified employees for its business needs at any time. Quipt’s failure to successfully outsource certain of its business functions could materially adversely affect its business, results of operations, and financial condition.

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Quipt’s ability to successfully operate its business is largely dependent upon the efforts of key personnel of Quipt, including senior management, the loss of any of whom could negatively impact Quipt’s operations and financial results.

Quipt is highly dependent on the performance and continued efforts of its senior management team. Quipt’s future success is dependent on its ability to continue to attract and retain qualified executive officers and senior management. Any inability to manage Quipt’s operations effectively could adversely impact its financial condition and results of operations.

Quipt’s ability to successfully operate its business is also dependent upon the efforts of certain other key personnel of Quipt. It is possible that Quipt will lose some key personnel, the loss of which could negatively impact its operations and profitability.

Quipt’s strategic growth plan, which has historically involved the acquisition of other companies, may not succeed.

Quipt’s strategic plan calls for growth in its business over the next several years through an increase in its density in select markets where it is established as well as the expansion of its geographic footprint into new markets. This growth would place (and has placed) significant demands on Quipt’s management team, systems, internal controls and financial and professional resources. As a result, Quipt could be required to incur (and has incurred) expenses for hiring additional qualified personnel, retaining professionals to assist in developing the appropriate control systems and expanding Quipt’s information technology infrastructure. If Quipt is unable to effectively manage growth, its financial results could be adversely impacted.

Quipt’s strategic plan has historically involved acquisitions of home medical equipment providers, and such acquisitions remain an element of Quipt’s strategy. Quipt may face increased competition for attractive acquisition candidates, which may limit the number of acquisition opportunities available to Quipt or lead to the payment of higher prices for its acquisitions. Without successful acquisitions, Quipt’s future growth rate could decline. In addition, Quipt cannot guarantee that any future acquisitions, if consummated, will result in further growth.

Quipt’s strategic plan contemplates successful integration of acquired home medical equipment providers with Quipt’s existing business, including reduction in operating expenses with respect to the acquired companies. Integrating an acquisition could be expensive and time-consuming and could disrupt Quipt’s ongoing business, negatively affect cash flow and distract management and other key personnel from day-to-day operations. Quipt may not be able to successfully combine the operations of recently acquired companies with its operations, and, even if such integration is accomplished, Quipt may never realize the potential benefits of such an acquisition.

The integration of acquisitions requires significant attention from management, may impose substantial demands on Quipt’s operations or other projects and may impose challenges on us including, but not limited to, consistencies in business standards, procedures, policies and business cultures. There can be no assurance that any future acquisitions, if consummated, will result in further growth.

Specific integration risks relating to the acquisition of other companies by Quipt may include:

● difficulties related to combining previously separate businesses into a single unit, including patient transitions, product and service offerings, distribution and operational capabilities and business cultures;

● availability of financing to the extent needed to fund acquisitions;

● customer loss and other general business disruption;

● managing the integration process while completing other independent acquisitions or dispositions;

● diversion of management’s attention from day-to-day operations;

● assumption of liabilities of an acquired business, including unforeseen or contingent liabilities or liabilities in excess of the amounts estimated;

● failure to realize anticipated benefits and synergies, such as cost savings and revenue enhancements;

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● potentially substantial costs and expenses associated with acquisitions and dispositions;

● failure to retain and motivate key employees;

● difficulties in establishing and applying Quipt’s internal control over financial reporting and disclosure controls and procedures to an acquired business;

● obtaining necessary regulatory licenses and payor-specific approvals, which may impact the timing of when Quipt is to bill and collect for services rendered;

● Quipt’s ability to transition patients in a timely manner may impact Quipt’s ability to collect amounts for services rendered;

● Quipt’s estimates for revenue accruals during the integration of acquisitions may require adjustments in future periods as the transition of patient information is finalized; and

● delays in obtaining new government and commercial insurance payor identification numbers for acquired branches, resulting in a slowdown and/or loss of associated revenue.

Political and economic conditions, including significant global or regional developments such as economic and political events, international conflicts (including the ongoing war in Ukraine and in the Middle East), natural disasters and public health crises that are out of Quipt’s control, could adversely affect its revenue, financial condition and results of operations.

Quipt’s business can be affected by a number of factors that are beyond its control, such as general geopolitical, economic and business conditions, including slower economic growth, disruptions in financial markets, economic downturns in the form of either contained or widespread recessionary conditions, inflation, elevated unemployment levels, sluggish or uneven economic recovery, government actions impacting trade agreements including the imposition of trade restrictions such as tariffs and retaliatory counter measures, government deficit reduction, tax legislation increasing the federal corporate income tax rates, natural and other disasters, public health crises affecting the operations of Quipt or its customers or suppliers, staffing shortages, production slowdowns or stoppages, raw material shortages and disruptions in delivery systems. We continue to monitor the worsening macroeconomic conditions, such as the war in Ukraine, the ongoing conflict in the Middle East and other global geopolitical tensions. Turmoil in the financial markets, including in the capital and credit markets, and any uncertainty over its breadth, depth and duration may put pressure on the global economy and could have a negative effect on Quipt’s business. The shortage of liquidity and credit combined with substantial losses in worldwide equity markets could cause an economic recession in the US or worldwide. If global financial markets experience extreme disruption, governments may take unprecedented actions intended to address extreme market conditions that may include severely restricted credit and declines in real estate values. If conditions in the global economy, U.S. economy or other key vertical or geographic markets are weak or uncertain, Quipt could experience material adverse impacts on its revenue, financial condition and results of operations.

Quipt’s current insurance program is expensive to maintain and may expose it to unexpected costs and negatively affect its business, financial condition and results of operations, particularly if it incurs losses not covered by its insurance or if claims or losses differ from its estimates.

There is an inherent risk of liability in the provision of healthcare services. As participants in the healthcare industry, Quipt may periodically be subject to lawsuits, some of which may involve large claims and significant costs to defend, such as mass tort or other class actions. Although Quipt’s insurance coverage reflects deductibles, self-insured retentions, limits of liability and similar provisions that it believes are reasonable based on its operations, the coverage under its insurance programs may not be adequate to protect it in all circumstances. Quipt’s insurance policies contain exclusions and conditions that could have a materially adverse impact on Quipt’s ability to receive indemnification thereunder, as well as customary sub-limits for particular types of losses. Additionally, insurance companies that currently insure companies in Quipt’s industry may cease to do so, may change the coverage provided or may substantially increase premiums in the future. The incurrence of losses and liabilities that exceed Quipt’s available coverage, therefore, could have a material adverse effect on its business, financial condition and results of operations.

Quipt also maintains Directors and Officers (D&O) Liability insurance coverage to protect all of its directors and executive officers. As premiums for insurance covering directors’ and officers’ liability are rising, Quipt may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. There can be no assurance that this D&O coverage will be sufficient to cover the costs of the events that may lead to its

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invocation, in which case, there could be an adverse impact on Quipt’s financial condition, should such an unforeseen event occur. As a result, it may be more difficult for us to attract and retain qualified people to serve on Quipt’s board of directors, its board committees, or as executive officers.

Potential conflicts of interest may arise.

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

Quipt conducts all of its operations through foreign subsidiaries.

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

Quipt’s revenue is generated from operations in the US and exposed to foreign exchange risk, which may negatively affect Quipt’s results of operations.

All of Quipt’s revenue is generated from operations in the US. Quipt is subject to a number of risks ‎associated with its operations that may increase liability and costs and require significant management attention. These ‎risks include:‎

● compliance with laws of the US that apply to Quipt’s US operations, including lawful access, privacy ‎laws and anti-corruption laws;‎

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

● potential adverse tax consequences; and

● litigation in US courts.‎

In addition, Quipt is exposed to foreign exchange risk. At times, including at September 30, 2024, Quipt ‎does hold significant cash in Canadian dollars (“C$”). Quipt monitors foreign currency exposures and ‎from time to time could authorize the use of derivative financial instruments such as forward foreign exchange ‎contracts to economically hedge a portion of foreign currency fluctuations.‎

Based on the exposure of Canadian cash at September 30, 2024, depreciation or appreciation of the Canadian dollar ‎against the US dollar (“$”) could result in a significant effect on net income or loss. Quipt has not employed any ‎foreign currency hedging programs.

Risks Related to Regulation

Quipt’s revenue could be impacted by federal and state changes to reimbursement and other Medicaid and Medicare policies.

Quipt derived approximately 32% and 33% of its net revenue for the years ended September 30, 2024 and 2023, respectively, from Medicare and various state-based Medicaid programs. These programs are subject to statutory and regulatory changes affecting overall spending, base rates or basis of payment, retroactive rate adjustments, annual caps

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that limit the amount that can be paid (including deductible and coinsurance amounts) for rehabilitation therapy services rendered to Medicare beneficiaries, administrative or executive orders and government funding restrictions, all of which may materially adversely affect the rates and frequency at which these programs reimburse Quipt. Healthcare providers, suppliers, and payors are facing increasing pressure to reduce healthcare costs, and recent budget proposals and legislation at both the federal and state levels have called for cuts in Medicare and Medicaid reimbursement rates. Enactment and implementation of measures to reduce or delay reimbursement or overall Medicare or Medicaid spending could result in substantial reductions in Quipt’s revenue and profitability. Payors may disallow Quipt’s requests for reimbursement based on determinations that certain costs are not reimbursable or reasonable because either adequate or additional documentation was not provided or because certain services were not covered or considered medically necessary. Revenue from third-party payors can be retroactively adjusted after a new examination during the claims settlement process or as a result of post-payment audits. Quipt may also be subject to pre-payment review of certain service lines or products and equipment as a result of negative audit findings or other third-party payor determinations, which can result in significant delays in claims processing and could materially impact its revenue.

As a result of the Public Health Emergency Declaration, National Emergency Declaration, and pursuant to the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), among other things, the Centers for Medicare & Medicaid Services (“CMS”) issued regulatory guidance indicating enforcement discretion and flexibility regarding the provisions of items and services by the Medicare Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (“DMEPOS”) suppliers like Quipt. These provisions were announced through blanket waivers under Section 1135 of the Social Security Act, two Interim Final Rules with Requests for Comment on April 6, 2020 and May 8, 2020, respectively, and through numerous forms of subregulatory guidance. These provisions included modifications of various requirements under CMS regulations and Medicare and Medicaid program rules that aim to expand the capacity of healthcare providers and suppliers to deliver healthcare services while minimizing the risk of viral exposure. CMS’s changes included the exercise of enforcement discretion with respect to the clinical conditions and face-to-face encounter requirements required under certain national and local coverage determinations applicable to certain items and supplies Quipt offers.

The CARES Act also provided for a temporary suspension of reduced rates for items and services provided by Quipt. Previously, CMS applied a blended payment rate for DME furnished in rural or noncontiguous non-competitive bidding areas. Pursuant to provisions of the CARES Act, through the end of the public health emergency, that blended rate was based on 50% of the adjusted fee schedule amount (adjusted based on competitively bid prices) and 50% of the unadjusted DMEPOS fee schedule amount. On December 28, 2021, CMS extended the temporary 50/50 blended rate for rural and noncontiguous non-competitive bidding areas after the public health emergency. This 50/50 blended rate was continued in the 2023 DMEPOS Fee Schedule.

The CARES Act introduced a new blended rate for DME furnished in non-rural or contiguous non-competitive bidding areas that is based on 75% of the adjusted fee schedule amount and 25% of the unadjusted fee schedule amount. The Consolidated Appropriations Act, 2023 further extended the 75/25 blended Medicare reimbursement rate in non-competitive bidding/non-rural areas through December 31, 2023. After December 31, 2023, the reimbursement rate has reverted to 100% of the Medicare fee schedule, adjusted to inflation.

While Quipt cannot predict what Medicare payment rates or coverage determinations will be in effect in future years, changes to payment rates or benefit coverages may materially impact its financial condition and results of operations.

The CARES Act temporarily suspended the 2% payment adjustment applied to all Medicare fee-for-service claims under The Budget Control Act of 2011. The 2% BDCA sequestration was reinstated as of July 1, 2022. The payment adjustment has, and may continue to, adversely affect Quipt. Additionally, sequestration may have a continued revenue impact on Quipt’s individual contracts with Medicare Advantage Organizations depending on individual contracts.

The Statutory Pay-As-You-Go Act of 2010 (PAYGO) required that automatic payment cuts of 4% be put into place if a statutory action is projected to create a net increase in the deficit over either five or 10 years. The enactment of the American Rescue Plan Act in 2021 would have triggered PAYGO sequestration in 2021. In the Protecting Medicare & American Farmers from Sequester Cuts Act, Congress delayed the PAYGO sequestration until January 1, 2023. The Consolidated Appropriations Act, 2023 (Public Law No: 117-328) further prevented implementation of the PAYGO

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Medicare 4% sequester through the end of 2024. If not renewed, the PAYGO payment adjustment may adversely affect Quipt.

Quipt is subject to US federal and state healthcare fraud and abuse and false claims laws and regulations, the prosecutions under which have increased in recent years and Quipt may become subject to such litigation, and if Quipt is unable to comply or has not fully complied with such laws, it could face substantial penalties.

Quipt’s operations are subject to various state and federal fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute, the federal Stark Law and the federal False Claims Act. These laws may impact, among other things, Quipt’s sales, marketing and education programs.

The federal Anti-Kickback Statute prohibits persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been violated. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. The Anti-Kickback Statute is broad and, despite a series of narrow safe harbors, prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. Penalties for violations of the federal Anti-Kickback Statute include criminal penalties and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs. Many states have also adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs.

The federal Ethics in Patient Referrals Act of 1989, commonly known as the “Stark Law,” prohibits, subject to certain exceptions, physician referrals of Medicare and, as applicable under state law, Medicaid patients to an entity providing certain “designated health services” if the physician or an immediate family member has any financial relationship with the entity. The Stark Law also prohibits the entity receiving the referral from billing any good or service furnished pursuant to an unlawful referral. Various states have corollary laws to the Stark Law, including laws that require physicians to disclose any financial interest they may have with a healthcare provider to their patients when referring patients to that provider. Both the scope and exceptions for such laws vary from state to state. The federal False Claims Act prohibits persons from knowingly filing, or causing to be filed, a false claim to, or the knowing use of false statements to obtain payment from the federal government. The False Claims Act defines “knowingly” to include actual knowledge, acting in deliberate ignorance of the truth or falsity of information, or acting in deliberate disregard of the truth or falsity of information. False Claims Act liability includes liability for reverse false claims for avoiding or decreasing an obligation to pay or transmit money to the government. This includes False Claims Act liability for failing to report and return overpayments within 60 days of the date on which the overpayment is “identified.” Penalties under the False Claims Act can include exclusion from the Medicare program. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act. Suits filed under the False Claims Act, known as qui tam actions, can be brought by any individual on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in any amounts paid by the entity to the government in fines or settlement. The frequency of filing qui tam actions has increased significantly in recent years, causing greater numbers of medical device, pharmaceutical and healthcare companies to have to defend a False Claims Act action. When an entity is determined to have violated the federal False Claims Act, it may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. Various states have also enacted laws modeled after the federal False Claims Act.

Quipt is currently the subject of an ongoing investigation by the US Department of Justice (the “DOJ”) concerning whether the Company may have caused the submission of false claims to government healthcare programs for CPAP equipment. In April 2024, Quipt received a subpoena from the SEC to provide certain documents related to the Company and the DOJ investigation, the civil investigative demand (“CID”) and financial reporting and disclosure matters (“SEC Subpoena”). Further to the SEC Subpoena, the SEC concluded its investigation in November 2024 and, based on the information it had as at such time, the SEC advised that it did not intend to recommend an enforcement action by it against the Company. No assurance can be given that no action may ultimately result from the SEC’s investigation.

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HIPAA, and its implementing regulations, also created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

From time to time, Quipt has been and is involved in various governmental audits, investigations and reviews related to its operations. Reviews and investigations can lead to government actions, resulting in the assessment of damages, civil or criminal fines or penalties, or other sanctions, including restrictions or changes in the way Quipt conducts business, loss of licensure or exclusion from participation in Medicare, Medicaid or other government programs. Additionally, as a result of these investigations, healthcare providers and entities may face litigation or have to agree to settlements that can include monetary penalties and onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement. If Quipt fails to comply with applicable laws, regulations and rules, its financial condition and results of operations could be adversely affected. Furthermore, becoming subject to these governmental investigations, audits and reviews may result in substantial costs and divert management’s attention from the business as Quipt cooperates with the government authorities, regardless of whether the particular investigation, audit or review leads to the identification of underlying issues.

Quipt is unable to predict whether it could be subject to actions under any of these laws, or the impact of such actions. If Quipt is found to be in violation of any of the laws described above or other applicable state and federal fraud and abuse laws, Quipt may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from Medicare, Medicaid and other government healthcare reimbursement programs and the curtailment or restructuring of its operations.

Failure by Quipt to successfully design, modify and implement technology-based and other process changes to maximize productivity and ensure compliance could ultimately have a significant negative impact on Quipt’s financial condition, reputation and results of operations.

Failure to achieve the cost savings or enhanced quality control expected from the successful design and implementation of such initiatives may adversely impact Quipt’s financial condition and results of operations. Additionally, Medicare and Medicaid often change their documentation requirements with respect to claims submissions. The standards and rules for healthcare transactions, code sets and unique identifiers also continue to evolve, such as ICD 10 and HIPAA 5010 and other data security requirements. Moreover, government programs and/or commercial insurance payors may have difficulties administering new standards and rules for healthcare transactions and this may adversely affect timelines of payment or payment error rates. The DMEPOS Competitive Bidding Program also imposes new reporting requirements on contracted providers. Failure by Quipt to successfully design and implement system or process modifications could have a significant impact on its operations and financial condition. From time to time, Quipt’s outsourced contractors for certain information systems functions may make operational, leadership or other changes that could impact Quipt’s plans and cost-savings goals. The implementation of many of the new standards and rules will require Quipt to make substantial investments. Further, the implementation of these system or process changes could have a disruptive effect on related transaction processing and operations. If Quipt’s implementation efforts related to systems development are unsuccessful, Quipt may need to write off amounts that it has capitalized related to systems development projects. Additionally, if systems development implementations do not occur, Quipt may need to incur additional costs to support its existing systems.

If CMS requires prior authorization or implements changes in documentation necessary for Quipt’s products, Quipt’s revenue, financial condition and results of operations could be negatively impacted.

CMS has established and maintains a Master List of Items Frequently Subject to Unnecessary Utilization of certain DMEPOS items identified as being subject to unnecessary utilization. This list identifies items that CMS has determined could potentially be subject to prior authorization as a condition of Medicare payment. Since 2012, CMS has

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also maintained a list of categories of DMEPOS items that require face-to-face encounters with practitioners and written orders before the DMEPOS supplier may furnish the items to beneficiaries. In a final rule issued in 2019, CMS combined and harmonized the two lists to create a single unified list (the “Master List”). CMS also reduced the financial threshold for inclusion on the Master List. With certain exceptions for reductions in Payment Threshold (defined as an average purchase fee of $1,000 or greater, adjusted annually for inflation, or an average monthly rental fee of $100 or greater, adjusted annually for inflation), items remain on the Master List for ten years from the date the item was added to the Master List. The presence of an item on the Master List does not automatically mean that prior authorization is required. Under the 2019 final rule, CMS selects items from the Master List for inclusion on the “Required Prior Authorization List.” The expanded Master List would increase the number of DMEPOS items potentially eligible to be selected for prior authorization, face-to-face encounter and written order prior to delivery requirements as a condition of payment. In August 2022, CMS suspended the prior authorization requirement for specified orthosis items on the Required Prior Authorization List under certain circumstances when reported with certain modifiers, effective April 13, 2022. On January 17, 2023, CMS published the annual F2F/WOPD Required List update in a federal register announcement, which added 10 orthosis codes that go into effect on April 17, 2023. To ensure practitioner involvement, these items will require an in person face-to-face encounter or telehealth encounter and also require a written order prior to delivery (WOPD). If CMS adds additional products to the Master List, expands the list of items subject to prior authorization, or expands face-to-face encounter requirements or provisions requiring a written order prior to delivery, these changes may adversely impact Quipt’s revenue, financial condition and results from operations.

Reimbursement claims are subject to audits by various governmental and private payor entities from time to time and such audits may negatively affect Quipt’s revenue, financial condition and results of operations.

Quipt receives a substantial portion of its revenues from the Medicare program. Medicare reimbursement claims made by healthcare providers, including HME providers, are subject to audit from time to time by governmental payors and their agents, such as MACs that, among other things, process and pay Medicare claims, auditors contracted by CMS, and insurance carriers, as well as the Office of Inspector General of the Department of Health and Human Services (the “OIG-HHS”), CMS and state Medicaid programs. These include specific requirements imposed by the Durable Medical Equipment Medicare Administrative Contractor (“DME MAC”) Supplier Manuals, Medicare DMEPOS enrollment requirements and Medicare DMEPOS Supplier Standards. To ensure compliance with Medicare, Medicaid and other regulations, government agencies or their contractors, including MACs, Recovery Audit Contractors (“RACs”), Unified Program Integrity Contractors (“UPICs”) and Zone Program Integrity Contractors (“ZPICs”), often conduct audits and request customer records and other documents to support Quipt’s claims submitted for payment of services rendered and compliance with government program claim submission requirements. Some contractors are paid a percentage of the overpayments recovered. Negative audit findings or allegations of fraud or abuse may subject Quipt or its individual subsidiaries to liability, such as overpayment liability, refunds or recoupments of previously paid claims, payment suspension, or the revocation of billing or payment privileges in governmental healthcare programs. If CMS or a state Medicaid agency determines that certain actions of the Company or an affiliated subsidiary present an undue risk of fraud, waste, or abuse, they may suspend the billing or payment privileges of the entity, deny the entity’s enrollment or revalidation for Medicare or Medicaid participation, and potentially deny the re-enrollments of other commonly owned entities. Such actions, if imposed on the Company or its subsidiaries, could materially adversely impact the Company’s revenue, financial condition and results of operations.

In many instances, there are only limited publicly available guidelines and methodologies for determining errors with certain audits. As a result, there can be a significant lack of clarity regarding required documentation and audit methodology. The clarity and completeness of each patient medical file, some of which is the work product of physicians not employed by Quipt, is essential to successfully challenging any payment denials. For example, certain provisions under CMS guidance manuals, local coverage determinations, and the DME MAC Supplier Manuals provide that clinical information from the “patient’s medical record” is required to justify the initial and ongoing medical necessity for the provision of DME. Some DME MACs, CMS staff and other government contractors have taken the position, that the “patient’s medical record” refers not to documentation maintained by the DME supplier but instead to documentation maintained by the patient’s physician, healthcare facility or other clinician, and that clinical information created by the DME supplier’s personnel and confirmed by the patient’s physician is not sufficient to establish medical necessity. If treating physicians do not adequately document, among other things, their diagnoses and plans of care, the risks that the Company will be subject to audits and payment denials are likely to increase. Moreover, auditors’ interpretations of these

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policies are inconsistent and subject to individual interpretation, leading to significant increases in individual suppliers and industry-wide perceived error rates. High error rates could lead to further audit activity and regulatory burdens and could result in Quipt making significant refunds and other payments to Medicare and other government programs. Accordingly, Quipt’s future revenues and cash flows from government healthcare programs may be reduced. Private payors also may conduct audits and may take legal action to recover alleged overpayments. Quipt could be adversely affected in some of the markets in which it operates if the auditing payor alleges substantial overpayments were made to Quipt due to coding errors or lack of documentation to support medical necessity determinations. Quipt cannot currently predict the adverse impact these measures might have on its financial condition and results of operations, but such an impact could be material.

Moreover, provisions of the Patient Protection and Affordable Care Act (“ACA”) implemented by CMS require that overpayments be reported and returned within 60 days of the date on which the overpayment is “identified.” Any overpayment retained after this deadline may be considered an “obligation” for purposes of the False Claims Act, liability for which can result in the imposition of substantial fines and penalties. CMS currently requires a six-year “lookback period,” for reporting and returning overpayments.

Quipt cannot currently predict the adverse impact, if any, that these audits, determinations, methodologies and interpretations might have on its financial condition and results of operations.

Significant reimbursement reductions and/or exclusion from markets or product lines could adversely affect Quipt.

In March 2019, CMS announced that it would consolidate all rounds and areas of the DMEPOS Competitive Bidding Program into a single round of competition effective January 1, 2021 named “Round 2021”, to consolidate prior CBAs. Round 2021 contracts became effective on January 1, 2021 and extend through December 31, 2023. CMS included 16 product categories in the Round 2021. On April 10, 2020, CMS announced that due to the COVID-19 pandemic, it removed the non-invasive ventilators product category from the Round 2021 DMEPOS Competitive Bidding Program.

On October 27, 2020, CMS announced that it would not award competitive bid contracts in 13 of the 15 remaining product categories due to a failure to achieve expected savings, and that Round 2021 contract awards would only be made for off-the-shelf (OTS) knee and back braces. On May 25, 2023, CMS announced a temporary gap period for the CBP starting January 1, 2024, following the expiration of all Round 2021 contracts for OTS knee and back braces on December 31, 2023. The gap period commenced as anticipated and CMS has yet to announce when the temporary gap period for the CBP would end, but indicated that it would start bidding for the next CBP round after it completes the formal notice and comment rulemaking process and implements necessary changes to the CBP to establish sustainable process, save money for Medicare patients and taxpayers, help limit fraud, waste, and abuse, and ensure patient access to quality items and services. During the temporary gap period, any Medicare-enrolled DMEPOS supplier may furnish DMEPOS items and services to patients, with payment in former CBAs based on 100% of the single payment amount for that CBA (increased by the projected percentage change in Consumer Price Index for All Urban Consumers), and payment in non-CBAs based on fully adjusted rates per the applicable methodology under 42 C.F.R. § 414.210(g).

The competitive bidding process (which is expected to be re-bid every three years) has historically put pressure on the amount Quipt is reimbursed in the markets in which it exists, as well as in areas that are not subject to the DMEPOS Competitive Bidding Program. The rates required to win future competitive bids could continue to depress reimbursement rates. Quipt will continue to monitor developments regarding the DMEPOS Competitive Bidding Program. While Quipt cannot predict the outcome of the DMEPOS Competitive Bidding Program on its business in the future nor the Medicare payment rates that will be in effect in future years for the items subjected to competitive bidding, the program may materially adversely affect its financial condition and results of operations.

Failure by Quipt to maintain required licenses, permits and accreditation could impact its operations.

Quipt is required to maintain a significant number of state and/or federal licenses and permits for its operations and facilities. The ability of Quipt and its subsidiaries to obtain, sustain or renew any such licenses and permits on acceptable ‎terms is subject to changes in regulations and policies and to the discretion of the applicable authorities or other ‎governmental agencies. There is no guarantee that the Quipt will meet these conditions.‎‎ Moreover, certain employees are

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required to maintain licenses in the states in which they practice. Quipt manages the facility licensing function centrally. In addition, individual clinical employees are responsible for obtaining, maintaining and renewing their professional licenses, and Quipt has processes in place designed to notify branch or pharmacy managers of renewal dates for the clinical employees under their supervision. State and federal licensing requirements are complex and often open to subjective interpretation by various regulatory agencies. Accurate licensure is also a critical threshold issue for the Medicare enrollment and the Medicare competitive bidding program. From time to time, Quipt may also become subject to new or different licensing requirements due to legislative or regulatory requirements developments or changes in its business, and such developments may cause Quipt to make further changes in its business, the results of which may be material. Although Quipt believes it has appropriate systems in place to monitor licensure, violations of licensing requirements may occur and failure by Quipt to acquire or maintain appropriate licensure for its operations, facilities and clinicians could result in interruptions in its operations, refunds to state and/or federal payors, sanctions or fines or the inability to serve Medicare beneficiaries in competitive bidding markets which could adversely impact Quipt’s financial condition and results of operations.

Accreditation is required by most of Quipt’s managed care payors and is a mandatory requirement for all Medicare DMEPOS providers. If Quipt or any of its branches lose accreditation, or if any of its new branches are unable to become accredited, such failure to maintain accreditation or become accredited could adversely impact Quipt’s financial condition and results of operations.

Legislative action or changes could adversely affect Quipt’s business, results of operations and financial condition.

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

Healthcare reform legislation could have a material impact on Quipt’s business, results of operations and financial condition.

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

Actual or perceived failures to comply with applicable data protection, privacy and security, and consumer protection laws, regulations, standards and other requirements could adversely affect Quipt’s business, results of operations and financial condition.

Numerous federal and state laws and regulations addressing patient privacy and consumer privacy, including HIPAA and the HITECH Act, govern the collection, dissemination, security, use and confidentiality of patient-identifiable health information or personal information. Such laws and regulations relating to privacy, data protection, marketing and advertising, and consumer protection are evolving and subject to potentially differing interpretations. These requirements may be interpreted and applied in a manner that varies from one jurisdiction to another and/or may conflict with other laws or regulations. As a result, Quipt’s practices may not have complied or may not comply in the future with all such laws, regulations, requirements and obligations. Any failure, or perceived failure, by Quipt or any of its third-party partners or

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service providers to comply with privacy policies or federal or state privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which they may be subject, or other legal obligations relating to privacy or consumer protection, could adversely affect Quipt’s reputation, brand and business, and may result in claims, proceedings or actions against Quipt by governmental entities, consumers, users, suppliers or others. These proceedings may result in financial liabilities or may require Quipt to change its operations, including ceasing the use or sharing of certain data sets.

HIPAA and the HITECH Act, and their implementing regulations, require Quipt to comply with standards for the use and disclosure of health information within Quipt and with third parties. HIPAA and the HITECH Act also include standards for common healthcare electronic transactions and code sets, such as claims information, plan eligibility, payment information, and privacy and security of individually identifiable health information.

HIPAA requires healthcare providers, including Quipt, in addition to health plans and clearinghouses, to develop and maintain policies and procedures with respect to protected health information that is used or disclosed. The HITECH Act included notification requirement for breaches of patient-identifiable health information, restricts certain disclosures and sales of patient-identifiable health information and provides a tiered system for civil monetary penalties for HIPAA violations. HIPAA also provides for criminal penalties.

In addition, various federal and state legislative and regulatory bodies, or self-regulatory organizations, may expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection and consumer protection. For instance, the CCPA became effective on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly defined) and provide such consumers new ways to opt-out of certain sales of personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Although there are limited exemptions for protected health information and the CCPA’s implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, the CCPA may increase Quipt’s compliance costs and potential liability. Many similar privacy laws have been proposed at the federal level and in other states.

Additionally, the FTC and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards for the online collection, use, dissemination and security of health-related and other personal information. Courts may also adopt the standards for fair information practices promulgated by the FTC, which concern consumer notice, choice, security and access. Consumer protection laws require Quipt to publish statements that describe how it handles personal information and choices individuals may have about the way Quipt handles their personal information. If such information that Quipt publishes is considered untrue, it may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Furthermore, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5 of the FTC Act.

Under the Federal CAN-SPAM Act, the TCPA and the Telemarketing Sales Rule and Medicare regulations, Quipt is limited in the ways in which it can market and service its products and services by use of email, text or telephone marketing. The actual or perceived improper sending of text messages may subject us to potential risks, including liabilities or claims relating to consumer protection laws. Numerous class-action suits under federal and state laws have been filed in recent years against companies who conduct SMS texting programs, with many resulting in multi-million-dollar settlements to the plaintiffs. Any future such litigation against us could be costly and time-consuming to defend. For example, the TCPA, a federal statute that protects consumers from unwanted telephone calls, faxes and text messages, restricts telemarketing and the use of automated SMS text messages without proper consent. On April 1, 2021, in Facebook, Inc. v. Duguid, 141 S. Ct. 1163 (2021), the U.S. Supreme Court adopted a narrow definition of the type of automated dialers that are subject to the TCPA, thereby removing some automated text messages from the scope of the TCPA consent requirements. As a result, there may be an increase in litigation under state laws and new legislation at the federal and state level in an effort to ensure that consent is required for calls and text messages that are now outside the scope of the TCPA. For example, in May 2021, the Florida legislature passed a bill that expands restrictions for telephonic

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sales calls, including text messages, made using automated selection and dialing systems and creates a private right of action for violations of the law. Additionally, state regulators may determine that telephone calls to patients of Quipt are subject to state telemarketing regulations. If Quipt does not comply with existing or new laws and regulations related to telephone contacts or patient health information, it could be subject to criminal or civil sanctions. New health information standards, whether implemented pursuant to HIPAA, the HITECH Act, congressional action or otherwise, could have a significant effect on the manner in which Quipt handles healthcare-related data and communicates with payors, and the cost of complying with these standards could be significant. The scope and interpretation of the laws that are or may be applicable to the delivery of consumer phone calls, emails and text messages are continuously evolving and developing. If Quipt does not comply with these laws or regulations or if it becomes liable under these laws or regulations, it could face direct liability, could be required to change some portions of its business model, could face negative publicity and its business, financial condition and results of operations could be adversely affected. Even an unsuccessful challenge of Quipt’s phone, email or SMS text practices by its consumers, regulatory authorities or other third parties could result in negative publicity and could require a costly response from and defense by Quipt.

Quipt may be adversely affected by global climate change or by legal, regulatory or market responses to such change.

The long-term effects of climate change are difficult to predict and may be widespread. The impacts may include physical risks (such as rising sea levels or frequency and severity of extreme weather conditions), social and human effects (such as population dislocations or harm to health and well-being), compliance costs and transition risks (such as regulatory or technology changes) and other adverse effects. The effects could impair, for example, the availability and cost of certain products, commodities and energy (including utilities), which in turn may impact Quipt’s ability to procure goods or services required for the operation of its business at the quantities and levels it requires. Quipt may bear losses incurred as a result of, for example, physical damage to or destruction of its facilities (such as patient service offices and warehouses), loss or spoilage of inventory, and business interruption due to weather events that may be attributable to climate change.

Governments in the U.S., Canada and abroad are considering new or expanded laws to address climate change. Such laws may include limitations on GHG emissions, mandates that companies implement processes to monitor and disclose climate-related matters, additional taxes or offset charges on specified energy sources, and other requirements. In October 2023, the state of California enacted the Climate Corporate Data Accountability Act (“SB-253”), which mandates the disclosure of GHG emissions, including Scope 1, Scope 2 and Scope 3 emissions; and the Climate-Related Financial Risk Act (“SB-261”), which mandates the disclosure of climate-related financial risks, and measures adopted to reduce and adapt to such risks. Both California laws require initial disclosures in 2026. Compliance with climate-related laws may be further complicated by disparate regulatory approaches in various jurisdictions. New or expanded climate-related laws could impose substantial costs on Quipt. At the present time, Quipt cannot predict their potential effect on its capital expenditures or results of operations. These events and impacts could materially adversely affect Quipt’s business and results of operations.

Risks Related to Our Financial Condition

If Quipt were required to write down all or part of its goodwill, its net earnings and net worth could be materially adversely affected.

Quipt had approximately $51,000,000 of goodwill recorded on its Consolidated Balance Sheets at September 30, 2024. Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. If Quipt’s market capitalization drops significantly below the amount of net equity recorded on its balance sheet, it might indicate a decline in its fair value and would require Quipt to further evaluate whether its goodwill has been impaired. If, as part of Quipt’s annual review of goodwill, or if any triggering events are identified on an interim basis indicating a possible impairment of goodwill, Quipt is required to write down all or a significant part of its goodwill, its net earnings and net worth would be materially adversely affected, which could affect Quipt’s flexibility to obtain additional financing. In addition, if Quipt’s assumptions used in preparing its valuations for purposes of impairment testing differ materially from actual future results, Quipt may record impairment charges in the future and its financial results may be materially adversely affected. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors, such as estimates of a reporting unit’s fair value, including the revenue growth rates, discount

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rate, and control premium used to estimate the reporting unit’s fair value, and judgment about impairment triggering events.

Quipt may not be able to generate sufficient cash flow to cover required payments or comply with financial and operating covenants under its long-term debt and long-term operating leases.

Failure to generate sufficient cash flow to cover required payments or comply with financial and operating covenants under Quipt’s long-term debt and long-term operating leases could result in defaults under such agreements and cross-defaults under other debt or operating lease arrangements, which could harm its operating subsidiaries. Quipt may not generate sufficient cash flow from operations to cover required interest, principal and lease payments. In addition, Quipt’s current indebtedness contains restrictive covenants and require Quipt to maintain or satisfy specified coverage tests. These restrictions may interfere with Quipt’s ability to obtain additional advances under its existing credit facility or to obtain new financing or to engage in other business activities, which may inhibit Quipt’s ability to grow its business and increase revenue. In addition, failure by Quipt to comply with these restrictive covenants could result in an event of default which, if not cured or waived, could result in the acceleration of its debt.

Quipt may need additional capital to fund its operating subsidiaries and finance its growth, and Quipt may not be able to obtain it on acceptable terms, or at all, which may limit its ability to grow.

Quipt’s ability to maintain and enhance its operating subsidiaries and equipment to meet regulatory standards, operate efficiently and remain competitive in its markets requires Quipt to commit substantial resources to continued investment in its affiliated facilities and equipment. Additionally, the continued expansion of its business through the acquisition of existing facilities, expansion of existing facilities and construction of new facilities may require additional capital, particularly if Quipt were to accelerate its acquisition and expansion plans. Financing may not be available or may be available only on terms that are not favorable. In addition, some of Quipt’s outstanding indebtedness restricts, among other things, its ability to incur additional debt. If Quipt is unable to raise additional funds or obtain additional funds on acceptable terms, it may have to delay or abandon some or all of its growth strategies. Further, if additional funds are raised through the issuance of additional equity securities, the percentage ownership of Quipt’s shareholders would be diluted. Any newly issued equity securities may have rights, preferences or privileges senior to those of the Common Shares.

We will continue to incur significantly increased expenses and administrative burdens as a result of being a public company, which could have a material adverse effect on Quipt’s business, financial condition and results of operations.

As a public company, Quipt is subject to the reporting requirements and other obligations of the Exchange Act, the Sarbanes-Oxley Act, including the requirements of Section 404, the Securities Act (British Columbia), applicable national and multilateral instruments, as well as rules and regulations subsequently implemented by the SEC, Canadian securities regulatory authorities, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board and the securities exchanges. The SEC, Canadian securities regulatory authorities, and other regulators continue to adopt new rules and regulations and make additional changes to existing regulations that require Quipt’s compliance. Regulatory reform may lead to substantial new disclosure obligations, which may lead to additional compliance costs and impact, in ways Quipt cannot currently anticipate, the manner in which Quipt operates its business. Compliance with such requirements may cause Quipt to continue to incur additional accounting, legal and other expenses and may make certain activities more time-consuming. Quipt also incurs costs associated with corporate governance requirements, including requirements under securities laws, as well as rules and regulations implemented by the SEC, Canadian securities regulatory authorities, TSX and Nasdaq. Such rules and regulations increase Quipt’s legal and financial compliance costs and Quipt continues to devote significant time to comply with these requirements. Quipt is currently evaluating and monitoring developments with respect to these rules and regulations and cannot predict or estimate the amount of additional costs it may incur or the timing of such costs.

Quipt has and will continue to incur costs to maintain internal control over financial reporting. It may also be more expensive to obtain director and officer liability insurance. Risks associated with Quipt’s status as a public company

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may make it more difficult to attract and retain qualified persons to serve on the board of directors or as executive officers. Furthermore, certain of the key personnel of Quipt may be unfamiliar with the requirements of operating a company regulated by the SEC and Canadian securities regulatory authorities, which could cause Quipt to have to expend time and resources helping them become familiar with such requirements. These increased costs will require Quipt to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic objectives. Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements, which could further increase costs.

Risks Related to Our Securities

We may not be able to effectively maintain controls and procedures required by Section 404 of the Sarbanes-Oxley Act that are applicable to us.

As a public company, Quipt is required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in Quipt’s quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting, as well as Canadian securities laws and regulations. To comply with the requirements of being a public company, we may continue to undertake various actions, such as implementing additional internal controls and procedures and hiring additional accounting or internal audit staff. These rules and regulations also increase our legal and financial compliance costs and make some activities more time-consuming and costly.

As described in Item 9A, we concluded that our internal control over financial reporting was not effective as of September 30, 2023. Specifically, management did not consistently execute controls to validate the completeness and accuracy of underlying data utilized in the operation of certain manual controls. We have taken a number of measures to remediate the material weakness identified as of September 30, 2023, and such material weakness has been remediated as of September 30, 2024.

If we are not able to maintain internal controls and procedures in accordance with the requirements of applicable securities laws, rules, and regulations, including, without limitation, Section 404 in a timely manner or with adequate compliance, we may not be able to conclude that our internal control over financial reporting is effective, which may subject us to adverse regulatory consequences and could harm investor confidence and the market price of our Common Shares. The existence of material weaknesses in internal control over financial reporting could adversely affect our reputation or investor perceptions of us.

The change from foreign private issuer to U.S. domestic issuer effective as of October 1, 2024 may result in significant additional costs and expenses to us.

As of March 31, 2024, we determined that we no longer qualify as a “foreign private issuer,” as defined under U.S. securities laws. As a result, effective as of October 1, 2024, we are no longer eligible to use the rules and forms designed for foreign private issuers and we are considered a U.S. domestic issuer. The regulatory and compliance costs to us under U.S. securities laws as a U.S. domestic issuer may be significantly more than the costs incurred as a foreign private issuer. Effective as of October 1, 2024, we are required to file periodic and current reports and registration statements on U.S. domestic issuer forms with the SEC, which are generally more detailed and extensive than the forms available to a foreign private issuer. In addition, we are required to comply with U.S. proxy requirements and Regulation FD, and our officers, directors and principal shareholders are subject to the beneficial ownership reporting and short-swing profit recovery requirements in Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We are also no longer eligible to rely upon exemptions from corporate governance requirements that are available to foreign private issuers or to benefit from other accommodations for foreign private issuers under the rules of the SEC or Nasdaq, which may involve additional costs.

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We are an “emerging growth company” and a “smaller reporting company,” and the reduced disclosure requirements applicable to emerging growth companies or smaller reporting companies may make our Common Shares less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. We may remain an emerging growth company for up to five years, or until such earlier time as we have more than $1.235 billion in annual revenue, the market value of our stock held by non-affiliates is more than $700 million or we issue more than $1 billion of non-convertible debt over a three-year period. For so long as we remain an emerging growth company, we are permitted and intend to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies. These exemptions include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, being permitted to present only two years of audited financial statements and a correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We cannot predict whether investors will find our Common Shares less attractive if we rely on these exemptions. If some investors find our Common Shares less attractive as a result, there may be a less active trading market for our Common Shares and our stock price may be more volatile.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. An emerging growth company can therefore delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. However, we are choosing to “opt out” of such extended transition period, and, as a result, we will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies that are not emerging growth companies. The JOBS Act provides that our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

We are also a “smaller reporting company,” as such term is defined in Rule 12b-2 of the Exchange Act, meaning that the market value of our Common Shares held by non-affiliates is less than $250 million. We may continue to be a smaller reporting company if either (i) the market value of our Common Shares held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our Common Shares held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Fluctuations in the price of Quipt’s securities could contribute to the loss of all or part of your investment.

Our Common Shares are currently listed and posted for trading on the TSX and Nasdaq. ‎The trading price of our Common Shares could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our Common Shares and our Common Shares may trade at prices significantly below the price you paid for them. In such circumstances, the trading price of our Common Shares may not recover and may experience a further decline.

Factors affecting the trading price of our Common Shares may include:

● actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

● changes in the market’s expectations about our operating results;

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● our operating results failing to meet the expectation of securities analysts, investors or our guidance in a particular period;

● changes in financial estimates and recommendations by securities analysts concerning Quipt or the home medical equipment industry in general;

● operating and stock price performance of other companies that investors deem comparable to us;

● our ability to market new and enhanced products on a timely basis;

● changes in laws and regulations affecting our business;

● our ability to meet compliance requirements;

● commencement of, or involvement in, litigation involving us;

● inability to quickly remediate material weaknesses or the continued identification of material weaknesses in internal control over financial reporting;

● changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

● the volume of shares of our Common Shares available for public sale;

● any major change in our board of directors or management;

● sales of substantial amounts of Common Shares by our directors, executive officers or significant shareholders or the perception that such sales could occur; and

● general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism, including the war in Ukraine and the ongoing conflict in the Middle East.

Broad market and industry factors may materially harm the market price of our securities irrespective of our operating performance. Securities of small-cap ‎and ‎healthcare ‎companies have experienced substantial volatility in the past, often based on ‎factors unrelated to ‎the ‎financial ‎performance or prospects of the companies involved. ‎In addition, the stock market in general, including each of Nasdaq and the TSX, have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. Accordingly, the market price of our ‎‎Common Shares at any given point in time may not ‎‎‎accurately ‎reflect the long-term value of the Company. The trading prices and valuations of these stocks, and of our Common Shares, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to us could depress our stock price regardless of our business, prospects, financial condition or results of operations. A decline in the market price of our Common Shares also could adversely affect our ability to issue additional securities and our ability to obtain additional financing in the future. Moreover, securities class-action litigation often has been brought ‎‎against companies ‎following periods of volatility in the market ‎price of their securities. The Company may in the ‎‎future be the target of ‎similar litigation. Securities litigation could ‎result in substantial costs and damages and divert ‎‎management’s attention ‎and resources‎.‎

Because Quipt has no current plans to pay cash dividends on its Common Shares for the foreseeable future, you may not receive any return on investment unless you sell your Common Shares for a price greater than that which you paid for them.

We have never declared or paid any dividends on our Common Shares. ‎We intend, for the ‎foreseeable future, ‎to retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends for the foreseeable future. Any decision to declare and pay dividends in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant. In addition, our ability to pay dividends may be limited by covenants of any existing and future outstanding indebtedness we or our subsidiaries incur. As a result, you may not receive any return on an investment in our Common Shares unless you sell our Common Shares for a price greater than that which you paid for them.

Quipt’s normal course issuer bid may have an impact that is not fully reflected in the current stock valuation.

On April 23, 2024, the Board authorized a normal course issuer bid (otherwise known as a share repurchase program) pursuant to which the Company may, through the facilities of the TSX, purchase for cancellation, subject to a daily limit of 7,553 Common Shares, up to 3,626,845 Common Shares from time to time in accordance with applicable

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securities laws, ‎representing approximately 10% of the Company’s public float (as defined by the TSX) as of the date thereof. The Board believes that, for reasons unrelated to the Company’s performance, the trading price of the Common Shares from time to time may not be reflective of the true value of the Company. The repurchase program does not obligate the Company to acquire a specified number of Common Shares and may be modified, suspended, or discontinued at any time at the Board’s discretion. To date, no Common Shares have been repurchased by the Company under the repurchase program.

Any repurchases that may be made in the future using our existing cash resources. The Company gives no assurances as to when, how much and for what duration stock repurchases may be made. However, stock repurchases may adversely affect the Company if the economy turns downward, as it could leave the Company limited in its ability to obtain cash necessary for ongoing operations or strategic initiatives. In addition, any repurchase of stock may have no positive impact on our stock price. Further, as stock may be repurchased, given the volatility of our stock price, we may repurchase stock at prices which, in hindsight, are materially higher than the subsequent price of our stock.

Provisions in our constating documents and under British Columbia law could make an acquisition of us, which may be beneficial to our shareholders, more difficult and may prevent attempts by our shareholders to replace or remove our current management.

Provisions in our constating documents may discourage, delay or prevent a merger, acquisition or other change in control of us that shareholders may consider favorable, including transactions in which shareholders might otherwise receive a premium for our shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our Common Shares, thereby depressing the market price of our Common Shares. Moreover, Quipt is authorized to issue an unlimited number of Common Shares, an unlimited number of first preferred ‎shares without par value, and an unlimited number of second preferred shares without par value.

In addition, because our board of directors is responsible for appointing the members of our management team, these provisions may frustrate or prevent any attempts by our shareholders to replace or remove our current management by making it more difficult for shareholders to replace members of our board of directors. Among other things, these provisions:

● allow the authorized number of our directors to be changed only by resolution of our board of directors;

● limit the manner in which shareholders can remove directors from the board;

● establish advance notice requirements for shareholder proposals that can be acted on at shareholder meetings and nominations to our board of directors;

● require that shareholder actions must be effected at a duly called shareholder meeting unless the requisite written consent for such actions is obtained in accordance with the Business Corporations Act (British Columbia);

● ‎authorize our board of directors to issue shares without shareholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors; and

● require the approval of the holders of at least two-thirds of the votes that all our shareholders would be entitled to cast to amend or repeal certain provisions of our constating documents.

Forward-looking statements may prove to be inaccurate which could have a material adverse effect on Quipt’s business, financial condition and results of operations.

Readers are cautioned not to place undue reliance on forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, of both a general and ‎specific nature, that could cause actual results to differ materially from those suggested by the forward-looking ‎statements or contribute to the possibility that predictions, forecasts or projections will prove to be materially ‎inaccurate. Additional information on the risks, assumptions and uncertainties are found in this Annual Report on Form 10-K and in ‎certain of the documents incorporated by reference herein under the heading “Caution Regarding ‎Forward-Looking Statements”.‎

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Item 1B. Unresolved Staff Comments.

None.

Item 1C. Cybersecurity.

Risk Management and Strategy

The Company has adopted policies and implemented certain controls and procedures that allow its management to assess, identify and manage material risks from cybersecurity threats and for its Board of Directors, through its Audit Committee, to actively oversee the strategic direction, objectives, and effectiveness of the Company’s cybersecurity risk management framework. The Cybersecurity Program is developed and reviewed by the Company’s executive leadership alongside the Company’s Audit Committee and carried out and overseen by the senior person in charge of IT at the Company, currently our Chief Compliance Officer (“CCO”).

The Company’s processes are integrated into its overall enterprise risk management program and compliments the Company’s enterprise-wide risk assessment architecture, as implemented by the Company’s management and as overseen by the Company’s Board of Directors through its Audit Committee.

The Company seeks to address cybersecurity risks through a cross-functional approach that is focused on preserving the confidentiality, security, and availability of the information that the Company collects and stores by identifying, preventing, and mitigating cybersecurity threats and effectively responding to cybersecurity incidents when they occur.

To identify and assess material risks from cybersecurity threats, we engage in regular network and endpoint monitoring, vulnerability assessments, penetration testing, and tabletop exercises. We continuously monitor threats and unauthorized access to our information security network.

We have developed incident response plans by using the information gained through testing and monitoring to manage any identified vulnerabilities and further improve our cybersecurity preparedness and response infrastructure. Such plans set forth the actions to be taken in responding to and recovering from cybersecurity incidents, which include triage, assessing the severity of incidents, escalation protocols, containment of incidents, investigation of incidents, and remediation. We also regularly perform phishing tests of our employees and provide annual privacy and security training for all employees. Our security training incorporates awareness of cyber threats (including but not limited to malware, ransomware, and social engineering attacks), password hygiene and incident reporting processes.

We review our cybersecurity risk framework and related policies annually with our senior management to help identify areas for continued focus and improvement. We also engage third parties to review and assess our processes annually.

The Company has also implemented processes to identify, monitor and address material risks from cybersecurity threats associated with our use of third-party service providers, including those in our supply chain or who have access to our systems, data or facilities that house such systems or data. discussing issues to be addressed and recommending securities measures to be improved where possible. Additionally, we generally require those third parties that could introduce significant cybersecurity risk to us to manage their cybersecurity risks in specified ways, and to agree to be subject to cybersecurity audits, which we conduct as appropriate.

Although in the last three fiscal years we have not experienced any material cybersecurity incidents and the expenses we have incurred from cybersecurity incidents, including financial losses, penalties, and settlements, were immaterial, we may experience such incidents in the future and the scope and impact of any such future incidents cannot be predicted. We have described whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, may materially affect or are reasonably likely to materially affect us, including our business strategy, results of operations, or financial condition in the risk factors titled “Quipt’s business depends on its information systems, including software licensed from or hosted by third parties, and ‎any failure or significant disruption or effective cyber-attack on any of these systems, security breaches or improper ‎disclosure of or loss of data could materially affect our business, results of operations and financial condition.‎” and “Quipt currently outsources, and from time to time in the

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future may outsource, a portion of its internal business ‎functions to third-party providers, which has significant risks, and Quipt’s failure to manage these risks successfully ‎could materially adversely affect its business, results of operations, and financial condition.” in Item 1A. “Risk Factors” of this Annual Report on Form 10-K.

Governance

Role of the Board of Directors and the Audit Committee

As part of the Board of Directors’ role in overseeing the Company’s enterprise risk management program, which includes our cybersecurity risk management framework, the Board is responsible for exercising oversight of management’s identification and management of, and planning for, material cybersecurity risks that may reasonably be expected to impact the Company. While the full Board has overall responsibility for risk oversight, the Board has delegated oversight responsibility related to risks from cybersecurity threats to the Audit Committee. The Audit Committee is responsible for overseeing the strategic direction, objectives, and effectiveness of the Company’s cybersecurity risk management framework, taking into account the Company’s risk exposures and progress of its risk management processes. The Audit Committee is informed of the Company’s cybersecurity risk management and receives an overview of its cybersecurity program from management at least quarterly. Material cybersecurity risks are also discussed during separate Board meetings as part of the Board’s risk oversight generally.

Role of Management

Our CCO is responsible for management’s oversight of cybersecurity governance, decision-making, risk management, awareness, and compliance across the Company. Our CCO works to employ a cybersecurity program designed to protect the Company’s information systems from cybersecurity threats and to respond to incidents in accordance with the Company’s incident response plan and other policies and procedures.

In the event of a material cybersecurity incident or investigation, management will, in compliance with escalation protocols in place, promptly report to the Audit Committee and the Board, as appropriate, in accordance with the Company’s incident response plan, and other policies and determine the timing of action, and necessary response.

Our CCO has over 20 years of experience in various roles in information technology and information security. He holds a degree in Legal Studies and holds several relevant certifications, including Certified HIPAA Professional (“CHP”).

Item 2. Properties.

The Company’s total space is approximately 700,000 square feet, and consists of warehouse, retail, and administrative offices. The Company leases all but two of its over 135 facilities. The following is a summary of the Company’s largest facilities by location:

		Square
Location	Owned / Leased	Footage	Primary Usage
Wilder, KY	Leased	25,000	Corporate headquarters, warehouse, administrative
Mesa, AZ	Leased	24,300	Warehouse, administrative
Indianapolis, IN	Leased	23,600	Warehouse, administrative
McComb, MS	Leased	15,600	Warehouse, retail
Indianapolis, IN	Leased	15,000	Warehouse, retail
Paducah, KY	Leased	11,500	Warehouse, retail
Lexington. KY	Leased	10,700	Warehouse, retail
Waterville, ME	Leased	10,370	Warehouse, retail
Lincoln, NE	Leased	10,000	Warehouse, retail

Management believes that the Company’s sites are adequate to support the business and that the properties and equipment have been well maintained.

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Item 3. Legal Proceedings.

From time to time, the Company is involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes and other business matters. The outcomes of our legal proceedings and other contingencies are inherently unpredictable, subject to significant uncertainties, and if one or more legal matters were resolved against the Company in a reporting period for amounts above management’s expectations, the Company’s financial condition and operating results for that period could be materially adversely affected.

The Company has received a civil investigative demand from the Department of Justice (“DOJ”) through the U.S. Attorney’s Office for the Northern District of Georgia pursuant to the False Claims Act regarding an investigation relating to the Company’s submission of claims relating to CPAP equipment. The Company is cooperating with the investigation. The DOJ has not indicated to the Company whether it believes the Company engaged in any wrongdoing. In April 2024, the Company received a subpoena from the U.S. Securities and Exchange Commission (the “SEC”) to provide certain documents related to the Company and the DOJ investigation, CID, and financial reporting and disclosure matters (“SEC Subpoena”). Further to the SEC Subpoena, the SEC concluded its investigation in November 2024 and, based on the information it had as at such time, the SEC advised that it did not intend to recommend an enforcement action by it against the Company. Additional governmental agencies could conduct independent investigations relating to this investigation or separate unrelated matters. No assurance can be given as to the timing or outcome of the DOJ’s investigation or that no action may ultimately result from the SEC’s investigation.

Item 4. Mine Safety Disclosure.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities.

Market Information and Holders

The Company’s Common Shares are listed for trading on the TSX and on Nasdaq, both ‎under the symbol “QIPT”.‎ As of December 11, 2024, there were 83 holders of record of the Company’s Common Shares. The actual number of shareholders is greater than this number of holders of record, and includes shareholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include shareholders whose shares may be held in trust by other entities.

Dividend Policy

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

Dividends paid or credited or deemed to be paid or credited by the Company to a non-resident of Canada will ‎generally be subject to Canadian withholding tax at the rate of 25%, subject to any applicable reduction in the rate ‎of such withholding under an income tax treaty between Canada and the country where the holder is resident. ‎Under the Canada-United States Tax Convention (1980), as amended, the withholding tax rate in respect of a dividend paid to a U.S. resident shareholder that beneficially ‎owns such dividends is generally reduced to 15%, unless the U.S. resident shareholder is a corporation ‎which owns at least 10% of the voting shares of the Company at that time, in which case the withholding tax rate ‎is reduced to 5%.‎ U.S. resident shareholders may be entitled to claim a foreign tax credit for any Canadian tax withheld, depending on the circumstances.

Unregistered Sale of Equity Securities

None.

Securities Authorized for Issuance under Equity Compensation Plans

Such information is incorporated by reference to the information set forth in Part III, Item 12 of this Annual Report on Form 10-K.

Purchase of Equity Securities

On April 23, 2024, the Board authorized a share repurchase program pursuant to which the Company may purchase for cancellation up to 3,626,845 Common Shares from time to time in accordance with applicable securities laws, ‎representing approximately 10% of the Company’s public float (as defined by the TSX) as of such date. The repurchase program does not obligate the Company to acquire a specified number of shares and may be modified, suspended, or discontinued at any time at the Board’s discretion. The repurchase program commenced on May 6, 2024 and will terminate upon the earliest of (i) April 30‎, 2025, (ii) the Company purchasing the maximum of ‎3,626,845 ‎Common Shares, and (iii) the Company terminating the program. To date, no Common Shares have been repurchased by the Company under the repurchase program.

Item 6. [Reserved]

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and the accompanying notes. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those described in Item 1A. "Risk Factors" and elsewhere in this Annual Report on Form 10-K.

The consolidated financial statements as of and for the years ended September 30, 2024 and 2023 (the “consolidated financial statements”) of the Company were prepared in accordance with accounting principles generally accepted in the US (“GAAP”).

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

Loss of Foreign Private Issuer Status

As a result of more than 50% of the Company’s outstanding voting securities being held directly or indirectly by residents of the US as of March 31, 2024 and otherwise not qualifying for foreign private issuer status under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company ceased to be a foreign private issuer, as defined in Rule 3b-4 under the Exchange Act, as of October 1, 2024. Accordingly, effective October 1, 2024, the Company is required to commence reporting on forms required by the Exchange Act of US domestic companies, such as periodic reports on Forms 10-K and 10-Q and current reports of Form 8-K. The Company has become subject to US proxy rules. Any securities issued by the Company have become subject to certain rules and restrictions under the Securities Act of 1933, as amended (the “Securities Act”). As disclosed in the risk factors discussed or referred to in the Company’s disclosure documents filed with Securities and Exchange Commission and available at www.sec.gov, and with the securities regulatory authorities in certain provinces of Canada and available at www.sedarplus.ca, compliance with the additional disclosure rules, compliance and timing requirements under the Securities Act, Exchange Act, and other applicable rules and regulations has resulted in increased expenses and require the Company’s management to devote substantial time and resources to comply with the new regulatory requirements.

The impact on becoming a domestic issuer reporting its consolidated financial statements in accordance with accounting principles generally accepted in the US (“GAAP”) as opposed to international financial reporting standards (“IFRS”), commencing with the annual financial statements as of and for the years ended September 30, 2024 and 2023, has been reflected in the financial statements in Item 8. The primary changes related to the year ended September 30, 2023 relate to the following:

- A reduction of revenues by approximately $10,000,000, with a corresponding elimination of bad debt expense, with no change to net loss.

- A new caption in the consolidated statement of income (loss) and the consolidated statement of cash flow related to approximately $5,000,000 of right-of-use operating lease amortization and interest with a corresponding reduction in depreciation of approximately $4,000,000 and interest expense of $1,000,000, with no change to net loss.

Overview

Quipt business objective

The growth in the number of elderly patients in the US healthcare market is creating pressure to provide more efficient delivery systems. Healthcare providers, such as hospitals, physicians, and pharmacies, are seeking partners that can offer a range of products and services that improve outcomes, reduce hospital readmissions, and help control costs. Quipt fills this need by delivering a growing number of specialized products and services to achieve these goals. Quipt seeks to provide an ever-expanding line of products and services over larger geographic regions within the US using several growth strategies. With over 140 offices, Quipt employs more than 1,200 personnel in the US.

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Future outlook

Our priority continues to be the generation of operational net profit, positive cash flow, and growth in Adjusted EBITDA, a non-GAAP financial measure defined below, in fiscal year 2025 and beyond. As we continue to expand in our existing markets, we plan to leverage our business platforms to enter new markets and expand our product offerings. Our continued business integration and rationalization, and our prior acquisitions, have given us a focus and path towards profitability. We will continue to improve operational efficiencies and call center management as they are key execution points to maintaining our Adjusted EBITDA while growing revenues by cross selling products to existing and acquired patients.

Highlights for the year ended September 30, 2024

● Increased revenues for the year ended September 30, 2024 to $245.9 million, or 16%, from the year ended September 30, 2023.

● Increased the number of equipment set-ups to 854,000 for the year ended September 30, 2024 from 754,000 in the prior year, an increase of 13%.

● Increased the number of respiratory resupply set-ups to 480,000 for the year ended September 30, 2024 from 396,000 in the prior year, an increase of 21%.

● Generated Adjusted EBITDA (a non-GAAP measure defined below) of $57.9 million, a 14% increase from the prior year, representing 23.5% of revenue.

Selected Annual Information ($ amounts in thousands, except per share amounts)

	As of or for the		As of or for the		As of or for the		As of or for the
	three months ended		three months ended		year ended		year ended
	September		September		September		September
	30, 2024		30, 2023		30, 2024		30, 2023
Number of patients served(1)		153,000		147,000		314,000		286,000
Number of equipment set-ups or deliveries		212,000		209,000		854,000		754,000
Respiratory resupply set-ups or deliveries		120,000		111,000		480,000		396,000
Adjusted EBITDA	$	13,369	$	14,662	$	57,853	$	50,631
Total revenues	$	61,332	$	59,648	$	245,915	$	211,677
Net income (loss) per share - Basic	$	(0.07)	$	(0.03)	$	(0.16)	$	(0.07)
Net income (loss) per share - Diluted	$	(0.07)	$	(0.03)	$	(0.16)	$	(0.07)
Total assets					$	247,248	$	247,408
Total long-term liabilities					$	79,207	$	75,719
Shareholders' equity					$	107,191	$	111,115

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

Operating Results

The fiscal year ended September 30, 2024 presented us with a range of challenges that we absorbed in the period, which negatively impacted our financial performance and prevented us from achieving our target of 8 to 10% annualized organic growth. The Medicare 75/25, which had been providing rate relief for certain geographies, was discontinued ‎ as of January 1, 2024‎. Although this change is still under legislative review, and could return, its immediate cessation had a negative impact ‎on our operating results ‎for the fiscal year ended September 30, 2024. Moreover, in certain regions, we also experienced the withdrawal of Medicare Advantage members due to a capitated agreement engaged with other providers in the industry. We estimate the revenue impact of these items to be a reduction of approximately $5,000,000 for the fiscal ‎year ended September 30, 2024.

The Company uses Change Healthcare, a subsidiary of UnitedHealth Group, to submit patient claims to certain non-Medicare payors for payment. UnitedHealth Group announced that on February 21, 2024, Change Healthcare’s information technology systems were impacted by a cybersecurity incident ‎ (the “Change Healthcare Incident”)‎. This

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incident significantly impacted the healthcare industry and hindered the ability to process and bill claims in the back half of the quarter, creating a reduction in our cash flow. We believe that the vast majority of claims have now been submitted. While cash collections increased during the six months ended September 30, 2024, we do not believe that we have fully collected certain accounts receivable from the backlog of submitted claims, estimated to be approximately $3,000,000, including collections of claims not directly impacted by the‎ Change Healthcare Incident that were slowed by the diversion of normal collection efforts to address this issue.

Comparison of Results of Operations for the Years and Three Months Ended September 30, 2024 and 2023

The following table summarizes our results of operations for the years and three months ended September 30, 2024 and 2023 (amounts in $thousands, except per share amounts):

	For the three		For the three		For the		For the
	months ended		months ended		year ended		year ended
	September 30,		September 30,		September 30,		September 30,
	30, 2024		30, 2023		30, 2024		30, 2023
Total revenues	$	61,332	$	59,648	$	245,915	$	211,677
Cost of inventory sold		17,664		16,283		68,925		57,897
Operating expenses		31,446		28,691		122,542		103,224
Right-of-use operating lease amortization and interest		1,362		1,450		5,974		5,131
Depreciation		10,016		9,483		38,490		30,901
Amortization of intangible assets		1,521		1,453		6,091		5,197
Stock-based compensation		330		1,369		2,484		5,280
Acquisition-related costs		7		137		401		1,269
Loss (gain) on sale of property and equipment		(55)		12		(107)		(75)
Interest expense, net		1,524		1,610		6,381		5,541
Loss on extinguishment of debt		—		—		—		30
(Gain) loss on foreign currency transactions		(188)		322		(43)		(108)
Share of loss in equity method investment		67		89		309		89
Change in fair value of derivative liability - interest rate swap		1,122		—		1,122		—
Provision (benefit) for income taxes		(273)		75		109		85
Net loss	$	(3,211)	$	(1,326)	$	(6,763)	$	(2,784)
Loss per share
Basic	$	(0.07)	$	(0.03)	$	(0.16)	$	(0.07)
Diluted	$	(0.07)	$	(0.03)	$	(0.16)	$	(0.07)

Revenue

For the year ended September 30, 2024, revenue totaled $245,915,000, an increase of $34,238,000, or 16%, from the year ended September 30, 2023. This increase is due to the full year benefit of acquisitions during the year ended September 30, 2023 and approximately $7,100,000, or 3%, organic growth.

For the year ended September 30, 2024, sales of medical equipment and supplies totaled $151,607,000, an increase of $26,102,000, or 21%, from the year ended September 30, 2023. This increase is due to the full year benefit of acquisitions during the year ended September 30, 2023, and the focus on sales of respiratory resupply products.

For the year ended September 30, 2024, rentals of medical equipment totaled $94,308,000, an increase of $8,136,000, or 9%, from the year ended September 30, 2023. This increase is primarily due to the full year benefit of acquisitions during the year ended September 30, 2023.

For the three months ended September 30, 2024, revenue totaled $61,332,000, an increase of $1,684,000, or 3%, from the three months ended September 30, 2023. This increase is due to the full three-month benefit of an acquisition during the three months ended September 30, 2023, and approximately 1% organic growth.

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Inventory sold

For the year ended September 30, 2024, inventory sold totaled $68,925,000 versus $57,897,000 for the year ended September 30, 2023. The increase in dollars was due to the growth in revenues but increased by a larger percentage than revenues due to a higher mix of sales of medical equipment and supplies relative to total revenue.

For the three months ended September 30, 2024, inventory sold totaled $17,924,000 versus $16,283,000 for the three months ended September 30, 2023. The increase in dollars was due to the growth in revenues but increased by a larger percentage than revenues due to a higher mix of sales of medical equipment and supplies relative to total revenue.

Operating expenses

For the year ended September 30, 2024, operating expenses were $122,542,000, an increase of $19,318,000 from $103,224,000 for the year ended September 30, 2023. The full year impact of the acquisitions during the year ended September 30, 2023, contributed approximately $8,600,000 of the increase. Professional fees related to the CID and the loss in foreign private issuer status contributed $3,298,000, with other increases primarily related to payroll and outbound freight related to the resupply business.

For the three months ended September 30, 2024, operating expenses were $31,446,000, an increase of $2,755,000 from $28,691,000 for the three months ended September 30, 2023. Professional fees related to the CID and the loss of foreign private issuer status contributed $1,093,000, and the full three-month impact of the acquisition during the three months ended September 30, 2023, contributed approximately $600,000. Other increases primarily related to payroll and outbound freight related to the resupply business.

Right-of-use operating lease amortization and interest

Right-of-use operating lease amortization and interest increased to $5,974,000 for the year ended September 30, 2024 from $5,131,000, or 16.4% for the year ended September 30, 2023. The increase was primarily due to the full year impact of the acquisitions during the year ended September 30, 2023.

Right-of-use operating lease amortization and interest decreased slightly to $1,362,000 for the three months ended September 30, 2024 from $1,450,000 for the three months ended September 30, 2023.

Depreciation expense

Depreciation expense increased by $7,589,000 to $38,490,000 for the year ended September 30, 2024. This increase is due to the full year impact of the acquisitions during the year ended September 30, 2023 and other increases to property, equipment, and right-of-use assets.

Depreciation expense increased by $533,000 to $10,016,000 for the three months ended September 30, 2024. This increase is due to the full three-month impact of the acquisition during the three months ended September 30, 2023 and other increases to property, equipment, and right-of-use assets.

Stock-based compensation

Stock-based compensation decreased by $2,796,000 to approximately $2,484,000 for the year ended September 30, 2024 due to timing of the vesting of the grants of restricted stock units and stock options during the years ended September 30, 2024 and 2023 and no new awards being granted during the year ended September 30, 2024.

Stock-based compensation decreased by $1,038,000 to approximately $330,000 for the three months ended September 30, 2024 due to timing of the vesting of the grants of restricted stock units and stock options during the quarters ended September 30, 2024 and 2023 and no new awards being granted during the year ended September 30, 2024.

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Acquisition-related costs

Acquisition related costs decreased by $868,000 to $401,000 for the year ended September 30, 2024. This decrease is due to not making any acquisitions during the year ended September 30, 2024.

Acquisition related costs decreased by $129,000 to $7,000 for the three months ended September 30, 2024, due to not making any acquisitions during the year ended September 30 2024.

Interest expense, net of interest income

Interest expense, net of interest income, increased to $6,382,000 for the year ended September 30, 2024 from $5,541,000 for the year ended September 30, 2023. This was primarily due to the higher borrowings on the Company’s senior credit facility, which was primarily a result of the acquisition of Great Elm.

Interest expense, net of interest income, decreased to $1,524,000 in the three months ended September 30, 2024 from $1,610,000 for the three months ended September 30, 2023, due to the benefit of the interest rate swaps.

Share of loss in equity method investment

Share of loss in equity method investment was a loss of $67,000 and $309,000 for the three months and year ended September 30, 2024, respectively. Equity in earnings of investment was a loss of $89,000 for the three months and year ended September 30, 2023. This represents the Company’s pro rata percentage of the net loss of  DMEScripts, LLC, which was acquired in the three months ended September 30, 2023.

Provision (benefit) for income taxes

The provision for income taxes of $109,000 for the year ended September 30, 2024 increased slightly from the $85,000 for the year ended September 30, 2023.

The benefit for income taxes was $273,000 for the three months ended September 30, 2024, as compared to a provision for income taxes of $75,000 for the three months ended September 30, 2023. The benefit primarily relates to the filing of the returns for the year ended September 30, 2023 being more favorable than originally estimated.

Non-GAAP measures

Throughout this MD&A, references are made to a measure which is believed to be meaningful in the assessment of the Company’s performance. This metrics is a non-standard measure under GAAP and may not be identical to similar measures reported by other companies. Readers are cautioned that the disclosure of these items is meant to add to, and not replace, the discussion of financial results as determined in accordance with GAAP. The primary purpose of this non-GAAP measure is to provide supplemental information that may prove useful to investors who wish to consider the impact of certain non-cash or unusual items on the Company’s operating performance. Management uses both GAAP and non-GAAP measures when planning, monitoring, and evaluating the Company’s performance.

Adjusted EBITDA

This MD&A refers to “Adjusted EBITDA,” which is a non-GAAP ‎financial measure that does not have standardized meaning prescribed by GAAP. The ‎Company’s ‎presentation of this financial measure may not be comparable to similarly titled measures used by ‎other ‎companies. This financial measure is intended to provide additional information to investors concerning ‎the ‎Company’s performance.‎

Adjusted EBITDA is defined as net income (loss), adjusted for net interest expense, depreciation, amortization, right-of-use operating lease amortization and interest, provision (benefit) for income taxes, professional fees related to CID and loss of foreign private issuer status, stock-based compensation, acquisition-related costs, loss on extinguishment of debt, gain (loss) on foreign currency transactions, change in fair value of derivative liability – interest rate swap, and share of

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loss in equity method investment. Adjusted EBITDA is a non-GAAP measure that the Company uses as an indicator of financial health and excludes ‎several items which may be useful in the consideration of the financial condition of the Company.

Set forth below are descriptions of the material financial items that have been excluded from net income (loss) to calculate Adjusted EBITDA and the material limitations associated with using this non-GAAP financial measure.

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

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

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

● We consider the professional fees related to the CID and the loss of private issuer status to be non-recurring events, and therefore not a representative component of the day-to-day operating performance of our business.

● Stock-based compensation may be useful for investors to consider because it is a component of compensation received by the Company’s directors, officers, employees, and consultants. However, stock-based compensation is being added back because it is non-cash and because the decisions which gave rise to these expenses were not made to increase revenue in a particular period, but rather were made for the Company’s long-term benefit over multiple periods.

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

● The change in fair value of derivative liability – interest rate swap is added back because it is non-cash in the period of change in the fair value.

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The following table is a reconciliation of net loss to Adjusted EBITDA for the indicated periods‎ (amounts in thousands of $):

	For the three		For the three		For the		For the
	months ended		months ended		year ended		year ended
	September		September		September		September
	30, 2024		30, 2023		30, 2024		30, 2023
Net loss	$	(3,211)	$	(1,326)	$	(6,763)	$	(2,784)
Add back:
Depreciation and amortization		11,537		10,936		44,581		36,098
Right-of-use operating lease amortization and interest		1,362		1,450	—	5,974		5,131
Interest expense, net		1,524		1,610		6,381		5,541
Provision (benefit) for income taxes		(273)		75		109		85
Professional fees related to CID		937		—		3,143		—
Professional fees related to loss of foreign private issuer status		155		—		155		—
Stock-based compensation		330		1,369		2,484		5,280
Acquisition-related costs		7		137		401		1,269
Loss on extinguishment of debt		—		—		—		30
Gain (loss) on foreign currency transactions		(188)		322		(43)		(108)
Change in fair value of derivative liability - interest rate swap		1,122		—		1,122		—
Share of loss in equity method investment		67		89		309		89
Adjusted EBITDA	$	13,369	$	14,662	$	57,853	$	50,631

Use of Proceeds

On November 12, 2021, the Company filed and obtained a receipt for its final short form base shelf prospectus (the ‎‎“Final Shelf Prospectus”) ‎with the securities commissions in each of the provinces and territories of Canada, and a ‎corresponding registration ‎statement on Form F-10 (the “Registration Statement”) with the SEC under the ‎US/Canada Multijurisdictional Disclosure System.‎ The Final Shelf Prospectus and corresponding Registration ‎Statement allow Quipt to undertake offerings of ‎common shares, preferred shares, debt securities, warrants, ‎subscription receipts and units (collectively, the “Securities”), or any combination thereof, up to an aggregate total ‎of C$200,000,000 from time to time during the ‎‎25-month period that the Final Shelf Prospectus remains effective. ‎The Final Shelf Prospectus expired December 12, 2023.

On April 25, 2023, the Company issued a total of 5,409,000 common shares for aggregate gross proceeds of approximately C$42,500,000, or $31,200,000, 5,129,000 of which common shares were issued under the Final Shelf Prospectus and Registration Statement and 280,000 of which common shares were issued in accordance with a concurrent brokered private placement. The net proceeds after underwriters’ commission and other professional fees in connection with the offering was approximately $27,900,000.

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The following table provides information about the Company’s recent debt and equity financings and the actual use of proceeds from those financings compared to the intended use of proceeds from the offerings.

Date of Financing	Type of Financing	Gross Proceeds	Initial Intended Use of Net Proceeds	Actual Use of Net Proceeds to Date	Explanation of Variance and Impact on Business Objectives
January 3, 2023	Facility consisting of a delayed-draw term loan facility of $85.0 million, a term loan of $5.0 million, and a $20.0 million revolving credit facility	$71.0 million, consisting of a $64.0 million draw on the delayed-draw term loan facility, and a $7.0 million draw on the revolving credit facility.	The ​​​​proceeds ​​ ​​were ​​expected ​​to ​​be ​​used for acquisitions, working capital, and general corporate requirements.	The proceeds were fully used to acquire Great Elm.	Proceeds have been used as intended.
April 25, 2023	Public and private offering	C$42.5 million ($31.2 million)	The ​​net ​​proceeds ​​ ​​were ​​expected ​​to ​​be ​​used for debt repayment, acquisitions, working capital, and general corporate requirements.	After $3.3 million of issuance costs, the net proceeds of $27.9 million was used to: - retain $10.9 million for working capital, general corporate requirements, and future acquisitions. - repay the then-outstanding $14.0 million balance on the revolving credit facility - acquire Southern Pharmaceutical Corporation for a net $3.0 million at closing	Proceeds have been used as intended.

Financial Position

The following table is the Company’s summarized financial position as of September 30, 2024 and 2023 (in $thousands):

	As of		As of
	September 30, 2024		September 30, 2023
Cash	$	16,174	$	17,209
Accounts receivable, inventory and prepaid assets		56,880		48,224
Property and equipment		37,385		35,503
Right of use assets, net		16,475		17,902
Other assets		120,334		128,570
Total assets	$	247,248	$	247,408
Accounts payable and other current liabilities	$	60,850	$	60,574
Long-term liabilities		79,207		75,719
Total liabilities		140,057		136,293
Shareholders’ equity		107,191		111,115
Total liabilities and shareholders’ equity	$	247,248	$	247,408

Liquidity and Capital Resources

The Company’s primary source of liquidity is cash on hand and its line of credit availability. As of September 30, 2024, the Company had cash on hand of $16,174,000 and revolving credit availability under the Facility, defined below, of $13,677,000. The Company’s approach in managing liquidity is to ensure, to the extent possible, that it will have enough liquidity to meet its liabilities when due. The Company will do so by continuously monitoring actual and expected cash flows and monitoring financial market conditions for signs of weakness. The Company faces minimal liquidity risk in its current financial obligations as they become due and payable.

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Cash Flows

The following is a summary of the Company’s cash flows for the following periods:

	For the three		For the three		For the		For the
	months ended		months ended		year ended		year ended
	September 30,		September 30,		September 30,		September 30,
	30, 2024		30, 2023		30, 2024		30, 2023
Net cash flow provided by operating activities	$	6,739	$	9,668	$	35,381	$	36,980
Net cash flow used in investing activities		(3,363)		(6,081)		(10,313)		(82,825)
Net cash flow provided by (used in) financing activities		(1,794)		(6,501)		(26,147)		54,430
Effect of exchange rate changes on cash held in foreign currencies		189		(322)		44		108
Net increase (decrease) in cash	$	1,771	$	(3,236)	$	(1,035)	$	8,693

Capital management

The Company considers its capital to be shareholders’ equity, which totaled $107,091,000 as of September 30, 2024, and the senior credit facility with a principal amount of $69,223,000 as of September 30, 2024.

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

The Company had the following equity instruments outstanding as of September 30, 2024 and September 30, 2023:

	As of	As of
	September 30, 2024	September 30, 2023
	(000’s)	(000’s)
Common shares	43,090	42,102
Options	3,402	3,957
Restricted stock units	519	1,034

Financing

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

Senior Credit Facility

The Company has a $110,000,000 senior credit facility (“the Facility”) with a group of US banks that matures in September 2027. The Facility consists of a delayed-draw term loan facility of $85,000,000, of which $64,000,000 has been drawn; a term loan of $5,000,000, which was drawn at closing; and a $20,000,000 revolving credit facility. The Facility is secured by substantially all assets of the Company and is subject to certain financial covenants, with which the Company was in compliance as of September 30, 2024.

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A summary of the outstanding balances related to the Facility as of September 30, 2024 is as follows (in thousands):

	As of		As of
	September 30, 2024		September 30, 2023
Delayed-draw term loan	$	58,400	$	61,600
Term loan		4,500		4,750
Revolving credit facility		6,323		—
Total principal		69,223		66,350
Deferred financing costs		(1,430)		(1,884)
Net carrying value	$	67,793	$	64,466
Current portion		3,248		3,352
Long-term portion		64,545		61,114
Net carrying value	$	67,793	$	64,466

The delayed-draw term loan and the term loan are bearing interest at a weighted average 7.6% as of September 30, 2024. The rate is based on a secured overnight financing rate (“SOFR”), with a floor of 0.5%, plus a spread of 2.1% to 2.85% (2.65% as of September 30, 2024) based on the Company’s leverage ratio and will reprice within three months. The revolving credit facility is bearing interest at 7.7% as of September 30, 2024 and will reprice within one month. The Facility also has fees for unused availability. Due to the near-term repricing of the interest rates, the fair value of the Facility approximates the principal value as of September 30, 2024 and 2023.

To manage the risks of the cash flows related to interest expense, the Company entered into several interest rate swaps on $59,000,000 of the principal amount of the Facility. The swaps carry a fixed SOFR of 3.4% to 4.4%, resulting in a weighted combined rate of 6.8%. The swaps are settled quarterly and mature on September 30, 2025, 2026 and at the Facility’s maturity. Any difference between the Facility’s SOFR rate and the swap’s rate is recorded as interest expense. For the year ended September 30, 2024, a reduction of $311,000 to interest expense was recorded in the condensed consolidated interim statements of income (loss).

As of September 30, 2024, the fair value of the interest rate swap liability was $1,122,000, and is recorded in derivative liability – interest rate swap in the condensed consolidated statements of financial position. The Company has recorded the changes in fair value of derivative liability – interest rate swaps on the consolidated statements of income (loss).

Interest expense on the Facility, including the impact of the interest rate swap agreement, was $5,346,000 and $4,415,000 for the years ended September 30, 2024 and 2023, respectively

The Company has incurred financing costs to obtain and maintain the Facility, which is reflected as a reduction of the outstanding balance and will be amortized as interest expense using the effective interest method over the life of the Facility. During the years ended September 30, 2024 and 2023, $513,000 and $462,000 of amortization of deferred financing costs was recorded, respectively.

Equipment Loans

The Company is offered financing arrangements from the Company’s suppliers and the supplier’s designated financial institution, in which payments for certain invoices or products can be financed and paid over an extended period. The financial institution pays the supplier when the original invoice becomes due, and the Company pays the third-party financial institution over a period of time. In most cases, the supplier accepts a discounted amount from the financial institution and the Company repays the financial institution the face amount of the invoice with no stated interest, in twelve equal monthly installments. The Company uses its incremental borrowing rate of 6.0% to 8.0% to impute interest on these arrangements. The Company has also assumed equipment loans in conjunction with several of its acquisitions. There are no covenants with the loans.

The balance of the loans as of September 30, 2024 is $12,859,000, with substantially all of it due within the next year.

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Lease Liabilities

The Company enters into leases for real estate and vehicles. Real estate leases are valued at the net present value of the future lease payments at an incremental borrowing rate of 5.9% to 8.0%. Vehicle leases are recorded at rate implicit in the lease based on the current value and the estimated residual value of the vehicle, equating to rates ranging from 5.1% to 12.8%. Future payments on these liabilities are as follows (in thousands):

Less than 1 year	$	12,573
Between 1 and 5 years		27,053
More than 5 years		886
Total		40,512
Less: finance charges		(21,362)
Lease liabilities		19,150
Current portion of lease liabilities		5,867
Long-term portion of lease liabilities	$	13,283

Quarterly operating results

Results of operations for the healthcare services market in which the Company operates show little seasonality from quarter to quarter. The increase in revenues from the past year is primarily due to the Company’s acquisitions during the year ended September 30, 2023.

The following table provides selected historical information and other data, which should be read in conjunction with the financial statements of the Company (amounts in thousands except per share amounts).

	As of or for the		As of or for the		As of or for the		As of or for the
	three months ended		three months ended		three months ended		three months ended
	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
Revenue	$	61,332	$	60,759	$	61,249	$	62,575
Net income (loss)		(3,111)		(1,701)		(1,365)		(586)
Net income (loss) per share - basic		(0.07)		(0.04)		(0.03)		(0.01)
Net income (loss) per share - diluted		(0.07)		(0.04)		(0.03)		(0.01)
Total assets	$	247,248	$	249,784	$	248,614	$	243,893

	As of or for the		As of or for the		As of or for the		As of or for the
	three months ended		three months ended		three months ended		three months ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Revenue	$	59,648	$	57,859	$	55,638	$	38,532
Net income (loss)		(1,326)		(1,034)		(749)		325
Net income (loss) per share - basic		(0.03)		(0.03)		(0.02)		0.01
Net income (loss) per share - diluted		(0.03)		(0.03)		(0.02)		0.01
Total assets	$	247,408	$	242,385	$	225,543	$	131,725

Related party transactions

The Company has six leases for office, warehouse, and retail space with a rental company affiliated with the Company’s Chief Executive Officer, Gregory Crawford, the majority of which were entered into in 2015. The leases have a combined area of 74,520 square feet. Lease payments under these leases are approximately $65,000 per month beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

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Off balance sheet arrangements

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

Critical accounting estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised. Actual results could differ from those estimates.

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

Accounts receivable

The Company estimates that a certain portion of receivables from customers may not be collected and maintains a reserve for expected pricing concessions and insurance denials. The Company evaluates the net realizable value of accounts receivable as of the date of the consolidated balance sheets, considering current and historical cash collections, the age of the accounts receivable, and relevant business conditions. Significant judgments are made in order to incorporate forward-looking information into the estimation of reserves and may result in changes to revenue and accounts receivable period to period which may significantly affect the Company’s results of operations.

Inventory

Inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. The Company’s inventory consists of finished goods purchased from vendors; therefore, no labor or overhead is included in the inventory cost. Inventory is subsequently recorded within cost of inventory sold on the consolidated statements of income (loss) at the time the inventory is sold. Inventory may be transferred to property and equipment as rental equipment.

The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to their estimated net realizable value.

Property, equipment, and right-of-use assets

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

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

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Intangible assets

The Company has recorded various intangible assets consisting primarily of non-compete agreements, trademarks, customer contracts and customer relationships in connection with various business acquisitions. Non-compete agreements are recognized at the estimated fair value associated with the non-compete agreements entered by the sellers of acquired companies. Trademarks are recognized at the estimated fair value associated with the trade name of the acquired company. Customer contracts are recognized at the estimated fair value of the present value of expected future customer billings based on the statistical life of a customer. Customer relationships are recognized based on the estimated fair value given to the long-term associations with referral sources such as doctors, medical centers, etc.

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

The Company periodically evaluates the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk. The Company did not have any long-lived asset impairments in the years ended September 30, 2024 or 2023.

Goodwill impairment

The Company tests goodwill for impairment on an annual basis on July 1, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist. The Company determines the fair value of our reporting unit using the income approach and market approach to valuation, as well as other generally accepted valuation methodologies. The income approach utilizes a discounted cash flow analysis using management’s assumptions. The market approach compares the reporting unit to similar companies with the assumption that companies operating in the same industry will share similar characteristics and that company values will correlate to those characteristics. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized equal to the difference between the carrying amount and the estimated fair value of the reporting unit. The Company concluded that there was no impairment of goodwill during fiscal 2024 or 2023.

The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

Equity method investee

In July 2023, the Company, through QHM Investments I, LLC, acquired an 8.3% ownership in DMEScripts, LLC for $1,500,000. As of September 30, 2024, the Company has cumulatively invested $1,710,000 and has an 8.5% ownership.  DMEScripts, LLC is an independent e-prescribe company in the US that automates the medical equipment ordering process. This technology is dedicated to improving the patient, prescriber, and provider experience by eliminating inefficiencies and reducing paperwork. The investment in DMEScripts, LLC is accounted for using the equity method.

The Company applies the equity method of accounting for investments when it determines it has a significant influence, but not a controlling interest in the investee. Significant influence is determined by considering key factors such as ownership interest, representation on the board of directors, participation in policy making decisions, business relationship and material intra-entity transactions, among other factors.

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The equity method investment is reported at cost and adjusted each period for the Company’s share of the investee's income (loss). The Company records “share of loss in equity method investment” on the consolidated statements of income (loss) for its pro rata share ownership percentage of the investee’s net loss. The carrying value of the equity method investment is reported in “other assets” on the consolidated balance sheets.

Foreign currency transactions

Transactions in foreign currencies are initially recorded at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date and exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the average monthly rates of exchange.

Revenue recognition

Revenues are billed to, and collections are received from customers. Because of continuing changes in the health care industry and third-party reimbursement, the consideration receivable from these insurance companies is variable as these billings can be challenged by the payor. Therefore, the amount billed by the Company is reduced to an estimate of the amount that the Company believes will be ultimately allowed by the insurance contract, including co-pays and deductibles. This estimate involves significant judgment including an analysis of past collections and historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting estimated revenue as necessary.

The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities during the years ended September 30, 2024 and 2023.

Rental of medical equipment

Revenue that is generated from equipment that the Company rents to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancellable lease term.

Sales of medical equipment and supplies

The Company sells equipment, consumable supplies, and replacement parts to customers and recognizes revenue on delivery, as at that point all performance obligations have been met.

Shipping and handling

The Company provides shipping and handling at no charge in sending product to customers. The Company does not consider this a separate performance obligation since these shipping and handling activities occur before the customer obtains control of the goods. The shipping and handling are considered activities to fulfill the entity’s promise to transfer the goods and are expensed as within operating expenses.

Share-based payments

The Company grants stock options and restricted stock units to employees, members of the Board of Directors, and consultants. The Company measures equity settled share-based payments based on their fair value at the grant date and

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recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes Model. In estimating fair value, management is required to make certain assumptions and estimates, such as the expected life of units, volatility of the Company’s future share price, risk-free interest rates, and future dividend yields, at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. The Company has elected to recognize the effect of forfeitures in compensation cost when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Further, the Company has elected to use the contractual term as the expected term. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period for each separately vesting portion of the award.

Fair value measurement

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

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

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

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

There were no transfers between the levels of fair value hierarchy during the years ended September 30, 2024 or September 30, 2023.

Loss per share

The Company presents basic and diluted loss per share data for its ordinary shares. Basic loss per share is calculated by dividing the net loss by the weighted average number of Common Shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the loss per share calculations. The Company’s potentially dilutive common share equivalents are stock options and restricted stock units. The years ended September 30, 2024 and 2023 were periods of net losses, therefore, the potentially dilutive common share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. In order to determine diluted loss per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase common shares at the average market price during the period.

Leases

Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets.

The Company’s operating leases are for real estate and range from 2 to 11 years. The Company’s finance leases are for vehicles and range from 2 to 7 years.

The Company’s leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. Some of the Company’s vehicle lease agreements contain residual value guarantees.

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The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset, and the contract conveys the right to control its use. The right-of-use asset is measured at the initial amount of the lease liability. Right-of-use assets are included in property and equipment in the Company's consolidated balance sheets.

Operating lease expense is recognized on a straight-line basis over the term of the lease. Finance lease cost includes a.) depreciation, which is recognized on a straight-line basis over the expected life of the right-of-use asset and included in depreciation in the Company’s consolidated statements of income (loss), and b.) interest expense, which is recognized following an effective interest rate method and is included in interest expense in the Company’s consolidated statements of income (loss).

The Company’s real estate operating leases do not provide an implicit rate that can be easily determined. Therefore, the Company applies its incremental borrowing rate to the lease based on the information available at the commencement date. This estimate impacts the carrying amount of the lease liabilities and the interest expense recorded on the consolidated statement of income (loss). Vehicle finance leases are recorded at the interest rate implicit in the lease based on the current value and the estimated residual value of the vehicle.

Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it is probable that it will choose to extend the lease at the end of the initial lease term. This estimate could affect future results if the Company extends the lease or exercises an early termination option.

The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset.

Income taxes

Deferred taxes are determined based on the differences between the financial statements and the tax bases using rates as enacted in the laws. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized.

Interest and penalties related to unrecognized tax benefits are recognized in the tax provision. Liabilities for uncertain tax positions are recognized when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. There have not been any material interest or penalties during any of the years presented.

Business combinations

The Company accounts for business combinations using the acquisition method when control is obtained by the Company. The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date.

Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates at fair value with the corresponding gain or loss being recognized in profit or loss.

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Contractual Commitments and Obligations

The following table summarizes the Company’s contractual commitments and obligations as of September 30, 2024 (in $thousands), which are primarily for debt, leasing of offices and other obligations. The leases have been entered into with terms between one and ten years, including optional extensions.

			Less than		1-3		4-5		After 5
	Total		1 year		Years		Years		Years
Debt	$	82,386	$	22,868	$	68	$	59,450	$	—
Finance lease obligations		22,134		7,113		12,430		2,148		443
Operating leases		114		114		—		—		—
Purchase obligations		—		—		—		—		—
Other obligations		29,310		29,310		—		—		—
Total contractual obligations	$	133,944	$	59,405	$	12,498	$	61,598	$	443

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The Company is exposed to financial risks of varying degrees of significance which would affect its ability to achieve its strategic objectives for growth: market risk (including currency risk and interest rate risk), credit risk, and liquidity risk. These risks arise from the normal course of operations and all transactions are undertaken to support the Company’s ability to continue as a going concern. Risk management is carried out by management under policies approved by the Board of Directors. The Company’s overall risk management program seeks to minimize potential adverse effects on the Company’s financial performance.

Credit risk

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

As of September 30, 2024, the Company has 13% of its accounts receivable with Medicare. As this is a US government program, we believe there is very little credit risk associated with these balances. No other customer represented more than 10% of outstanding accounts receivable.

Currency risk

Currency risk is the risk that the Company will be subject to foreign currency fluctuations in its cash balances denominated in foreign currencies. All of the Company’s sales and inventory sold and almost all of the Company’s operating expenses are in US dollars. Cash is maintained in both US dollars and Canadian dollars. Consequently, the Company is exposed to foreign exchange fluctuations. The Company will continue to maintain cash balances in both US and Canadian dollars, but management anticipates that it will not purchase any securities or financial instruments to speculate on currency fluctuations or engage in any currency hedging programs.

The Company’s objective in managing its foreign currency risk is to monitor foreign exchange rates and minimize its net exposures to foreign currency cash flows by generally holding most of its cash in US dollars. However, at times, including at September 30, 2024, the Company does temporarily hold significant cash in Canadian dollars. During the twelve months ended September 30, 2024, the Company recognized a foreign currency gain of approximately $43,000, due to favorable movements in the exchange rates. The Company monitors foreign currency exposures and from time to time could

51

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

Based on the exposure of Canadian cash at September 30, 2024, depreciation or appreciation of the Canadian dollar against the US dollar could result in a significant effect on net income or loss. The Company has not employed any foreign currency hedging programs.

Interest rate risk

Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate on the credit facility has a variable rate that can be fixed for a maximum of six months. During the year ended September 30, 2024, the Company entered into interest rate swap agreements whereby $59,000,000 of principal will receive a fixed rate. With $69,223,000 of borrowings on this facility at September 30, 2024, each 1% increase would result in an additional $10,223 of annual interest expense. The interest on the Company’s other debt is either imputed or has a fixed rate and is not subject to cash flow interest rate risk.

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Item 8. Financial Statements and Supplementary Data.

TABLE OF CONTENTS

Report of the Independent Registered Public Accounting Firm (BDO USA, P.C., Cincinnati, Ohio, PCAOB #243)

Consolidated Statements of Financial Position	55
Consolidated Statements of Income (Loss)	56
Consolidated Statements of Changes in Shareholders’ Equity	57
Consolidated Statements of Cash Flows	58
Notes to the Consolidated Financial Statements	59

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Report of Independent Registered Public Accounting Firm

Shareholders and Board of Directors

Quipt Home Medical Corp.

Wilder, KY

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated statements of financial position of Quipt Home Medical Corp. (the “Company”) as of September 30, 2024 and 2023, the related consolidated statements of income (loss), changes in shareholders’ equity, and cash flows for each of the two years in the period ended September 30, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at September 30, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

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

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

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

/s/ BDO USA, P.C.

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

Cincinnati, Ohio

December 16, 2024

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Quipt Home Medical Corp.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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

	As of		As of
	September 30,		September 30,
	2024		2023
ASSETS
Current assets
Cash	$	16,174	$	17,209
Accounts receivable, net		29,116		25,978
Inventory		20,853		18,414
Prepaid and other current assets		6,911		3,832
Total current assets		73,054		65,433
Long-term assets
Property and equipment, net		37,385		35,503
Right of use assets, net		16,475		17,902
Goodwill		50,733		52,825
Intangible assets, net		67,953		74,040
Equity method investment		1,311		1,411
Other assets		337		294
Total long-term assets		174,194		181,975
TOTAL ASSETS	$	247,248	$	247,408
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	$	35,363	$	32,018
Current portion of equipment loans		12,804		14,114
Current portion of lease liabilities		5,867		5,122
Current portion of senior credit facility		3,248		3,352
Deferred revenue		3,568		4,511
Purchase price payable		—		1,457
Total current liabilities		60,850		60,574
Long-term liabilities
Equipment loans		55		233
Lease liabilities		13,283		14,028
Derivative liability - interest rate swap		1,122		—
Senior credit facility		64,545		61,114
Deferred income taxes		202		344
TOTAL LIABILITIES		140,057		136,293
COMMITMENTS AND CONTINGENCIES (Note 11)
SHAREHOLDERS' EQUITY
Capital stock
Common shares, no par value, unlimited shares authorized; 43,091,273 and 42,102,471 issued and outstanding as of September 30, 2024 and 2023		—		—
Preferred Shares, no par value, unlimited shares authorized, none issued and outstanding as of September 30, 2024 and 2023		—		—
Additional paid in-capital		277,762		274,923
Accumulated deficit		(170,571)		(163,808)
TOTAL SHAREHOLDERS' EQUITY		107,191		111,115
TOTAL LIABILITIES AND EQUITY	$	247,248	$	247,408

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

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Quipt Home Medical Corp.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

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

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Revenue
Rentals of medical equipment	$	94,308	$	86,172
Sales of medical equipment and supplies		151,607		125,505
Total revenues		245,915		211,677
Cost of inventory sold		68,925		57,897
Operating expenses		122,542		103,224
Right-of-use operating lease amortization and interest		5,974		5,131
Depreciation		38,490		30,901
Amortization of intangible assets		6,091		5,197
Stock-based compensation		2,484		5,280
Acquisition-related costs		401		1,269
Gain on disposals of property and equipment		(107)		(75)
Operating income		1,115		2,853
Financing expenses
Interest expense		7,168		5,910
Interest income		(787)		(369)
Loss on extinguishment of debt		—		30
Gain on foreign currency transactions		(43)		(108)
Share of loss in equity method investment		309		89
Change in fair value of derivative liability - interest rate swap		1,122		—
Loss before taxes		(6,654)		(2,699)
Provision for income taxes		109		85
Net loss	$	(6,763)	$	(2,784)
Net income (loss) per share (Note 15)
Basic loss per share	$	(0.16)	$	(0.07)
Diluted loss per share	$	(0.16)	$	(0.07)
Weighted average number of common shares outstanding:
Basic		42,501		38,607
Diluted		42,501		38,607

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

56

Quipt Home Medical Corp.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’

EQUITY

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

	Number of					Total
	Shares	Additional Paid-		Accumulated		shareholders'
	(000’s)	In Capital		Deficit		equity
Balance September 30, 2022	35,605	$	240,571	$	(161,024)	$	79,547
Net loss	—		—		(2,784)		(2,784)
Acquisition of Great Elm	432		2,060				2,060
Issuance of shares, net of issuance costs of $3,303	5,409		27,866				27,866
Settlement of restricted stock units	526		(1,338)				(1,338)
Stock options exercised	130		484				484
Stock-based compensation	—		5,280				5,280
Balance September 30, 2023	42,102	$	274,923	$	(163,808)	$	111,115
Net loss	—		—		(6,763)		(6,763)
Settlement of restricted stock units	469		(213)		—		(213)
Stock options exercised	519		568		—		568
Stock-based compensation	—		2,484		—		2,484
Balance September 30, 2024	43,090	$	277,762	$	(170,571)	$	107,191

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

57

Quipt Home Medical Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

	Year Ended September 30,
	2024		2023
Operating activities
Net loss	$	(6,763)	$	(2,784)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		44,581		36,098
Stock-based compensation		2,484		5,280
Gain on disposals of property and equipment		(107)		(75)
Loss on extinguishment of debt		—		30
Amortization of financing costs and accretion of purchase price payable		551		591
Gain on foreign currency transactions		(43)		(108)
Share of loss in equity method investment		309		89
Change in fair value of derivative liability - interest rate swap		1,122		—
Deferred income taxes		342		(548)
Right-of-use operating lease amortization and interest		5,974		5,131
Payments of operating leases, including interest		(5,386)		(4,622)
Adjustments to purchase price payable		(29)		(96)
Change in working capital, net of acquisitions:
Net increase in accounts receivable		(3,294)		(3,063)
Net increase in inventory		(3,420)		(60)
Net increase in prepaid and other current assets		(3,124)		(2,239)
Net (decrease) increase in deferred revenue		(943)		240
Net increase in accounts payables and accrued liabilities		3,127		3,116
Net cash flow provided by operating activities		35,381		36,980
Investing activities
Purchase of property and equipment		(10,313)		(6,852)
Cash proceeds from sale of property and equipment		210		65
Cash paid for acquisitions, net of cash acquired		(210)		(76,038)
Net cash flow used in investing activities		(10,313)		(82,825)
Financing activities
Repayments of equipment loans and SBA loan		(26,792)		(20,447)
Repayments of finance leases		(1,579)		(821)
Issuance of delayed-draw term loan under senior credit facility		—		64,000
Repayments of senior credit facility		(3,450)		(2,650)
Borrowings on the revolving credit facility		17,100		16,500
Repayments on the revolving credit facility		(10,777)		(23,500)
Issuance costs relating to credit facility		(60)		(581)
Issuance of shares, net of issuance costs		—		27,866
Settlement of restricted stock units		(213)		(1,338)
Proceeds from exercise of stock options		568		484
Payments of purchase price payable		(944)		(5,083)
Net cash flow (used in) provided by financing activities		(26,147)		54,430
Net increase (decrease) in cash		(1,079)		8,585
Effect of exchange rate changes on cash held in foreign currencies		44		108
Cash, beginning of year		17,209		8,516
Cash, end of year	$	16,174	$	17,209
Supplemental cash flow information
Cash paid for interest	$	(6,826)	$	(6,026)
Cash paid for income taxes		(1,249)		(680)
Operating lease additions		4,229		7,938
Equipment loan additions		25,304		23,615
Finance lease additions		1,975		1,159
Purchases of property and equipment in ending accounts payable		214		—

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

58

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

1.Nature of operations

Reporting entity

Quipt Home Medical Corp. (“Quipt” or the “Company”) was incorporated under the Business Corporations Act (Alberta) on March 5, 1997. On December 30, 2013, pursuant to a Certificate of Continuance, the Company changed its jurisdiction of governance by continuing from Alberta into British Columbia. The Company’s head office is located at 1019 Town Drive, Wilder, Kentucky 41076, and its registered office is located at Suite 2700, 1133 Melville Street, Vancouver, British Columbia V6E 4E5.

All significant operating decisions are based on analysis of the Company as a whole; accordingly, the Company operates in one business segment, which is the sale and rental of medical equipment and related devices.

The Company’s common shares are traded on the Nasdaq Capital Market and the Toronto Stock Exchange, both under the symbol “QIPT”.

2.Basis of Presentation and summary of significant accounting policies

Basis of accounting

These consolidated financial statements as of and for the years ended September 30, 2024 and 2023 (the “Consolidated Financial Statements”) of the Company were prepared in accordance with accounting principles generally accepted in the US (“GAAP”).

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

Historically, the Company qualified as a foreign private issuer and prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Effective October 1, 2024, the Company no longer qualifies as a foreign private issuer as defined in Rule 405 of Regulation C under the Securities Act and Rule 3b-4 under the Exchange Act and therefore has become a domestic filer and must file this Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and in accordance with GAAP. The Company’s consolidated financial statements were prepared in accordance with GAAP retrospectively for the year ended September 30, 2023.

The consolidated financial statements of the Company are presented in US dollars, which is the Company’s functional currency, determined using management’s judgment that the primary economic environment in which it will derive its revenues and expenses incurred to generate those revenues is the US.

Basis of measurement

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

59

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated. The Company’s consolidated entities, which all have a functional currency of US dollars and ownership of 100%, are as follows:

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

Use of estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised. Actual results could differ from those estimates.

Estimates where management has made subjective judgments and where there is significant risk of material adjustments to assets and liabilities in future accounting periods include fair value measurements for financial instruments and share-

60

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

based transactions, useful lives and impairment of non-financial assets (property and equipment and intangible assets), provision for expected credit losses, fair value measurements for assets and liabilities acquired in business acquisitions, and calculation of deferred taxes.

Accounts receivable

Due to the nature of our industry and the reimbursement environment in which the Company operates, certain estimates are required to record total net revenues and accounts receivable at their net realizable values, including estimating variable consideration. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements, contractual terms, and the uncertainty of reimbursement amounts for certain services may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial, or account review. Net realizable values are estimated based on a number of factors, including age of the receivables, changes in customer payment patterns, historical experience, industry trends, and current economic conditions.

Inventory

Inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. The Company’s inventory consists of finished goods purchased from vendors; therefore, no labor or overhead is included in the inventory cost. Inventory is subsequently recorded within cost of inventory sold sales on the consolidated statements of operations at the time the inventory is sold. Inventory is transferred to property and equipment as rental equipment at the time of rental revenue recognition.

The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to their estimated net realizable value.

Property, equipment, and right-of-use assets

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

The estimated useful lives of the assets are as follows:

Description	Estimated Useful Life
Rental equipment	1	-	5 years
Right-of-use real estate	Life of lease 2	-	11 years
Right-of-use vehicles	Life of lease 2	-	7 years
Vehicles	1	-	5 years
Leasehold improvements	Life of lease 1	-	11 years
Buildings			25 years
Office and technology equipment			5 years

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

61

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Intangible assets

The Company has recorded various intangible assets consisting of customer relationships, customer contracts, trade names and non-compete agreements, in connection with various business acquisitions. Customer relationships are recognized based on the estimated fair value given to the long-term associations with referral sources such as doctors, hospitals, and sleep centers. Customer contracts are recognized at the estimated fair value of the present value of expected future customer billings based on the statistical life of a customer Trade names are recognized at the estimated fair value associated with the trade name of the acquired company. Non-compete agreements are recognized at the estimated fair value associated with the non-compete agreements entered into by the sellers of acquired companies. Definite life intangible assets are amortized on a straight-line basis over the estimated useful lives of the related assets as follows:

Description	Estimated Useful Life
Customer relationships	10	-	20 years
Customer contracts			2 years
Trade names			10 years
Non-compete agreements			5 years

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

The Company periodically evaluates the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk, which are Level 3 unobservable inputs. The Company did not have any long-lived asset impairments in the years ended September 30, 2024 or 2023.

Goodwill impairment

The Company tests goodwill for impairment on an annual basis on July 1, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist. The Company determines the fair value of our reporting unit using the income approach (a Level 3 fair value input) and market approach (a Level 2 fair value input) to valuation, as well as other generally accepted valuation methodologies. The income approach utilizes a discounted cash flow analysis using management’s assumptions. The market approach compares the reporting unit to similar companies with the assumption that companies operating in the same industry will share similar characteristics and that company values will correlate to those characteristics. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized equal to the difference between the carrying amount and the estimated fair value of the reporting unit. The Company concluded that there was no impairment of goodwill during fiscal 2024 or 2023.

The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

62

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Equity method investee

In July 2023, the Company, through QHM Investments I, LLC, acquired an 8.3% ownership in DMEScripts, LLC for $1,500,000. As of September 30, 2024, the Company has cumulatively invested $1,710,000 and has an 8.5% ownership.  DMEScripts, LLC is an independent e-prescribe company in the US that automates the medical equipment ordering process. This technology is dedicated to improving the patient, prescriber, and provider experience by eliminating inefficiencies and reducing paperwork. The investment in DMEScripts, LLC is accounted for using the equity method.

The Company applies the equity method of accounting for investments when it determines it has a significant influence, but not a controlling interest in the investee. Significant influence is determined by considering key factors such as ownership interest, representation on the board of directors, participation in policy making decisions, business relationship and material intra-entity transactions, among other factors.

The equity method investment is reported at cost and adjusted each period for the Company’s share of the investee's income (loss). The Company records “share of loss in equity method investment” on the consolidated statements of income (loss) for its pro rata share ownership percentage of the investee’s net loss.

Foreign currency transactions

Transactions in foreign currencies are initially recorded at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date and exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the average monthly rates of exchange.

Revenue recognition

Revenues are billed to, and collections are received from customers. Because of continuing changes in the health care industry and third-party reimbursement, the consideration receivable from these insurance companies is variable as these billings can be challenged by the payor. Therefore, the amount billed by the Company is reduced to an estimate of the amount that the Company believes will be ultimately allowed by the insurance contract, including co-pays and deductibles. This estimate involves significant judgment including an analysis of past collections and historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting estimated revenue as necessary.

The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities during the years ended September 30, 2024 and 2023.

Rental of medical equipment

Revenue that is generated from equipment that the Company rents to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including

63

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancellable lease term.

Sales of medical equipment and supplies

The Company sells equipment, consumable supplies, and replacement parts to customers and recognizes revenue on delivery, as at that point all performance obligations have been met.

Shipping and handling

The Company provides shipping and handling at no charge in sending product to customers. The Company does not consider this a separate performance obligation since these shipping and handling activities occur before the customer obtains control of the goods. The shipping and handling are considered activities to fulfill the entity’s promise to transfer the goods and are expensed as within operating expenses.

Stock-based compensation

The Company grants stock options and restricted stock units to employees, members of the Board of Directors, and consultants. The Company measures equity settled share-based payments based on their fair value at the grant date and recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes Model. In estimating fair value, management is required to make certain assumptions and estimates, such as the expected life of units, volatility of the Company’s future share price, risk-free interest rates, and future dividend yields, at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. The Company has elected to recognize the effect of forfeitures in compensation cost when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Further, the Company has elected to use the contractual term as the expected term. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period for each separately vesting portion of the award.

Fair value measurement

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

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

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

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

There were no transfers between the levels of fair value hierarchy during the years ended September 30, 2024 or September 30, 2023.

64

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Loss per share

The Company presents basic and diluted loss per share data for its ordinary shares. Basic loss per share is calculated by dividing the net loss by the weighted average number of Common Shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the loss per share calculations. The Company’s potentially dilutive common share equivalents are stock options and restricted stock units. The years ended September 30, 2024 and 2023 were periods of net losses, therefore, the potentially dilutive common share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. In order to determine diluted loss per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase common shares at the average market price during the period.

Leases

Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets.

The Company’s operating leases are for real estate and range from 2 to 11 years. The Company’s finance leases are for vehicles and range from 2 to 7 years.

The Company’s leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. Some of the Company’s vehicle lease agreements contain residual value guarantees.

The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset, and the contract conveys the right to control its use. The right-of-use asset is measured at the initial amount of the lease liability. Right-of-use assets are included in property and equipment in the Company's consolidated balance sheets.

Operating lease expense is recognized on a straight-line basis over the term of the lease. Finance lease cost includes a.) depreciation, which is recognized on a straight-line basis over the expected life of the right-of-use asset and included in depreciation in the Company’s consolidated statements of income (loss), and b.) interest expense, which is recognized following an effective interest rate method and is included in interest expense in the Company’s consolidated statements of income (loss).

The Company’s real estate operating leases do not provide an implicit rate that can be easily determined. Therefore, the Company applies its incremental borrowing rate to the lease based on the information available at the commencement date. This estimate impacts the carrying amount of the lease liabilities and the interest expense recorded on the consolidated statement of income (loss). Vehicle finance leases are recorded at the interest rate implicit in the lease based on the current value and the estimated residual value of the vehicle.

Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it is probable that it will choose to extend the lease at the end of the initial lease term. This estimate could affect future results if the Company extends the lease or exercises an early termination option.

65

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset.

Income taxes

Deferred taxes are determined based on the differences between the financial statements and the tax bases using rates as enacted in the laws. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized.

Interest and penalties related to unrecognized tax benefits are recognized in the tax provision. Liabilities for uncertain tax positions are recognized when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. There are not any material interest or penalties during any of the years presented.

Business combinations

The Company accounts for business combinations using the acquisition method when control is obtained by the Company. The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date.

Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates at fair value with the corresponding gain or loss being recognized in profit or loss.

Financial instruments concentration of credit risk

The Company maintains cash with various major financial institutions which generally exceeds federally insured limits. The Company performs periodic evaluations of the financial institutions in which its cash is invested.

Derivatives financial instruments

The Company is exposed to risks related to changes in interest rates. The financial risk management program is designed to manage the exposure arising from cash flow variability and uses derivative financial instruments to minimize this risk. The Company does not enter into derivative financial instruments for trading or speculative purposes.

The Company’s derivative instruments consist of interest rate swap contracts. Derivative instruments are recorded in the consolidated balance sheets and the changes in the fair values of these interest rate swap contracts are recorded on the consolidated statements of income/(loss).

66

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Recently adopted accounting pronouncements

On October 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Further, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard. While the adoption of ASC 326 could result in a higher allowance recorded in the future for credit losses on receivables within the scope of the standard due to the prescribed measurement principles, the impact of the adoption on the Company's consolidated financial statements was not material.

Recently issued accounting pronouncements

The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can selectively delay the adoption of all accounting standards until those standards would otherwise apply to private companies. The Company has elected to utilize this exemption and, as a result, the consolidated financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. To date, however, the Company has not delayed the adoption of any accounting standards except as noted below. Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid by jurisdiction. The ASU is effective for public business entities' annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.  

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting ("Topic 280"), which requires disclosure of incremental segment information, including significant segment expenses that are regularly provided to the chief operating decision maker and to disclose how reported measures of segment profit or loss are used in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU No. 2024-01, Compensation-Stock Compensation ("Topic 718"), which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC 718. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the SEC issued its final climate disclosure rule, which requires registrants to provide climate-related disclosures in their annual reports and registration statements. The new disclosure requirements will be effective for the Company beginning with its annual report for the year ending September 30, 2025. In April 2024, the SEC stayed its final climate rule to allow for a judicial review of pending legal challenges. The Company is currently evaluating the impact

67

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

these rules will have on its consolidated financial statements and related disclosures and will monitor the litigation progress relating to these rules for possible impacts on the disclosure requirements under the rules.

3.Acquisitions of and investment in businesses

Prior year acquisitions

Acquisition of Great Elm Healthcare, LLC

On January 3, 2023, the Company, through QHM Holdings, LLC, acquired Great Elm Healthcare, LLC (“Great Elm”). Great Elm is an Arizona-based company with operations in seven states in the same industry as the Company. The purchase price was $73,569,000, comprised of $72,689,000 in cash at closing to the sellers, plus 431,996 Quipt common shares at a closing price per share of $4.77 for $2,060,000, less $820,000 of cash acquired, and less $360,000 for cash received from a working capital adjustment. The cash at closing was obtained from the delayed-draw term loan and revolving credit facility of the senior credit facility described in Note 9. The Company has determined that the transaction is an acquisition of a business under ASC 805 Business Combinations, and it has been accounted for by applying the acquisition method. The Company expensed $10,000 and $1,238,000 of professional fees in conjunction with the acquisition for the fiscal years ended September 30, 2024 and 2023, respectively.

The pro forma revenues and net income for Great Elm for the year ended September 30, 2023 as if the acquisition had occurred on October 1, 2022, was approximately $67,500,000 and $2,300,000, respectively, of which approximately $50,800,000 and $2,100,000 were recognized in the period from January 3, 2023 to September 30, 2023.

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

Accounts receivable	$	5,531
Inventory		1,398
Prepaid and other current assets		584
Property, equipment, and right of use assets		13,261
Goodwill		22,826
Intangible asset - customer relationships		42,000
Intangible asset - trade name		5,820
Other assets		161
Accounts payable		(6,085)
Accrued liabilities		(3,845)
Deferred revenue		(1,022)
Equipment loans		(4,259)
Lease liabilities		(2,801)
Net assets acquired	$	73,569
Cash paid at closing	$	72,689
Cash received from working capital adjustment		(360)
Cash acquired		(820)
Equity issued at closing		2,060
Consideration paid or payable	$	73,569

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

68

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Acquisition of Southern Pharmaceutical Corporation

On September 1, 2023, the Company, through QHM Holdings, LLC, acquired Southern Pharmaceutical Corporation (“Southern”). Southern is a Mississippi-based company with operations in three states in the same industry as the Company. The purchase price was $3,782,000, comprised of $3,153,000 in cash to the sellers at closing, plus $753,000 of holdbacks paid during the year ended September 30, 2024, less $124,000 of cash acquired. The Company has determined that the transaction is an acquisition of a business under ASC 805, and it has been accounted for by applying the acquisition method. The Company expensed $120,000 and $24,000 of professional fees in conjunction with the acquisition during the fiscal years ended September 30, 2024 and 2023, respectively.

The pro forma revenues and net income for Southern for the year ended September 30, 2023, as if the acquisition had occurred on October 1, 2022, was approximately $10,100,000 and $1,000,000, respectively, of which approximately $800,000 and $200,000 were recognized in the period from September 1, 2023 to September 30, 2023.

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

Accounts receivable	$	845
Inventory		1,374
Prepaid and other current assets		4
Property, equipment, and right of use assets		3,290
Goodwill		243
Intangible asset - customer relationships		2,190
Intangible asset - trade name		300
Intangible asset - non-compete agreements		40
Accounts payable		(1,483)
Accrued liabilities		(196)
Deferred revenue		(212)
Equipment loans		(1,063)
Lease liabilities		(1,142)
Deferred income taxes		(408)
Net assets acquired	$	3,782
Cash paid at closing	$	3,153
Cash acquired		(124)
Cash to be paid after closing, included in purchase price payable		753
Consideration paid or payable	$	3,782

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

69

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Purchase price payable

The purchase price payable included on the consolidated statements of financial position relates to holdbacks of Southern and others from prior years, less payments and adjustments made. Below is the movement in purchase price payable for the years ended September 30, 2024 and 2023:

Balance, September 30, 2022	$	5,778
Addition from acquisitions		1,274
Accretion of interest		128
Derecognition of purchase price payable		(640)
Payments		(5,083)
Balance, September 30, 2023	$	1,457
Accretion of interest		37
Derecognition of purchase price payable		(550)
Payments		(944)
Balance, September 30, 2024	$	—

4.Prepaid and other current assets

Following is a summary of prepaid and other current assets as of September 30, 2024 and 2023:

	As at September 30,		As of September 30,
	2024		2023
Vendor rebates	$	2,798	$	2,211
Prepaid insurance		1,904		825
Prepaid income taxes		1,283		424
Other		926		372
Total	$	6,911	$	3,832

70

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

5.Property, equipment, and right-of-use assets

Following is a summary of property, equipment, and right-of-use assets as of September 30, 2024 and 2023:

	As at September 30,		As of September 30,
	2024		2023
Rental equipment		64,568		61,683
Vehicles		3,296		2,516
Leasehold improvements		2,403		2,117
Office and technology equipment		1,130		1,124
Land		160		160
Buildings		930		930
Projects in process		360		—
Property and equipment, gross		72,847		68,530
Less: accumulated depreciation		(35,462)		(33,027)
Property and equipment, net	$	37,385	$	35,503
Right-of-use real estate	$	23,510	$	21,227
Right-of-use vehicles		5,498		4,211
Right of use, gross		29,008		25,438
Less: accumulated amortization		(12,533)		(7,536)
Right of use, net	$	16,475	$	17,902

Rental equipment transferred from inventory during the fiscal years ended September 30, 2024 and 2023 was $33,566,000 and $29,279,000, respectively. For the years ended September 30, 2024 and 2023, the Company obtained equipment loans (Note 9) of $25,304,000 and $23,615,000, respectively, with the balance of $8,262,000 and $5,664,000 paid in cash, respectively.

6.Goodwill and intangible assets

Goodwill continuity

Following is the activity in goodwill for the years ended September 30, 2024 and 2023:

Balance, September 30, 2022	$	28,208
Adjustments to prior year acquisitions		(544)
Acquisitions during the year ended September 30, 2023:
Great Elm		22,826
Southern		2,335
Balance, September 30, 2023	$	52,825
Adjustments related to final purchase price allocation for Southern acquisition		(2,092)
Balance, September 30, 2024	$	50,733

71

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Intangible assets

Following is a summary of intangible assets as of September 30, 2024 and 2023:

	As of September 30,		As of September 30,
	2024		2023
Customer relationships	$	79,088	$	79,088
Trade names		11,581		11,581
Customer contracts		3,851		3,851
Non-compete agreements		710		710
Intangible assets, gross		95,230		95,230
Less: accumulated amortization		(27,277)		(21,190)
Intangible assets, net	$	67,953	$	74,040

As of September 30, 2024, estimated annual amortization for intangible assets for each of the next five years and thereafter is approximately:

	Estimated
Year Ending September 30,	Amortization
2025	$	6,016
2026		5,776
2027		5,723
2028		5,594
2029		5,587
Thereafter		39,257
Intangible assets, net	$	67,953

7.Accounts payable and accrued liabilities

Following is a summary of accounts payable and accrued liabilities as of September 30, 2024 and 2023:

	As of September 30,		As of September 30,
	2024		2023
Accounts payable	$	29,310	$	24,736
Accrued compensation		4,576		4,927
Other		1,477		2,355
Total	$	35,363	$	32,018

8.Deferred revenue

Activity for deferred revenue for the years ended September 30, 2024 and 2023 is as follows:

	For the year ended		For the year ended
	September 30, 2024		September 30, 2023
Beginning balance	$	4,511	$	3,036
Acquisitions		—		1,234
Operations		(943)		241
Ending balance	$	3,568	$	4,511

72

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

9.Long-term debt and lease liabilities

Senior credit facility

The Company has a $110,000,000 senior credit facility (“the Facility”) with a group of US banks that matures in September 2027. The Facility consists of a delayed-draw term loan facility of $85,000,000, of which $64,000,000 has been drawn; a term loan of $5,000,000, which was drawn at closing; and a $20,000,000 revolving credit facility. The Facility is secured by substantially all assets of the Company and is subject to certain financial covenants, with which the Company was in compliance as of September 30, 2024.

A summary of the balances on the Facility as of September 30, 2024 and 2023 is as follows:

	As of		As of
	September 30, 2024		September 30, 2023
Delayed-draw term loan	$	58,400	$	61,600
Term loan		4,500		4,750
Revolving credit facility		6,323		—
Total principal		69,223		66,350
Deferred financing costs		(1,430)		(1,884)
Net carrying value	$	67,793	$	64,466
Current portion		3,248		3,352
Long-term portion		64,545		61,114
Net carrying value	$	67,793	$	64,466

As of September 30, 2024, scheduled future repayments of the Facility are as follows:

Year Ending September 30,	Amount
2025	$	3,450
2026		3,450
2027		69,223
Total	$	76,123

The delayed-draw term loan and the term loan are bearing interest at a weighted average 7.6% as of September 30, 2024. The rate is based on a secured overnight financing rate (“SOFR”), with a floor of 0.5%, plus a spread of 2.1% to 2.85% (2.65% as of September 30, 2024) based on the Company’s leverage ratio and will reprice within three months. The revolving credit facility is bearing interest at 7.7% as of September 30, 2024 and will reprice within one month. The Facility also has fees for unused availability. The fair value of the Facility was determined considering market conditions, credit worthiness and the current terms of debt, which is considered Level 2 on the fair value hierarchy. Due to the near-term repricing of the interest rates, the fair value of the Facility approximates the principal value as of September 30, 2024 and 2023.

To manage the risks of the cash flows related to interest expense, the Company entered into several interest rate swaps on $59,000,000 of the principal amount of the Facility. The swaps carry a fixed SOFR of 3.4% to 4.4%, resulting in a weighted combined rate of 6.8%. The swaps are settled quarterly and mature on September 30, 2025, 2026 and at the Facility’s maturity. Any difference between the Facility’s SOFR rate and the swap’s rate is recorded as interest expense. For the year

73

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

ended September 30, 2024, a reduction of $311,000 to interest expense was recorded in the consolidated statements of income (loss).

As of September 30, 2024, the fair value of the interest rate swap liability, which was determined using Level 2 inputs of market conditions on future expected interest rates, credit worthiness, and the current terms of debt, was $1,122,000, and is recorded in derivative liability – interest rate swap in the condensed consolidated statements of financial position. The Company has recorded the changes in fair value of derivative liability – interest rate swaps on the consolidated statements of income (loss).

Interest expense on the Facility, including the impact of the interest rate swap agreement, was $5,346,000 and $4,415,000 for the years ended September 30, 2024 and 2023, respectively

The Company has incurred financing costs to obtain and maintain the Facility, which is reflected as a reduction of the outstanding balance and will be amortized as interest expense using the effective interest method over the life of the Facility. During the years ended September 30, 2024 and 2023, $513,000 and $462,000 of amortization of deferred financing costs was recorded, respectively.

Equipment Loans

The Company is offered financing arrangements from the Company’s suppliers and the supplier’s designated financial institution, in which payments for certain invoices or products can be financed and paid over an extended period. The financial institution pays the supplier when the original invoice becomes due, and the Company pays the third-party financial institution over a period of time. In most cases, the supplier accepts a discounted amount from the financial institution and the Company repays the financial institution the face amount of the invoice with no stated interest, in twelve equal monthly installments. The Company uses its incremental borrowing rate of 6.0% to 8.0% to impute interest on these arrangements. The Company has also assumed equipment loans in conjunction with several of its acquisitions.

There are no covenants with the loans and the carrying value of the equipment that is pledged as security against the loans is $22,871,000 and $20,262,000 as of September 30, 2024 and 2023, respectively.

Following is the activity in equipment loans for the years ended September 30, 2024 and 2023:

	Year Ended		Year Ended
	September 30, 2024		September 30, 2023
Beginning Balance	$	14,347		5,707
Additions:
Acquisitions		—		5,322
Operations		25,304		23,615
Repayments		(26,792)		(20,297)
Ending Balance		12,859		14,347
Current portion, due during the year ended September 30, 2025		12,804		14,114
Long-term portion, due during the year ended September 30, 2026	$	55	$	233

Leases Liabilities

The Company enters into leases for real estate and vehicles. Real estate leases are operating leases and are valued at the net present value of the future lease payments at the incremental borrowing rate . Vehicle leases are finance leases and recorded at the rate implicit in the lease based on the current value and the estimated residual value of the vehicle, if any.

74

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Below is the movement in lease liabilities for the years ended September 30, 2024 and 2023 respectively:

	Finance		Operating		Total
Balance, September 30, 2022	$	1,993	$	8,506	$	10,499
Additions during the period:
Acquisitions		583		3,361		3,944
Operations		1,159		7,938		9,097
Lease terminations		—		(13)		(13)
Repayments		(821)		(3,556)		(4,377)
Balance, September 30, 2023	$	2,914	$	16,236	$	19,150
Additions during the period:
Operations		1,975		4,229		6,204
Lease terminations		—		(438)		(438)
Repayments		(1,579)		(4,187)		(5,766)
Balance, September 30, 2024	$	3,310	$	15,840	$	19,150

Future payments pursuant to lease liabilities are as follows:

Year Ending September 30,	Operating		Finance		Total
2025	$	5,518	$	1,537	$	7,055
2026		4,610		1,039		5,649
2027		3,301		682		3,983
2028		2,360		428		2,788
2029		1,697		68		1,765
2030		450		—		450
Thereafter		443		—		443
Gross lease payments		18,379		3,754		22,133
Less amounts relating to interest		(2,539)		(444)		(2,983)
Lease liabilities	$	15,840	$	3,310	$	19,150

The components of finance lease expense are as follows:

		Years ended September, 30
	Classification	2024		2023
Finance lease expense:
Amortization of lease assets	Depreciation	$	1,262	$	983
Interest on lease liabilities	Interest expense		262		187
Total finance lease cost		$	1,524	$	1,170

75

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Other information relating to leases is as follows:

	As of			As of
	September 30, 2024			September 30, 2023
Weighted average remaining lease term (years)
Operating leases		4.1			4.5
Finance leases		2.8			2.3
Weighted average discount rate
Operating leases		7.4	%		7.4	%
Finance leases		8.5	%		8.5	%

SBA Loan

In conjunction with an acquisition in 2021, the Company assumed an SBA Loan. The loan was paid off during the year ended September 30, 2023 and a loss on extinguishment of long-term debt of $30,000 was recorded.

10.Shareholders’ Equity

Authorized share capital

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

Issued share capital

The Company has only one class of common shares outstanding. Common shares are classified as equity, and costs related to the issuance of shares are recognized as a reduction of equity.

Issuance of common shares

In April 2023, the Company completed a bought deal public offering and brokered private placement. The Company issued a total of 5,409,000 common shares for aggregate gross proceeds of approximately C$42,500,000, or $31,200,000. Underwriters received a commission of approximately C$2,100,000, or $1,500,000, and other professional fees of approximately $1,800,000 were incurred for net proceeds of approximately $27,900,000. A portion of the net proceeds were used to fully pay down the revolver portion of the Facility during the twelve months ended September 30, 2023.

Employee, director, and consultant options

The Company has a stock option plan, which it uses for grants to directors, officers, employees, and consultants. Options granted under the plan are non-assignable and may be granted for a term not exceeding ten years. Stock options having varying vesting periods, and the options granted during the year ended September 30, 2023 vest quarterly over eight or twelve quarters.

76

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

A summary of stock options is provided below:

		Weighted
	Number of options (000’s)	average exercise price
Balance, September 30, 2022	3,751	C$	4.24
Granted	435		8.30
Exercised	(130)		5.01
Expired	(48)		6.94
Forfeited	(51)		7.22
Balance, September 30, 2023	3,957	C$	4.49
Exercised	(520)		1.50
Expired	(31)		7.35
Forfeited	(4)		8.48
Balance, September 30, 2024	3,402	C$	4.91

At September 30, 2024, the Company had 3,158,000 vested stock options with a weighted average exercise price of C$4.66. The weighted average share price on the dates of exercise during the years ended September 30, 2024 and 2023 was C$4.48 and C$8.69, respectively.

The fair value of the stock options granted during the year ended September 30, 2023 was C$5.43. The Company used the Black-Scholes option pricing model calculated using the following assumptions:

	Year Ended
	September 30,
	2023
Share price at grant date		C$8.30
Risk-free interest rate		3.29%
Expected volatility		51.95%
Expected life of option		10 years
Expected dividend yield		Nil

Restricted stock units

The Company also grants restricted stock units to directors, officers, employees, and consultants. Each unit represents the right to ‎receive one common share, and vests over a period of one to two years from the grant date and are generally settled in the calendar year after vesting. The number of shares issued was less than the number of units settled due to the officers’ election to receive a reduced number of shares to satisfy their tax withholding obligations. These tax withholdings resulted in cash outflows of $213,000 and $1,338,000 for the years ended September 30, 2024 and 2023, respectively.

The fair value of the restricted stock units on the date of grant are discounted to reflect the difference between the vesting dates and the expected issuance dates, to be expensed over the respective vesting periods with an increase to contributed surplus.

77

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

A summary of restricted stock units is provided below:

	Number	Weighted average
	of units (000’s)	grant-date price
Balance, September 30, 2022	930	C$	8.34
Settled	(727)		8.30
Granted	831		8.30
Balance, September 30, 2023	1,034	C$	8.34
Settled	(515)		8.38
Balance, September 30, 2024	519	C$	8.30

Unrecognized compensation expense related to nonvested shares of stock options, restricted stock, and performance units was $430,000 at September 30, 2024 and will be recognized over a weighted average vesting period of 0.4 years. For the years ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Restricted stock units	$	1,639	$	3,383
Stock options		845		1,897
Stock-based compensation expense	$	2,484	$	5,280

11.Commitments and Contingencies

From time to time, the Company is involved in various legal proceedings arising from the ordinary course of business, including governmental investigations or other actions or lawsuits stemming from a failure to comply with laws or regulations.

The Company has received a civil investigative demand from the Department of Justice (“DOJ”) through the U.S. Attorney’s Office for the Northern District of Georgia pursuant to the False Claims Act regarding an investigation concerning whether the Company may have caused the submission of false claims to government healthcare programs for CPAP equipment. The Company is cooperating with the investigation. The DOJ has not indicated to the Company whether it believes the Company engaged in any wrongdoing. In April 2024, the Company received a subpoena from the U.S. Securities and Exchange Commission (the “SEC”) to provide certain documents related to the Company and the DOJ investigation, CID, and financial reporting and disclosure matters (“SEC Subpoena”). Further to the SEC Subpoena, the SEC concluded its investigation in November 2024 and, based on the information it had as at such time, the SEC advised that it did not intend to recommend an enforcement action by it against the Company. Additional governmental agencies could conduct independent investigations relating to this investigation or separate unrelated matters. No assurance can be given as to the timing or outcome of the DOJ’s investigation or that no action may ultimately result from the SEC’s investigation.

78

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

12.Operating expenses

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Payroll and employee benefits	$	78,905	$	67,720
Facilities, other than leases		5,623		5,000
Billing		11,030		9,140
Professional fees		6,288		3,561
Outbound freight		5,466		4,157
Vehicle fuel and maintenance		4,675		4,166
Bank and credit card fees		2,121		1,752
Technology		1,592		1,461
Insurance		1,549		1,651
All other		5,293		4,616
Total operating expenses	$	122,542	$	103,224

13.Income taxes

The Company’s US and foreign income before taxes were as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
US	$	(1,770)	$	2,145
Foreign		(4,884)		(4,844)
	$	(6,654)	$	(2,699)

The details of the Company’s income tax provision (benefit) are set forth below:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Current provision (benefit):
Federal	$	—	$	—
Foreign		—		—
State		(233)		633
		(233)		633
Deferred provision (benefit):
Federal		369		(668)
Foreign		—		—
State		(27)		120
		342		(548)
Provision for income taxes	$	109	$	85

79

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

The reconciliation of the Company’s income taxes calculated at the US federal statutory rate to its effective tax rate is set forth below:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
US federal statutory rate	21.0	%	21.0	%
State taxes, net of federal benefit	3.2		(22.9)
Statutory rate differential attributable to foreign operations	1.6		10.7
Executive compensation	(3.4)		(25.3)
Stock-based compensation	3.2		(23.5)
Change in valuation allowances	(24.1)		38.2
Other	(3.1)		(1.3)
Effective income tax rate	(1.6)	%	(3.1)	%

The statutory rate differential attributable to foreign operations is derived from local country taxes levied on the Company’s operations in Canada.

The change in valuation allowance relates to the Company’s deferred tax assets that it generated or utilized during the current year as well as changes in the Company’s assessment regarding its likelihood of using its deferred tax assets. The Company considered all the positive and negative evidence available to determine whether it is more likely than not that tax benefit from utilization of the deferred tax assets will ultimately be realized. Based upon that evidence, the Company determined that only a portion of its deferred tax assets will be utilized in the future to offset taxable income generated by the reversal of its deferred tax liabilities.

80

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

Deferred tax

The Company’s deferred tax assets (liabilities) are comprised of the following:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Deferred tax assets:
Net and capital operating loss carryforwards	$	16,469	$	16,524
Lease liabilities		4,777		4,519
Reserve for accounts receivable		2,074		2,481
Accrued and stock-based compensation		3,146		3,107
Goodwill		11,551		13,448
Interest		2,459		1,252
Other		964		621
Share issuance costs		540		839
Total deferred tax assets		41,980		42,791
Deferred tax assets valuation allowances		(19,089)		(17,667)
Deferred tax asset, net	$	22,891	$	25,124
Deferred tax liabilities:
Property, equipment, and right of use assets, net	$	(9,080)	$	(10,153)
Intangible assets, net		(14,013)		(15,313)
Total deferred tax liabilities	$	(23,093)	$	(25,466)
Net deferred tax assets (liabilities)	$	(202)	$	(342)

The activity of the Company’s valuation allowance is as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Balance at beginning of year	$	(17,667)	$	(8,011)
Increases		(1,422)		(9,656)
Balance at end of year	$	(19,089)	$	(17,667)

The US loss carryforwards of approximately $20,000,000 expire in 2030 through 2038 whereas the remaining US loss of approximately $14,000,000 can be carried forward indefinitely.

The Canadian non-capital loss carry-forwards of approximately $28,000,000 have various expiry dates starting in 2027 through 2044. The net capital losses of approximately $1,000,000 can be carried forward indefinitely.

The Company does not have unrecognized tax benefits due to uncertain tax positions. Management has determined that it is more likely than not that all tax positions that the Company has recorded in its income tax provision and tax returns would be sustained upon examination by the taxing authorities. There are no audits currently in progress.

81

Quipt Home Medical Corp.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2024 and 2023

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

14.Related party transactions

The Company has six leases for office, warehouse, and retail space with a rental company affiliated with the Company’s Chief Executive Officer, the majority of which were entered into in 2015. The leases have a combined area of 74,520 square feet. Lease payments under these leases are approximately $65,000 per month in total beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

82

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of disclosure controls and procedures.

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Exchange Act) are designed to provide reasonable assurance that (i) information required to be disclosed by the Company in reports that it files or submits to the Canadian securities regulatory authorities or the SEC, as applicable, is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in the Company’s reports filed with the Canadian securities regulatory authorities or the SEC, as applicable, is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and its Chief Financial Officer (“CFO”), as appropriate, to allow for timely decisions regarding required disclosure. It should be noted that, because of inherent limitations, our disclosure controls and procedures, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the disclosure controls and procedures are met.

As required by paragraph (b) of Rule 13a-15 under the Exchange Act, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report.

Management’s report on internal control over financial reporting.

Management of the Company is responsible for establishing and maintaining adequate "ICFR" (as such term is defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings) and "internal control over financial reporting" (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) (together, “ICFR”). Our internal control over financial reporting is a process that is designed under the supervision of our Chief Executive Officer and Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Our internal control over financial reporting includes those policies and procedures that:

● Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and that receipts and expenditures recorded by us are being made only in accordance with authorizations of our management and Board of Directors; and

● Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

Management has conducted its evaluation of the effectiveness of internal control over financial reporting as of September 30, 2024, based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing the operational effectiveness of our internal control over financial reporting. Management reviewed the results of the assessment with the Audit Committee of the Board of

83

Directors. Based on its assessment and review with the Audit Committee, management concluded that, as of September 30, 2024, the Company’s internal control over financial reporting was effective.

Remediation of previously reported material weakness and changes in internal control over financial reporting.

Management has concluded that a material weakness in our internal control over financial reporting existed as of September 30, 2023. The material weakness related to controls to validate the completeness and accuracy of underlying data utilized in the operation of the certain manual controls.

Management has completed its design and implementation of what we believe are effective measures to strengthen our internal controls over financial reporting and remediate the material weakness. Our executed internal control remediation efforts included:

- a complete evaluation of all manual controls as to design and operating effectiveness,

- a comprehensive review of the source systems where the data resides and extracted, and

- more robust review of the data, increased support and evidence of the completeness and accuracy of the data, and enhanced documentation of review.

During the three months ended September 30, 2024, the Company completed its testing of the operating effectiveness of internal controls impacted by these remediation efforts and determined that the material weakness has been effectively remediated as of September 30, 2024.

Changes in internal control over financial reporting.

Other than the actions we have taken to remediate the material weakness described above for the fiscal year ended September 30, 2023, there were no other changes in our internal control over financial reporting (as described in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

During the three months ended September 30, 2024, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” as defined in Item 408 of Regulation S-K.

Insider Trading Arrangements and Policies

The Company has insider trading policies and procedures that govern the purchase, sale and other dispositions of its securities by directors, officers and employees, as well as by the Company itself. The Company believes these policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations and applicable listing standards.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

84

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated by reference to the 2025 Proxy Statement filed pursuant to Regulation 14A, which will be filed no later than 120 days after September 30, 2024.

Item 11. Executive Compensation.

The information required by this item is incorporated by reference to the 2025 Proxy Statement filed pursuant to Regulation 14A, which will be filed no later than 120 days after September 30, 2024.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.

The information required by this item is incorporated by reference to the 2025 Proxy Statement filed pursuant to Regulation 14A, which will be filed no later than 120 days after September 30, 2024.

Item 13. Certain Relationships and Related Transactions and Director Independence.

The information required by this item is incorporated by reference to the 2025 Proxy Statement filed pursuant to Regulation 14A, which will be filed no later than 120 days after September 30, 2024.

Item 14. Principal Accountant Fees and Services.

The information required by this item is incorporated by reference to the 2025 Proxy Statement filed pursuant to Regulation 14A, which will be filed no later than 120 days after September 30, 2024.

85

PART IV

Item 15. Exhibits and Financial Statement Schedules.

1.Financial Statements:

The following Consolidated Financial Statements of Quipt Home Medical Corp. and subsidiaries, management’s report and the report of the independent registered public accounting firm are incorporated by reference in Part II, Item 8 of this Form 10-K.

● Report of Independent Registered Public Accounting Firm

● Consolidated Statements of Financial Position

● Consolidated Statements of Income (Loss)

● Consolidated Statements of Shareholders’ Equity

● Consolidated Statements of Cash Flows

● Notes to Consolidated Financial Statements

2.Financial Statement Schedules:

These schedules are omitted because of the absence of the conditions under which they are required or because the information is set forth in the Consolidated Financial Statements or Notes thereto.

86

Exhibits

3.1*#	Notice of Articles
3.2*	Articles
4*	Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
10.1	Amended and Restated Credit and Guaranty Agreement dated September 16, 2022 (incorporated by reference to Exhibit 99.1 to the Registrant’s Report on Form 6-K filed on January 24, 2023)
10.1.1	Amendment No. 1 to Amended and Restated Credit and Guaranty Agreement and Limited Consent dated January 3, 2023 (incorporated by reference to Exhibit 99.2 to the Registrant’s Report on Form 6-K filed on January 24, 2023)
10.2	Membership Interest Purchase Agreement dated January 3, 2023 (incorporated by reference to Exhibit 99.4 to the Registrant’s Report on Form 6-K filed on January 24, 2023)
10.3	Equity Distribution Agreement dated May 15, 2023 (incorporated by reference to Exhibit 99.1 to the Registrant’s Report on Form 6-K filed on May 16, 2023)
10.4*†˄	Employment Agreement with Gregory Crawford
10.5*†˄	Employment Agreement with Hardik Mehta
10.6†	2019 Stock Option Plan, as amended and form of stock option agreement there under (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 filed on July 16, 2021)
10.7†	2021 Equity Incentive Plan (incorporated by reference to Exhibit 99.99 to the Registrant’s Registration Statement on Form 40-F filed on May 14, 2021)
10.7.1†	Form of Stock Option Agreement under 2021 Equity Incentive Plan (incorporated by reference to Exhibit 99.3 to the Registrant’s Registration Statement on Form S-8 filed on July 16, 2021)
10.7.2†	Form of Restricted Stock Unit Agreement under 2021 Equity Incentive Plan (incorporated by reference to Exhibit 99.5 to the Registrant’s Registration Statement on Form S-8 filed on July 16, 2021)
10.8†	2024 Equity Inventive Plan (incorporated by reference to Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 filed on April 12, 2024)
10.8.1†*	Form of Stock Option Agreement under 2024 Equity Incentive Plan
10.8.2†*	Form of Restricted Stock Unit Agreement under 2024 Equity Incentive Plan
10.9†*	Form of the Indemnity Agreement between the Registrant and each of its directors and executive officers
19*	Insider Trading Policy
21*	Subsidiaries of the Registrant
23*	Consent of BDO USA, P.C.
31.1*	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32**	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97*	Policy for Recovery of Erroneously Awarded Incentive Compensation
101‎.INS*‎	Inline XBRL Instance Document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document

87

101. PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*	Cover Page Interactive Data File (formatted as Inline XBRL and incorporated by reference to Exhibit 101)

† Represents a management contract or compensatory plan or arrangement.

* Filed herewith.

** This certification is not deemed “filed” for purposes of Section 18 of the Securities Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that Quipt Home Medical Corp. specifically incorporates it by reference.

# Certain information contained in this exhibit has been redacted pursuant to Item 601(a)(6) of Regulation S-K.

˄ Portions of this exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K as the Registrant has determined that (i) the omitted information is not material, and (ii) the omitted material is of the type that the Registrant treats as private or confidential.

Item 16. Form 10-K Summary.

None.

88

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized in the city of Wilder, State of Kentucky.

QUIPT HOME MEDICAL CORP.
	By	/s/ Gregory Crawford
		Gregory Crawford, Chief Executive Officer
		December 16, 2024

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Gregory Crawford (Gregory Crawford)	Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer)	December 16, 2024
/s/ Hardik Mehta (Hardik Mehta)	Chief Financial Officer (Principal Financial Officer)	December 16, 2024
/s/ Thomas Roehrig (Thomas Roehrig)	Executive VP of Finance (Principal Accounting Officer)	December 16, 2024
/s/ Mark Greenberg (Mark Greenberg)	Director	December 16, 2024
/s/ Brian Wessel (Brian Wessel)	Director	December 16, 2024
/s/ Kevin Carter (Dr. Kevin Carter)	Director	December 16, 2024

89

EX-3.1

Exhibit 3.1

Certain personally identifiable information contained in this document has been redacted pursuant to Item 601(a)(6) of Regulation S-K. Redacted information is indicated with the notation “[***]”.

Mailing Address:

POBox9431StnProvGovt Victoria BC V8W 9V3

www.corporateonline.gov.bc.ca

Location:

2ndFloor-940BlanshardStreet Victoria BC

1 877 526-1526

Notice of Articles

BUSINESS CORPORATIONS ACT

CERTIFIED COPY

OfaDocumentfiledwiththeProvinceof British Columbia Registrar of Companies

T.K. SPARKS

This Notice of Articles was issued by the Registrar on: November 9, 2023 10:07 AM Pacific Time

Incorporation Number:

BC1146327

Recognition Date and Time: December 21, 2017 04:19 PM Pacific Time as a result of an Amalgamation

Name of Company:

QUIPT HOME MEDICAL CORP.

NOTICE OF ARTICLES

REGISTERED OFFICE INFORMATION

Mailing Address:

SUITE 2700,

1133 MELVILLE STREET VANCOUVERBCV6E4E5 CANADA

Delivery Address:

SUITE 2700,

1133 MELVILLE STREET VANCOUVERBCV6E4E5 CANADA

RECORDS OFFICE INFORMATION

Mailing Address:

SUITE 2700,

1133 MELVILLE STREET VANCOUVERBCV6E4E5 CANADA

Delivery Address:

SUITE 2700,

1133 MELVILLE STREET VANCOUVERBCV6E4E5 CANADA

Page: 1 of 3

DIRECTOR INFORMATION

Last Name, First Name, Middle Name:

Carter, Kevin

Mailing Address:

[***]

Delivery Address:

[***]

Last Name, First Name, Middle Name:

Wessel, Brian

Mailing Address:

[***]

Delivery Address:

[***]

Last Name, First Name, Middle Name:

Crawford, Gregory

Mailing Address:

1019 TOWN DRIVE

WILDERKY41076 UNITED STATES

Delivery Address:

1019 TOWN DRIVE

WILDERKY41076 UNITED STATES

Last Name, First Name, Middle Name:

Greenberg,Mark

Mailing Address:

[***]

Delivery Address:

[***]

RESOLUTION DATES:

Date(s)ofResolution(s)orCourtOrder(s)attachingoralteringSpecialRightsandRestrictionsattachedtoaclassor a series of shares:

December 20, 2017

December 20, 2017

AUTHORIZED SHARE STRUCTURE

1. No MaximumCommon SharesWithout Par Value

WithSpecialRightsor Restrictions attached

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Page: 2 of 3

2. No MaximumFirst Preferred SharesWithout Par Value

WithSpecialRightsor Restrictions attached

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

3. No MaximumSecond Preferred SharesWithout Par Value

WithSpecialRightsor Restrictions attached

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

Page: 3 of 3

EX-3.2

Exhibit 3.2

Number: C0989759

BC1146327

BUSINESS CORPORATIONS ACT

ARTICLES

of

QUIPT HOME MEDICAL CORP

PATIENT HOME MONITORING CORP.

PROTECH HOME MEDICAL CORP.

TABLE OF CONTENTS

PART 1 INTERPRETATION‌1

PART 2 SHARES AND SHARE CERTIFICATES‌2

PART 3 ISSUE OF SHARES‌4

PART 4 SHARE REGISTERS‌5

PART 5 SHARE TRANSFERS‌5

PART 6 TRANSMISSION OF SHARES‌6

PART 7 PURCHASE, REDEEM OR OTHERWISE ACQUIRE SHARES‌7

PART 8 BORROWING POWERS‌8

PART 9 ALTERATIONS‌8

PART 10 MEETINGS OF SHAREHOLDERS‌10

PART 11 PROCEEDINGS AT MEETINGS OF SHAREHOLDERS‌12

PART 12 VOTES OF SHAREHOLDERS‌16

PART 13 DIRECTORS‌20

PART 14 ELECTION AND REMOVAL OF DIRECTORS‌22

PART 15 ALTERNATE DIRECTORS‌30

PART 16 POWERS AND DUTIES OF DIRECTORS‌31

PART 17 INTERESTS OF DIRECTORS AND OFFICERS‌32

PART 18 PROCEEDINGS OF DIRECTORS‌33

PART 19 EXECUTIVE AND OTHER COMMITTEES‌36

PART 20 OFFICERS‌38

PART 21 INDEMNIFICATION‌38

PART 22 DIVIDENDS‌40

PART 23 ACCOUNTING RECORDS AND AUDITOR‌42

PART 24 NOTICES‌42

PART 25 SEAL‌44

PART 26 SPECIAL RIGHTS AND RESTRICTIONS ATTACHING TO SHARES‌45

Number: C0989759

BC1146327

BUSINESS CORPORATIONS ACT

ARTICLES

of

PROTECH HOME MEDICAL CORP. QUIPT HOME MEDICAL CORP.

PATIENT IIOME MONITORING CORP.

(the "Company")

PART 1

INTERPRETATION

Definitions

1.1In these Articles, unless the context otherwise requires:

(a)"Act" means the Business Corporations Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(b)"board of directors", "directors" and "board" mean the directors or sole director of the Company for the time being;

(c)"Interpretation Act" means the Interpretation Act (British Columbia) from time to time in force and all amendments thereto and includes all regulations and amendments thereto made pursuant to that Act;

(d)"legal personal representative" means the personal or other legal representative of the shareholder;

(e)"registered address" of a shareholder means the shareholder's address as recorded in the central securities register;

(f)"seal" means the seal of the Company, if any;

(g)"share" means a share in the share structure of the Company; and

(h)"special majority" means the majority of votes described in §11.2 which is required to pass a special resolution.

- 2 -

Act and Interpretation Act Definitions Applicable

1.2The definitions in the Act and the definitions and rules of construction in the

Interpretation Act, with the necessary changes, so far as applicable, and except as the context requires otherwise, apply to these Articles as if they were an enactment. If there is a conflict between a definition in the Act and a definition or rule in the Interpretation Act relating to a term used in these Articles, the definition in the Act will prevail. If there is a conflict or inconsistency between these Articles and the Act, the Act will prevail.

PART 2

SHARES AND SHARE CERTIFICATES

Authorized Share Structure

2.1The authorized share structure of the Company consists of shares of the class or

classes and series, if any, described in the Notice of Articles of the Company.

Form of Share Certificate

2.2Each share certificate issued by the Company must comply with, and be signed as

required by, the Act.

Shareholder Entitled to Certificate, Acknowledgment or Written Notice

2.3Unless the shares of which the shareholder is the registered owner are

uncertificated shares, each shareholder is entitled, without charge, to (a) one share certificate representing the shares of each class or series of shares registered in the shareholder's name or (b) a non-transferable written acknowledgment of the shareholder's right to obtain such a share certificate, provided that in respect of a share held jointly by several persons, the Company is not bound to issue more than one share certificate and delivery of a share certificate for a share to one of several joint shareholders or to one of the shareholders' duly authorized agents will be sufficient delivery to all. If a shareholder is the registered owner of uncertificated shares, the Company must send to a holder of an uncertificated share a written notice containing the information required by the Act within a reasonable time after the issue or transfer of such share.

Delivery by Mail

2.4Any share certificate or non-transferable written acknowledgment of a

shareholder's right to obtain a share certificate, or written notice of the issue or transfer of an uncertificated share may be sent to the shareholder by mail at the shareholder's registered address and neither the Company nor any director, officer or agent of the Company is liable for any loss to the shareholder because the share certificate, acknowledgement or written notice is lost in the mail or stolen.

- 3 -

Replacement of Worn Out or Defaced Certificate or Acknowledgement

2.5If a share certificate or a non-transferable written acknowledgment of the

shareholder's right to obtain a share certificate is worn out or defaced, the Company must, on production of the share certificate or acknowledgment, as the case may be, and on such other terms, if any, as are deemed fit:

(a)cancel the share certificate or acknowledgment; and

(b)issue a replacement share certificate or acknowledgment.

Replacement of Lost, Stolen or Destroyed Certificate or Acknowledgment

2.6If a share certificate or a non-transferable written acknowledgment of a

shareholder's right to obtain a share certificate is lost, stolen or destroyed, a replacement share certificate or acknowledgment, as the case may be, must be issued to the person entitled to that share certificate or acknowledgment, if the requirements of the Act are satisfied, as the case may be, if the directors receive:

(a)proof satisfactory to it of the loss, theft or destruction; and

(b)any indemnity the directors consider adequate.

Splitting Share Certificates

2.7If a shareholder surrenders a share certificate to the Company with a written

request that the Company issue in the shareholder's name two or more share certificates, each representing a specified number of shares and in the aggregate representing the same number of shares as the share certificate so surrendered, the Company must cancel the surrendered share certificate and issue replacement share certificates in accordance with that request.

Certificate Fee

2.8There must be paid to the Company, in relation to the issue of any share

certificate under §2.5, §2.6 or §2.7, the amount, if any, not exceeding the amount prescribed under the Act, determined by the directors.

Recognition of Trusts

2.9Except as required by law or statute or these Articles, no person will be

recognized by the Company as holding any share upon any trust, and the Company is not bound by or compelled in any way to recognize (even when having notice thereof) any equitable, contingent, future or partial interest in any share or fraction of a share or (except as required by law or statute or these Articles or as ordered by a court of competent jurisdiction) any other rights in respect of any share except an absolute right to the entirety thereof in the shareholder.

- 4 -

PART 3

ISSUE OF SHARES

Directors Authorized

3.1Subject to the Act and the rights, if any, of the holders of issued shares of the

Company, the Company may allot, issue, sell or otherwise dispose of the unissued shares, and issued shares held by the Company, at the times, to the persons, including directors, in the manner, on the terms and conditions and for the consideration (including any premium at which shares with par value may be issued) that the directors may determine. The issue price for a share with par value must be equal to or greater than the par value of the share.

Commissions and Discounts

3.2The Company may at any time pay a reasonable commission or allow a

reasonable discount to any person in consideration of that person's purchase or agreement to purchase shares of the Company from the Company or any other person's procurement or agreement to procure purchasers for shares of the Company.

Brokerage

3.3The Company may pay such brokerage fee or other consideration as may be

lawful for or in connection with the sale or placement of its securities.

Conditions of Issue

3.4Except as provided for by the Act, no share may be issued until it is fully paid. A

share is fully paid when:

(a)consideration is provided to the Company for the issue of the share by one or more of the following:

(i)past services performed for the Company;

(ii)property;

(iii)money; and

(b)the value of the consideration received by the Company equals or exceeds the issue price set for the share under §3.1.

Share Purchase Warrants and Rights

3.5Subject to the Act, the Company may issue share purchase warrants, options and

rights upon such terms and conditions as the directors determine, which share purchase warrants, options and rights may be issued alone or in conjunction with debentures, debenture stock, bonds, shares or any other securities issued or created by the Company from time to time.

- 5 -

PART 4

SHARE REGISTERS

Central Securities Register

4.1As required by and subject to the Act, the Company must maintain a central

securities register and may appoint an agent to maintain such register. The directors may appoint one or more agents, including the agent appointed to keep the central securities register, as transfer agent for shares or any class or series of shares and the same or another agent as registrar for shares or such class or series of shares, as the case may be. The directors may terminate such appointment of any agent at any time and may appoint another agent in its place.

PART 5

SHARE TRANSFERS

Registering Transfers

5.1A transfer of a share must not be registered unless the Company or the transfer

agent or registrar for the class or series of shares to be transferred has received:

(a)except as exempted by the Act, a written instrument of transfer in respect of the share has been received by the Company (which may be a separate document or endorsed on the share certificate for the shares transferred) made by the shareholder or other appropriate person or by an agent who has actual authority to act on behalf of that person;

(b)if a share certificate has been issued by the Company in respect of the share to be transferred, that share certificate;

(c)if a non-transferable written acknowledgment of the shareholder's right to obtain a share certificate has been issued by the Company in respect of the share to be transferred, that acknowledgment; and

(d)such other evidence, if any, as the Company or the transfer agent or registrar for the class or series of share to be transferred may require to prove the title of the transferor or the transferor's right to transfer the share, that the written instrument of transfer and the right of the transferee to have the transfer registered.

Form of Instrument of Transfer

5.2The instrument of transfer in respect of any share of the Company must be either

in the form, if any, on the back of the Company's share certificates of that class or series or in some other form that may be approved by the directors from time to time or by the transfer agent or registrar for those shares.

- 6 -

Transferor Remains Shareholder

5.3Except to the extent that the Act otherwise provides, the transferor of a share is

deemed to remain the holder of it until the name of the transferee is entered in a securities register of the Company in respect of the transfer.

Signing of Instrument of Transfer

5.4If a shareholder, or the shareholder's duly authorized attorney, signs an

instrument of transfer in respect of shares registered in the name of the shareholder, the signed instrument of transfer constitutes a complete and sufficient authority to the Company and its directors, officers and agents to register the number of shares specified in the instrument of transfer or specified in any other manner, or, if no number is specified, all the shares represented by the share certificates or set out in the written acknowledgments deposited with the instrument of transfer, or if the shares are uncertificated shares, then all of the shares registered in the name of the shareholder on the central securities register:

(a)in the name of the person named as transferee in that instrument of transfer; or

(b)if no person is named as transferee in that instrument of transfer, in the name of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered.

Enquiry as to Title Not Required

5.5Neither the Company nor any director, officer or agent of the Company is bound

to inquire into the title of the person named in the instrument of transfer as transferee or, if no person is named as transferee in the instrument of transfer, of the person on whose behalf the instrument is deposited for the purpose of having the transfer registered or is liable for any claim related to registering the transfer by the shareholder or by any intermediate owner or holder of the shares transferred, of any interest in such shares, of any share certificate representing such shares or of any written acknowledgment of a right to obtain a share certificate for such shares.

Transfer Fee

5.6There must be paid to the Company, in relation to the registration of a transfer,

the amount, if any, determined by the directors.

PART 6

TRANSMISSION OF SHARES

Legal Personal Representative Recognized on Death

6.1In case of the death of a shareholder, the legal personal representative of the

shareholder, or in the case of shares registered in the shareholder's name and the name of another person in joint tenancy, the surviving joint holder, will be the only person recognized by the Company as having any title to the shareholder's interest in the shares. Before recognizing a

- 7 -

person as a legal personal representative of a shareholder, the Company shall receive the documentation required by the Act.

Rights of Legal Personal Representative

6.2The legal personal representative of a shareholder has the same rights, privileges

and obligations that attach to the shares held by the shareholder, including the right to transfer the shares in accordance with these Articles, provided the documents required by the Act and the directors have been deposited with the Company. This §6.2 does not apply in the case of the death of a shareholder with respect to shares registered in the name of the shareholder and the name of another person in joint tenancy.

PART 7

PURCHASE, REDEEM OR OTHERWISE ACQUIRE SHARES

Company Authorized to Purchase, Redeem or Otherwise Acquire Shares

7.1Subject to §7.2, the special rights or restrictions attached to the shares of any class

or series and the Act, the Company may, if authorized by the directors, purchase, redeem or otherwise acquire any of its shares at the price and upon the terms determined by the directors.

Purchase When Insolvent

7.2The Company must not make a payment or provide any other consideration to

purchase, redeem or otherwise acquire any of its shares if there are reasonable grounds for believing that:

(a)the Company is insolvent; or

(b)making the payment or providing the consideration would render the Company insolvent.

Sale and Voting of Purchased, Redeemed or Otherwise Acquired Shares

7.3If the Company retains a share redeemed, purchased or otherwise acquired by it,

the Company may sell, gift or otherwise dispose of the share, but, while such share is held by the Company, it:

(a)is not entitled to vote the share at a meeting of its shareholders;

(b)must not pay a dividend in respect of the share; and

(c)must not make any other distribution in respect of the share.

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Company Entitled to Purchase, Redeem or Otherwise Acquire Share Fractions

7.4The Company may, without prior notice to the holders, purchase, redeem or

otherwise acquire for fair value any and all outstanding share fractions of any class or kind of shares in its authorized share structure as may exist at any time and from time to time. Upon the Company delivering the purchase funds and confirmation of purchase or redemption of the share fractions to the holders' registered or last known address, or if the Company has a transfer agent then to such agent for the benefit of and forwarding to such holders, the Company shall thereupon amend its central securities register to reflect the purchase or redemption of such share fractions and if the Company has a transfer agent, shall direct the transfer agent to amend the central securities register accordingly. Any holder of a share fraction, who upon receipt of the funds and confirmation of purchase or redemption of same, disputes the fair value paid for the fraction, shall have the right to apply to the court to request that it set the price and terms of payment and make consequential orders and give directions the court considers appropriate, as if the Company were the "acquiring person" as contemplated by Division 6, Compulsory Acquisitions, under the Act and the holder were an "offeree" subject to the provisions contained in such Division, mutatis mutandis.

PART 8

BORROWING POWERS

8.1The Company, if authorized by the directors, may:

(a)borrow money in the manner and amount, on the security, from the sources and on the terms and conditions that they consider appropriate;

(b)issue bonds, debentures and other debt obligations either outright or as security for any liability or obligation of the Company or any other person and at such discounts or premiums and on such other terms as the directors consider appropriate;

(c)guarantee the repayment of money by any other person or the performance of any obligation of any other person; and

(d)mortgage, charge, whether by way of specific or floating charge, grant a security interest in, or give other security on, the whole or any part of the present and future assets and undertaking of the Company.

PART 9

ALTERATIONS

Alteration of Authorized Share Structure

9.1Subject to §9.2 and the Act, the Company may by ordinary resolution (or a

resolution of the directors in the case of §9.1(c) or §9.1(f)):

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(a)create one or more classes or series of shares or, if none of the shares of a class or series of shares are allotted or issued, eliminate that class or series of shares;

(b)increase, reduce or eliminate the maximum number of shares that the Company is authorized to issue out of any class or series of shares or establish a maximum number of shares that the Company is authorized to issue out of any class or series of shares for which no maximum is established;

(c)subdivide or consolidate all or any of its unissued, or fully paid issued, shares;

(d)if the Company is authorized to issue shares of a class of shares with par value:

(i)decrease the par value of those shares; or

(ii)if none of the shares of that class of shares are allotted or issued, increase the par value of those shares;

(e)change all or any of its unissued, or fully paid issued, shares with par value into shares without par value or any of its unissued shares without par value into shares with par value;

(f)alter the identifying name of any of its shares; or

(g)otherwise alter its shares or authorized share structure when required or permitted to do so by the Act where it does not specify by a special resolution;

and, if applicable, alter its Notice of Articles and Articles accordingly.

Special Rights or Restrictions

9.2Subject to the Act and in particular those provisions of the Act relating to the

rights of holders of outstanding shares to vote if their rights are prejudiced or interfered with, the Company may by ordinary resolution:

(a)create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or

(b)vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued,

and alter its Notice of Articles and Articles accordingly.

Change of Name

9.3The Company may by resolution of the directors authorize an alteration to its

Notice of Articles in order to change its name or adopt or change any translation of that name.

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Other Alterations

9.4If the Act does not specify the type of resolution and these Articles do not specify another type of resolution, the Company may by ordinary resolution alter these Articles.

PART 10

MEETINGS OF SHAREHOLDERS

Annual General Meetings

10.1Unless an annual general meeting is deferred or waived in accordance with the Act, the Company must hold its first annual general meeting within 18 months after the date on which it was incorporated or otherwise recognized, and after that must hold an annual general meeting at least once in each calendar year and not more than 15 months after the last annual reference date at such time and place as may be determined by the directors.

Resolution Instead of Annual General Meeting

10.2If all the shareholders who are entitled to vote at an annual general meeting consent in writing by a unanimous resolution to all of the business that is required to be transacted at that annual general meeting, the annual general meeting is deemed to have been held on the date of the unanimous resolution. The shareholders must, in any unanimous resolution passed under this §10.2, select as the Company's annual reference date a date that would be appropriate for the holding of the applicable annual general meeting.

Calling of Meetings of Shareholders

10.3The directors may, at any time, call a meeting of shareholders.

Notice for Meetings of Shareholders

10.4The Company must send notice of the date, time and location of any meeting of shareholders (including, without limitation, any notice specifying the intention to propose a resolution as an exceptional resolution, a special resolution or a special separate resolution, and any notice to consider approving an amalgamation into a foreign jurisdiction, an arrangement or the adoption of an amalgamation agreement, and any notice of a general meeting, class meeting or series meeting), in the manner provided in these Articles, or in such other manner, if any, as may be prescribed by ordinary resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to attend the meeting, to each director and to the auditor of the Company, unless these Articles otherwise provide, at least the following number of days before the meeting:

(a)if the Company is a public company, 21 days;

(b)otherwise, 10 days.

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Record Date for Notice

10.5The directors may set a date as the record date for the purpose of determining

shareholders entitled to notice of any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Act, by more than four months. The record date must not precede the date on which the meeting is held by fewer than:

(a)if the Company is a public company, 21 days;

(b)otherwise, 10 days.

If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

Record Date for Voting

10.6The directors may set a date as the record date for the purpose of determining

shareholders entitled to vote at any meeting of shareholders. The record date must not precede the date on which the meeting is to be held by more than two months or, in the case of a general meeting requisitioned by shareholders under the Act, by more than four months. If no record date is set, the record date is 5 p.m. on the day immediately preceding the first date on which the notice is sent or, if no notice is sent, the beginning of the meeting.

Failure to Give Notice and Waiver of Notice

10.7The accidental omission to send notice of any meeting of shareholders to, or the

non-receipt of any notice by, any of the persons entitled to notice does not invalidate any proceedings at that meeting. Any person entitled to notice of a meeting of shareholders may, in writing or otherwise, waive that entitlement or may agree to reduce the period of that notice. Attendance of a person at a meeting of shareholders is a waiver of entitlement to notice of the meeting unless that person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Notice of Special Business at Meetings of Shareholders

10.8If a meeting of shareholders is to consider special business within the meaning of

§11.1, the notice of meeting must:

(a)state the general nature of the special business; and

(b)if the special business includes considering, approving, ratifying, adopting or authorizing any document or the signing of or giving of effect to any document, have attached to it a copy of the document or state that a copy of the document will be available for inspection by shareholders:

(i)at the Company's records office, or at such other reasonably accessible location in British Columbia as is specified in the notice; and

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(ii)during statutory business hours on any one or more specified days before the day set for the holding of the meeting.

Place of Meetings

10.9In addition to any location in British Columbia, any general meeting may be held

in any location outside British Columbia approved by a resolution of the directors.

PART 11

PROCEEDINGS AT MEETINGS OF SHAREHOLDERS

Special Business

11.1At a meeting of shareholders, the following business is special business:

(a)at a meeting of shareholders that is not an annual general meeting, all business is special business except business relating to the conduct of or voting at the meeting;

(b)at an annual general meeting, all business is special business except for the following:

(i)business relating to the conduct of or voting at the meeting;

(ii)consideration of any financial statements of the Company presented to the meeting;

(iii)consideration of any reports of the directors or auditor;

(iv)the setting or changing of the number of directors;

(v)the election or appointment of directors;

(vi)the appointment of an auditor;

(vii)the setting of the remuneration of an auditor;

(viii)business arising out of a report of the directors not requiring the passing of a special resolution or an exceptional resolution;

(ix)any other business which, under these Articles or the Act, may be transacted at a meeting of shareholders without prior notice of the business being given to the shareholders.

Special Majority

11.2The majority of votes required for the Company to pass a special resolution at a

general meeting of shareholders is two-thirds of the votes cast on the resolution.

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Quorum

11.3Subject to the special rights or restrictions attached to the shares of any class or

series of shares, and to §11.4, the quorum for the transaction of business at a meeting of shareholders is at least one person who is, or who represents by proxy, one or more shareholders who, in the aggregate, hold at least 5% of the issued shares entitled to be voted at the meeting.

One Shareholder May Constitute Quorum

11.4If there is only one shareholder entitled to vote at a meeting of shareholders:

(a)the quorum is one person who is, or who represents by proxy, that shareholder, and

(b)that shareholder, present in person or by proxy, may constitute the meeting. Persons Entitled to Attend Meeting

11.5In addition to those persons who are entitled to vote at a meeting of shareholders,

the only other persons entitled to be present at the meeting are the directors, the president (if any), the secretary (if any), the assistant secretary (if any), any lawyer for the Company, the auditor of the Company, any persons invited to be present at the meeting by the directors or by the chair of the meeting and any persons entitled or required under the Act or these Articles to be present at the meeting; but if any of those persons does attend the meeting, that person is not to be counted in the quorum and is not entitled to vote at the meeting unless that person is a shareholder or proxy holder entitled to vote at the meeting.

Requirement of Quorum

11.6No business, other than the election of a chair of the meeting and the adjournment

of the meeting, may be transacted at any meeting of shareholders unless a quorum of shareholders entitled to vote is present at the commencement of the meeting, but such quorum need not be present throughout the meeting.

Lack of Quorum

11.7If, within one-half hour from the time set for the holding of a meeting of

shareholders, a quorum is not present:

(a)in the case of a general meeting requisitioned by shareholders, the meeting is dissolved, and

(b)in the case of any other meeting of shareholders, the meeting stands adjourned to the same day in the next week at the same time and place.

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Lack of Quorum at Succeeding Meeting

11.8If, at the meeting to which the meeting referred to in §11.7(b) was adjourned, a

quorum is not present within one-half hour from the time set for the holding of the meeting, the person or persons present and being, or representing by proxy, two or more shareholders entitled to attend and vote at the meeting shall be deemed to constitute a quorum.

Chair

11.9The following individual is entitled to preside as chair at a meeting of

shareholders:

(a)the chair of the board, if any; or

(b)if the chair of the board is absent or unwilling to act as chair of the meeting, the president, if any.

Selection of Alternate Chair

11.10If, at any meeting of shareholders, there is no chair of the board or president

present within 15 minutes after the time set for holding the meeting, or if the chair of the board and the president are unwilling to act as chair of the meeting, or if the chair of the board and the president have advised the secretary, if any, or any director present at the meeting, that they will not be present at the meeting, the directors present may choose either one of their number or the solicitor of the Company to be chair of the meeting. If all of the directors present decline to take the chair or fail to so choose or if no director is present or the solicitor of the Company declines to take the chair, the shareholders entitled to vote at the meeting who are present in person or by proxy may choose any person present at the meeting to chair the meeting.

Adjournments

11.11The chair of a meeting of shareholders may, and if so directed by the meeting

must, adjourn the meeting from time to time and from place to place, but no business may be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

Notice of Adjourned Meeting

11.12It is not necessary to give any notice of an adjourned meeting of shareholders or

of the business to be transacted at an adjourned meeting of shareholders except that, when a meeting is adjourned for 30 days or more, notice of the adjourned meeting must be given as in the case of the original meeting.

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Decisions by Show of Hands or Poll

11.13Subject to the Act, every motion put to a vote at a meeting of shareholders will be

decided on a show of hands unless a poll, before or on the declaration of the result of the vote by show of hands, is directed by the chair or demanded by any shareholder entitled to vote who is present in person or by proxy.

Declaration of Result

11.14The chair of a meeting of shareholders must declare to the meeting the decision

on every question in accordance with the result of the show of hands or the poll, as the case may be, and that decision must be entered in the minutes of the meeting. A declaration of the chair that a resolution is carried by the necessary majority or is defeated is, unless a poll is directed by the chair or demanded under §11.13, conclusive evidence without proof of the number or proportion of the votes recorded in favour of or against the resolution.

Motion Need Not be Seconded

11.15No motion proposed at a meeting of shareholders need be seconded unless the

chair of the meeting rules otherwise, and the chair of any meeting of shareholders is entitled to propose or second a motion.

Casting Vote

11.16In case of an equality of votes, the chair of a meeting of shareholders does not,

either on a show of hands or on a poll, have a second or casting vote in addition to the vote or votes to which the chair may be entitled as a shareholder.

Manner of Taking Poll

11.17Subject to §11.18, if a poll is duly demanded at a meeting of shareholders:

(a)the poll must be taken:

(i)at the meeting, or within seven days after the date of the meeting, as the chair of the meeting directs; and

(ii)in the manner, at the time and at the place that the chair of the meeting directs;

(b)the result of the poll is deemed to be the decision of the meeting at which the poll is demanded; and

(c)the demand for the poll may be withdrawn by the person who demanded it.

Demand for Poll on Adjournment

11.18A poll demanded at a meeting of shareholders on a question of adjournment must

be taken immediately at the meeting.

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Chair Must Resolve Dispute

11.19In the case of any dispute as to the admission or rejection of a vote given on a

poll, the chair of the meeting must determine the dispute, and the determination of the chair made in good faith is final and conclusive.

Casting of Votes

11.20On a poll, a shareholder entitled to more than one vote need not cast all the votes

in the same way.

No Demand for Poll on Election of Chair

11.21No poll may be demanded in respect of the vote by which a chair of a meeting of

shareholders is elected.

Demand for Poll Not to Prevent Continuance of Meeting

11.22The demand for a poll at a meeting of shareholders does not, unless the chair of

the meeting so rules, prevent the continuation of a meeting for the transaction of any business other than the question on which a poll has been demanded.

Retention of Ballots and Proxies

11.23The Company must, for at least three months after a meeting of shareholders,

keep each ballot cast on a poll and each proxy voted at the meeting, and, during that period, make them available for inspection during normal business hours by any shareholder or proxy holder entitled to vote at the meeting. At the end of such three month period, the Company may destroy such ballots and proxies.

PART 12

VOTES OF SHAREHOLDERS

Number of Votes by Shareholder or by Shares

12.1Subject to any special rights or restrictions attached to any shares and to the

restrictions imposed on joint shareholders under §12.3:

(a)on a vote by show of hands, every person present who is a shareholder or proxy holder and entitled to vote on the matter has one vote; and

(b)on a poll, every shareholder entitled to vote on the matter has one vote in respect of each share entitled to be voted on the matter and held by that shareholder and may exercise that vote either in person or by proxy.

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Votes of Persons in Representative Capacity

12.2A person who is not a shareholder may vote at a meeting of shareholders, whether

on a show of hands or on a poll, and may appoint a proxy holder to act at the meeting, if, before doing so, the person satisfies the chair of the meeting, or the directors, that the person is a legal personal representative or a trustee in bankruptcy for a shareholder who is entitled to vote at the meeting.

Votes by Joint Holders

12.3If there are joint shareholders registered in respect of any share:

(a)any one of the joint shareholders may vote at any meeting of shareholders, personally or by proxy, in respect of the share as if that joint shareholder were solely entitled to it; or

(b)if more than one of the joint shareholders is present at any meeting of shareholders, personally or by proxy, and more than one of them votes in respect of that share, then only the vote of the joint shareholder present whose name stands first on the central securities register in respect of the share will be counted.

Legal Personal Representatives as Joint Shareholders

12.4Two or more legal personal representatives of a shareholder in whose sole name

any share is registered are, for the purposes of §12.3, deemed to be joint shareholders registered in respect of that share.

Representative of a Corporate Shareholder

12.5If a corporation, that is not a subsidiary of the Company, is a shareholder, that

corporation may appoint a person to act as its representative at any meeting of shareholders of the Company, and:

(a)for that purpose, the instrument appointing a representative must be received:

(i)at the registered office of the Company or at any other place specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice for the receipt of proxies, or if no number of days is specified, two business days before the day set for the holding of the meeting or any adjourned meeting; or

(ii)at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting or by a person designated by the chair of the meeting or adjourned meeting;

(b)if a representative is appointed under this §12.5:

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(i)the representative is entitled to exercise in respect of and at that meeting the same rights on behalf of the corporation that the representative represents as that corporation could exercise if it were a shareholder who is an individual, including, without limitation, the right to appoint a proxy holder; and

(ii)the representative, if present at the meeting, is to be counted for the purpose of forming a quorum and is deemed to be a shareholder present in person at the meeting.

Evidence of the appointment of any such representative may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages.

Proxy Provisions Do Not Apply to All Companies

12.6If and for so long as the Company is a public company or a pre-existing reporting

company which has the Statutory Reporting Company Provisions as part of its Articles or to which the Statutory Reporting Company Provisions apply, then §12.7 to §12.15 are not mandatory, however the directors of the Company are authorized to apply all or part of such sections or to adopt alternative procedures for proxy form, deposit and revocation procedures to the extent that the directors deem necessary in order to comply with securities laws applicable to the Company.

Appointment of Proxy Holders

12.7Every shareholder of the Company entitled to vote at a meeting of shareholders

may, by proxy, appoint one or more (but not more than two) proxy holders to attend and act at the meeting in the manner, to the extent and with the powers conferred by the proxy.

Alternate Proxy Holders

12.8A shareholder may appoint one or more alternate proxy holders to act in the place

of an absent proxy holder.

Proxy Holder Need Not Be Shareholder

12.9A proxy holder need not be a shareholder of the Company. Deposit of Proxy

12.10A proxy for a meeting of shareholders must:

(a)be received at the registered office of the Company or at any other place

specified, in the notice calling the meeting, for the receipt of proxies, at least the number of business days specified in the notice, or if no number of days is specified, two business

days before the day set for the holding of the meeting or any adjourned meeting; or

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(b)unless the notice provides otherwise, be received, at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting or by a person designated by the chair of the meeting or adjourned meeting.

A proxy may be sent to the Company by written instrument, fax or any other method of transmitting legibly recorded messages, including through Internet or telephone voting or by email, if permitted by the notice calling the meeting or the information circular for the meeting.

Validity of Proxy Vote

12.11A vote given in accordance with the terms of a proxy is valid notwithstanding the

death or incapacity of the shareholder giving the proxy and despite the revocation of the proxy or the revocation of the authority under which the proxy is given, unless notice in writing of that death, incapacity or revocation is received:

(a)at the registered office of the Company, at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or

(b)at the meeting or any adjourned meeting by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.

Form of Proxy

12.12A proxy, whether for a specified meeting or otherwise, must be either in the

following form or in any other form approved by the directors or the chair of the meeting:

[Name of Company]

(the "Company")

The undersigned, being a shareholder of the Company, hereby appoints [name] or, failing that person, [name], as proxy holder for the undersigned to attend, act and vote for and on behalf of the undersigned at the meeting of shareholders of the Company to be held on [month, day, year] and at any adjournment of that meeting.

Number of shares in respect of which this proxy is given (if no number is

specified, then this proxy is given in respect of all shares registered in the name of

the undersigned): ______________________

	Chief Executive Officer and Director
Signed [month, day, year]
[Signature of shareholder]
[Name of shareholder—printed]

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Revocation of Proxy

12.13Subject to §12.14, every proxy may be revoked by an instrument in writing that is

received:

(a)at the registered office of the Company at any time up to and including the last business day before the day set for the holding of the meeting or any adjourned meeting at which the proxy is to be used; or

(b)at the meeting or any adjourned meeting, by the chair of the meeting or adjourned meeting, before any vote in respect of which the proxy has been given has been taken.

Revocation of Proxy Must Be Signed

1 2.1 4An instrument referred to in §12.13 must be signed as follows:

(a)if the shareholder for whom the proxy holder is appointed is an individual, the instrument must be signed by the shareholder or the shareholder's legal personal representative or trustee in bankruptcy;

(b)if the shareholder for whom the proxy holder is appointed is a corporation, the instrument must be signed by the corporation or by a representative appointed for the corporation under §12.5.

Production of Evidence of Authority to Vote

12.15The chair of any meeting of shareholders may, but need not, inquire into the

authority of any person to vote at the meeting and may, but need not, demand from that person production of evidence as to the existence of the authority to vote.

PART 13

DIRECTORS

First Directors; Number of Directors

13.1The first directors are the persons designated as directors of the Company in the

Notice of Articles that applies to the Company when it is recognized under the Act. The number of directors, excluding additional directors appointed under §14.8, is set at:

(a)subject to §(b) and §(c), the number of directors that is equal to the number of the Company's first directors;

(b)if the Company is a public company, the greater of three and the most recently set of:

(i)the number of directors set by a resolution of the directors (whether or not previous notice of the resolution was given); and

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(ii)the number of directors in office pursuant to §14.4;

(c)if the Company is not a public company, the most recently set of:

(i)the number of directors set by a resolution of the directors (whether or not previous notice of the resolution was given); and

(ii)the number of directors in office pursuant to §14.4. Change in Number of Directors

13.2If the number of directors is set under §13.1(b)(i) or §13.1(c)(i):

(a)the shareholders may elect or appoint the directors needed to fill any vacancies in the board of directors up to that number; or

(b)if the shareholders do not elect or appoint the directors needed to fill any vacancies in the board of directors up to that number then the directors, subject to §14.8, may appoint directors to fill those vacancies.

Directors' Acts Valid Despite Vacancy

13.3An act or proceeding of the directors is not invalid merely because fewer than the

number of directors set or otherwise required under these Articles is in office.

Qualifications of Directors

13.4A director is not required to hold a share as qualification for his or her office but

must be qualified as required by the Act to become, act or continue to act as a director.

Remuneration of Directors

13.5The directors are entitled to the remuneration for acting as directors, if any, as the

directors may from time to time determine. If the directors so decide, the remuneration of the directors, if any, will be determined by the shareholders.

Reimbursement of Expenses of Directors

13.6The Company must reimburse each director for the reasonable expenses that he or

she may incur in and about the business of the Company.

Special Remuneration for Directors

13.7If any director performs any professional or other services for the Company that

in the opinion of the directors are outside the ordinary duties of a director, he or she may be paid remuneration fixed by the directors, or at the option of the directors, fixed by ordinary resolution, and such remuneration will be in addition to any other remuneration that he or she may be entitled to receive.

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Gratuity, Pension or Allowance on Retirement of Director

13.8Unless otherwise determined by ordinary resolution, the directors on behalf of the

Company may pay a gratuity or pension or allowance on retirement to any director who has held any salaried office or place of profit with the Company or to his or her spouse or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance.

PART 14

ELECTION AND REMOVAL OF DIRECTORS

Election at Annual General Meeting

14.1At every annual general meeting and in every unanimous resolution contemplated

by §10.2:

(a)the shareholders entitled to vote at the annual general meeting for the election of directors must elect, or in the unanimous resolution appoint, a board of directors consisting of the number of directors for the time being set under these Articles; and

(b)all the directors cease to hold office immediately before the election or appointment of directors under §(a), but are eligible for re-election or re-appointment.

Consent to be a Director

14.2No election, appointment or designation of an individual as a director is valid

unless:

(a)that individual consents to be a director in the manner provided for in the Act;

(b)that individual is elected or appointed at a meeting at which the individual is present and the individual does not refuse, at the meeting, to be a director; or

(c)with respect to first directors, the designation is otherwise valid under the Act.

Failure to Elect or Appoint Directors

14.3If:

(a)the Company fails to hold an annual general meeting, and all the shareholders who are entitled to vote at an annual general meeting fail to pass the unanimous resolution contemplated by §10.2, on or before the date by which the annual general meeting is required to be held under the Act; or

(b)the shareholders fail, at the annual general meeting or in the unanimous resolution contemplated by §10.2, to elect or appoint any directors;

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then each director then in office continues to hold office until the earlier of:

(c)when his or her successor is elected or appointed; and

(d)when he or she otherwise ceases to hold office under the Act or these Articles.

Places of Retiring Directors Not Filled

14.4If, at any meeting of shareholders at which there should be an election of

directors, the places of any of the retiring directors are not filled by that election, those retiring directors who are not re-elected and who are asked by the newly elected directors to continue in office will, if willing to do so, continue in office to complete the number of directors for the time being set pursuant to these Articles but their term of office shall expire when new directors are elected at a meeting of shareholders convened for that purpose. If any such election or continuance of directors does not result in the election or continuance of the number of directors for the time being set pursuant to these Articles, the number of directors of the Company is deemed to be set at the number of directors actually elected or continued in office.

Directors May Fill Casual Vacancies

14.5Any casual vacancy occurring in the board of directors may be filled by the

directors.

Remaining Directors Power to Act

14.6The directors may act notwithstanding any vacancy in the board of directors, but

if the Company has fewer directors in office than the number set pursuant to these Articles as the quorum of directors, the directors may only act for the purpose of appointing directors up to that number or of calling a meeting of shareholders for the purpose of filling any vacancies on the board of directors or, subject to the Act, for any other purpose.

Shareholders May Fill Vacancies

14.7If the Company has no directors or fewer directors in office than the number set

pursuant to these Articles as the quorum of directors, the shareholders may elect or appoint directors to fill any vacancies on the board of directors.

Additional Directors

14.8Notwithstanding §13.1 and §13.2, between annual general meetings or by

unanimous resolutions contemplated by §10.2, the directors may appoint one or more additional directors, but the number of additional directors appointed under this §14.8 must not at any time exceed:

(a)one-third of the number of first directors, if, at the time of the appointments, one or more of the first directors have not yet completed their first term of office; or

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(b)in any other case, one-third of the number of the current directors who were elected or appointed as directors other than under this §14.8.

Any director so appointed ceases to hold office immediately before the next election or appointment of directors under §14.1(a), but is eligible for re-election or re-appointment.

Ceasing to be a Director

14.9A director ceases to be a director when:

(a)the term of office of the director expires;

(b)the director dies;

(c)the director resigns as a director by notice in writing provided to the Company or a lawyer for the Company; or

(d)the director is removed from office pursuant to §14.10 or §14.11.

Removal of Director by Shareholders

14.10The Company may remove any director before the expiration of his or her term of

office by special resolution. In that event, the shareholders may elect, or appoint by ordinary resolution, a director to fill the resulting vacancy. If the shareholders do not elect or appoint a director to fill the resulting vacancy contemporaneously with the removal, then the directors may appoint or the shareholders may elect, or appoint by ordinary resolution, a director to fill that vacancy.

Removal of Director by Directors

14.11The directors may remove any director before the expiration of his or her term of

office if the director is convicted of an indictable offence, or if the director ceases to be qualified to act as a director of a company and does not promptly resign, and the directors may appoint a director to fill the resulting vacancy.

Nomination of Directors 14.12

(a)Subject only to the Act, only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Company. Nominations of persons for election to the board may be made at any annual meeting of shareholders, or at any special meeting of shareholders (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the person calling such special meeting):

(i) by or at the direction of the board or an authorized officer of the Company, including pursuant to a notice of meeting;

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(ii) by or at the direction or request of one or more shareholders pursuant to a proposal made in accordance with the provisions of the Act or a requisition of the shareholders made in accordance with the provisions of the Act; or

(iii) by any person (a "Nominating Shareholder"):

(A)who, at the close of business on the date of the giving of the notice provided for below in this §14.12 and on the record date for notice of such meeting, is entered in the securities register as a holder of one or more shares carrying the right to vote at such meeting or who beneficially owns shares that are entitled to be voted at such meeting and

(B)who complies with the notice procedures set forth below in this §14.12.

(b)In addition to any other applicable requirements, for a nomination to be made by a Nominating Shareholder, such person must be give:

(i) timely notice thereof in proper written form to the Corporate Secretary of the Company at the principal executive offices of the Company in accordance with this §14.12; and

(ii) the representation and agreement with respect to each candidate for nomination as required by, and within the time period specified in §14.12(d).

(c)To be timely under §14.12(b)(i), a Nominating Shareholder's notice to the Corporate Secretary of the Company must be made:

(i) in the case of an annual meeting of shareholders, not less than 30 nor more than 65 days prior to the date of the annual meeting of shareholders; provided, however, that in the event that the annual meeting of shareholders is called for a date that is less than 40 days after the date (the "Notice Date") on which the first public announcement of the date of the annual meeting was made, notice by the Nominating Shareholder may be made not later than the tenth (10th) day following the Notice Date; and

(ii) in the case of a special meeting (which is not also an annual meeting) of shareholders called for the purpose of electing directors (whether or not called for other purposes), not later than the fifteenth (15th) day following the day on which the first public announcement of the date of the special meeting of shareholders was made.

(iii) Notwithstanding the foregoing, the board may, in its sole discretion, waive any requirement in this §14.12(c).

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(d)To be in proper written form, a Nominating Shareholder's notice to the Corporate Secretary of the Company, under §14.12(b)(i) must set forth:

(i) as to each person whom the Nominating Shareholder proposes to nominate for election as a director:

(A)the name, age, business address and residence address of the person,

(B)the principal occupation or employment of the person,

(C)the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the person as of the record date for the Meeting of Shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice,

(D)a statement as to whether such person would be "independent" of the Company (within the meaning of sections 1.4 and 1.5 of National Instrument 52-110 — Audit Committees of the Canadian Securities Administrators, as such provisions may be amended from time to time) if elected as a director at such meeting and the reasons and basis for such determination and

(E)any other information relating to the person that would be required

to be disclosed in a dissident's proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws; and

(ii)as to the Nominating Shareholder giving the notice,

(A)any information relating to such Nominating Shareholder that would be required to be made in a dissident's proxy circular in connection with solicitations of proxies for election of directors pursuant to the Act and Applicable Securities Laws, and

(B)the class or series and number of shares in the capital of the Company which are controlled or which are owned beneficially or of record by the Nominating Shareholder as of the record date for the Meeting of Shareholders (if such date shall then have been made publicly available and shall have occurred) and as of the date of such notice.

(e)To be eligible to be a candidate for election as a director of the Company and to be duly nominated, a candidate must be nominated in the manner prescribed in this §14.12 and the candidate for nomination, whether nominated by the board or otherwise, must have previously delivered to the Corporate Secretary of the Company at the principal executive offices of the Company, not less than 5 days prior to the date of the Meeting of Shareholders, a written representation and agreement (in form provided by

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the Company) that such candidate for nomination, if elected as a director of the Company, will comply with all applicable corporate governance, conflict of interest, confidentiality, share ownership, majority voting and insider trading policies and other policies and guidelines of the Company applicable to directors and in effect during such person's term in office as a director (and, if requested by any candidate for nomination, the Corporate Secretary of the Company shall provide to such candidate for nomination all such policies and guidelines then in effect).

(f)No person shall be eligible for election as a director of the Company unless nominated in accordance with the provisions of this §14.12; provided, however, that nothing in this §14.12 shall be deemed to preclude discussion by a shareholder (as distinct from nominating directors) at a meeting of shareholders of any matter in respect of which it would have been entitled to submit a proposal pursuant to the provisions of the Act. The chair of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures set forth in the foregoing provisions and, if any proposed nomination is not in compliance with such foregoing provisions, to declare that such defective nomination shall be disregarded.

(g)For purposes of this §14.12:

(i) "Affiliate", when used to indicate a relationship with a person, shall mean a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person;

(ii) "Applicable Securities Laws" means the Securities Act (British Columbia) and the equivalent legislation in the other provinces and in the territories of Canada, as amended from time to time, the rules, regulations and forms made or promulgated under any such statute and the published national instruments, multilateral instruments, policies, bulletins and notices of the securities commissions and similar regulatory authorities of each of the applicable provinces and territories of Canada;

(iii) "Associate", when used to indicate a relationship with a specified person, shall mean:

(A)any corporation or trust of which such person owns beneficially, directly or indirectly, voting securities carrying more than 10% of the voting rights attached to all voting securities of such corporation or trust for the time being outstanding,

(B)any partner of that person,

(C)any trust or estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar capacity,

(D)a spouse of such specified person,

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(E)any person of either sex with whom such specified person is living in conjugal relationship outside marriage or

(F)any relative of such specified person or of a person mentioned in §14.12(g)(iii)(D) or §14.12(g)(iii)(E) of this definition if that relative has the same residence as the specified person.

(iv) "Derivatives Contract" shall mean a contract between two parties (the "Receiving Party" and the "Counterparty") that is designed to expose the Receiving Party to economic benefits and risks that correspond substantially to the ownership by the Receiving Party of a number of shares in the capital of the Company or securities convertible into such shares specified or referenced in such contract (the number corresponding to such economic benefits and risks, the "Notional Securities"), regardless of whether obligations under such contract are required or permitted to be settled through the delivery of cash, shares in the capital of the Company or securities convertible into such shares or other property, without regard to any short position under the same or any other Derivatives Contract. For the avoidance of doubt, interests in broad-based index options, broad-based index futures and broad-based publicly traded market baskets of stocks approved for trading by the appropriate governmental authority shall not be deemed to be Derivatives Contracts;

(v) "Meeting of Shareholders" shall mean such annual shareholders meeting or special shareholders meeting, whether general or not, at which one or more persons are nominated for election to the board by a Nominating Shareholder;

(vi) "owned beneficially" or "owns beneficially" means, in connection with the ownership of shares in the capital of the Company by a person,

(A)any such shares as to which such person or any of such person's Affiliates or Associates owns at law or in equity, or has the right to acquire or become the owner at law or in equity, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any payment, upon the exercise of any conversion right, exchange right or purchase right attaching to any securities, or pursuant to any agreement, arrangement, pledge or understanding whether or not in writing;

(B)any such shares as to which such person or any of such person's Affiliates or Associates has the right to vote, or the right to direct the voting, where such right is exercisable immediately or after the passage of time and whether or not on condition or the happening of any contingency or the making of any payment, pursuant to any agreement, arrangement, pledge or understanding whether or not in writing;

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(C)any such shares which are beneficially owned, directly or indirectly, by a Counterparty (or any of such Counterparty's Affiliates or Associates) under any Derivatives Contract (without regard to any short or similar position under the same or any other Derivatives Contract) to which such person or any of such person's Affiliates or Associates is a Receiving Party; provided, however that the number of shares that a person owns beneficially pursuant to this §14.12(g)(vi)(C) in connection with a particular Derivatives Contract shall not exceed the number of Notional Securities with respect to such Derivatives Contract; provided, further, that the number of securities owned beneficially by each Counterparty (including their respective Affiliates and Associates) under a Derivatives Contract shall for purposes of this clause be deemed to include all securities that are owned beneficially, directly or indirectly, by any other Counterparty (or any of such other Counterparty's Affiliates or Associates) under any Derivatives Contract to which such first Counterparty (or any of such first Counterparty's Affiliates or Associates) is a Receiving Party and this proviso shall be applied to successive Counterparties as appropriate; and

(D)any such shares which are owned beneficially within the meaning of this definition by any other person with whom such person is acting jointly or in concert with respect to the Company or any of its securities; and

(vii) "public announcement" shall mean disclosure in a press release reported by a national news service in Canada, or in a document publicly filed by the Company or its agents under its profile on the System of Electronic Document Analysis and Retrieval at www.sedar.com.

(h)Notwithstanding any other provision to this §14.12, notice or any delivery given to the Corporate Secretary of the Company pursuant to this §14.12 may only be given by personal delivery, facsimile transmission or by email (provided that the Corporate Secretary of the Company has stipulated an email address for purposes of this notice, at such email address as stipulated from time to time), and shall be deemed to have been given and made only at the time it is served by personal delivery, email (at the address as aforesaid) or sent by facsimile transmission (provided that receipt of confirmation of such transmission has been received) to the Corporate Secretary at the address of the principal executive offices of the Company; provided that if such delivery or electronic communication is made on a day which is a not a business day or later than 5:00 p.m. (Vancouver time) on a day which is a business day, then such delivery or electronic communication shall be deemed to have been made on the subsequent day that is a business day.

(i)In no event shall any adjournment or postponement of a Meeting of Shareholders or the announcement thereof commence a new time period for the giving of a Nominating Shareholder's notice as described in §14.12(c) or the delivery of a representation and agreement as described in §14.12(e).

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PART 15

ALTERNATE DIRECTORS

Appointment of Alternate Director

15.1Any director (an "appointor") may by notice in writing received by the Company

appoint any person (an "appointee") who is qualified to act as a director to be his or her alternate to act in his or her place at meetings of the directors or committees of the directors at which the appointor is not present unless (in the case of an appointee who is not a director) the directors have reasonably disapproved the appointment of such person as an alternate director and have given notice to that effect to his or her appointor within a reasonable time after the notice of appointment is received by the Company.

Notice of Meetings

15.2Every alternate director so appointed is entitled to notice of meetings of the

directors and of committees of the directors of which his or her appointor is a member and to attend and vote as a director at any such meetings at which his or her appointor is not present.

Alternate for More than One Director Attending Meetings

15.3A person may be appointed as an alternate director by more than one director, and

an alternate director:

(a)will be counted in determining the quorum for a meeting of directors once for each of his or her appointors and, in the case of an appointee who is also a director, once more in that capacity;

(b)has a separate vote at a meeting of directors for each of his or her appointors and, in the case of an appointee who is also a director, an additional vote in that capacity;

(c)will be counted in determining the quorum for a meeting of a committee of directors once for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a directors, once more in that capacity; and

(d)has a separate vote at a meeting of a committee of directors for each of his or her appointors who is a member of that committee and, in the case of an appointee who is also a member of that committee as a director, an additional vote in that capacity.

Consent Resolutions

15.4Every alternate director, if authorized by the notice appointing him or her, may

sign in place of his or her appointor any resolutions to be consented to in writing.

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Alternate Director an Agent

15.5Every alternate director is deemed to be the agent of his or her appointor.

Revocation or Amendment of Appointment of Alternate Director

15.6An appointor may at any time, by notice in writing received by the Company,

revoke or amend the terms of the appointment of an alternate director appointed by him or her.

Ceasing to be an Alternate Director

15.7The appointment of an alternate director ceases when:

(a)his or her appointor ceases to be a director and is not promptly re-elected or re­appointed;

(b)the alternate director dies;

(c)the alternate director resigns as an alternate director by notice in writing provided to the Company or a lawyer for the Company;

(d)the alternate director ceases to be qualified to act as a director; or

(e)the term of his appointment expires, or his or her appointor revokes the appointment of the alternate directors.

Remuneration and Expenses of Alternate Director

15.8The Company may reimburse an alternate director for the reasonable expenses

that would be properly reimbursed if he or she were a director, and the alternate director is entitled to receive from the Company such proportion, if any, of the remuneration otherwise payable to the appointor as the appointor may from time to time direct.

PART 16

POWERS AND DUTIES OF DIRECTORS

Powers of Management

16.1The directors must, subject to the Act and these Articles, manage or supervise the

management of the business and affairs of the Company and have the authority to exercise all such powers of the Company as are not, by the Act or by these Articles, required to be exercised by the shareholders of the Company. Notwithstanding the generality of the foregoing, the directors may set the remuneration of the auditor of the Company.

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Appointment of Attorney of Company

16.2The directors may from time to time, by power of attorney or other instrument,

under seal if so required by law, appoint any person to be the attorney of the Company for such purposes, and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the directors under these Articles and excepting the power to fill vacancies in the board of directors, to remove a director, to change the membership of, or fill vacancies in, any committee of the directors, to appoint or remove officers appointed by the directors and to declare dividends) and for such period, and with such remuneration and subject to such conditions as the directors may think fit. Any such power of attorney may contain such provisions for the protection or convenience of persons dealing with such attorney as the directors think fit. Any such attorney may be authorized by the directors to sub-delegate all or any of the powers, authorities and discretions for the time being vested in him or her.

PART 17

INTERESTS OF DIRECTORS AND OFFICERS

Obligation to Account for Profits

17.1A director or senior officer who holds a disclosable interest (as that term is used

in the Act) in a contract or transaction into which the Company has entered or proposes to enter is liable to account to the Company for any profit that accrues to the director or senior officer under or as a result of the contract or transaction only if and to the extent provided in the Act.

Restrictions on Voting by Reason of Interest

17.2A director who holds a disclosable interest in a contract or transaction into which

the Company has entered or proposes to enter is not entitled to vote on any directors' resolution to approve that contract or transaction, unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors may vote on such resolution.

Interested Director Counted in Quorum

17.3A director who holds a disclosable interest in a contract or transaction into which

the Company has entered or proposes to enter and who is present at the meeting of directors at which the contract or transaction is considered for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered at the meeting.

Disclosure of Conflict of Interest or Property

17.4A director or senior officer who holds any office or possesses any property, right

or interest that could result, directly or indirectly, in the creation of a duty or interest that materially conflicts with that individual's duty or interest as a director or senior officer, must disclose the nature and extent of the conflict as required by the Act.

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Director Holding Other Office in the Company

17.5A director may hold any office or place of profit with the Company, other than the

office of auditor of the Company, in addition to his or her office of director for the period and on the terms (as to remuneration or otherwise) that the directors may determine.

No Disqualification

17.6No director or intended director is disqualified by his or her office from

contracting with the Company either with regard to the holding of any office or place of profit the director holds with the Company or as vendor, purchaser or otherwise, and no contract or transaction entered into by or on behalf of the Company in which a director is in any way interested is liable to be voided for that reason.

Professional Services by Director or Officer

17.7Subject to the Act, a director or officer, or any person in which a director or

officer has an interest, may act in a professional capacity for the Company, except as auditor of the Company, and the director or officer or such person is entitled to remuneration for professional services as if that director or officer were not a director or officer.

Director or Officer in Other Corporations

17.8A director or officer may be or become a director, officer or employee of, or

otherwise interested in, any person in which the Company may be interested as a shareholder or otherwise, and, subject to the Act, the director or officer is not accountable to the Company for any remuneration or other benefits received by him or her as director, officer or employee of, or from his or her interest in, such other person.

PART 18

PROCEEDINGS OF DIRECTORS

Meetings of Directors

18.1The directors may meet together for the conduct of business, adjourn and

otherwise regulate their meetings as they think fit, and meetings of the directors held at regular intervals may be held at the place, at the time and on the notice, if any, as the directors may from time to time determine.

Voting at Meetings

18.2Questions arising at any meeting of directors are to be decided by a majority of

votes and, in the case of an equality of votes, the chair of the meeting has a second or casting vote.

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Chair of Meetings

18.3The following individual is entitled to preside as chair at a meeting of directors:

(a)the chair of the board, if any;

(b)in the absence of the chair of the board, the president, if any, if the president is a director; or

(c)any other director chosen by the directors if:

(i)neither the chair of the board nor the president, if a director, is present at the meeting within 15 minutes after the time set for holding the meeting;

(ii)neither the chair of the board nor the president, if a director, is willing to chair the meeting; or

(iii)the chair of the board and the president, if a director, have advised the secretary, if any, or any other director, that they will not be present at the meeting.

Meetings by Telephone or Other Communications Medium

18.4A director may participate in a meeting of the directors or of any committee of the

directors:

(a)in person; or

(b)by telephone or by other communications medium if all directors participating in the meeting, whether in person or by telephone or other communications medium, are able to communicate with each other.

A director who participates in a meeting in a manner contemplated by this §18.4 is deemed for all purposes of the Act and these Articles to be present at the meeting and to have agreed to participate in that manner.

Calling of Meetings

18.5A director may, and the secretary or an assistant secretary of the Company, if any,

on the request of a director must, call a meeting of the directors at any time.

Notice of Meetings

18.6Other than for meetings held at regular intervals as determined by the directors

pursuant to §18.1, 48 hours' notice or such lesser notice as the Chairman in his discretion determines, acting reasonably, is appropriate in any unusual circumstances of each meeting of the directors, specifying the place, day and time of that meeting must be given to each of the directors by any method set out in §24.1 or orally or by telephone.

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When Notice Not Required

18.7It is not necessary to give notice of a meeting of the directors to a director if:

(a)the meeting is to be held immediately following a meeting of shareholders at which that director was elected or appointed, or is the meeting of the directors at which that director is appointed; or

(b)the director has waived notice of the meeting.

Meeting Valid Despite Failure to Give Notice

18.8The accidental omission to give notice of any meeting of directors to, or the non-

receipt of any notice by, any director, does not invalidate any proceedings at that meeting.

Waiver of Notice of Meetings

18.9Any director may send to the Company a document signed by him or her waiving

notice of any past, present or future meeting or meetings of the directors and may at any time withdraw that waiver with respect to meetings held after that withdrawal. After sending a waiver with respect to all future meetings and until that waiver is withdrawn, no notice of any meeting of the directors need be given to that director and all meetings of the directors so held are deemed not to be improperly called or constituted by reason of notice not having been given to such director. Attendance of a director or alternate director at a meeting of the directors is a waiver of notice of the meeting unless that director or alternate director attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

Quorum

18.10The quorum necessary for the transaction of the business of the directors may be

set by the directors and, if not so set, is deemed to be a majority of the directors or, if the number of directors is set at one, is deemed to be set at one director, and that director may constitute a meeting.

Validity of Acts Where Appointment Defective

1 8.1 1Subject to the Act, an act of a director or officer is not invalid merely because of

an irregularity in the election or appointment or a defect in the qualification of that director or officer.

Consent Resolutions in Writing

18.12A resolution of the directors or of any committee of the directors may be passed

without a meeting:

(a)in all cases, if each of the directors entitled to vote on the resolution consents to it in writing; or

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(b)in the case of a resolution to approve a contract or transaction in respect of which a director has disclosed that he or she has or may have a disclosable interest, if each of the other directors who have not made such a disclosure consents in writing to the resolution.

A consent in writing under this §18.12 may be by signed document, fax, email or any other method of transmitting legibly recorded messages. A consent in writing may be in two or more counterparts which together are deemed to constitute one consent in writing. A resolution of the directors or of any committee of the directors passed in accordance with this §18.12 is effective on the date stated in the consent in writing or on the latest date stated on any counterpart and is deemed to be a proceeding at a meeting of directors or of the committee of the directors and to be as valid and effective as if it had been passed at a meeting of the directors or of the committee of the directors that satisfies all the requirements of the Act and all the requirements of these Articles relating to meetings of the directors or of a committee of the directors.

PART 19

EXECUTIVE AND OTHER COMMITTEES

Appointment and Powers of Executive Committee

19.1The directors may, by resolution, appoint an executive committee consisting of

the director or directors that they consider appropriate, and this committee has, during the intervals between meetings of the board of directors, all of the directors' powers, except:

(a)the power to fill vacancies in the board of directors;

(b)the power to remove a director;

(c)the power to change the membership of, or fill vacancies in, any committee of the directors; and

(d)such other powers, if any, as may be set out in the resolution or any subsequent directors' resolution.

Appointment and Powers of Other Committees

19.2The directors may, by resolution:

(a)appoint one or more committees (other than the executive committee) consisting of the director or directors that they consider appropriate;

(b)delegate to a committee appointed under §(a) any of the directors' powers, except:

(i)the power to fill vacancies in the board of directors;

(ii)the power to remove a director;

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(iii)the power to change the membership of, or fill vacancies in, any committee of the directors; and

(iv)the power to appoint or remove officers appointed by the directors; and

(c)make any delegation referred to in §(b) subject to the conditions set out in the resolution or any subsequent directors' resolution.

Obligations of Committees

19.3Any committee appointed under §19.1 or §19.2, in the exercise of the powers

delegated to it, must:

(a)conform to any rules that may from time to time be imposed on it by the directors; and

(b)report every act or thing done in exercise of those powers at such times as the directors may require.

Powers of Board

19.4The directors may, at any time, with respect to a committee appointed under §19.1

or §19.2:

(a)revoke or alter the authority given to the committee, or override a decision made by the committee, except as to acts done before such revocation, alteration or overriding;

(b)terminate the appointment of, or change the membership of, the committee; and

(c)fill vacancies in the committee. Committee Meetings

19.5Subject to §19.3(a) and unless the directors otherwise provide in the resolution

appointing the committee or in any subsequent resolution, with respect to a committee appointed under §19.1 or §19.2:

(a)the committee may meet and adjourn as it thinks proper;

(b)the committee may elect a chair of its meetings but, if no chair of a meeting is elected, or if at a meeting the chair of the meeting is not present within 15 minutes after the time set for holding the meeting, the directors present who are members of the committee may choose one of their number to chair the meeting;

(c)a majority of the members of the committee constitutes a quorum of the committee; and

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(d)questions arising at any meeting of the committee are determined by a majority of votes of the members present, and in case of an equality of votes, the chair of the meeting does not have a second or casting vote.

PART 20

OFFICERS

Directors May Appoint Officers

20.1The directors may, from time to time, appoint such officers, if any, as the

directors determine and the directors may, at any time, terminate any such appointment.

Functions, Duties and Powers of Officers

20.2The directors may, for each officer:

(a)determine the functions and duties of the officer;

(b)entrust to and confer on the officer any of the powers exercisable by the directors on such terms and conditions and with such restrictions as the directors think fit; and

(c)revoke, withdraw, alter or vary all or any of the functions, duties and powers of the officer.

Qualifications

20.3No person may be appointed as an officer unless that person is qualified in

accordance with the Act. One person may hold more than one position as an officer of the Company. Any person appointed as the chair of the board or as a managing director must be a director. Any other officer need not be a director.

Remuneration and Terms of Appointment

20.4All appointments of officers are to be made on the terms and conditions and at the

remuneration (whether by way of salary, fee, commission, participation in profits or otherwise) that the directors thinks fit and are subject to termination at the pleasure of the directors, and an officer may in addition to such remuneration be entitled to receive, after he or she ceases to hold such office or leaves the employment of the Company, a pension or gratuity.

PART 21

INDEMNIFICATION

Definitions

21.1In this Part 21:

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(a)"eligible party", in relation to a company, means an individual who:

is or was a director, alternate director or officer of the Company;

is or was a director, alternate director or officer of another corporation

(A)at a time when the corporation is or was an affiliate of the Company, or

(B)at the request of the Company; or

(iii)at the request of the Company, is or was, or holds or held a position equivalent to that of, a director, alternate director or officer of a partnership, trust, joint venture or other unincorporated entity;

and includes, except in the definition of "eligible proceeding", and §163(1)(c) and (d) and §165 of the Act, the heirs and personal or other legal representatives of that individual;

(b)"eligible penalty" means a judgment, penalty or fine awarded or imposed in, or an amount paid in settlement of, an eligible proceeding;

(c)"eligible proceeding" means a proceeding in which an eligible party or any of the heirs and personal or other legal representatives of the eligible party, by reason of the eligible party being or having been a director, alternate director or officer of, or holding or having held a position equivalent to that of a director, alternate director or officer of, the Company or an associated corporation

(i)is or may be joined as a party; or

(ii)is or may be liable for or in respect of a judgment, penalty or fine in, or expenses related to, the proceeding;

(d)"expenses" has the meaning set out in the Act and includes costs, charges and expenses, including legal and other fees, but does not include judgments, penalties, fines or amounts paid in settlement of a proceeding; and

(e)"proceeding" includes any legal proceeding or investigative action, whether current, threatened, pending or completed.

Mandatory Indemnification of Eligible Parties

21.2Subject to the Act, the Company must indemnify each eligible party and the heirs and legal personal representatives of each eligible party against all eligible penalties to which such person is or may be liable, and the Company must, after the final disposition of an eligible proceeding, pay the expenses actually and reasonably incurred by such person in respect of that proceeding. Each eligible party is deemed to have contracted with the Company on the terms of the indemnity contained in this §21.2.

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Indemnification of Other Persons

21.3Subject to any restrictions in the Act, the Company may agree to indemnify and

may indemnify any person (including an eligible party) against eligible penalties and pay expenses incurred in connection with the performance of services by that person for the Company.

Authority to Advance Expenses

21.4The Company may advance expenses to an eligible party to the extent permitted

by and in accordance with the Act.

Non-Compliance with Act

21.5Subject to the Act, the failure of an eligible party of the Company to comply with

the Act or these Articles or, if applicable, any former Companies Act or former Articles does not, of itself, invalidate any indemnity to which he or she is entitled under this Part 21.

Company May Purchase Insurance

21.6The Company may purchase and maintain insurance for the benefit of any eligible

party (or the heirs or legal personal representatives of any eligible party) against any liability incurred by any eligible party.

PART 22

DIVIDENDS

Payment of Dividends Subject to Special Rights

22.1The provisions of this Part 22 are subject to the rights, if any, of shareholders

holding shares with special rights as to dividends.

Declaration of Dividends

22.2Subject to the Act, the directors may from time to time declare and authorize

payment of such dividends as they may deem advisable.

No Notice Required

22.3The directors need not give notice to any shareholder of any declaration under

§22.2.

Record Date

22.4The directors must set a date as the record date for the purpose of determining

shareholders entitled to receive payment of a dividend. The record date must not precede the date on which the dividend is to be paid by more than two months.

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Manner of Paying Dividend

22.5A resolution declaring a dividend may direct payment of the dividend wholly or

partly in money or by the distribution of specific assets or of fully paid shares or of bonds, debentures or other securities of the Company or any other corporation, or in any one or more of those ways.

Settlement of Difficulties

22.6If any difficulty arises in regard to a distribution under §22.5, the directors may

settle the difficulty as they deem advisable, and, in particular, may:

(a)set the value for distribution of specific assets;

(b)determine that money in substitution for all or any part of the specific assets to which any shareholders are entitled may be paid to any shareholders on the basis of the value so fixed in order to adjust the rights of all parties; and

(c)vest any such specific assets in trustees for the persons entitled to the dividend.

When Dividend Payable

22.7Any dividend may be made payable on such date as is fixed by the directors.

Dividends to be Paid in Accordance with Number of Shares

22.8All dividends on shares of any class or series of shares must be declared and paid

according to the number of such shares held.

Receipt by Joint Shareholders

22.9If several persons are joint shareholders of any share, any one of them may give

an effective receipt for any dividend, bonus or other money payable in respect of the share.

Dividend Bears No Interest

22.10No dividend bears interest against the Company. Fractional Dividends

22.11If a dividend to which a shareholder is entitled includes a fraction of the smallest

monetary unit of the currency of the dividend, that fraction may be disregarded in making payment of the dividend and that payment represents full payment of the dividend.

Payment of Dividends

22.12Any dividend or other distribution payable in money in respect of shares may be

paid by cheque, made payable to the order of the person to whom it is sent, and mailed to the registered address of the shareholder, or in the case of joint shareholders, to the registered

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address of the joint shareholder who is first named on the central securities register, or to the person and to the address the shareholder or joint shareholders may direct in writing. The mailing of such cheque will, to the extent of the sum represented by the cheque (plus the amount of the tax required by law to be deducted), discharge all liability for the dividend unless such cheque is not paid on presentation or the amount of tax so deducted is not paid to the appropriate taxing authority.

Capitalization of Retained Earnings or Surplus

22.13Notwithstanding anything contained in these Articles, the directors may from time

to time capitalize any retained earnings or surplus of the Company and may from time to time issue, as fully paid, shares or any bonds, debentures or other securities of the Company as a dividend representing the retained earnings or surplus so capitalized or any part thereof.

PART 23

ACCOUNTING RECORDS AND AUDITOR

Recording of Financial Affairs

23.1The directors must cause adequate accounting records to be kept to record

properly the financial affairs and condition of the Company and to comply with the Act.

Inspection of Accounting Records

23.2Unless the directors determine otherwise, or unless otherwise determined by

ordinary resolution, no shareholder of the Company is entitled to inspect or obtain a copy of any accounting records of the Company.

PART 24

NOTICES

Method of Giving Notice

24.1Unless the Act or these Articles provide otherwise, a notice, statement, report or

other record required or permitted by the Act or these Articles to be sent by or to a person may be sent by:

(a)mail addressed to the person at the applicable address for that person as follows:

(i)for a record mailed to a shareholder, the shareholder's registered address;

(ii)for a record mailed to a director or officer, the prescribed address for mailing shown for the director or officer in the records kept by the Company or the mailing address provided by the recipient for the sending of that record or records of that class;

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(iii)in any other case, the mailing address of the intended recipient;

(b)delivery at the applicable address for that person as follows, addressed to the person:

(i)for a record delivered to a shareholder, the shareholder's registered address;

(ii)for a record delivered to a director or officer, the prescribed address for delivery shown for the director or officer in the records kept by the Company or the delivery address provided by the recipient for the sending of that record or records of that class;

(iii)in any other case, the delivery address of the intended recipient;

(c)sending the record by fax to the fax number provided by the intended recipient for the sending of that record or records of that class;

(d)sending the record by email to the email address provided by the intended recipient for the sending of that record or records of that class;

(e)physical delivery to the intended recipient.

Deemed Receipt of Mailing

24.2A notice, statement, report or other record that is:

(a)mailed to a person by ordinary mail to the applicable address for that person referred to in §24.1 is deemed to be received by the person to whom it was mailed on the day (Saturdays, Sundays and holidays excepted) following the date of mailing;

(b)faxed to a person to the fax number provided by that person referred to in §24.1 is deemed to be received by the person to whom it was faxed on the day it was faxed; and

(c)emailed to a person to the e-mail address provided by that person referred to in §24.1 is deemed to be received by the person to whom it was e-mailed on the day that it was emailed.

Certificate of Sending

24.3A certificate signed by the secretary, if any, or other officer of the Company or of

any other corporation acting in that capacity on behalf of the Company stating that a notice, statement, report or other record was sent in accordance with §24.1 is conclusive evidence of that fact.

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Notice to Joint Shareholders

24.4A notice, statement, report or other record may be provided by the Company to

the joint shareholders of a share by providing such record to the joint shareholder first named in the central securities register in respect of the share.

Notice to Legal Personal Representatives and Trustees

24.5A notice, statement, report or other record may be provided by the Company to

the persons entitled to a share in consequence of the death, bankruptcy or incapacity of a shareholder by:

(a)mailing the record, addressed to them:

(i)by name, by the title of the legal personal representative of the deceased or incapacitated shareholder, by the title of trustee of the bankrupt shareholder or by any similar description; and

(ii)at the address, if any, supplied to the Company for that purpose by the persons claiming to be so entitled; or

(b)if an address referred to in §24.5(a)(ii) has not been supplied to the Company, by giving the notice in a manner in which it might have been given if the death, bankruptcy or incapacity had not occurred.

Undelivered Notices

24.6If on two consecutive occasions, a notice, statement, report or other record is sent

to a shareholder pursuant to §24.1 and on each of those occasions any such record is returned because the shareholder cannot be located, the Company shall not be required to send any further records to the shareholder until the shareholder informs the Company in writing of his or her new address.

PART 25

SEAL

Who May Attest Seal

25.1Except as provided in §25.2 and §25.3, the Company's seal, if any, must not be

impressed on any record except when that impression is attested by the signatures of:

(a)any two directors;

(b)any officer, together with any director;

(c)if the Company only has one director, that director; or

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(d)any one or more directors or officers or persons as may be determined by the directors.

Sealing Copies

25.2For the purpose of certifying under seal a certificate of incumbency of the

directors or officers of the Company or a true copy of any resolution or other document, despite §25.1, the impression of the seal may be attested by the signature of any director or officer or the signature of any other person as may be determined by the directors.

Mechanical Reproduction of Seal

25.3The directors may authorize the seal to be impressed by third parties on share

certificates or bonds, debentures or other securities of the Company as they may determine appropriate from time to time. To enable the seal to be impressed on any share certificates or bonds, debentures or other securities of the Company, whether in definitive or interim form, on which facsimiles of any of the signatures of the directors or officers of the Company are, in accordance with the Act or these Articles, printed or otherwise mechanically reproduced, there may be delivered to the person employed to engrave, lithograph or print such definitive or interim share certificates or bonds, debentures or other securities one or more unmounted dies reproducing the seal and such persons as are authorized under §25.1 to attest the Company's seal may in writing authorize such person to cause the seal to be impressed on such definitive or interim share certificates or bonds, debentures or other securities by the use of such dies. Share certificates or bonds, debentures or other securities to which the seal has been so impressed are for all purposes deemed to be under and to bear the seal impressed on them.

PART 26

SPECIAL RIGHTS AND RESTRICTIONS

ATTACHING TO SHARES

The Company is authorized to issued an unlimited number of First Preferred Shares, an

unlimited number of Second Preferred Shares and an unlimited number of Common Shares,

all subject to the following rights, privileges, restrictions and conditions:

26.1The First Preferred shares as a class shall have attached thereto the following rights,

privileges, restrictions and conditions:

(a)Issuance in Series: The First Preferred Shares may be issued from time to time in one or more series and, subject to these articles, the board of directors is authorized to fix, from time to time before issuance, the number of shares in and the designation, rights, privileges, restrictions and conditions attaching to the shares of each series of First Preferred Shares.

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(b)Ranking of First Preferred Shares: The First Preferred Shares of each series shall, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, rank on a parity with the First Preferred Shares of every other series and be entitled to preference over the Second Preferred Shares, the Common shares and the shares of any other class ranking junior to the First Preferred Shares. The First Preferred Shares of any series shall also be entitled to such other preferences, not inconsistent with these provisions, over the Second Preferred Shares, the Common Shares and the shares of any other class ranking junior to the First Preferred Shares or as may be fixed in accordance with §26.1(a).

(c)Approval by Holders of First Preferred Shares: The approval by the holders of the First Preferred Shares with respect to any and all matters referred to herein may, subject to the provisions of the Business Corporations Act (British Columbia), be given in writing by the holders of all of the First Preferred Shares for the time being outstanding or by resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at a meeting of the holders of the First Preferred Shares duly called and held for the purpose of considering the subject matter of such resolution and at which meeting holders of not less than a majority of all First Preferred Shares then outstanding are present in person or represented by proxy; provided, however, that if at any such meeting, when originally held, the holders of at least a majority of all First Preferred Shares then outstanding are not present in person or represented by proxy within 30 minutes after the time fixed for the meeting, then the meeting shall be adjourned to such date, being not less than 15 days later, and to such time and place, as may be fixed by the chairman of such meeting and at such adjourned meeting the holders of First Preferred Shares present in person or represented by proxy, whether or not they hold a majority of all First Preferred Shares then outstanding, may transact the business for which the meeting was originally called, and a resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at such adjourned meeting shall constitute the approval of the holders of the First Preferred Shares hereinbefore mentioned. Notice of any such original meeting of the holders of the First Preferred Shares shall be given not less than 21 days nor more than 50 days prior to the date fixed for such meeting and shall specify in general terms the purpose for which the meeting is called. No notice of any such adjourned meeting need be given unless such meeting is adjourned by one or more adjournments for an aggregate of 30 days or more from the date of such original meeting, in which latter case notice of the adjourned meeting shall be given in the manner prescribed for the original meeting as aforesaid.

26.2The Second Preferred shares as a class shall have attached thereto the following rights, privileges, restrictions and conditions:

(a)Issuance in Series: The Second Preferred Shares may be issued from time to time in one or more series and, subject to these articles, the board of directors is

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authorized to fix, from time to time before issuance, the number of shares in and the designation, rights, privileges, restrictions and conditions attaching to the shares of each series of Second Preferred Shares.

(b)Ranking of Second Preferred Shares: The Second Preferred Shares of each series shall, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding- up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs, rank on a parity with the Second Preferred Shares of every other series and be entitled to preference over the Common shares and the shares of any other class ranking junior to the Second Preferred Shares. The Second Preferred Shares of any series shall also be entitled to such other preferences, not inconsistent withthese provisions, over the Common Shares and the shares of any other class ranking junior to the Second Preferred Shares or as may be fixed in accordance with §26.2(a).

(c)Approval by Holders of Second Preferred Shares: The approval by the holders of the Second Preferred Shares with respect to any and all matters referred to herein may, subject to the provisions of the Business Corporations Act (British Columbia), be given in writing by the holders of all of the Second Preferred Shares for the time being outstanding or by resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at a meeting of the holders of the Second Preferred Shares duly called and held for the purpose of considering the subject matter of such resolution and at which meeting holders of not less than a majority of all Second Preferred Shares then outstanding are present in person or represented by proxy; provided, however, that if at any such meeting, when originally held, the holders of at least a majority of all Second Preferred Shares then outstanding are not present in person or represented by proxy within 30 minutes after the time fixed for the meeting, then the meeting shall be adjourned to such date, being not less than 15 days later, and to such time and place, as may be fixed by the chairman of such meeting and at such adjourned meeting the holders of Second Preferred Shares present in person or represented by proxy, whether or not they hold a majority of all Second Preferred Shares then outstanding, may transact the business for which the meeting was originally called, and a resolution duly passed and carried by not less than two-thirds of the votes cast on a poll at such adjourned meeting shall constitute the approval of the holders of the Second Preferred Shares hereinbefore mentioned. Notice of any such original meeting of the holders of the Second Preferred Shares shall be given not less than 21 days nor more than 50 days prior to the date fixed for such meeting and shall specify in general terms the purpose for which the meeting is called. No notice of any such adjourned meeting need be given unless such meeting is adjourned by one or more adjournments for an aggregate of 30 days or more from the date of such original meeting, in which latter case notice of the adjourned meeting shall be given in the manner prescribed for the original meeting as aforesaid.

26.3The Common Shares as a class shall have attached thereto the following rights, privileges, restrictions and conditions:

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(a)Voting: The holders of the Common Shares shall be entitled to receive notice of and to attend all meetings of the shareholders of the Company and, on any vote taken by poll, to one vote in respect of each Common Share held at all such meetings.

(b)Dividends: Subject to the rights of the holders of the First Preferred Shares and Second Preferred Shares and any other class of shares ranking senior to the Common Shares, the holders of the Common Shares shall be entitled to receive and participate rateably in any dividends declared by the board of directors.

(c)Liquidation, Dissolution or Winding-Up: Subject to the rights of the holders of the First Preferred Shares and Second Preferred Shares and any other class of shares ranking senior to the Common Shares, in the event of the liquidation, dissolution or winding up of the Company or other distribution of the assets of the Company among its shareholders for the purposes of winding up its affairs, the holders of

theCommon Shares shall participate rateably in the distribution of the assets of the Company.

EX-4

Exhibit 4

DESCRIPTION OF REGISTRANT'S SECURITIES REGISTERED

PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934

The following is a summary of the common shares (the “Common Shares”) of Quipt Home Medical Corp. (the “Company,” “we,” “us,” or “our”) based upon the Company’s Notice of Articles (“Notice”) and Articles (“Articles”). The following summary is not complete and is subject to, and qualified in its entirety by reference to, our Notice and our Articles, each of which are incorporated by reference as exhibits to the Annual Report on Form 10-K to which this Exhibit 4 is attached and are incorporated by reference herein. We encourage you to read our Notice, our Articles and the applicable provisions of Canadian law for additional information.

General

As of September 30, 2024, the Company had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”): our Common Shares. The Company is authorized to issue an unlimited number of Common Shares without par value, an unlimited number of first preferred shares without par value, and an unlimited number of second preferred shares without par value.

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

Common Shares

Voting Rights

All registered holders of our Common Shares are entitled to receive notice of any general or special meeting to be convened by the Company. At any general or special meeting, subject to the restrictions on joint registered owners of Common Shares, each holder of Common Shares is entitled to one vote per share of which it is the registered owner on all matters upon which holders of the Common Shares are entitled to vote and may exercise such votes either in person or by proxy. Otherwise, on a show of hands every Shareholder who is present in person and entitled to vote will have one vote, and on a poll every Shareholder has one vote for each Common Share of which it is the registered owner. Holders of our Common Shares do not have cumulative voting rights for election of directors. Subject to the Business Corporations Act (British Columbia) (“BCBCA”) and in particular those provisions relating to the rights of holders of outstanding shares to vote if their rights are prejudiced or interfered with, the Company may by ordinary resolution: (a) create special rights or restrictions for, and attach those special rights or restrictions to, the shares of any class or series of shares, whether or not any or all of those shares have been issued; or (b) vary or delete any special rights or restrictions attached to the shares of any class or series of shares, whether or not any or all of those shares have been issued, and alter its Notice and Articles accordingly.

Dividend Rights

Holders of Common Shares are entitled to receive dividends out of the assets available for the payment or distribution of dividends at such times and in such amount and form as the Company’s board of directors (the “Board”) may from time to time determine, subject to any preferential rights of the holders of any outstanding preferred shares.

Liquidation Rights

In the event of and voluntary or involuntary liquidation, dissolution or winding up of the Company or any other distribution of its assets among its shareholders for the purpose of winding up its affairs, the holders of Common

1615254296.4

Shares will be entitled to share ratably in the Company’s assets remaining after payment of all debts and other liabilities, subject to any preferential rights of the holders of any outstanding preferred shares.

Preemptive and Redemption Rights

Holders of Common Shares do not have any preemptive or redemption rights. The rights, preferences and privileges of the holders of our Common Shares are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred shares that we may designate and issue in the future.

Preferred Shares

Our Board is authorized to issue from time to time an unlimited number of first preferred shares in one or more series and an unlimited number of second preferred shares in one or more series, to establish from time to time the number of shares to be included in each series and to fix the designation, rights, privileges, restrictions and conditions attaching to the preferred shares. The first preferred shares of each series shall, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company or for the purpose of winding–up its affairs, rank on parity with the first preferred shares of every other series and be entitled to preference over the second preferred shares of every other series and the Common Shares of the Company. The second preferred shares of each series shall, with respect to the payment of dividends and the distribution of assets in the event of the liquidation, dissolution or winding-up of the Company or for the purpose of winding–up its affairs, rank on parity with the second preferred shares of every other series and be entitled to preference over the Common Shares of the Company. The issuance of preferred shares, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in control of our company and might adversely affect the market price of the Common Shares and the voting and other rights of the holders of Common Shares. At present, the Company has no plans to issue any preferred shares.

Anti-Takeover Provisions

The provisions of the BCBCA, our Notice, and our Articles could have the effect of delaying, deferring or discouraging another person from acquiring control of the Company. These provisions, which are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons seeking to acquire control of us to negotiate first with our Board. We believe that the benefits of increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

Certain Takeover Bid Requirements

Unless such offer constitutes an exempt transaction, an offer made by a person (an “offeror”) to acquire outstanding shares of a Canadian entity that, when aggregated with the offeror’s holdings (and those of persons or companies acting jointly with the offeror), would constitute 20% or more of the outstanding shares, would be subject to the take-over provisions of Canadian securities laws. The foregoing is a limited and general summary of certain aspects of applicable securities law in the provinces and territories of Canada, all in effect as of the date hereof.

In addition to those take-over bid requirements noted above, the acquisition of shares may trigger the application of additional statutory regimes including amongst others, the Investment Canada Act (Canada) and the Competition Act (Canada).

This summary is not a comprehensive description of relevant or applicable considerations regarding such requirements and, accordingly, is not intended to be, and should not be interpreted as, legal advice to any prospective purchaser and no representation with respect to such requirements to any prospective purchaser is made. Prospective investors should consult their own Canadian legal advisors with respect to any questions regarding securities law in the provinces and territories of Canada.

Actions Requiring a Special Majority

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Under the BCBCA, unless otherwise stated in the Articles, certain corporate actions require the approval of a special majority of shareholders, meaning holders of shares representing 66 2/3% of those votes cast in respect of a shareholder vote addressing such matter. Those items requiring the approval of a special majority generally relate to fundamental changes with respect to our business, and include amongst others, resolutions: (i) altering certain sections of the Articles; (ii) approving an amalgamation; (iii) approving a plan of arrangement; and (iv) providing for a sale of all or substantially all of our assets.

Articles and Notice Provisions

Our Articles and our Notice include a number of provisions that could deter hostile takeovers or delay or prevent changes in control of our company, including the following:

• Board size. The number of directors constituting our Board is permitted to be set only by a resolution adopted by a majority vote of our entire Board. These provisions would prevent a shareholder from gaining control of our Board by increasing the size of our Board  and filling the resulting vacancies with its own nominees. This makes it more difficult to change the composition of our Board but promotes continuity of management.

• Advance notice requirements for director nominations. Our Articles provide advance notice procedures for shareholders seeking to nominate candidates for election as directors at our annual meeting of shareholders. Our Articles also specify certain requirements regarding the form and content of a shareholder’s notice. These provisions might preclude our shareholders from making nominations for directors at our annual meeting of shareholders if the proper procedures are not followed. We expect that these provisions might also discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of the Company.

• No cumulative voting. Our Articles do not provide for cumulative voting.

• Issuance of preferred shares. Our Board has the authority, without further action by the shareholders, to issue an unlimited number of preferred shares with rights and preferences, including voting rights, designated from time to time by our Board. The existence of authorized but unissued preferred shares would enable our Board to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means.

Exchange Listing

The Company’s Common Shares are listed on the NASDAQ Capital Market and the Toronto Stock Exchange, both under the symbol “QIPT.”

Transfer Agent and Registrar

The transfer agent and registrar for the Company’s Common Shares is Computershare Investor Services Inc., located at 2nd Floor, 510 Burrard Street, Vancouver, British Columbia V6C 3A8.1.

Other Canadian Laws Affecting U.S. Shareholders

Other than the matters discussed below under the heading “Tax Matters Applicable to Ownership of Our Common ‎Shares”, there are no governmental laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting the remittance of interest, dividends or other payments by us to non-residents of Canada.

There are no limitations specific to the rights of non-residents of Canada to hold or vote our Common Shares under the laws of British Columbia, the BCBCA, or in our Articles or Notice, other than those imposed by the Investment Canada Act (Canada) as discussed below.

Non-Canadian investors who acquire a controlling interest in us may be subject to the Investment Canada Act (Canada), which governs the basis on which non-Canadians may invest in Canadian businesses. Under the Investment Canada Act (Canada), the acquisition of a majority of the voting interests of an entity (or of a majority of the undivided ownership interests in the voting common shares of an entity that is a corporation) is deemed to be an acquisition of control of that entity. The acquisition of less than a majority but one-third or more of the voting common shares of a

1615254296.4

corporation (or of an equivalent undivided ownership interest in the voting common shares of the corporation) is presumed to be acquisition of control of that corporation unless it can be established that, on the acquisition, the corporation is not controlled in fact by the acquirer through the ownership of the voting common shares. The acquisition of less than one-third of the voting common shares of a corporation (or of an equivalent undivided ownership interest in the voting common shares of the corporation) is deemed not to be acquisition of control of that corporation.

Tax Matters Applicable to Ownership of Our Common Shares

Holders Resident in the United States

The following portion of this summary is applicable to a holder of our Common Shares who, for the purposes of the Income Tax Act (Canada) (the “Tax Act”) and the Canada-United States Tax Convention (1980), as amended (the “Treaty”), at all relevant times, is not resident or deemed to be resident in Canada, is a resident of the United States for the purposes of the Treaty and qualifies for the full benefits thereunder, and who does not use or hold (and is not deemed to use or hold) the Company’s common shares in connection with a business carried on in Canada (a “U.S. Resident Holder”). This part of the summary is not applicable to a U.S. Resident Holder that is an insurer that carries on an insurance business in Canada.

Taxation of Dividends

Dividends paid or credited or deemed to be paid or credited by the Company to a non-resident of Canada will generally be subject to Canadian withholding tax at the rate of 25%, subject to any applicable reduction in the rate of such withholding under an income tax treaty between Canada and the country where the holder is resident. Under the Treaty, the withholding tax rate in respect of a dividend paid to a U.S. Resident Holder that beneficially owns such dividends is generally reduced to 15%, unless the U.S. Resident Holder is a C Corporation shareholder which owns at least 10% of the voting shares of the Company at that time, in which case the withholding tax rate is reduced to 5%.

Disposition of Common Shares

A U.S. Resident Holder will not be subject to tax under the Tax Act in respect of any capital gain realized on the disposition of our common shares, provided that the common shares are not “taxable Canadian property” for purposes of the Tax Act. Provided that the common shares are listed on a designated stock exchange at a particular time, the common shares generally will not constitute taxable Canadian property to a U.S. Resident Holder at that time unless, at any time during the 60 month period immediately preceding that time: (i) 25% or more of the issued shares of any class or series of the Company’s capital stock were owned by any combination of (a) the U.S. Resident Holder, (b) persons with whom the U.S. Resident Holder did not deal at arm’s length, and (c) partnerships in which the U.S. Resident Holder or a person described in (b) holds a membership interest directly or indirectly through one or more partnerships; and (ii) more than 50% of the value of the common shares was derived, directly or indirectly, from one or any combination of (a) real or immoveable property situated in Canada, (b) Canadian resource properties, (c) timber resource properties, and (d) options in respect of, or an interest in, any such property (whether or not the property exists), all for purposes of the Tax Act. A U.S. Resident Holder’s common shares can also be deemed to be taxable Canadian property in certain circumstances set out in the Tax Act.

1615254296.4

EX-10.4

Exhibit 10.4

CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is entered into effective as of Commencement Date set forth below by and between PHM Services, Inc., (“Employer”) and Gregory J. Crawford (“Employee”) pursuant to the following terms and conditions.

1.EMPLOYMENT TERM. Commencing November 1, 2020 (“Commencement Date”), Employer shall employ Employee in the position of Chief Executive Officer for a three-year period (“Initial Term”), unless terminated earlier pursuant to Section 3 below.  Employee’s employment under this Agreement shall renew automatically for additional one year terms (each, a “Renewal Term” and, together with the Initial Term, referred to herein as the “Employment Term”) upon the expiration of the Initial Term and/or Renewal Term, as applicable thereafter, unless, either party gives the other a written notice, at least sixty (90) calendar days prior to the expiration of the Initial Term or the then Renewal Term, of its intention not to renew this Agreement and/ or any extension thereof.

2.ACKNOWLEDGEMENT OF TERMS OF EMPLOYMENT.

(A)Title and Reporting. Employee’s title shall be Chief Executive Officer and Employee shall report directly to the Board of Directors (the “Board”) of Protech Home Medical Corp.  (the “Parent”).

(B)Devotion of Business Time. Employee will perform the duties appropriate for the Chief Executive Officer position and other such duties, services, and responsibilities as may be assigned to Employee by the Board, and Employee may be obligated, from time to time and as business needs necessitate, to act as an officer or director of Employer’s affiliates and subsidiaries (collectively, the “Services”) and Employee agrees and acknowledges that the compensation described in Section 3 below constitutes payment-in-full for all Services performed. Employee shall at all times during the Employment Period, faithfully, with diligence and to the best of his ability, experience, and talents, perform the Services pursuant to the express and implicit terms hereof and to Employer’s reasonable satisfaction.

(C)Place of Performance. Employee shall perform the Services under thisAgreement primarily in Wilder, Kentucky (subject to necessary travel requirements).

(D)Compliance. Employee shall comply with all of Employer’s rules and regulations as they are adopted and amended from time to time. Employee shall also comply with all laws, regulations, and ordinances applicable to the performance of his dutieshereunder.

3.COMPENSATION. As compensation for the Services provided during the Employment Period by Employee under this Agreement, Employer shall pay Employee asfollows:

(A)Base Salary. An annual initial base salary of $525,000.00, less applicable deductionsand withholdings (the “Base Salary”), payable biweekly or such other regular periods as Employer shall determine in accordance with Employer’s normal payroll policies. The Base Salary will increase seven percent (7.0%) on each anniversary of the Commencement Date.  

(B)Bonus.In addition to Base Salary, Employee may be eligible to receive an annual, discretionary,ExecutiveBonus.Theamountofthebonus,ifany,willbecontingentontheoverall performance of Employer and its affiliates, as well as Employee’s performance as determined by the Board. The Executive Compensation Committee of the Board shall meet together with Employee prior to the commencement of each fiscal year to determine the specific performance targets that need to be satisfactorily achieved in the forthcoming fiscal year in order for the Employee to receive the Executive Bonus. Employee acknowledges that the fact that Employee may have received a bonus at any time does not give rise to any expectation or entitlement to receive any bonus in the future, or as to the size of any future bonus. A bonus, if any, will be paid no later than December 31 following the Fiscal Year in which it is earned. Employee will be entitled payment of a bonus if Employee has earned it and if the employee was employed at the end of the applicable Fiscal Year (September 30). Employee will not be entitled to Bonus if the employee was no longer employed orwasservingoutanynoticegivenbyhimorbyEmployertoterminateemploymentattheend of the applicable Fiscal Year (September 30)

(C)Stock based Compensation. As of the Commencement Date and on or about each anniversary date of the Commencement Date, pursuant to the Parent’s stock option plan, and satisfaction of any US or Canadian securities law requirements, Employee will be either granted stock options to purchase shares of common stock of Parent (“Option Grant”) and/or restricted stock  of the Parent (“Restricted Stock”) of a value equal to fifty percent (50.0%) of the Base Salary at the time of such grant, subject to Board approval at the board meeting on or about the respective grant date. The strike price for any Option Grant shall be the most recent market close on the day of the Board approval and such Option Grant and any Restricted Stock grant shall contain such other terms and conditions, including without limitation, the term, forfeiture, vesting schedule and acceleration provisions as determined by the Board.

Notwithstanding the abovementioned, (i) all remaining unvested portions of any Option Grant shall be accelerated and will vest immediately upon a Change of Control and (ii) any remaining restrictions or forfeiture with respect to any Restricted Stock grant will immediately terminate upon a Change of Control.  For the purposes of this Agreement, “Change of Control” shall mean the sale of all or substantially all the assets of the Employer and/or Parent; any merger, consolidation or acquisition of the Employer and/or Parent with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of the voting capital stock of the Employer and/or Parent in one or more related transactions.

(D)Benefits.Employeewillbeentitledtoparticipateinsuchbenefitplansasgenerally provided by Employer to similarly situated employees, but only to the extent provided in such plans and for so long as Employer provides or offers such plans. Employer reserves the right to modify, amend or terminate such benefit plans at any time without priornotice.

(E)Paid Time Off, Holidays, and Sick Days. Employee shall be entitled to four (4) weeks paid vacation per year. Employee shall also be entitled to the following holidays: New Year’s Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day following Thanksgiving Day and Christmas Day. Employer may change company recognized holidays with advanced notice and in its sole discretion.  Employee will receive four (4) sick days per year and may request use of sick leave in accordance with Employer’s sick leave policy.

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(F)Expense Reimbursement. Employer will reimburse Employee for all reasonable business expenses incurred by Employee in connection with the performance of the Services hereunder, in accordance with and subject to Employer’s reimbursement policies in effect from time to time and Employer’s receipt of evidence of such expenses. Employer shall provide Employee with a company credit card and for reasonable business use. Employer will also reimburse Employee for cellular phone expenses in the amount of $50.00 per payperiod.

(G)Vehicle. Employer shall provide Employee a company vehicle or current company vehicle allowance.  In addition, Employee can use company credit cardfor fuel. If the employee opts for the company vehicle, the company will also provide for vehicle maintenance purchases upon employment. Employer reserves the right to change, vary or withdrawEmployee’scarintheevent Employee loses his driving license (e.g. as a result of a motoringoffense).

4.TERMINATION. The date upon which this Agreement, and Employee’s employment pursuant to this Agreement, terminates, for any reason whatsoever, shall be referred to herein as the “Termination Date.”

(A) Termination in the Event of Employee’s Death. In the event of Employee’s death during the Employment Period, the parties’ obligations under this Agreement shall immediately and automatically terminate. In such event, Employer shall pay to Employee’s estate: (1) any of the Compensation from Section 3(A) that was earned but not paid through the TerminationDate;

(2) a monetary amount equal to the value of any accrued, but unused, vacation vested pursuant to Section 3(D); and (3) any reimbursable expenses incurred by Employee under Section 3(E) but un-reimbursed on the Termination Date, provided that such expenses and required substantiation and documentation are submitted within ninety (90) days of the Termination Date and that such expenses are reimbursable under Employer’s reimbursement policy (all of the foregoing, cumulatively, the “Final Compensation”).

(B) Termination in the Event of Employee’s Permanent Disability. In the event of EmployeeisdeemedpermanentlydisabledduringtheEmploymentPeriod,theparties’obligations under this Agreement shall immediately and automatically terminate. For purposes of this Agreement,“permanentdisability”meansEmployee’sincapacityduetophysicalormentalillness that prevents Employee from satisfactorily performing the Services on a full time basis for any one hundred eighty (180) days during the immediately preceding twelve(12)-monthperiod.ThesedeterminationsshallbemadebymutualagreementoftheParties or, in the absence of mutual agreement, a physician selected by Employer or its insurers and a physician selected by Employee (or his representatives); provided, however, that if the opinionof Employer’s physician and the Employee’s physician conflict, Employer’s physician and the Employee’sphysicianshalltogetheragreeupona thirdphysician,whoseopinionshallbebinding on the Parties hereto. Upon termination of this Agreement by reason of Employee’s permanent disability, Employer shall have no further obligations to Employee, other than Employer’s obligation to pay the FinalCompensation.

(C) Termination by Employer “For Cause” During Term. During the Term,EmployermayterminatethisAgreement“ForCause”uponthedeliveryofwrittennoticeto Employee at any time immediately upon the occurrence of any of the followingevents:

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(i)Employee’s material breach of representations or obligations under this Agreement or Employee’s material failure to satisfactorily perform the Services, which isnot cured by Employee within thirty (30) days after receiving written notice of such material breach or failure fromEmployer or the Board;

(ii)AnyactoromissionbyEmployeewhichwouldreasonablybelikely to have a material adverse effect on the business of Employer, which is not cured by Employee withinthirty(30)daysofreceivingwrittennoticeofsuchactoromissionfromEmployer,provided that any breach of Employee’s duties pursuant to Sections 5, 6, or 7 of this Agreement will be cause for immediatetermination;

(iii)Employee’s material misconduct, theft, dishonesty, fraud, misappropriation, embezzlement, or gross negligence;or

(iv)Employee’s conviction, guilty plea, or plea of nolo contendere for anycrimethat:(1)involvesmoralturpitude,(2)isfraud,embezzlement,larceny,forgery,bribery, theft or dishonesty, or (3) casts doubt on Employee’s ability to perform his work or Employee’s trust, judgment, or other similar moralcharacteristics.

Upon termination of this Contract during the Initial Term “For Cause,” Employer shall have no further obligations to Employee, other than Employer’s obligation to pay Final Compensation.

(D) Termination by Employer “Without Cause” During the Initial Term. During the Employment Term, Employer shall have the right to, at any time, terminate this Agreement “Without Cause” for any or no reason. In the event of a termination of this Agreement by Employer “Without Cause” during the Employment Term, Employer shall pay Employee the Final Compensation as well as a severance payment equal to Employee’s Base Salary for the remaining period of the Employment Term, less applicable deductions and withholdings (the “Severance Payment”),upon Employee’s execution and delivery of a full release from liability to Employer (the “Release”); provided however, in the event of termination by Employer within the one-year period following a Change of Control (as defined above), the Severance Payment shall equal the greater of (i) the Employee’s Base Salary for the remaining Employment Term or (ii) the Employee’s then current Base Salary multiplied by two (2).  TheSeverancePaymentshallbepaidinroughlyequivalentinstallmentsthroughouttheremainder of the Employment Term in accordance with Employer’s normal payrollpractices.  Notwithstanding the foregoing, Employee's transfer of employment to any affiliate or subsidiary of the Employer will not constitute a termination ofemploymentunderthisAgreement,andwillnotentitleEmployeetothepaymentofanybenefits under thisSection 4(D).

(E) Termination by Employee With “Good Reason” During Term. During the Term, Employee may terminate this Agreement with “Good Reason” upon the delivery of written notice to Employer at any time immediately upon the occurrence of any of the following events without the prior written consent of Employee:

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(i)a material reduction in the nature or scope of Employee’s responsibilities, or the assignment to Employee of duties that are materially inconsistent with Employee’s position (in each case as compared to Employee’s responsibilities, duties or position on the Commencement Date);

(ii)the Company’s requiring the Executive to relocate or otherwise move from his home residence;

(iii)A diminution in Employee’s Base Salary from the amount set forth in Section 3, which is not cured by Employer within thirty (30) days of receiving notice of such diminution from Employee;

(iv)any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company; or

(v)Employer’s breach of any material obligation under thisAgreement which is not cured by Employer within thirty (30) days of receiving notice of such breach from Employee.

In the event of a termination of this Agreement by Employee with “Good Reason”, Employer shall be obligated to pay Employee the Final Compensation as well as the Severance Payment, upon Employee’s execution and delivery of the Release. The Severance Payment shall be paid in roughly equivalent installments throughout the remainder of the Employment Termin accordance with Employer’s normal payrollpractices.

(F) Termination by Employee Without “Good Reason” During the Term. Employee may terminate this Agreement during the Term without “Good Reason” upon providingEmployerwithfifteen(15)days’notice(the“Notice Period”).Followingtheexpiration of the Notice Period, Employer shall not have any further obligations to Employee, other than for the Final Compensation, which shall be paid on the regularly scheduled payday following the expiration of the Notice Period. At the sole option of Employer, the Employer may accept or require Employee’s immediate resignation and waive the Notice Period. In such case, Employer shallpayEmployeetheFinalCompensation.Suchpaymentshallbemadeonthesecondregularly scheduled payday following Employee’sresignation.

5.NON-COMPETITION. Employee acknowledges that Employer and Affiliates (as defined below) have invested substantial money and resources in establishing relationships with Clients (as defined below). Employee further acknowledges that the restrictions contained in this Section 5arereasonableandnecessarytoprotectEmployerandAffiliatesfromunfaircompetitionandthat Employer and Affiliates have a protectable property interest in Clients, and that such restrictions willnotdepriveEmployeeofhisabilitytoearnaliving.Accordingly,duringtheRestrictedPeriod (asdefinedbelow),Employeeshallnotasanindividual,owner,proprietor,partner,jointventurer, shareholder, independent contractor, consultant, agent, director, officer, employee, beneficiary or in any other capacity whatsoever, either directly or indirectly, render services or advice to, accept employment with, lend Employee’s name or credit to, work for, participate in the ownership, management, operation, financing or control of an entity currently engaged in, or desiring to

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become engaged in, a Covered Service (as defined below) in the Restricted Area (as defined below).Notwithstandingtheforegoing,nothinginthisAgreementrestrictsEmployeefromowning less than one percent (1%) of any class of securities of such entity as a passive investor, if such securities are listed on a national securities exchange. Employee understands that this provision does not restrict Employee from accepting any employment with any entity that does not engage in a CoveredService.

The following terms as used in this Section 5 and the below Section 6 shall have the meanings described below:

“Affiliate”meansanyentitythatdirectlyorindirectly,throughoneormoreintermediaries orotherwise,controls,iscontrolledbyorisundercommoncontrolwithEmployer,where"control" means the ability to direct management or policies through the ownership of voting securities, by contract orotherwise.

“Client” means any individual, corporation, limited liability company, partnership, businessorotherentity,whetherfor-profitornot-for-profit(i)thatisabusinessentityorindividual with whom Employer or an Affiliate has contracted or negotiated or to whom Employer or an Affiliate has provided Covered Services during the course of Employee’s employment; (ii) who refers patients to Employer or an Affiliate; (iii) who provides diagnostic services to or on behalf of Employer or an Affiliate during the course of Employee’s employment; (iv) insurance companies, health care providers and such health care provider’s insurance companies who have a contractual or other relationship with, or makes payments to, Employer or an Affiliate, or (v) who is a customer of Employer or an Affiliate during the course of Employee’s employment or becomes a prospective customer to whom Employer or an Affiliate has within the last twelve monthsofEmployee’semploymentwithEmployerhashaddirectandsubstantivecommunications regarding the sale or provision of health care equipment, supplies, andservices.

“CoveredServices”means(i)thesaleorprovisionofhealthcareequipment,supplies,and servicesforsleepapneasufferers,chronicrespiratoryfailurepatients,oxygentherapypatients,and theprovisionofrespiratorysupportservicesthroughtheuseofstateoftheartspecializedmedical equipment and highly trained respiratory therapists; (ii) the sale or provision of other products or services offered or provided by Employer or an Affiliate.

“RestrictedPeriod”meanstheEmploymentPeriodandaperiodofone(1)yearfollowing the Termination Date for any reasonwhatsoever.

6.NON-SOLICITATION. Employee acknowledges that the restrictions contained thisSection 6 of the Agreement are reasonable and necessary to protect Employer from unfair competition, and that Employer has a protectable property interest in its Clients and its Employees, and that such restrictions will not deprive Employee of the ability to earn a living. Employee agrees that duringtheRestrictedPeriod,Employeeshallnot,eitherdirectlyorindirectly:(i)solicitthe services,orattempttosolicittheservices,of,orhire,anyemployeeofEmployeroranAffiliateto be employed by or to perform services on behalf of any other person or entity (provided, however, that nothing in this Section 6 shall prohibit the use of a general solicitation in a publication or by

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othermeans) or (ii) solicit or attempt to solicit any Client in order to provide any Covered Service to such Client.

7.CONFIDENTIALITY AND RETURN OF MATERIALS. Employer shall furnish Employee with Confidential Information related to Employer and/or its affiliates and subsidiaries during Employee’semployment.EmployeeacknowledgesthatthisConfidentialInformationisfurnished for the purpose of enabling Employee to provide the Services to the Employer. During the Employment Period and after the Termination Date: (i) Employee shall hold all Confidential Information in strict confidence and take all reasonable precautions to prevent its inadvertent disclosuretoanyunauthorizedperson;(ii) Employeeshallnot,directlyorindirectly,use,disclose, or make available to any other person or entity any of the Confidential Information, other than as specifically required by law, regulation, subpoena or court order or in the proper performance of Employee’sduties;and(iii)EmployeeshallnotusetheConfidentialInformationtosolicit,induce, recruit, seek or enter into a relationship with, or seek to interfere or adversely affect Employer’s relationship with any of its Clients or employees. Upon the termination of Employee's employment for any reason or upon Employer’s request at any time, Employee shall immediately return to Employer all of Employer’s property, including, but not limited to, mobile phone, personal digital assistant (PDA), keys, pass cards, credit cards, confidential or proprietary lists (including,butnotlimitedto,customer,supplier,licensor,andclientlists),rolodexes,tapes,laptop computer,software,computerfiles,marketingandsalesmaterials,andanyotherproperty,record, document, or piece of equipment belonging to Employer. Employee will not (i) retain anycopies ofEmployer’sproperty,includinganycopiesexistinginelectronicform,whichareinEmployee's possession, custody, or control (even if they reside on a personal device or email account), or (ii) destroy, delete, or alter any property of Employer, including, but not limited to, any files stored electronically, without Employer’s prior writtenconsent.

“ConfidentialInformation,”asusedinthisSection 7,means,butisnotnecessarilylimited to, any information relating to the business or affairs of Employer and any Affiliate, which may include, in whole or part, information concerning: accounts, sales, sales volume, sales methods, salesproposals,Clients,prospectlists,manuals,formulae,products,processes,methods,financial information or data, business and financial strategies, methods or practices, patients or customers of Employer or any of its subsidiaries, pricing data or lists, business plans, financial models, compositions, ideas, improvements, inventions, research, computer programs, computer related information or data, system documentation, software products, patented products, copyrighted information, know-how and operating methods and any other trade secret or proprietary information developed, owned, possessed or used by Employer. “Confidential Information” shall not include information that: (i) is or becomes generally available to the public other than as a resultofadisclosureofsuchinformationbyEmployee;or(ii)isorbecomesavailabletoEmployee on a non-confidential basis from a source other than Employer, any of its subsidiaries or their respectiverepresentativesandClientsandsuchsourceisnotboundbyaconfidentialityagreement with, or other obligation of secrecy to, the Employer or any of itssubsidiaries.

8.REMEDIES. Employee acknowledges and agrees that if Employee breaches any of the provisionsofSections 5,6,or7ofthisAgreement,Employermaysufferimmediateandirreparable harm for which monetary damages alone will not be a sufficient remedy, and that, in addition to all other remedies that Employer may have, Employer shall be entitled to seek injunctive relief,

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specific performance, and any other form of equitable relief to remedy a breach or threatened breachofthisAgreementandtoenforcetheprovisionsofthisAgreementwithouttheneedtopost bond. The existence of this right shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies which Employer may have at law or in equity. In any action or proceeding brought by a party to enforce this Agreement, the prevailing party shall be entitled to recover the costs and expenses incurred (including, but not limited to, legal fees and expenses incurred by the prevailingparty).

If Employee violates the noncompetition and/or non-solicitation covenants of this AgreementandEmployerbringslegalactionforinjunctiveorotherrelief,thenEmployerwillnot bedeprivedofthebenefitofthefullRestrictedPeriod,asaresultofthetimeinvolvedinobtaining the relief. Accordingly, Employee agrees that the regularly scheduled expiration date of such Restricted Period will be extended by the same amount of time that Employee is determined to have violated such covenant.

It is further agreed that Sections 5,6,or7 of this Agreement will be regarded as divisible, andifanypartofsuchcovenantisdeclaredinvalid,unenforceable,orvoidastotime,areaorscope of activities, a court with appropriate jurisdiction shall be authorized to rewrite, substitute, and enforce provisions which are valid; and the validity and enforceability of this Agreement as modified will not beaffected.

9.GOVERNING LAW. This Agreement is made under and shall be construed according to the laws of the Commonwealth of Kentucky. All disputes which in any manner arise out of or relate to this Agreementorthesubjectmatterthereofshallberesolvedexclusivelybyarbitrationinaccordance with the provisions of this Section 9. A Party may commence arbitration by sending a written demand for arbitration to the other Parties. However, such demand shall not be effective unlessit sets forth in detail the nature of the controversy, the dollar amount involved, if any, the remedies sought, and attached to such demand is a copy of thissubsection.

(A)Thereshallbeonearbitrator.IfthePartiesshallfailtoselectamutuallyacceptable arbitrator within 10 days after the demand for arbitration is mailed, then the Parties stipulate to arbitration before a single arbitrator sitting on the panel of the American Arbitration Association (“AAA”), and selected in the sole discretion of the AAAadministrator.

(B)The Parties shall share all costs of arbitration equally, except that the prevailing PartyshallbeentitledtoreimbursementbytheotherPartyofsuchParty’sattorneys’feesandcosts and any arbitration fees and expenses incurred in connection with the arbitrationhereunder.

(C)The substantive law of the State of Kentucky shall be applied by thearbitrator.

(D)Arbitration shall take place in Covington, Kentucky, unless the Parties otherwise agree in writing. As soon as reasonably practicable, a hearing with respect to the dispute or matter to be resolved shall be conducted by the arbitrator. As soon as reasonably practicable thereafter, the arbitrator shall arrive at a final decision, which shall be reduced to writing, signed by the arbitrator and mailed to each of the Parties and their legal counsel.

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(E)All decisions of the arbitrator shall be final, binding and conclusive on the Parties andshallconstitutetheonlymethodofresolvingdisputesormatterssubjecttoarbitrationpursuant to this Agreement. The arbitrator or a court of appropriate jurisdiction may issue a writ of execution to enforce the arbitrator’sjudgment.

(F)Notwithstanding anything to the contrary in this Agreement, claims foremergency orpreliminaryorpermanentinjunctivereliefmaybebroughtin,anddecidedby,astateorfederal court located in Kenton County, Kentucky.

10.AMENDMENT. This Agreement shall not be modified, amended, rescinded, canceled, or waived in whole or in part, except by written amendment authorized by the Board and executed byEmployee.

11.WAIVER. The waiver by either party of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.

12.NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed received if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile or e-mail (with confirmationofreceipt)tothePartiesatthefollowingaddress(oratsuchotheraddressforaParty as shall be specified by likenotice):

IftoEmployer:PHM Services, Inc.

1019 Towne Dr. Wilder, KY 41076

With acopyto:Katz Teller

255 E. Fifth Street, Suite 2400

Cincinnati, Ohio 45202

Attn: John R. Gierl, Esq.

IftoEmployee: GregCrawford

[***]

With acopyto: [to be supplied]

13.ENTIRE AGREEMENT, BINDING EFFECT. This Agreement constitutes the entire agreement between the Parties concerning the subject matter thereof. No oral statements or prior written material not specifically incorporated herein shall be of any force and effect, and no changesinoradditionstothisAgreementshallberecognizedunlessincorporatedhereinbywritten amendment, such amendment to become effective on the date stipulated therein. Employee acknowledgesandrepresentsthat,inexecutingthisAgreement,hedidnotrely,andhasnotrelied, on any communications, promises, statements, inducements, or representation(s), oral or written, by Employer, except as expressly contained in thisAgreement. This Agreement supersedes in its

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entirety that certain Employment Agreement dated April 9, 2018 by and between Employer and Employee.

14.THIRD-PARTY BENEFICIARIES. This Agreement will not confer any rights or remedies upon any person or entity other than the Employer and Employee, and their respective successors and permittedassigns.

15.ASSIGNMENT AND SUBCONTRACTORS. Employee shall not assign this Agreement or subcontractanyworkrequiredtobeperformedbyitwithoutthepriorwrittenconsentofEmployer.

16.SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever, (i) the validity, legality and unenforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegalorunenforceable,thatarenotthemselvesinvalid,illegalorunenforceable),shallnotinany waybeaffectedorimpairedthereby,and(ii)suchprovisionorprovisionsheldtobeinvalid,illegal or unenforceable shall be limited or modified in its or their application to the minimum extent necessary to avoid such invalidity, illegality or unenforceability, and, as so limited or modified, suchprovisionorprovisionsandthebalanceofthisAgreementshallbeenforceableinaccordance with theirterms.

17.COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. The Parties agree that a fully executed photocopy of this Agreement, and signature transmitted by PDF or other electronic means, shall be valid as an original.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date written below.

PHM SERVICES, INC. By:​ ​ Name: Title: Employee: ​ ​ GREG CRAWFORD

[Signature Page – Executive Employment Agreement]

EX-10.5

Exhibit 10.5

CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL. REDACTED INFORMATION IS INDICATED BY [***]

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (the “Agreement”) is entered into effective as of Commencement Date set forth below by and between PHM Services, Inc., (“Employer”) and Hardik Mehta (“Employee”) pursuant to the following terms and conditions.

1.EMPLOYMENT TERM. Commencing November 1, 2020 (“Commencement Date”), Employer shall employ Employee in the position of Chief Executive Officer for a three-year period (“Initial Term”), unless terminated earlier pursuant to Section 3 below.  Employee’s employment under this Agreement shall renew automatically for additional one year terms (each, a “Renewal Term” and, together with the Initial Term, referred to herein as the “Employment Term”) upon the expiration of the Initial Term and/or Renewal Term, as applicable thereafter, unless, either party gives the other a written notice, at least sixty (90) calendar days prior to the expiration of the Initial Term or the then Renewal Term, of its intention not to renew this Agreement and/ or any extension thereof.

2.ACKNOWLEDGEMENT OF TERMS OF EMPLOYMENT.

(A)Title and Reporting. Employee’s title shall be Chief Financial Officer and Employee shall report directly to the Chief Executive Officer (the “CEO”) of Protech Home Medical Corp.  (the “Parent”).

(B)Devotion of Business Time. Employee will perform the duties appropriate for the Chief Executive Officer position and other such duties, services, and responsibilities as may be assigned to Employee by the Board, and Employee may be obligated, from time to time and as business needs necessitate, to act as an officer or director of Employer’s affiliates and subsidiaries (collectively, the “Services”) and Employee agrees and acknowledges that the compensation described in Section 3 below constitutes payment-in-full for all Services performed. Employee shall at all times during the Employment Period, faithfully, with diligence and to the best of his ability, experience, and talents, perform the Services pursuant to the express and implicit terms hereof and to Employer’s reasonable satisfaction.

(C)Place of Performance. Employee shall perform the Services under thisAgreement primarily in Wilder, Kentucky (subject to necessary travel requirements).

(D)Compliance. Employee shall comply with all of Employer’s rules and regulations as they are adopted and amended from time to time. Employee shall also comply with all laws, regulations, and ordinances applicable to the performance of his dutieshereunder.

3.COMPENSATION. As compensation for the Services provided during the Employment Period by Employee under this Agreement, Employer shall pay Employee asfollows:

(A)Base Salary. An annual initial base salary of $445,000.00, less applicable deductionsand withholdings (the “Base Salary”), payable biweekly or such other regular periods

as Employer shall determine in accordance with Employer’s normal payroll policies. The Base Salary will increase seven percent (7.0%) on each anniversary of the Commencement Date.  

(B)Bonus.In addition to Base Salary, Employee may be eligible to receive an annual, discretionary,ExecutiveBonus.Theamountofthebonus,ifany,willbecontingentontheoverall performance of Employer and its affiliates, as well as Employee’s performance as determined by the Board. The Executive Compensation Committee of the Board shall meet together with Employee prior to the commencement of each fiscal year to determine the specific performance targets that need to be satisfactorily achieved in the forthcoming fiscal year in order for the Employee to receive the Executive Bonus. Employee acknowledges that the fact that Employee may have received a bonus at any time does not give rise to any expectation or entitlement to receive any bonus in the future, or as to the size of any future bonus. A bonus, if any, will be paid no later than December 31 following the Fiscal Year in which it is earned. Employee will be entitled payment of a bonus if Employee has earned it and if the employee was employed at the end of the applicable Fiscal Year (September 30). Employee will not be entitled to Bonus if the employee was no longer employed orwasservingoutanynoticegivenbyhimorbyEmployertoterminateemploymentattheend of the applicable Fiscal Year (September 30)

(C)Stock based Compensation. As of the Commencement Date and on or about each anniversary date of the Commencement Date, pursuant to the Parent’s stock option plan, and satisfaction of any US or Canadian securities law requirements, Employee will be either granted stock options to purchase shares of common stock of Parent (“Option Grant”) and/or restricted stock  of the Parent (“Restricted Stock”) of a value equal to fifty percent (50.0%) of the Base Salary at the time of such grant, subject to Board approval at the board meeting on or about the respective grant date. The strike price for any Option Grant shall be the most recent market close on the day of the Board approval and such Option Grant and any Restricted Stock grant shall contain such other terms and conditions, including without limitation, the term, forfeiture, vesting schedule and acceleration provisions as determined by the Board.

Notwithstanding the abovementioned, (i) all remaining unvested portions of any Option Grant shall be accelerated and will vest immediately upon a Change of Control and (ii) any remaining restrictions or forfeiture with respect to any Restricted Stock grant will immediately terminate upon a Change of Control.  For the purposes of this Agreement, “Change of Control” shall mean the sale of all or substantially all the assets of the Employer and/or Parent; any merger, consolidation or acquisition of the Employer and/or Parent with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of the voting capital stock of the Employer and/or Parent in one or more related transactions.

(D)Benefits.Employeewillbeentitledtoparticipateinsuchbenefitplansasgenerally provided by Employer to similarly situated employees, but only to the extent provided in such plans and for so long as Employer provides or offers such plans. Employer reserves the right to modify, amend or terminate such benefit plans at any time without priornotice.

(E)Paid Time Off, Holidays, and Sick Days. Employee shall be entitled to four (4) weeks paid vacation per year. Employee shall also be entitled to the following holidays: New Year’s Day, Good Friday, Memorial Day, July 4th, Labor Day, Thanksgiving Day, the day following Thanksgiving Day and Christmas Day. Employer may change company recognized

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holidays with advanced notice and in its sole discretion.  Employee will receive four (4) sick days per year and may request use of sick leave in accordance with Employer’s sick leave policy.

(F)Expense Reimbursement. Employer will reimburse Employee for all reasonable business expenses incurred by Employee in connection with the performance of the Services hereunder, in accordance with and subject to Employer’s reimbursement policies in effect from time to time and Employer’s receipt of evidence of such expenses. Employer shall provide Employee with a company credit card and for reasonable business use. Employer will also reimburse Employee for cellular phone expenses in the amount of $50.00 per payperiod.

(G)Vehicle. Employer shall provide Employee a company vehicle or current company vehicle allowance.  In addition, Employee can use company credit cardfor fuel. If the employee opts for the company vehicle, the company will also provide for vehicle maintenance purchases upon employment. Employer reserves the right to change, vary or withdrawEmployee’scarintheevent Employee loses his driving license (e.g. as a result of a motoringoffense).

4.TERMINATION. The date upon which this Agreement, and Employee’s employment pursuant to this Agreement, terminates, for any reason whatsoever, shall be referred to herein as the “Termination Date.”

(A) Termination in the Event of Employee’s Death. In the event of Employee’s death during the Employment Period, the parties’ obligations under this Agreement shall immediately and automatically terminate. In such event, Employer shall pay to Employee’s estate: (1) any of the Compensation from Section 3(A) that was earned but not paid through the TerminationDate;

(2) a monetary amount equal to the value of any accrued, but unused, vacation vested pursuant to Section 3(D); and (3) any reimbursable expenses incurred by Employee under Section 3(E) but un-reimbursed on the Termination Date, provided that such expenses and required substantiation and documentation are submitted within ninety (90) days of the Termination Date and that such expenses are reimbursable under Employer’s reimbursement policy (all of the foregoing, cumulatively, the “Final Compensation”).

(B) Termination in the Event of Employee’s Permanent Disability. In the event of EmployeeisdeemedpermanentlydisabledduringtheEmploymentPeriod,theparties’obligations under this Agreement shall immediately and automatically terminate. For purposes of this Agreement,“permanentdisability”meansEmployee’sincapacityduetophysicalormentalillness that prevents Employee from satisfactorily performing the Services on a full time basis for any one hundred eighty (180) days during the immediately preceding twelve(12)-monthperiod.ThesedeterminationsshallbemadebymutualagreementoftheParties or, in the absence of mutual agreement, a physician selected by Employer or its insurers and a physician selected by Employee (or his representatives); provided, however, that if the opinionof Employer’s physician and the Employee’s physician conflict, Employer’s physician and the Employee’sphysicianshalltogetheragreeupona thirdphysician,whoseopinionshallbebinding on the Parties hereto. Upon termination of this Agreement by reason of Employee’s permanent disability, Employer shall have no further obligations to Employee, other than Employer’s obligation to pay the FinalCompensation.

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(C) Termination by Employer “For Cause” During Term. During the Term,EmployermayterminatethisAgreement“ForCause”uponthedeliveryofwrittennoticeto Employee at any time immediately upon the occurrence of any of the followingevents:

(i)Employee’s material breach of representations or obligations under this Agreement or Employee’s material failure to satisfactorily perform the Services, which isnot cured by Employee within thirty (30) days after receiving written notice of such material breach or failure fromEmployer or the Board;

(ii)AnyactoromissionbyEmployeewhichwouldreasonablybelikely to have a material adverse effect on the business of Employer, which is not cured by Employee withinthirty(30)daysofreceivingwrittennoticeofsuchactoromissionfromEmployer,provided that any breach of Employee’s duties pursuant to Sections 5, 6, or 7 of this Agreement will be cause for immediatetermination;

(iii)Employee’s material misconduct, theft, dishonesty, fraud, misappropriation, embezzlement, or gross negligence;or

(iv)Employee’s conviction, guilty plea, or plea of nolo contendere for anycrimethat:(1)involvesmoralturpitude,(2)isfraud,embezzlement,larceny,forgery,bribery, theft or dishonesty, or (3) casts doubt on Employee’s ability to perform his work or Employee’s trust, judgment, or other similar moralcharacteristics.

Upon termination of this Contract during the Initial Term “For Cause,” Employer shall have no further obligations to Employee, other than Employer’s obligation to pay Final Compensation.

(D) Termination by Employer “Without Cause” During the Initial Term. During the Employment Term, Employer shall have the right to, at any time, terminate this Agreement “Without Cause” for any or no reason. In the event of a termination of this Agreement by Employer “Without Cause” during the Employment Term, Employer shall pay Employee the Final Compensation as well as a severance payment equal to Employee’s Base Salary for the remaining period of the Employment Term, less applicable deductions and withholdings (the “Severance Payment”),upon Employee’s execution and delivery of a full release from liability to Employer (the “Release”); provided however, in the event of termination by Employer within the one-year period following a Change of Control (as defined above), the Severance Payment shall equal the greater of (i) the Employee’s Base Salary for the remaining Employment Term or (ii) the Employee’s then current Base Salary multiplied by two (2).  TheSeverancePaymentshallbepaidinroughlyequivalentinstallmentsthroughouttheremainder of the Employment Term in accordance with Employer’s normal payrollpractices.  Notwithstanding the foregoing, Employee's transfer of employment to any affiliate or subsidiary of the Employer will not constitute a termination ofemploymentunderthisAgreement,andwillnotentitleEmployeetothepaymentofanybenefits under thisSection 4(D).

(E) Termination by Employee With “Good Reason” During Term. During the Term, Employee may terminate this Agreement with “Good Reason” upon the delivery of written notice

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to Employer at any time immediately upon the occurrence of any of the following events without the prior written consent of Employee:

(i)a material reduction in the nature or scope of Employee’s responsibilities, or the assignment to Employee of duties that are materially inconsistent with Employee’s position (in each case as compared to Employee’s responsibilities, duties or position on the Commencement Date);

(ii)the Company’s requiring the Executive to relocate or otherwise move from his home residence;

(iii)A diminution in Employee’s Base Salary from the amount set forth in Section 3, which is not cured by Employer within thirty (30) days of receiving notice of such diminution from Employee;

(iv)any failure by the Company to obtain the assumption of this Agreement by any successor or assign of the Company; or

(v)Employer’s breach of any material obligation under thisAgreement which is not cured by Employer within thirty (30) days of receiving notice of such breach from Employee.

In the event of a termination of this Agreement by Employee with “Good Reason”, Employer shall be obligated to pay Employee the Final Compensation as well as the Severance Payment, upon Employee’s execution and delivery of the Release. The Severance Payment shall be paid in roughly equivalent installments throughout the remainder of the Employment Termin accordance with Employer’s normal payrollpractices.

(F) Termination by Employee Without “Good Reason” During the Term. Employee may terminate this Agreement during the Term without “Good Reason” upon providingEmployerwithfifteen(15)days’notice(the“Notice Period”).Followingtheexpiration of the Notice Period, Employer shall not have any further obligations to Employee, other than for the Final Compensation, which shall be paid on the regularly scheduled payday following the expiration of the Notice Period. At the sole option of Employer, the Employer may accept or require Employee’s immediate resignation and waive the Notice Period. In such case, Employer shallpayEmployeetheFinalCompensation.Suchpaymentshallbemadeonthesecondregularly scheduled payday following Employee’sresignation.

5.NON-COMPETITION. Employee acknowledges that Employer and Affiliates (as defined below) have invested substantial money and resources in establishing relationships with Clients (as defined below). Employee further acknowledges that the restrictions contained in this Section 5arereasonableandnecessarytoprotectEmployerandAffiliatesfromunfaircompetitionandthat Employer and Affiliates have a protectable property interest in Clients, and that such restrictions willnotdepriveEmployeeofhisabilitytoearnaliving.Accordingly,duringtheRestrictedPeriod (asdefinedbelow),Employeeshallnotasanindividual,owner,proprietor,partner,jointventurer, shareholder, independent contractor, consultant, agent, director, officer, employee, beneficiary or

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in any other capacity whatsoever, either directly or indirectly, render services or advice to, accept employment with, lend Employee’s name or credit to, work for, participate in the ownership, management, operation, financing or control of an entity currently engaged in, or desiring to become engaged in, a Covered Service (as defined below) in the Restricted Area (as defined below).Notwithstandingtheforegoing,nothinginthisAgreementrestrictsEmployeefromowning less than one percent (1%) of any class of securities of such entity as a passive investor, if such securities are listed on a national securities exchange. Employee understands that this provision does not restrict Employee from accepting any employment with any entity that does not engage in a CoveredService.

The following terms as used in this Section 5 and the below Section 6 shall have the meanings described below:

“Affiliate”meansanyentitythatdirectlyorindirectly,throughoneormoreintermediaries orotherwise,controls,iscontrolledbyorisundercommoncontrolwithEmployer,where"control" means the ability to direct management or policies through the ownership of voting securities, by contract orotherwise.

“Client” means any individual, corporation, limited liability company, partnership, businessorotherentity,whetherfor-profitornot-for-profit(i)thatisabusinessentityorindividual with whom Employer or an Affiliate has contracted or negotiated or to whom Employer or an Affiliate has provided Covered Services during the course of Employee’s employment; (ii) who refers patients to Employer or an Affiliate; (iii) who provides diagnostic services to or on behalf of Employer or an Affiliate during the course of Employee’s employment; (iv) insurance companies, health care providers and such health care provider’s insurance companies who have a contractual or other relationship with, or makes payments to, Employer or an Affiliate, or (v) who is a customer of Employer or an Affiliate during the course of Employee’s employment or becomes a prospective customer to whom Employer or an Affiliate has within the last twelve monthsofEmployee’semploymentwithEmployerhashaddirectandsubstantivecommunications regarding the sale or provision of health care equipment, supplies, andservices.

“CoveredServices”means(i)thesaleorprovisionofhealthcareequipment,supplies,and servicesforsleepapneasufferers,chronicrespiratoryfailurepatients,oxygentherapypatients,and theprovisionofrespiratorysupportservicesthroughtheuseofstateoftheartspecializedmedical equipment and highly trained respiratory therapists; (ii) the sale or provision of other products or services offered or provided by Employer or an Affiliate.

“RestrictedPeriod”meanstheEmploymentPeriodandaperiodofone(1)yearfollowing the Termination Date for any reasonwhatsoever.

6.NON-SOLICITATION. Employee acknowledges that the restrictions contained thisSection 6 of the Agreement are reasonable and necessary to protect Employer from unfair competition, and that Employer has a protectable property interest in its Clients and its Employees, and that such restrictions will not deprive Employee of the ability to earn a living. Employee agrees that duringtheRestrictedPeriod,Employeeshallnot,eitherdirectlyorindirectly:(i)solicitthe services,orattempttosolicittheservices,of,orhire,anyemployeeofEmployeroranAffiliateto

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be employed by or to perform services on behalf of any other person or entity (provided, however, that nothing in this Section 6 shall prohibit the use of a general solicitation in a publication or by othermeans) or (ii) solicit or attempt to solicit any Client in order to provide any Covered Service to such Client.

7.CONFIDENTIALITY AND RETURN OF MATERIALS. Employer shall furnish Employee with Confidential Information related to Employer and/or its affiliates and subsidiaries during Employee’semployment.EmployeeacknowledgesthatthisConfidentialInformationisfurnished for the purpose of enabling Employee to provide the Services to the Employer. During the Employment Period and after the Termination Date: (i) Employee shall hold all Confidential Information in strict confidence and take all reasonable precautions to prevent its inadvertent disclosuretoanyunauthorizedperson;(ii) Employeeshallnot,directlyorindirectly,use,disclose, or make available to any other person or entity any of the Confidential Information, other than as specifically required by law, regulation, subpoena or court order or in the proper performance of Employee’sduties;and(iii)EmployeeshallnotusetheConfidentialInformationtosolicit,induce, recruit, seek or enter into a relationship with, or seek to interfere or adversely affect Employer’s relationship with any of its Clients or employees. Upon the termination of Employee's employment for any reason or upon Employer’s request at any time, Employee shall immediately return to Employer all of Employer’s property, including, but not limited to, mobile phone, personal digital assistant (PDA), keys, pass cards, credit cards, confidential or proprietary lists (including,butnotlimitedto,customer,supplier,licensor,andclientlists),rolodexes,tapes,laptop computer,software,computerfiles,marketingandsalesmaterials,andanyotherproperty,record, document, or piece of equipment belonging to Employer. Employee will not (i) retain anycopies ofEmployer’sproperty,includinganycopiesexistinginelectronicform,whichareinEmployee's possession, custody, or control (even if they reside on a personal device or email account), or (ii) destroy, delete, or alter any property of Employer, including, but not limited to, any files stored electronically, without Employer’s prior writtenconsent.

“ConfidentialInformation,”asusedinthisSection 7,means,butisnotnecessarilylimited to, any information relating to the business or affairs of Employer and any Affiliate, which may include, in whole or part, information concerning: accounts, sales, sales volume, sales methods, salesproposals,Clients,prospectlists,manuals,formulae,products,processes,methods,financial information or data, business and financial strategies, methods or practices, patients or customers of Employer or any of its subsidiaries, pricing data or lists, business plans, financial models, compositions, ideas, improvements, inventions, research, computer programs, computer related information or data, system documentation, software products, patented products, copyrighted information, know-how and operating methods and any other trade secret or proprietary information developed, owned, possessed or used by Employer. “Confidential Information” shall not include information that: (i) is or becomes generally available to the public other than as a resultofadisclosureofsuchinformationbyEmployee;or(ii)isorbecomesavailabletoEmployee on a non-confidential basis from a source other than Employer, any of its subsidiaries or their respectiverepresentativesandClientsandsuchsourceisnotboundbyaconfidentialityagreement with, or other obligation of secrecy to, the Employer or any of itssubsidiaries.

8.REMEDIES. Employee acknowledges and agrees that if Employee breaches any of the provisionsofSections 5,6,or7ofthisAgreement,Employermaysufferimmediateandirreparable

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harm for which monetary damages alone will not be a sufficient remedy, and that, in addition to all other remedies that Employer may have, Employer shall be entitled to seek injunctive relief, specific performance, and any other form of equitable relief to remedy a breach or threatened breachofthisAgreementandtoenforcetheprovisionsofthisAgreementwithouttheneedtopost bond. The existence of this right shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies which Employer may have at law or in equity. In any action or proceeding brought by a party to enforce this Agreement, the prevailing party shall be entitled to recover the costs and expenses incurred (including, but not limited to, legal fees and expenses incurred by the prevailingparty).

If Employee violates the noncompetition and/or non-solicitation covenants of this AgreementandEmployerbringslegalactionforinjunctiveorotherrelief,thenEmployerwillnot bedeprivedofthebenefitofthefullRestrictedPeriod,asaresultofthetimeinvolvedinobtaining the relief. Accordingly, Employee agrees that the regularly scheduled expiration date of such Restricted Period will be extended by the same amount of time that Employee is determined to have violated such covenant.

It is further agreed that Sections 5,6,or7 of this Agreement will be regarded as divisible, andifanypartofsuchcovenantisdeclaredinvalid,unenforceable,orvoidastotime,areaorscope of activities, a court with appropriate jurisdiction shall be authorized to rewrite, substitute, and enforce provisions which are valid; and the validity and enforceability of this Agreement as modified will not beaffected.

9.GOVERNING LAW. This Agreement is made under and shall be construed according to the laws of the Commonwealth of Kentucky. All disputes which in any manner arise out of or relate to this Agreementorthesubjectmatterthereofshallberesolvedexclusivelybyarbitrationinaccordance with the provisions of this Section 9. A Party may commence arbitration by sending a written demand for arbitration to the other Parties. However, such demand shall not be effective unlessit sets forth in detail the nature of the controversy, the dollar amount involved, if any, the remedies sought, and attached to such demand is a copy of thissubsection.

(A)Thereshallbeonearbitrator.IfthePartiesshallfailtoselectamutuallyacceptable arbitrator within 10 days after the demand for arbitration is mailed, then the Parties stipulate to arbitration before a single arbitrator sitting on the panel of the American Arbitration Association (“AAA”), and selected in the sole discretion of the AAAadministrator.

(B)The Parties shall share all costs of arbitration equally, except that the prevailing PartyshallbeentitledtoreimbursementbytheotherPartyofsuchParty’sattorneys’feesandcosts and any arbitration fees and expenses incurred in connection with the arbitrationhereunder.

(C)The substantive law of the State of Kentucky shall be applied by thearbitrator.

(D)Arbitration shall take place in Covington, Kentucky, unless the Parties otherwise agree in writing. As soon as reasonably practicable, a hearing with respect to the dispute or matter to be resolved shall be conducted by the arbitrator. As soon as reasonably practicable thereafter, the arbitrator shall arrive at a final decision, which shall be reduced to writing, signed by the arbitrator and mailed to each of the Parties and their legal counsel.

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(E)All decisions of the arbitrator shall be final, binding and conclusive on the Parties andshallconstitutetheonlymethodofresolvingdisputesormatterssubjecttoarbitrationpursuant to this Agreement. The arbitrator or a court of appropriate jurisdiction may issue a writ of execution to enforce the arbitrator’sjudgment.

(F)Notwithstanding anything to the contrary in this Agreement, claims foremergency orpreliminaryorpermanentinjunctivereliefmaybebroughtin,anddecidedby,astateorfederal court located in Kenton County, Kentucky.

10.AMENDMENT. This Agreement shall not be modified, amended, rescinded, canceled, or waived in whole or in part, except by written amendment authorized by the Board and executed byEmployee.

11.WAIVER. The waiver by either party of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.

12.NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed received if delivered personally or by commercial delivery service, or mailed by registered or certified mail (return receipt requested) or sent via facsimile or e-mail (with confirmationofreceipt)tothePartiesatthefollowingaddress(oratsuchotheraddressforaParty as shall be specified by likenotice):

IftoEmployer:PHM Services, Inc.

1019 Towne Dr. Wilder, KY 41076

With acopyto:Katz Teller

255 E. Fifth Street, Suite 2400

Cincinnati, Ohio 45202

Attn: John R. Gierl, Esq.

IftoEmployee: Hardik Mehta

[***]

With acopyto: [to be supplied]

13.ENTIRE AGREEMENT, BINDING EFFECT. This Agreement constitutes the entire agreement between the Parties concerning the subject matter thereof. No oral statements or prior written material not specifically incorporated herein shall be of any force and effect, and no changesinoradditionstothisAgreementshallberecognizedunlessincorporatedhereinbywritten amendment, such amendment to become effective on the date stipulated therein. Employee acknowledgesandrepresentsthat,inexecutingthisAgreement,hedidnotrely,andhasnotrelied,

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on any communications, promises, statements, inducements, or representation(s), oral or written, by Employer, except as expressly contained in thisAgreement. This Agreement supersedes in its entirety that certain Employment Agreement dated April 9, 2018 by and between Employer and Employee.

14.THIRD-PARTY BENEFICIARIES. This Agreement will not confer any rights or remedies upon any person or entity other than the Employer and Employee, and their respective successors and permittedassigns.

15.ASSIGNMENT AND SUBCONTRACTORS. Employee shall not assign this Agreement or subcontractanyworkrequiredtobeperformedbyitwithoutthepriorwrittenconsentofEmployer.

16.SEVERABILITY. If any provision or provisions of this Agreement shall be held to be invalid, illegal, or unenforceable for any reason whatsoever, (i) the validity, legality and unenforceability of the remaining provisions of this Agreement (including without limitation, all portions of any paragraphs of this Agreement containing any such provision held to be invalid, illegalorunenforceable,thatarenotthemselvesinvalid,illegalorunenforceable),shallnotinany waybeaffectedorimpairedthereby,and(ii)suchprovisionorprovisionsheldtobeinvalid,illegal or unenforceable shall be limited or modified in its or their application to the minimum extent necessary to avoid such invalidity, illegality or unenforceability, and, as so limited or modified, suchprovisionorprovisionsandthebalanceofthisAgreementshallbeenforceableinaccordance with theirterms.

17.COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original. The Parties agree that a fully executed photocopy of this Agreement, and signature transmitted by PDF or other electronic means, shall be valid as an original.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date written below.

PHM SERVICES, INC. By:​ ​ Name: Title: Employee: ​ ​ Hardik Mehta

[Signature Page – Executive Employment Agreement]

EX-10.8(1)

Exhibit 10.8.1

QUIPT HOME MEDICAL CORP.

STOCK OPTION AGREEMENT

Quipt Home Medical Corp. (the “Company”) has granted to the Participant named in the Notice of Grant of Stock Option (the “Grant Notice”) to which this Stock Option Agreement (the “Option Agreement”) is attached an option (the “Option”) to purchase certain common shares in the capital of the Company (the “Common Shares”) upon the terms and conditions set forth in the Grant Notice and this Option Agreement. The Option has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Quipt Home Medical Corp. 2024 Equity Incentive Plan ‎ (the “Plan”), as amended to the Date of Grant, the provisions of which are incorporated herein by reference. By signing the Grant Notice, the Participant: (a) acknowledges receipt of, and represents that the Participant has read and is familiar with, the Grant Notice, this Option Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of shares issuable pursuant to the Option (the “Plan Prospectus”), (b) accepts the Option subject to all of the terms and conditions of the Grant Notice, this Option Agreement and the Plan, and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Option Agreement or the Plan.

1.Definitions and Construction.

1.1Definitions. Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

1.2Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Option Agreement. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.Tax Consequences - U.S. Participants.

The entirety of this Section 2 only applies in the event that the Participant ‎constitutes a U.S. Participant. ‎

2.1Tax Status of Option. This Option is intended to have the tax status designated in the Grant Notice.

(a)Incentive Stock Option. If the Grant Notice so designates, this Option is intended to be an Incentive Stock Option within the meaning of Section 422(b) of the Code, but the Company does not represent or warrant that this Option qualifies as such. The Participant should consult with the Participant’s own tax advisor regarding the tax effects of this Option and the requirements necessary to obtain favorable income tax treatment under Section 422 of the Code, including, but not limited to, holding period requirements. (NOTE TO PARTICIPANT: If the Option is exercised more than three (3) months after the date on which you cease to be an Employee (other than by reason of your death or permanent and total disability as defined in Section 22(e)(3) of the Code), the Option will be treated as a Nonstatutory Stock Option and not as an Incentive Stock Option to the extent required by Section 422 of the Code.)

(b)Nonstatutory Stock Option. If the Grant Notice so designates, this Option is intended to be a Nonstatutory Stock Option and shall not be treated as an Incentive Stock Option within the meaning of Section 422(b) of the Code.

2.2ISO Fair Market Value Limitation.If the Grant Notice designates this Option as an Incentive Stock Option, then to the extent that the Option (together with all Incentive Stock Options granted to the Participant under all stock option plans of the Participating Company Group, including the Plan) becomes exercisable for the first time during any calendar year for shares having a Fair Market Value greater than US$100,000, the portion of such options which exceeds such amount will be treated as Nonstatutory Stock Options. For purposes of this Section 2.2, options designated as Incentive Stock Options are taken into account in the order in which they were granted, and the Fair Market Value of stock is determined as of the time the option with respect to such stock is granted. If the Code is amended to provide for a different limitation from that set forth in this Section 2.2, such different limitation shall be deemed incorporated herein effective as of the date required or permitted by such amendment to the Code. If the Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 2.2, the Participant may designate which portion of such Option the Participant is exercising. In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Separate certificates representing each such portion shall be issued upon the exercise of the Option. (NOTE TO PARTICIPANT: If the aggregate Exercise Price of the Option (that is, the Exercise Price multiplied by the Number of Option Shares) plus the aggregate exercise price of any other Incentive Stock Options you hold (whether granted pursuant to the Plan or any other stock option plan of the Participating Company Group) is greater than US$100,000, you should contact the Chief Financial Officer of the Company to ascertain whether the entire Option qualifies as an Incentive Stock Option.)

3.Administration.

All questions of interpretation concerning the Grant Notice, this Option Agreement, the Plan or any other form of agreement or other document employed by the Company in the administration of the Plan or the Option shall be determined by the Committee. All such determinations by the Committee shall be final, binding and conclusive upon all persons having an interest in the Option, unless fraudulent or made in bad faith. Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or the Option or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest in the Option. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election.

4.Exercise of the Option.

4.1Right to Exercise. Except as otherwise provided herein, the Option shall be exercisable prior to the termination of the Option (as provided in Section 6) in an amount not to exceed the number of Vested Shares less the number of shares previously acquired upon exercise of the Option. In no event shall the Option be exercisable for more shares than the Number of Option Shares, as adjusted pursuant to Section 9.

4.2Method of Exercise. Exercise of the Option shall be by means of electronic or written notice (the “Exercise Notice”) in a form authorized by the Company. An electronic Exercise Notice must be digitally signed or authenticated by the Participant in such manner as required by the notice and transmitted to the Company or an authorized representative of the Company (including a third-party administrator designated by the Company). In the event that the Participant is not authorized or is unable to provide an electronic Exercise Notice, the Option shall be exercised by a written Exercise Notice addressed to the Company, which shall be signed by the Participant and delivered in person, by certified or registered mail, return receipt requested, by confirmed electronic transmission, or by such other means as

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the Company may permit, to the Company, or an authorized representative of the Company (including a third-party administrator designated by the Company). Each Exercise Notice, whether electronic or written, must state the Participant’s election to exercise the Option, the number of whole Common Shares for which the Option is being exercised and such other representations and agreements as to the Participant’s investment intent with respect to such shares as may be required pursuant to the provisions of this Option Agreement. Further, each Exercise Notice must be received by the Company prior to the termination of the Option as set forth in Section 6 and must be accompanied by full payment of the aggregate Exercise Price for the number of Common Shares being purchased. The Option shall be deemed to be exercised upon receipt by the Company of such electronic or written Exercise Notice and the aggregate Exercise Price.

4.3Payment of Exercise Price.

(a)Forms of Consideration Authorized. Except as otherwise provided below, payment of the aggregate Exercise Price for the number of Common Shares for which the Option is being exercised shall be made (i) by check or in cash equivalent; (ii) if permitted by the Company and subject to the limitations contained in Section 4.3(b), by means of (1) a Cashless Exercise, (2) a Net-Exercise, (3) Surrender, or (4) by such other consideration as may be approved by the Committee from time to time to the extent ‎permitted by Applicable Law‎; or (iii) by any combination of the foregoing.

(b)Limitations on Forms of Consideration. The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedure providing for payment of the Exercise Price through any of the means described below, including with respect to the Participant notwithstanding that such program or procedures may be available to others.

(i)Cashless Exercise. A “Cashless Exercise” means the delivery of a properly executed Exercise Notice together with irrevocable instructions to a broker in a form acceptable to the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to Common Shares acquired upon the exercise of the Option in an amount not less than the aggregate Exercise Price for such shares (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System).

(ii)Net-Exercise. A “Net-Exercise” means the delivery of a properly executed Exercise Notice electing a procedure pursuant to which (1) the Company will reduce the number of shares otherwise issuable to the Participant upon the exercise of the Option by the largest whole number of shares having a Fair Market Value that does not exceed the aggregate Exercise Price for the shares with respect to which the Option is exercised, and (2) the Participant shall pay to the Company in cash the remaining balance of such aggregate Exercise Price not satisfied by such reduction in the number of whole shares to be issued. Following a Net-Exercise, the number of shares remaining subject to the Option, if any, shall be reduced by the sum of (1) the net number of shares issued to the Participant upon such exercise, and (2) the number of shares deducted by the Company for payment of the aggregate Exercise Price.

(iii)Surrender. A “Surrender” means the surrendering of an Option with delivery of a properly endorsed Surrender Notice to the Company, pursuant to which the Participant indicates an election to receive a cash payment equal to the difference, per Option surrendered, between the Exercise Price and the Fair Market Value of the underlying shares, which Surrender Notice is subject to acceptance by the Board in its sole discretion, and provided that arrangements satisfactory to the Company have been made to pay any applicable withholding taxes.

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4.4Tax Withholding.

(a)In General. At the time the Option is exercised, in whole or in part, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums required to satisfy the federal, provincial, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company Group, if any, which arise in connection with the Option. The Company shall have no obligation to deliver Common Shares until the tax withholding obligations of the Participating Company Group have been satisfied by the Participant.

(b)Withholding in Shares. The Company shall have the right, but not the obligation, to require the Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations upon exercise of the Option by deducting from the Common Shares otherwise issuable to the Participant upon such exercise a number of whole shares having a Fair Market Value, as determined by the Company as of the date of exercise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates if required to avoid liability classification of the Option under the accounting principles adopted and used by the Company from time to time.  

4.5Beneficial Ownership of Shares; Certificate Registration. The Participant hereby authorizes the Company, in its sole discretion, to deposit for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has notice any or all shares acquired by the Participant pursuant to the exercise of the Option. Except as provided by the preceding sentence, a certificate or direct registration statement (DRS) for the shares as to which the Option is exercised shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

4.6Restrictions on Grant of the Option and Issuance of Shares. The grant of the Option and the issuance of Common Shares upon exercise of the Option shall be subject to compliance with all applicable requirements of federal, provincial, state or foreign law with respect to such securities. The Option may not be exercised if the issuance of Common Shares upon exercise would constitute a violation of any applicable federal, provincial, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Shares may then be listed. In addition, the Option may not be exercised unless (i) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option, or (ii) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of the Option, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

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4.7Fractional Shares. The Company shall not be required to issue fractional shares upon the exercise of the Option.

5.Nontransferability of the Option.

During the lifetime of the Participant, the Option shall be exercisable only by the Participant or the Participant’s guardian or legal representative. The Option shall not be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution. Following the death of the Participant, the Option, to the extent provided in Section 7, may be exercised by the Participant’s legal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

6.Termination of the Option.

The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of business on the Option Expiration Date, (b) the close of business on the last date for exercising the Option following termination of the Participant’s Service as described in Section 7, or (c) a Change in Control to the extent provided in Section 8.

7.Effect of Termination of Service.

7.1Option Exercisability. The Option shall terminate immediately upon the Participant’s termination of Service to the extent that it is then unvested and shall be exercisable after the Participant’s termination of Service to the extent it is then vested only during the applicable time period as determined below and thereafter shall terminate.

(a)Disability. If the Participant’s Service terminates because of the Disability of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant (or the Participant’s guardian or legal representative) at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

(b)Death. If the Participant’s Service terminates because of the death of the Participant, the Option, to the extent unexercised and exercisable for Vested Shares on the date on which the Participant’s Service terminated, may be exercised by the Participant’s legal representative or other person who acquired the right to exercise the Option by reason of the Participant’s death at any time prior to the expiration of twelve (12) months after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date. The Participant’s Service shall be deemed to have terminated on account of death if the Participant dies within three (3) months after the Participant’s termination of Service.

(c)Termination for Cause. Notwithstanding any other provision of this Option Agreement to the contrary, if the Participant’s Service is terminated for Cause or if, following the Participant’s termination of Service and during any period in which the Option otherwise would remain exercisable, the Participant engages in any act that would constitute Cause, the Option shall terminate in its entirety and cease to be exercisable immediately upon such termination of Service or act.

(d)Other Termination of Service. If the Participant’s Service terminates for any reason, except Disability, death or Cause, the Option, to the extent unexercised and exercisable for Vested Shares by the Participant on the date on which the Participant’s Service terminated, may be exercised by

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the Participant at any time prior to the expiration of thirty (30) days after the date on which the Participant’s Service terminated, but in any event no later than the Option Expiration Date.

7.2Extension if Exercise Prevented by Law. Notwithstanding the foregoing, other than termination of the Participant’s Service for Cause and subject to compliance with Applicable Law, if the exercise of the Option within the applicable time periods set forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option shall remain exercisable until the later of (a) thirty (30) days after the date such exercise first would no longer be prevented by such provisions, or (b) the end of the applicable time period under Section 7.1, but in any event no later than the Option Expiration Date.

7.3Black-Out Period Extension for Canadian Participants. If the Participant is a Canadian Participant, then, notwithstanding any provision of the Option Agreement to the contrary, should the Option Expiration Date fall within a Black-Out Period, such Option Expiration Date shall be ‎automatically extended without any ‎further act or formality to that date which is the 10th business day ‎after the end of the Black-Out Period, and such ‎‎10th business day shall be considered the expiration date of the Option for all purposes under the Plan and this Option Agreement, provided that the automatic extension of the Option Expiration Date will not be permitted where the Participant or the Company is subject to a cease trade order (or similar order under applicable securities laws) in respect of the Company’s securities.‎

8.Effect of Change in Control.

In the event of a Change in Control, the Option shall be subject to the definitive agreement entered into by the Company in connection with the Change in Control. Except to the extent that the Committee determines to cancel the award in accordance with Section 13(d) of the Plan or cash out the Option in accordance with Section 13.1(e) of the Plan, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the Option or substitute for all or any portion of the Option a substantially equivalent option for the Acquiror’s stock. For purposes of this Section, the Option or any portion thereof shall be deemed assumed if, following the Change in Control, the Option confers the right to receive, subject to the terms and conditions of the Plan and this Option Agreement, for each Common Share subject to such portion of the Option immediately prior to the Change in Control, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a Common Share on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Common Shares); provided, however, that if such consideration is not solely common stock of the Acquiror, the Committee may provide for the consideration to be received upon the exercise of the Option, for each Common Share subject to the Option, to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Common Shares pursuant to the Change in Control; provided further that the Committee may, in its discretion, determine that an Option shall or shall not be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, earnouts and similar conditions as the other holders of the Common Shares, subject to any limitations or reductions as may be necessary to comply with Section 409A or Section 424 of the Code. The Option shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that the Option is neither assumed or continued by the Acquiror in connection with the Change in Control nor exercised as of the time of the Change in Control.

9.Adjustments for Changes in Capital Structure.

Subject to any required action by the shareholders of the Company, and, in the ‎case of a U.S. Participant, the requirements of Sections 409A and 424 of the Code, in each case, to the extent

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applicable, in the event of any change in the Common Shares effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the shareholders of the Company in a form other than Common Shares (excepting normal cash dividends) that has a material effect on the Fair Market Value of Common Shares, appropriate and proportionate adjustments shall be made in the number, Exercise Price and kind of shares subject to the Option, in order to prevent dilution or enlargement of the Participant’s rights under the Option. For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.” Any fractional share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number and the Exercise Price shall be rounded up to the nearest whole cent. In no event may the Exercise Price be decreased to an amount less than the par value, if any, of the stock subject to the Option. The Committee in its sole discretion, may also make such adjustments in the terms of the Option to reflect, or related to, such changes in the capital structure of the Company or distributions as it deems appropriate. All adjustments pursuant to this Section shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.Rights as a Shareholder, Director, Employee or Service Provider.

The Participant shall have no rights as a shareholder with respect to any shares covered by the Option until the date of the issuance of the shares for which the Option has been exercised (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the shares are issued, except as provided in Section 9. If the Participant is an Employee, the Participant understands and acknowledges that, except as ‎otherwise provided in a separate, written employment agreement between a Participating ‎Company and the Participant, the Participant’s employment is for no specified term and, in the ‎case of a U.S. Participant, is “at will”.  Nothing in this Option Agreement shall confer upon the ‎Participant any right to continue in the Service of a Participating Company or interfere in any ‎way with any right of the Participating Company Group to terminate the Participant’s Service as a Director, an Employee or Service Provider, as the case may be, at any time. If the Participant is a Canadian Participant, the Participant’s participation in the Plan is ‎‎“voluntary”, in the sense that the ‎Participant is not ‎required to purchase or participate in the Plan ‎with the expectation of (i) ‎employment or continued ‎employment, in the case that the Participant ‎that is an Employee, (ii) appointment, employment, ‎continued appointment or continued ‎employment, in ‎the case that the Participant that is an Officer, or (iii) engagement or ‎continued ‎engagement, in the case that the Participant ‎that is a Service Provider.‎

11.Notice of Sales Upon Disqualifying Disposition.

11.1The Participant shall dispose of the shares acquired pursuant to the Option only in accordance with the provisions of this Option Agreement.

11.2In addition, if the Grant Notice designates this Option as an Incentive Stock Option, the Participant shall (a) promptly notify the Chief Financial Officer of the Company if the Participant disposes of any of the shares acquired pursuant to the Option within one (1) year after the date the Participant exercises all or part of the Option or within two (2) years after the Date of Grant and (b) provide the Company with a description of the circumstances of such disposition. Until such time as the Participant disposes of such shares in a manner consistent with the provisions of this Option Agreement, unless otherwise expressly authorized by the Company, the Participant shall hold all shares acquired pursuant to the Option in the Participant’s name (and not in the name of any nominee) for the one-year

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period immediately after the exercise of the Option and the two-year period immediately after Date of Grant. At any time during the one-year or two-year periods set forth above, the Company may place a legend on any certificate representing shares acquired pursuant to the Option requesting the transfer agent for the Company’s stock to notify the Company of any such transfers. The obligation of the Participant to notify the Company of any such transfer shall continue notwithstanding that a legend has been placed on the certificate pursuant to the preceding sentence. In no case may this Option be designated as an Incentive Stock Options if the Participant is a Canadian Participant.

12.Legends.

The Company may at any time place legends referencing any applicable federal, provincial, state or foreign securities law restrictions on all certificates representing Common Shares subject to the provisions of this Option Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to the Option in the possession of the Participant in order to carry out the provisions of this Section.

In the event that the Participant is a U.S. Participant, unless otherwise specified by the Company, legends placed on such certificates may include, but shall not be limited to, the following:

“THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE REGISTERED HOLDER UPON EXERCISE OF AN INCENTIVE STOCK OPTION AS DEFINED IN SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (“ISO”). IN ORDER TO OBTAIN THE PREFERENTIAL TAX TREATMENT AFFORDED TO ISOs, THE SHARES SHOULD NOT BE TRANSFERRED WITHIN ONE (1) YEAR AFTER THE DATE THE PARTICIPANT EXERCISES ALL OR PART OF THE OPTION NOR WITHIN TWO (2) YEARS AFTER THE DATE OF GRANT. SHOULD THE REGISTERED HOLDER ELECT TO TRANSFER ANY OF THE SHARES PRIOR TO THIS DATE AND FOREGO ISO TAX TREATMENT, THE TRANSFER AGENT FOR THE SHARES SHALL NOTIFY THE CORPORATION IMMEDIATELY. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE INCENTIVE STOCK OPTION IN THE REGISTERED HOLDER’S NAME (AND NOT IN THE NAME OF ANY NOMINEE) PRIOR TO THIS DATE OR UNTIL TRANSFERRED AS DESCRIBED ABOVE.”

13.Miscellaneous Provisions.

13.1Termination or Amendment. The Committee may terminate or amend the Plan or the Option at any time; provided, however, that except as provided in Section 8 in connection with a Change in Control, no such termination or amendment may have a materially adverse effect on the Option or any unexercised portion thereof without the consent of the Participant unless such termination or amendment is necessary to comply with any applicable law or government regulation. No amendment or addition to this Option Agreement shall be effective unless in writing.

13.2Further Instruments. The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Option Agreement.

13.3Binding Effect. This Option Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

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13.4Delivery of Documents and Notices. Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Option Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)Description of Electronic Delivery and Signature. The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Option Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to the Participant electronically. In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice and Exercise Notice called for by Section 4.2 to the Company or to such third party involved in administering the Plan as the Company may designate from time to time. Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company. Any and all such documents and notices may be electronically signed.

(b)Consent to Electronic Delivery and Signature. The Participant acknowledges that the Participant has read Section 13.4(a) of this Option Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice and Exercise Notice, as described in Section 13.4(a). The Participant agrees that any and all such documents requiring a signature may be electronically signed and that such electronic signature shall have the same effect as handwritten signature for the purposes of validity, enforceability and admissibility. The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing. The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails. Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails. The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.4(a) or may change the electronic mail address to which such documents are to be delivered (if the Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail. Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.4(a).

13.5Integrated Agreement. The Grant Notice, this Option Agreement and the Plan shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter. To the extent contemplated herein, the provisions of the Grant Notice, the Option Agreement and the Plan shall survive any exercise of the Option and shall remain in full force and effect.

13.6Applicable Law. Except to the extent governed by applicable United States, this Option Agreement shall be governed by the laws of the Province of British Columbia and the federal laws of Canada, without regard to their conflict of law rules.

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13.7Counterparts. The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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EX-10.8(2)

Exhibit 10.8.2

QUIPT HOME MEDICAL CORP.

RESTRICTED SHARE UNITS AGREEMENT

Quipt Home Medical Corp. has granted to the Participant named in the Notice of Grant of Restricted Share Units (the “Grant Notice”) to which this Restricted Share Units Agreement (the “Agreement”) is attached an Award consisting of Restricted Share Units (each a “Unit”) subject to the terms and conditions set forth in the Grant Notice and this Agreement.  The Award has been granted pursuant to and shall in all respects be subject to the terms and conditions of the Quipt Home Medical Corp. 2024 Equity Incentive Plan (the “Plan”), as amended to the Date of Grant, the provisions of which are incorporated herein by reference.  By signing the Grant Notice, the Participant: (a) acknowledges receipt of and represents that the Participant has read and is familiar with the Grant Notice, this Agreement, the Plan and a prospectus for the Plan prepared in connection with the registration with the Securities and Exchange Commission of the common shares in the capital of the Company (the “Common Shares”) issuable pursuant to the Award (the “Plan Prospectus”), (b) accepts the Award subject to all of the terms and conditions of the Grant Notice, this Agreement and the Plan and (c) agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Grant Notice, this Agreement or the Plan.

1.Definitions and Construction.

1.1Definitions.  Unless otherwise defined herein, capitalized terms shall have the meanings assigned to such terms in the Grant Notice or the Plan.

1.2Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of this Agreement.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.

2.Administration.

All questions of interpretation concerning the Grant Notice, this Agreement, the Plan or any other form of agreement or other document employed by the Company in the administration of the Plan or the Award shall be determined by the Committee.  All such determinations by the Committee shall be final, binding and conclusive upon all persons having an interest in the Award, unless fraudulent or made in bad faith.  Any and all actions, decisions and determinations taken or made by the Committee in the exercise of its discretion pursuant to the Plan or the Award or other agreement thereunder (other than determining questions of interpretation pursuant to the preceding sentence) shall be final, binding and conclusive upon all persons having an interest in the Award.  Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, or election.

3.The Award.

3.1Grant of Units.  On the Date of Grant, the Participant shall acquire, subject to the provisions of this Agreement, the Total Number of Units set forth in the Grant Notice, subject to adjustment as provided in Section 9.  Each Unit represents a right to receive on a date determined in accordance with the Grant Notice and this Agreement one (1) Common Share.

3.2No Monetary Payment Required.  The Participant is not required to make any monetary payment (other than applicable tax withholding, if any) as a condition to receiving the Units or Common Shares issued upon settlement of the Units, the consideration for which shall be past services actually rendered or future services to be rendered to a Participating Company or for its benefit.  Notwithstanding the foregoing, if required by applicable law, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the Fair Market Value of the Common Shares issued upon settlement of the Units.

4.Vesting of Units.

Units acquired pursuant to this Agreement shall become Vested Units as provided in the Grant Notice.  For purposes of determining the number of Vested Units following an Ownership Change Event, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after the Ownership Change Event. Notwithstanding anything to the contrary contained herein or in the Grant Notice, Units granted to a Canadian Participant for the purposes of the Tax Act must be settled no later than December 15th of the third calendar year following the year in which the Participant rendered Service resulting in the granting of such Units.

5.Company Reacquisition Right.

5.1Grant of Company Reacquisition Right.  In the event that the Participant’s Service terminates for any reason or no reason, with or without cause, the Participant shall forfeit and the Company shall automatically reacquire all Units which are not, as of the time of such termination (as determined and interpreted in accordance with the Plan), Vested Units (“Unvested Units”), and the Participant shall not be entitled to any payment therefor (the “Company Reacquisition Right”). Notwithstanding anything to the contrary set forth herein or in the Plan, any Units that remain subject to Vesting Conditions on the date which is twelve (12) months following termination for any reason shall automatically expire and be of no further force or effect.

5.2Ownership Change Event, Non-Cash Dividends, Distributions and Adjustments.  Upon the occurrence of an Ownership Change Event, a dividend or distribution to the shareholders of the Company paid in Common Shares or other property, or any other adjustment upon a change in the capital structure of the Company as described in Section 9, any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy) to which the Participant is entitled by reason of the Participant’s ownership of Unvested Units shall be immediately subject to the Company Reacquisition Right and included in the terms “Units” and “Unvested Units” for

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all purposes of the Company Reacquisition Right with the same force and effect as the Unvested Units immediately prior to the Ownership Change Event, dividend, distribution or adjustment, as the case may be.  For purposes of determining the number of Vested Units following an Ownership Change Event, dividend, distribution or adjustment, credited Service shall include all Service with any corporation which is a Participating Company at the time the Service is rendered, whether or not such corporation is a Participating Company both before and after any such event.

6.Settlement of the Award.

6.1Issuance of Common Shares.  Subject to the provisions of Section 6.3, the Company shall issue to the Participant on the Settlement Date with respect to each Vested Unit to be settled on such date one (1) Common Share.  The Settlement Date with respect to a Unit shall be the date specified by the Grant Notice (an “Original Settlement Date”); provided, however, that if the tax withholding obligations of a Participating Company, if any, will not be satisfied by the share withholding method described in Section 7.3 and the Original Settlement Date would occur on a date on which a sale by the Participant of the Common Shares to be issued in settlement of the Vested Units would violate the Trading Compliance Policy of the Company, then the Settlement Date for such Vested Units shall be deferred until the next day on which the sale of such shares would not violate the Trading Compliance Policy, but in any event on or before the last day of the calendar year of the Original Settlement Date.  Common Shares issued in settlement of Units shall not be subject to any restriction on transfer other than any such restriction as may be required pursuant to Section 6.3, Section 7 or the Company’s Trading Compliance Policy.

6.2Beneficial Ownership of Common Shares; Certificate Registration.  The Participant hereby authorizes the Company, in its sole discretion, to deposit any or all Common Shares acquired by the Participant pursuant to the settlement of the Award with the Company’s transfer agent, including any successor transfer agent, to be held in book entry form, or to deposit such Common Shares for the benefit of the Participant with any broker with which the Participant has an account relationship of which the Company has notice.  Except as provided by the foregoing, a certificate for the Common Shares acquired by the Participant shall be registered in the name of the Participant, or, if applicable, in the names of the heirs of the Participant.

6.3Restrictions on Grant of the Award and Issuance of Common Shares.  The grant of the Award and issuance of Common Shares upon settlement of the Award shall be subject to compliance with all applicable requirements of federal, provincial, state or foreign law with respect to such securities.  No Common Shares may be issued hereunder if the issuance of such Common Shares would constitute a violation of any applicable federal, provincial, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any Common Shares subject to the Award shall relieve the Company of any liability in respect of the failure to issue such Common Shares as to which such requisite authority shall not have been obtained.  As a condition to the settlement of the Award, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

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6.4Fractional Shares.  The Company shall not be required to issue fractional Common Shares upon the settlement of the Award.

7.Tax Withholding.

7.1In General.  At the time the Grant Notice is executed, or at any time thereafter as requested by a Participating Company, the Participant hereby authorizes withholding from payroll and any other amounts payable to the Participant, and otherwise agrees to make adequate provision for, any sums required to satisfy the federal, provincial, state, local and foreign tax (including any social insurance) withholding obligations of the Participating Company, if any, which arise in connection with the Award, the vesting of Units or the issuance of Common Shares in settlement thereof.  The Company shall have no obligation to deliver Common Shares until the tax withholding obligations of the Participating Company have been satisfied by the Participant.

7.2Assignment of Sale Proceeds.  Subject to compliance with applicable law and the Company’s Trading Compliance Policy, if permitted by the Company, the Participant may satisfy the Participating Company’s tax withholding obligations in accordance with procedures established by the Company providing for delivery by the Participant to the Company or a broker approved by the Company of properly executed instructions, in a form approved by the Company, providing for the assignment to the Company of the proceeds of a sale with respect to some or all of the Common Shares being acquired upon settlement of Units.

7.3Withholding in Shares.  The Company shall have the right, but not the obligation, to require the Participant to satisfy all or any portion of a Participating Company’s tax withholding obligations by deducting from the Common Shares otherwise deliverable to the Participant in settlement of the Award a number of whole Common Shares having a Fair Market Value, as determined by the Company as of the date on which the tax withholding obligations arise, not in excess of the amount of such tax withholding obligations determined by the applicable minimum statutory withholding rates if required to avoid liability classification of the Award under generally accepted accounting principles adopted and used by the Company from time to time.

8.Effect of Change in Control.

In the event of a Change in Control, the Award shall be subject to the definitive agreement entered into by the Company in connection with the Change in Control.  Except to the extent that the Committee determines to cancel the award in accordance with Section 13(d) of the Plan or cash out the Award in accordance with Section 13.1(e) of the Plan, the surviving, continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of the Participant, assume or continue in full force and effect the Company’s rights and obligations under all or any portion of the outstanding Units or substitute for all or any portion of the outstanding Units substantially equivalent rights with respect to the Acquiror’s stock.  For purposes of this Section, a Unit shall be deemed assumed if, following the Change in Control, the Unit confers the right to receive, subject to the terms and conditions of the Plan and this Agreement, the consideration (whether stock, cash, other securities or property or a combination thereof) to which a holder of a Common Share on the effective date of the Change in Control was entitled (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Common Shares); provided,

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however, that if such consideration is not solely common stock of the Acquiror, the Committee may provide for the consideration to be received upon settlement of the Unit to consist solely of common stock of the Acquiror equal in Fair Market Value to the per share consideration received by holders of Stock pursuant to the Change in Control; provided further that the Committee may, in its discretion, determine that a Unit shall or shall not be subject to the same post-closing purchase price adjustments, escrow terms, offset rights, holdback terms, earnouts and similar conditions as the other holders of the Common Shares, subject to any limitations or reductions as may be necessary to comply with Section 409A or Section 424 of the Code.  The Award shall terminate and cease to be outstanding effective as of the time of consummation of the Change in Control to the extent that Units subject to the Award are neither assumed or continued by the Acquiror in connection with the Change in Control nor settled as of the time of the Change in Control.

9.Adjustments for Changes in Capital Structure.

Subject to any required action by the shareholders of the Company, and, in the case of a U.S. Participant, the requirements of Section 409A of the Code, in each case, to the extent applicable, in the event of any change in the Stock effected without receipt of consideration by the Company, whether through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the shareholders of the Company in a form other than Stock (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy) that has a material effect on the Fair Market Value of Common Shares, appropriate and proportionate adjustments shall be made in the number of Units subject to the Award and/or the number and kind of shares or other property to be issued in settlement of the Award, in order to prevent dilution or enlargement of the Participant’s rights under the Award.  For purposes of the foregoing, conversion of any convertible securities of the Company shall not be treated as “effected without receipt of consideration by the Company.”  Any and all new, substituted or additional securities or other property (other than regular, periodic cash dividends paid on Stock pursuant to the Company’s dividend policy) to which the Participant is entitled by reason of ownership of Units acquired pursuant to this Award will be immediately subject to the provisions of this Award on the same basis as all Units originally acquired hereunder.  Any fractional Unit or share resulting from an adjustment pursuant to this Section shall be rounded down to the nearest whole number.  Such adjustments shall be determined by the Committee, and its determination shall be final, binding and conclusive.

10.Rights as a Shareholder, Director, Employee or Service Provider.

The Participant shall have no rights as a shareholder with respect to any Common Shares which may be issued in settlement of this Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company).  No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date the Common Shares are issued, except as provided in Section 9.  If the Participant is an Employee, the Participant understands and acknowledges that, except as ‎‎otherwise provided in a separate, written employment agreement between a Participating ‎Company ‎and the Participant, the Participant’s employment is for no specified term and, in the ‎case of a U.S. ‎Participant, is “at will”.  Nothing in this Agreement shall

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confer upon the ‎Participant any ‎right to continue in the Service of a Participating Company or interfere in any ‎way with any right of ‎the Participating Company Group to terminate the Participant’s Service as a Director, an Employee ‎or Service Provider, as the case may be, at any time. If the Participant is a Canadian Participant, the ‎Participant’s participation in the Plan is ‎‎“voluntary”, in the sense that the ‎Participant is not ‎required ‎to purchase or participate in the Plan ‎with the expectation of (i) ‎employment or continued ‎‎employment, in the case that the Participant ‎that is an Employee, (ii) appointment, employment, ‎‎continued appointment or continued ‎employment, in ‎the case that the Participant that is an Officer, ‎or (iii) engagement or ‎continued ‎engagement, in the case that the Participant ‎that is a Service ‎Provider‎.

11.Legends.

The Company may at any time place legends referencing any applicable federal, provincial, state or foreign securities law restrictions on all certificates representing Common Shares issued pursuant to this Agreement.  The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing Common Shares acquired pursuant to this Award in the possession of the Participant in order to carry out the provisions of this Section.

12.Compliance with Section 409A - U.S. Participants.

The entirety of this Section 12 only applies in the event that the Participant constitutes a U.S. Participant. It is intended that any election, payment or benefit which is made or provided pursuant to or in connection with this Award that may result in Section 409A Deferred Compensation shall comply in all respects with the applicable requirements of Section 409A (including applicable regulations or other administrative guidance thereunder, as determined by the Committee in good faith) to avoid the unfavorable tax consequences provided therein for non-compliance.  In connection with effecting such compliance with Section 409A, the following shall apply:

12.1Separation from Service; Required Delay in Payment to Specified Employee.  Notwithstanding anything set forth herein to the contrary, no amount payable pursuant to this Agreement on account of the Participant’s termination of Service which constitutes a “deferral of compensation” within the meaning of the Treasury Regulations issued pursuant to Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless and until the Participant has incurred a “separation from service” within the meaning of the Section 409A Regulations.  Furthermore, to the extent that the Participant is a “specified employee” within the meaning of the Section 409A Regulations as of the date of the Participant’s separation from service, no amount that constitutes a deferral of compensation which is payable on account of the Participant’s separation from service shall be paid to the Participant before the date (the “Delayed Payment Date”) which is the first day of the seventh month after the date of the Participant’s separation from service or, if earlier, the date of the Participant’s death following such separation from service.  All such amounts that would, but for this Section, become payable prior to the Delayed Payment Date will be accumulated and paid on the Delayed Payment Date.

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12.2Other Changes in Time of Payment.  Neither the Participant nor the Company shall take any action to accelerate or delay the payment of any benefits under this Agreement in any manner which would not be in compliance with the Section 409A Regulations.

12.3Amendments to Comply with Section 409A; Indemnification.  Notwithstanding any other provision of this Agreement to the contrary, the Company is authorized to amend this Agreement, to void or amend any election made by the Participant under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with the Section 409A Regulations without prior notice to or consent of the Participant.  The Participant hereby releases and holds harmless the Company, its directors, officers and shareholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Participant in connection with the Award, including as a result of the application of Section 409A.

12.4Advice of Independent Tax Advisor.  The Company has not obtained a tax ruling or other confirmation from the Internal Revenue Service with regard to the application of Section 409A to the Award, and the Company does not represent or warrant that this Agreement will avoid adverse tax consequences to the Participant, including as a result of the application of Section 409A to the Award.  The Participant hereby acknowledges that he or she has been advised to seek the advice of his or her own independent tax advisor prior to entering into this Agreement and is not relying upon any representations of the Company or any of its agents as to the effect of or the advisability of entering into this Agreement.

13.Miscellaneous Provisions.

13.1Termination or Amendment.  The Committee may terminate or amend the Plan or this Agreement at any time; provided, however, that except as provided in Section 8 in connection with a Change in Control, no such termination or amendment may have a materially adverse effect on the Participant’s rights under this Agreement without the consent of the Participant unless such termination or amendment is necessary to comply with applicable law or government regulation, including but not limited to, in the case of a U.S. Participant, Section 409A.  No amendment or addition to this Agreement shall be effective unless in writing.

13.2Nontransferability of the Award.  Prior to the issuance of Common Shares on the applicable Settlement Date, neither this Award nor any Units subject to this Award shall be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or the Participant’s beneficiary, except transfer by will or by the laws of descent and distribution.  All rights with respect to the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

13.3Further Instruments.  The parties hereto agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

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13.4Binding Effect.  This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer set forth herein, be binding upon the Participant and the Participant’s heirs, executors, administrators, successors and assigns.

13.5Delivery of Documents and Notices.  Any document relating to participation in the Plan or any notice required or permitted hereunder shall be given in writing and shall be deemed effectively given (except to the extent that this Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, electronic delivery at the e-mail address, if any, provided for the Participant by a Participating Company, or upon deposit in the U.S. Post Office or foreign postal service, by registered or certified mail, or with a nationally recognized overnight courier service, with postage and fees prepaid, addressed to the other party at the address of such party set forth in the Grant Notice or at such other address as such party may designate in writing from time to time to the other party.

(a)Description of Electronic Delivery and Signature.  The Plan documents, which may include but do not necessarily include: the Plan, the Grant Notice, this Agreement, the Plan Prospectus, and any reports of the Company provided generally to the Company’s shareholders, may be delivered to the Participant electronically.  In addition, if permitted by the Company, the Participant may deliver electronically the Grant Notice to the Company or to such third party involved in administering the Plan as the Company may designate from time to time.  Such means of electronic delivery may include but do not necessarily include the delivery of a link to a Company intranet or the Internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other means of electronic delivery specified by the Company.  Any and all such documents and notices may be electronically signed.

(b)Consent to Electronic Delivery and Signature.  The Participant acknowledges that the Participant has read Section 13.5(a) of this Agreement and consents to the electronic delivery of the Plan documents and, if permitted by the Company, the delivery of the Grant Notice, as described in Section 13.5(a).  The Participant agrees that any and all such documents requiring a signature may be electronically signed and that such electronic signature shall have the same effect as handwritten signature for the purposes of validity, enforceability and admissibility.  The Participant acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Participant by contacting the Company by telephone or in writing.  The Participant further acknowledges that the Participant will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails.  Similarly, the Participant understands that the Participant must provide the Company or any designated third party administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.  The Participant may revoke his or her consent to the electronic delivery of documents described in Section 13.5(a) or may change the electronic mail address to which such documents are to be delivered (if Participant has provided an electronic mail address) at any time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic mail.  Finally, the Participant understands that he or she is not required to consent to electronic delivery of documents described in Section 13.5(a).

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13.6Integrated Agreement.  The Grant Notice, this Agreement and the Plan shall constitute the entire understanding and agreement of the Participant and the Participating Company Group with respect to the subject matter contained herein or therein and supersede any prior agreements, understandings, restrictions, representations, or warranties among the Participant and the Participating Company Group with respect to such subject matter.  To the extent contemplated herein or therein, the provisions of the Grant Notice, this Agreement and the Plan shall survive any settlement of the Award and shall remain in full force and effect.

13.7Applicable Law.  Except to the extent governed by applicable United States, this Option Agreement shall be governed by the laws of the Province of British Columbia and the federal laws of Canada, without regard to their conflict of law rules.

13.8Counterparts.  The Grant Notice may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

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EX-10.9

Exhibit 10.9

INDEMNITY AGREEMENT

DATED this [X] day of [X], [X].

BETWEEN:

QUIPT HOME MEDICAL CORP., a corporation amalgamated under the laws of the Province of British Columbia

(hereinafter referred to as the “Indemnifier”)

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[X], an individual residing in the [X]

(hereinafter referred to as the “Indemnified Party”).

WHEREAS the Indemnified Party has been elected and/or appointed a director and/or officer of the Indemnifier;

AND WHEREAS the Indemnifier desires to indemnify the Indemnified Party in certain circumstances in respect of liability which the Indemnified Party may incur as a result of such Indemnified Party acting as the director and/or officer of the Indemnifier;

NOW THEREFORE, IN CONSIDERATION OF the premises and mutual covenants herein contained, and in consideration of the sum of One Dollar ($1.00) paid by the Indemnified Party to the Indemnifier (the receipt of which is hereby acknowledged) and in consideration of the Indemnified Party acting as the director and/or officer of the Indemnifier, the Indemnifier and the Indemnified Party do hereby covenant and agree as follows:

1. Indemnification

(a) To the full extent allowed by applicable law, the Indemnifier irrevocably agrees to indemnify and save harmless the Indemnified Party, his or her heirs, successors and legal representatives from and against any and all damages, liabilities, losses, costs, charges and expenses suffered or incurred at any time by the Indemnified Party, his or her heirs, successors or legal representatives as a result or by reason of the Indemnified Party acting as the director and/or officer of the Indemnifier or by reason of any action taken or not taken by such Indemnified Party in such capacity, including without limitation, any liability arising under applicable corporate and securities legislation or otherwise, and including any costs, charges and expenses the Indemnified Party may incur in enforcing this Agreement, provided that such damages, liabilities, losses, costs, charges or expenses were not suffered or incurred as a direct result of such Indemnified Party’s own gross negligence, fraud, dishonesty or wilful default.

(b) The Indemnifier irrevocably agrees:

(i) except in respect of an action by or on behalf of the Indemnifier to procure a judgment in its favour, to indemnify the Indemnified Party and his or her heirs, successors and legal representatives against all damages, liabilities, losses, costs, charges, expenses, penalties and fines including an amount paid to settle an action where such settlement has been consented to by the Indemnifier, acting reasonably,

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cause of action, proceeding, claim or demand whatsoever or to satisfy a judgment, reasonably incurred by the Indemnified Party in respect of any civil, criminal, quasi criminal or administrative action or proceeding to which the Indemnified Party is made a party by reason of such Indemnified Party acting as the director and/or officer of the Indemnifier, if:

(1) the Indemnified Party acted honestly and in good faith with a view to the best interests of the Indemnifier; and

(2) in the case of a criminal, quasi criminal or administrative action or proceeding that is enforced by monetary penalty, the Indemnified Party had reasonable grounds for believing that the Indemnified Party’s conduct was lawful;

(ii) to indemnify the Indemnified Party and his or her heirs, successors and legal representatives in respect of an action by or on behalf of the Indemnifier to procure a judgment in its favour, to which the Indemnified Party is made a party by reason of such Indemnified Party acting as the director and/or officer of the Indemnifier against all costs, charges and expenses reasonably incurred by the Indemnified Party in connection with the action if the Indemnified Party has fulfilled the conditions set forth in Clauses 1(b)(i)(1) and (2) set out above and if the Indemnifier obtains the approval of a court of competent jurisdiction to grant such indemnity;

(iii) in the event that the approval of a court of competent jurisdiction is required to effect any indemnification granted hereunder, the Indemnifier agrees to make application at its expense for and use its best efforts to obtain the court’s approval to such indemnification provided that the Indemnified Party has fulfilled the conditions set forth in Clauses 1(b)(i)(1) and (2) herein;

(iv) notwithstanding Clauses 1(b)(i) and (ii) above, to indemnify the Indemnified Party and his or her heirs, successors and legal representatives in respect of all costs, charges and expenses reasonably incurred by the Indemnified Party in connection with the defence of any civil, criminal, quasi criminal or administrative action or proceeding to which the Indemnified Party is made a party by reason of such Indemnified Party acting as the director and/or officer of the Indemnifier, if the Indemnified Party:

(1) was substantially successful on the merits in such Indemnified Party’s defence of the action or proceeding; and

(2) fulfills the conditions set out in Clauses 1(b)(i)(1) and (2) set out above; and

(v) to indemnify the Indemnified Party and his or her heirs, successors and legal representatives in respect of all costs, charges and expenses reasonably incurred by the Indemnified Party in connection with defence of any threatened civil, criminal, quasi criminal or administrative action or proceeding or alleged wrongdoing (or settlement thereof with the consent of the Indemnifier acting reasonably) against the Indemnified Party by reason of such Indemnified Party acting as the director and/or officer of the Indemnifier.

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(c) For the purposes of this Agreement, the termination of any action, claim, demand or proceeding by judgement, order, settlement, conviction, plea or similar or other result shall not, of itself, create a presumption either that the Indemnified Party did not act honestly or in good faith with a view to the best interests of the Indemnifier or that, in the case of a criminal, quasi criminal or administrative action or proceeding that is enforced by a monetary penalty, the Indemnified Party did not have reasonable grounds for believing that his conduct was lawful.

(d) Without limiting the generality of the foregoing and notwithstanding anything contained herein:

(i) nothing in this Agreement shall be interpreted, by implication or otherwise, in limitation of the scope of the indemnification provided in Subsections 1(a) and (b) hereof; and

(ii) Subsection 1(b) is intended to provide indemnification to the Indemnified Party to the fullest extent permitted by applicable laws (the “Applicable Laws”) and, in the event that such Applicable Laws or the interpretation thereof are amended to permit a broader scope of indemnification (including, without limitation, the deletion or limiting of one or more of the provisos to the applicability of indemnification), Subsection 1(b) shall be deemed to be amended concurrently with such amendment to the Applicable Law so as to provide such broader indemnification.

2. Prepaid Expenses

To the full extent allowed by applicable law, all costs, charges and expenses reasonably incurred by the Indemnified Party in investigating, defending or appealing any civil, criminal, quasi criminal or administrative action or proceeding, actual or threatened, covered hereunder shall, at the request of such Indemnified Party, be paid by the Indemnifier in advance or promptly reimbursed if paid by the Indemnified Party as may be appropriate to enable the Indemnified Party to properly investigate, defend or appeal such action or proceeding, with the understanding and agreement being herein made that, in the event it is ultimately determined as provided hereunder that the Indemnified Party was not entitled to be so indemnified, or was not entitled to be fully so indemnified, that the Indemnified Party shall indemnify and hold harmless the Indemnifier, and pay to the Indemnifier forthwith after such ultimate determination such amount or the appropriate portion thereof, so paid in advance.

3. Other Rights and Remedies

Indemnification and advance payment of costs, charges and expenses as provided by this Agreement shall not be deemed to derogate from or exclude any other rights to which the Indemnified Party may be entitled under any provision of the Applicable Laws or otherwise at law, as the same may be amended from time to time, this Agreement, the Articles of the Indemnifier, any vote of shareholders of the Indemnifier, or otherwise, both as to matters arising out of the Indemnified Party’s position as the director and/or officer of the Indemnifier, or as to matters arising out of another capacity with the Indemnifier. The Indemnifier hereby agrees that it will not amend its Articles in any way that will be inconsistent with this Agreement.

4. Notice of Proceedings

The Indemnified Party agrees to give notice to the Indemnifier promptly after being served with any statement of claim, writ, notice of motion, indictment or other document commencing or continuing

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any civil, criminal, quasi criminal or administrative action or proceeding against the Indemnified Party, or receiving notice of any threatened civil, criminal, quasi criminal or administrative action or proceeding or alleged wrongdoing against the Indemnified Party, and in respect of which the Indemnified Party is entitled to be indemnified hereunder and the Indemnifier agrees to give notice to the Indemnified Party in writing within seven days of (a) being served with any such statement of claim, writ, notice of motion, indictment or other document commencing or continuing any civil, criminal, quasi criminal or administrative action or proceeding naming the Indemnified Party as a party, or (b) receiving notice of any such threatened civil, criminal, quasi criminal or administrative action or proceeding or alleged wrongdoing against the Indemnified Party.

The Indemnifier further agrees to promptly retain counsel, who shall be reasonably satisfactory to the Indemnified Party, to represent the Indemnified Party in any such matter.

5. Right to Retain Other Counsel

In any such matter the Indemnified Party shall have the right to retain other counsel to act on such Indemnified Party’s behalf, provided that the fees and disbursements of such other counsel shall be paid by such Indemnified Party unless (a) such Indemnified Party and the Indemnifier shall have mutually agreed to the retention of such other counsel, (b) the Indemnifier shall not have taken up or assumed the defense of such action, claim, demand or proceeding and employed counsel within the prescribed time after notice of such action, claim, demand or proceeding from the Indemnified Party, or (c) the named parties to any such action, claim, demand or proceeding (including any added third, or interpleaded parties) include the Indemnifier and the Indemnified Party and, in the written opinion of the Indemnified Party’s counsel, a copy of which is provided to the Indemnifier, representation by the same counsel would be inappropriate due to actual or potential differing interests between them (including the availability of different defences), in which event the Indemnifier agrees to pay the reasonable fees and disbursements of such counsel (on a solicitor and his own client basis).

6. Tax Gross Up

If the Canada Revenue Agency or any provincial taxing authority, or the United States Internal Revenue Service or any state taxing authority, assesses the Indemnified Party on the basis that any indemnity payment received must be included in computing the Indemnified Party’s income for tax purposes, then, unless the Indemnifier elects to dispute such assessment at its expense and is successful in reversing the assessment, the Indemnifier will make an additional payment or payments from time to time, at such times in such amounts as will ensure the Indemnified Party is not out-of-pocket, to the Indemnified Party to fully ensure that, taking into account any income inclusion required in respect of any indemnity payment or such additional payment or payments, the Indemnified Party is after receiving such additional payment or payments, fully compensated for any actual tax liability (including any interest or penalty), or for the use of losses, deductions, credits or similar amounts used in offsetting an income inclusion or other assessed amounts relating to any indemnity payment or to any additional payment made under this Agreement.

7. Enforcement of Claim

If any claim arising from any right to indemnification conferred by the Indemnifier upon the Indemnified Party pursuant to this Agreement is not paid in full by the Indemnifier within 30 days after a written claim has been received by the Indemnifier, the Indemnified Party may, at any time thereafter, bring suit against the Indemnifier to recover the unpaid amount of the claim and, if successful in whole or in part, the Indemnified Party will be entitled to be paid also the expense of prosecuting such claim.

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8. Insurance

(a) The Indemnifier shall use commercially reasonable efforts to obtain and at all times maintain a policy of insurance with respect to liability relating to its directors and officers, whether or not the Indemnifier would have the power to indemnify the Indemnified Party against such costs, charges, expenses, liabilities or losses under the applicable law, which policy shall (i) pursuant to its terms extend to the Indemnified Party in his capacity as director and/or officer of the Indemnifier and (ii) be written, to the extent commercially available, on an occurrence basis.

(b) In the event that the Indemnified Party is an insured under such policy and an insurable event occurs, the Indemnified Party will be indemnified promptly as agreed hereto regardless of whether the Indemnifier has received the insurance proceeds. The Indemnified Party is entitled to full indemnification as agreed hereto notwithstanding any deductible amounts or policy limits contained in any such insurance policy.

9. Indemnified Party to Cooperate

The Indemnified Party agrees to give the Indemnifier such information and cooperation as the Indemnifier may reasonably require from time to time in respect of all matters hereunder.

10. Notices

Any notice, document or other communication required or permitted by this Agreement to be given by a party hereto shall be in writing and is sufficiently given if delivered personally, or if sent by prepaid ordinary mail posted in Canada, or if transmitted by any form of telecommunication (which is tested prior to transmission, confirms to the sender the receipt of the entire transmission by the recipient and reproduces a complete written version of the transmission at the point of reception) to such party addressed as follows:

(a) if to the Indemnified Party, at:

[X]

Email: [X]

(b) if to the Indemnifier, at:

1019 Town Drive
Wilder, Kentucky 41076

Email: investorinfo@myquipt.com

Notice so mailed shall be deemed to have been given on the third business day (“Business Day”) means a day other than a Saturday, Sunday or any day other than Saturday or Sunday on which the principal commercial banks located at Toronto, Ontario are not open for business during normal banking hours) after deposit in a post office or public letterbox. Neither party shall mail any notice, request or other communication hereunder during any period in which Canadian postal workers are on strike or if such strike is imminent and may reasonably be anticipated to affect the normal delivery of mail. Notice transmitted by a form of recorded telecommunication during normal business hours on a Business Day (9:00 a.m. to 5:00 p.m. local time at the place of receipt) shall be deemed to have been given on the day of transmission or, in the case of notice transmitted outside of normal business hours shall be deemed to have been given on the first Business Day after the day of transmission; provided that immediately following such transmission

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such notice is given by personal delivery. Notice delivered personally shall be deemed to have been given on the day it was delivered. Any party may from time to time notify the others in the manner provided herein of any change of address which thereafter, until changed by like notice, shall be the address of such party for all purposes hereof.

11. Severability

If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, all portions of any paragraph of this Agreement containing such provisions held to be invalid, illegal or unenforceable that are not of themselves in whole invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and (b) to the fullest possible extent, the provisions of this Agreement (including, without limitation, all portions of any paragraphs of this Agreement containing any provisions held to be invalid, illegal or unenforceable, that are not of themselves in whole invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision which is held to be invalid, illegal or unenforceable.

12. Governing Law

The parties hereto agree that this Agreement shall be construed and enforced in accordance with the laws of the Province of Ontario and the laws of Canada applicable therein and shall be treated, in all respects, as a Ontario contract.

13. Modification and Waiver

No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

14. Entire Agreement

This Agreement shall supersede and replace any and all prior agreements (except any written agreement of employment between the Indemnifier and the Indemnified Party, which shall remain in full force and effect), except to the extent augmented or amended hereby, between the parties hereto respecting the specific subject matter set forth herein, and shall constitute the entire agreement between the parties hereto in respect of the specific subject matter set forth herein.

15. Survival; Successors and Assigns

The indemnification and advance payment of costs, charges and expenses as provided by, and granted pursuant to, this Agreement will continue if the Indemnified Party ceases to be the director and/or officer, employee or agent of the Indemnifier for any actions, proceedings, claims or demands whatsoever arising out of the Indemnified Party’s relationship with the Indemnifier and notwithstanding any action, proceeding, claim or demand is made, filed or threatened after the Indemnified Party terminates such relationship. This Agreement shall be binding upon and enure for the benefit of the Indemnifier and its successors and assigns and to the Indemnified Party and his or her estates, executors, administrators, legal representatives, lawful heirs, successors and assigns.

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16. Resignations Will Not Be Prevented

Nothing contained in this Agreement shall prevent the Indemnified Party from resigning at any time from any office that the Indemnified Party holds with the Indemnifier or otherwise holds at the request of the Indemnifier.

17. Successor Legislation

Any references herein to any enactment shall be deemed to be references to such enactment as the same may be amended or replaced from time to time.

18. Counterparts

For the convenience of the parties, this Agreement may be executed in several counterparts, each of which when so executed shall be, and be deemed to be, an original instrument and such counterparts together shall constitute one and the same instrument (and notwithstanding their date of execution shall be deemed to bear date as of the date of this Agreement). A signed facsimile, portable document format (PDF) or telecopied copy of this Agreement shall be effective and valid proof of execution and delivery.

19. Effective Date

For greater certainty, notwithstanding the date of execution hereof, the indemnities provided herein shall be effective as against the Indemnifier as of the date the Indemnified Party first was appointed or elected the director and/or officer of the Indemnifier.

IN WITNESS WHEREOF the parties hereto have executed this Agreement as at the date first written above.

Signed, sealed and delivered, in the presence of:	) ) ) ) ) ) )
Witness		[X]

QUIPT HOME MEDICAL CORP.
Per:
	Name:
	Title:
I have authority to bind the Corporation.

EX-19

Exhibit 19

QUIPT HOME MEDICAL CORP.

INSIDER TRADING POLICY

Effective as of October 1, 2024

Section 1.All Employees, Officers, Directors and their Family Members and Affiliates Are Subject to this Policy. This Insider Trading Policy (“Policy”) applies to all employees, directors, officers, and consultants of Quipt Home Medical Corp. (the “Company”) or its subsidiaries, their family members and entities over which such individuals have or share voting or investment control or otherwise exercise direction or control. This Policy also applies to any other person who receives material nonpublic information from any Company insider or is otherwise designated by the Compliance Officer. For purposes of this Policy, “family members” include people who live with you, or are financially dependent on you, and also include those whose transactions in securities are directed by you or are subject to your influence or control.

This Policy continues to apply following termination of employment or other relationship with the Company or any of its subsidiaries until after the second trading day that any material non-public information in your possession has become public or is no longer material. Each employee, officer, consultant and director is personally responsible for the actions of their family members and other persons with whom they have a relationship who are subject to this Policy, including any pre-clearances required.

Section 2.Trading in Company Securities While in Possession of Material Nonpublic Information is Prohibited. The purchase or sale of securities by any person who possesses material nonpublic information is a violation of applicable securities laws and stock exchange rules. It is important to avoid the appearance, as well as the fact, of trading based on material nonpublic information.

No person subject to this Policy who is aware of material nonpublic information relating to the Company may, directly or indirectly (through family members, other persons, entities or otherwise):

● buy, sell, or otherwise trade in the securities of the Company,

● advise anyone else to buy, sell, or otherwise trade in the securities of the Company; or

● otherwise engage in any action to take personal advantage of that information.

For purposes of this Policy, the term “trade” includes any transaction in Company securities, including gifts and pledges or any hedging or derivative transactions, or other transaction, agreement, arrangement or understanding, or material amendment or termination thereof, that would be ‎required to be reported in accordance with applicable laws or regulations ‎‎(including National Instrument 55-104 – Insider Reporting Requirements and ‎Exemptions (“NI 55-104”)).

Each person subject to this Policy may, from time to time, be required to forego a proposed transaction even if he or she planned to make the transaction before learning material nonpublic information and even though the person may suffer economic loss or forego anticipated profit by waiting.

Section 3.Trades May Occur Only During Open Trading Windows. Directors, officers and employees of the Company or any of its subsidiaries are only permitted to sell Company securities during an open “trading window.” The trading window generally opens following the close of trading on the second full trading day following the public issuance of the Company’s earnings release for the most recent fiscal quarter or fiscal year and closes on the last trading day of the then-current fiscal quarter or fiscal year. The Compliance Officer may advise directors, officers and employees of the Company and its subsidiaries when the trading window opens and closes; provided that such directors, officers and employees are charged with the knowledge of and responsible for their own compliance with this Policy in every situation. In addition to these regularly scheduled “closed” window periods, the Company may impose a special “blackout” period at its discretion due to the existence of material nonpublic information, as provided below. Even during an otherwise open trading window, directors, officers and employees of the Company and its subsidiaries are prohibited from trading in Company securities while in possession of material nonpublic information. Because this prohibition applies to actual trades, please note that merely placing a standing, limit or similar order at a time when you do not have material nonpublic information will not excuse a subsequent trade pursuant to that order fulfilled at a time when you do have material nonpublic information (unless the trade is made in compliance with Rule 10b5-1 (“Rule 10b5-1”) promulgated by the Securities and Exchange Commission (the “SEC”) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), or an “automatic plan” (referred to in Canadian securities legislation), as applicable, that has been approved by the Compliance Officer).

Section 4.Trading in Other Public Companies’ Securities While in Possession of Material Nonpublic Information is Prohibited. No person subject to this Policy who possesses material nonpublic information relating to other publicly traded companies, including our vendors, customers and partners, as a result of employment with the Company or the performance of services on our behalf, may, directly or indirectly (through family members, other persons, entities or otherwise) buy or sell securities of such companies, or advise anyone else to do so, or otherwise engage in any action to take personal advantage of that information.

Section 5.Certain Types of Transactions Are Prohibited.

● Short Sales. Short sales of Company securities are prohibited, as short sales evidence the seller’s expectation that Company securities will decline in value, signal to the market that the seller has no confidence in the Company or its short-term prospects, and may reduce the seller’s incentive to improve Company performance. In addition, Section 16(c) of the Exchange Act, prohibits directors and officers from engaging in short sales.

● Monetization of Equity Awards. Monetization of equity awards (such as stock options, deferred and restricted ‎share units, and other equity-like securities) is prohibited.‎

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● Publicly Traded Options. Transactions in puts, calls or other derivative securities involving shares of the Company are prohibited, as any such transaction is, in effect, a bet on the short-term movement of the shares of the Company, creates the appearance of trading based on inside information, and may focus attention on short-term performance at the expense of Company long-term objectives.

● Hedging Transactions. Hedging or monetization transactions (including but not limited to zero-cost collars, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments) are prohibited, as such transactions allow you to continue to own Company securities without the full risks and rewards of ownership and as a result, you may not have the same objectives as other shareholders.

● Margin Accounts and Pledges. Directors, officers and other employees are prohibited from holding Company securities in a margin account or pledging Company securities as collateral for a loan, as such securities may be traded without your consent (for failing to meet a margin call or if you default on the loan) at a time when you possess material nonpublic information or otherwise are not permitted to trade. However, in the case of a pledge to collateralize a loan unrelated to securities trading, such as a home loan, the Compliance Officer may pre-clear the proposed pledge in limited circumstances upon concluding the transaction does not misuse material nonpublic information.

● Short-Term Trading. Executive officers and directors who purchase Company securities in the open market may not sell any Company securities of the same class during the six months following the purchase (or vice versa), as short-term trading of the Company’s securities is not permitted under the Exchange Act, may be distracting and may unduly focus the person on short-term stock market performance, instead of the Company’s long-term business objectives, and may result in the disgorgement of any short swing profits.

Section 6.Sharing Material Nonpublic Information is Prohibited. No person subject to this Policy, or any person in a special relationship (as such term is defined in Canadian securities laws) with the Company, who possesses material nonpublic information relating to the Company or any other publicly traded companies may directly or indirectly (through family members, other persons, entities or otherwise) pass that information on to others outside the Company, including friends, family, or other acquaintances (referred to as “tipping”), other than in the necessary course of business (as such term is defined in Canadian securities laws), until such information has been disseminated to the public. You must treat material nonpublic information about our business partners with the same care required with respect to such information related directly to the Company.

Tipping includes passing information under circumstances that could suggest that you were trying to help another profit or avoid a loss. Exercise care when speaking with others who do not “need to know”, even if they are subject to this Policy, as well as when communicating with family, friends and others not associated with the Company. To avoid the appearance of impropriety, refrain from discussing our business or prospects or making recommendations about buying or selling our securities or the securities of other companies with which we have a relationship. Inquiries about the Company should be directed to our investor relations teams.

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Section 7.Recommendations Regarding Trading in Company Securities are Prohibited. No person subject to this Policy may make recommendations or express opinions on trading in Company securities while in possession of material nonpublic information, except to advise others not to trade in Company securities if doing so might violate the law or this Policy.

Section 8.Only Designated Company Spokespersons Are Authorized to Disclose Material Nonpublic Information. Applicable securities laws prohibit the Company from selectively disclosing material nonpublic information. The Company has established a Regulation FD Compliance Policy, which includes procedures for releasing material information in a manner that is designed to achieve broad dissemination of the information immediately upon its release. Employees must follow the Company’s Regulation FD Compliance Policy, which among other things prohibits employees from in any manner disclosing material nonpublic information to anyone outside the Company, including family members and friends, and including social media or electronic communications. Any inquiries about the Company should be directed to our investor relations team.

Section 9.Other Transactions in Company Securities.

● General Rule. This Policy applies to all transactions in Company securities, including any securities the Company may issue from time to time, such as preferred shares, warrants and convertible debentures, as well as to derivative securities relating to the shares of the Company, whether or not issued by Company, such as exchange-traded options.

● Employee Benefit Plans.

1.Equity Incentive Plans. The trading restrictions set forth in this Policy do not apply to the exercise of stock options or exercise or settlement of other equity awards, but do apply to all sales of securities to pay the exercise price or associated tax withholding, including a “same-day sale” of shares received on exercise of options to pay the exercise price (sometimes called a “cashless exercise”) or applicable tax withholding. These restrictions also apply to the same-day sale of shares received on the settlement of restricted stock units or similar awards to cover applicable tax withholding.

2.Employee Stock Purchase Plans. The trading restrictions set forth in this Policy do not apply to purchases of Company securities pursuant to the employee’s advance instructions under any employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan). However, no alteration to instructions regarding the level of withholding or the purchase of Company securities in such plans is permitted while in the possession of material nonpublic information. Any sale of securities acquired under such plans remains subject to the prohibitions and restrictions of this Policy.

Section 10.Directors, Officers and Certain Named Employees Are Subject to Additional Restrictions.

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● Section 16 Insiders. The Company’s directors and officers (“Section 16 Insiders”) are subject to the reporting provisions and trading restrictions of Section 16 of the Exchange Act and the underlying rules and regulations promulgated by the SEC.

● Reporting Insiders. The Company’s directors and certain officers of the Company and others who qualify as Reporting Insiders (as such term is defined in NI 55-104) (the “Reporting Insiders”) are subject to the reporting provisions and trading restrictions of Canadian securities laws.

● Insider Employees. The Company has designated the persons with the roles/titles listed on Exhibit A as employees who have frequent access to material nonpublic information concerning the Company (“Insider Employees”). The Company will amend Exhibit A from time to time as necessary.

● Additional Restrictions. Because Section 16 Insiders, Reporting Insiders and Insider Employees regularly possess material nonpublic information about the Company, and in light of the reporting requirements to which Section 16 Insiders and Reporting Insiders are subject under applicable securities laws, Section 16 Insiders, Reporting Insiders and Insider Employees are subject to the additional restrictions set forth in Appendix I hereto. For purposes of this Policy, Section 16 Insiders, Reporting Insiders and Insider Employees are each referred to as “Insiders.”

Section 11.Policy Violations Must Be Reported. Any person who violates this Policy, the Company’s Regulation FD Compliance Policy or any applicable laws governing insider trading, or knows of any such violation by any other person, must report the violation immediately to the Compliance Officer. Upon learning of any such violation, the Compliance Officer will determine whether the Company should release any material nonpublic information or whether the Company should report the violation to the SEC, Canadian securities regulatory authorities or other appropriate governmental authority.

Section 12.Insider Trading Compliance Officers. The Company’s Chief Financial Officer shall act as the Company’s Insider Trading Compliance Officer (the “Compliance Officer”); provided, however, that if the Chief Financial Officer is a party to a proposed trade or such position is not filled, transaction or inquiry relating to this Policy, the Company’s Chief Executive Officer shall act as the Compliance Officer with respect to such proposed trade, transaction or inquiry. The Compliance Officer may delegate his or her authority to act as the Compliance Officer as he or she deem necessary or appropriate in his or her sole discretion. The duties and powers of the Compliance Officer and his or her delegees may include the following:

●Administering, monitoring and enforcing compliance with this Policy.

●Responding to all inquiries relating to this Policy.

●Designating and announcing special trading blackout periods during which specified persons may trade in Company securities.

●Providing copies of this Policy and other appropriate materials to all current and new directors, officers, employees and consultants, and such other persons as the

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Compliance Officer determines have access to material nonpublic information concerning the Company.

●Administering, monitoring and enforcing compliance with applicable insider trading laws and regulations.

●Assisting in the preparation and filing of all required SEC reports filed by Section 16 Insiders relating to their trading in Company securities, including Forms 3, 4, 5 and 144 and Schedules 13D and 13G.

●Assisting in the preparation and filing of all required insider filings and reports with Canadian securities regulators through the System for Electronic Disclosure by Insiders (SEDI) filed by Reporting Insiders relating to their trading in Company securities.

●Maintaining as Company records originals or copies of all documents required by the provisions of this Policy, and copies of all required reports to be filed with the SEC or any Canadian securities regulatory authority relating to insider trading, including Form 55-102F2 and Forms 3, 4, 5 and 144 and Schedules 13D and 13G.

●Proposing revisions to this Policy as necessary to reflect changes in applicable insider trading laws and regulations (to be considered by the Nominating and Corporate Governance Committee (the “Governance Committee”) of the Board of Directors (the “Board”) of the Company at its next meeting).

●Maintaining the accuracy of the list of roles/titles as set forth on Exhibit A, and updating such list periodically as necessary to reflect additions or deletions.

●Designing and requiring training about the obligations of this Policy as the Compliance Officer considers appropriate.

The Compliance Officer may designate one or more individuals who may perform the Compliance Officer’s duties under this Policy in the event that a Compliance Officer is unable or unavailable to perform such duties.

Section 13.Definition of “Material Nonpublic Information”

● “Material”. Information about the Company is “material” if there is a substantial likelihood it would affect the investment or voting decisions of a reasonable investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company, and includes, for greater certainty, any material facts or material changes (as such terms are defined under applicable securities laws). Any type of information that would reasonably be expected to have a significant effect on the market price or value of Company securities or an investor’s decision to buy or sell Company securities is material. Both positive and negative information may be material. While it is not possible to identify all

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information that would be deemed material, the following information ordinarily would be considered material:

o Financial performance, including quarterly and year-end operating results, including significant changes in performance or liquidity.

o Projections of future earnings or losses, or other earnings guidance, and any changes to previously announced earnings guidance.

o Company projections and strategic plans.

o New major contracts, suppliers, or finance sources or the loss thereof.

o Significant changes or developments in products or services or delays in new product or service introduction or development.

o Significant pricing or cost changes.

o Potential mergers or acquisitions, the sale of Company assets or subsidiaries or major partnering agreements.

o Changes in senior management or the Board.

o Changes in corporate or capital structure.

o Changes in business and operations.

o Significant labor disputes or negotiations.

o Changes in credit arrangements.

o Stock splits, public or private securities/debt offerings, or changes in Company dividend policies or amounts.

o A significant cybersecurity incident, such as a data breach or a significant disruption or unauthorized access to information technology infrastructure.

o Actual or threatened major litigation, or the resolution of such litigation.

● “Nonpublic”. Material information is “nonpublic” if it has not been widely disseminated to the general public through a report filed with the SEC and the Canadian securities regulatory authorities or through major newswire services, national news dissemination services or financial news services in Canada and the United States and investors have been given a reasonable amount of time to analyze the information. For purposes of this Policy, information will be considered public after the close of trading on the second full trading day following the Company’s widespread public release of the information. Material information includes material facts and material changes (as such terms are defined under applicable securities laws).

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● Consult Compliance Officer When in Doubt. Any employees who are unsure whether the information that they possess is material or nonpublic must consult the Compliance Officer for guidance before trading in any Company securities.

Section 14.The Company May Suspend All Trading Activities by Employees. In order to avoid any questions and to protect both the Company and its personnel from any potential liability, from time to time the Company may impose a “blackout” period during which some or all directors, officers and employees may not buy or sell Company securities. The Compliance Officer will impose such a blackout period if, in their judgment, there exists nonpublic information that would make trades by the specified group of persons inappropriate in light of the risk that such trades could be viewed as violating applicable securities laws. If you are made aware of such a blackout period, you may not disclose its existence to anyone. The Board will not approve the grant of stock options or other forms of equity-based compensation awards during the period of any trading black-out.

Section 15.Maintaining Confidentiality. All directors, officers and employees of the Company and its subsidiaries are ‎prohibited from informing, other than in the necessary course of business, ‎another person or company of material undisclosed information relating to the ‎Company.‎

A director, officer or employee of the Company and its subsidiaries may disclose ‎material undisclosed information to third parties where doing so is in the ‎necessary course of business. This exception would generally cover ‎communications with:‎

● Vendors, suppliers, or strategic partners on issues such as research and ‎development, sales and marketing, and supply contracts.‎

● Employees, officers, and board members.‎

● Lenders, legal counsel, auditors, underwriters, and financial and other ‎professional advisors to the Company.‎

● Parties to negotiations.‎

● Labor unions and industry associations.‎

● Government agencies and non-governmental regulators.‎

● Credit rating agencies (provided that the information is disclosed for the ‎purpose of assisting the agency to formulate a credit rating and the ‎agency’s ratings generally are or will be publicly available).‎

Communicating material undisclosed information to family members, friends or ‎other third parties constitutes tipping and can result in serious consequences for ‎the Company and the persons communicating and receiving the information.‎

Information communicated internally and externally to outside parties in the ‎necessary course of business should be done on a need-to-know basis consisting ‎only of that information that is necessary for the recipient to be able to perform its ‎responsibilities.‎

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Outside parties who are aware of material undisclosed information relating to the ‎Company must be advised that:‎

● The information is confidential.‎

● They must not communicate that information to anyone else except in the ‎necessary course of business and on a need-to-know basis.‎

● They are subject to the insider trading, tipping and recommending prohibitions ‎of applicable securities laws.‎

An outside party will generally be required to enter into a confidentiality ‎agreement with the Company except in circumstances where the party owes a ‎duty of trust or confidence to the Company.‎

In order to prevent the misuse or inadvertent disclosure of material undisclosed ‎information, the following procedures should be observed:‎

● Documents and files containing confidential information should be kept in a ‎safe place to which access is restricted to individuals on a need-to-know ‎basis.‎

● Code names should be used where appropriate.‎

● Confidential matters should not be discussed in places where discussion could ‎be overheard (for example, elevators, hallways, restaurants, airplanes or ‎taxis).‎

● Reasonable care should be exercised in the use of wireless telephones or other ‎wireless devices.‎

● Confidential documents should not be read or displayed in public places and ‎should not be discarded where others can retrieve them.‎

● Employees must ensure that they maintain the confidentiality of information in ‎their possession outside of the office as well as inside the office.‎

● Reasonable care should be exercised in the transmission of confidential ‎information by electronic means.‎

● Unnecessary copying of confidential documents should be avoided and ‎documents containing confidential information should be promptly ‎removed from conference rooms and work areas after meetings are ‎concluded.‎

● Extra copies of confidential documents should be shredded or otherwise ‎destroyed.‎

● Access to confidential electronic data should be restricted through the use of ‎passwords.‎

Section 16.Applicability of Policy to Securities and Material Undisclosed Information of other Companies. The prohibitions contained in this Policy with respect to insider trading, tipping and recommending trades in securities of the Company will also apply to directors,

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officers and employees of the Company and its subsidiaries in relation to the securities of other companies in circumstances where such persons may be in possession of material undisclosed information relating to such companies obtained in the course of the Company's business. In these circumstances, information about other companies should be treated in the same way as comparable information relating to the Company.

Section 17.Violations of Insider Trading Laws or This Policy Can Result in Severe Consequences.

● Civil and Criminal Penalties. The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge profit made or loss avoided, pay civil penalties up to three times the profit made or loss avoided, face private action for damages or public interest orders such as trading bans and bans against acting as a director or officer of a public company and acting as or becoming a registrant, as well as be subject to criminal penalties, including up to imprisonment and/or fines. Persons found guilty of insider trading or tipping may also be subject to a fine and may also be liable to compensate for damages the buyer or seller of securities (in the case of insider trading) or any person that bought or sold securities to or from a tippee (in the case of tipping) and otherwise prohibited from trading in securities or acting as an officer or director of a company. The Company and/or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties.

● Company Discipline. Violation of this Policy or applicable insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause.

Section 18.This Policy Is Subject to Revision. The Company may change the terms of this Policy from time to time to respond to developments in law and practice, and will take steps to inform all affected persons of any material changes.

Section 19.All Persons Must Acknowledge Their Agreement to Comply with This Policy. This Policy will be available on the Company’s internal website and delivered to all persons subject to this Policy upon adoption or the commencement of their employment or other service relationship with the Company. Upon first receiving a copy of this Policy, each such person must sign an acknowledgment that he or she has received a copy of and agrees to comply with this Policy. The Compliance Officer may periodically require written certifications by those subject to this Policy, including as to their compliance with this Policy or to refresh their acknowledgement of and agreement to comply with this Policy. Any acknowledgment and agreement hereunder will constitute consent for the Company to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy.

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APPENDIX I

Special Restrictions on Transactions in
Company Securities by Insiders

To minimize the risk of apparent or actual violations of the rules governing insider trading, we have adopted these special restrictions relating to transactions in our securities by Insiders. Insiders are responsible for ensuring compliance with this Appendix I, including restrictions on all trading during certain periods, by family members and members of their households and by entities over which they exercise voting or investment control or otherwise exercise direction or control. Insiders should provide each of these persons or entities with a copy of this Policy.

Section 1.Trade Pre-Clearance Required. As part of this Policy, all purchases and sales of equity securities of the Company by Insiders, other than transactions that are not subject to this Policy or transactions pursuant to a Rule 10b5-1 trading plan or other automatic plan authorized by the Compliance Officer, must be pre-cleared by the Compliance Officer. This requirement is intended to prevent inadvertent Policy violations, avoid trades involving the appearance of improper insider trading, facilitate timely Form 4 reporting by Section 16 Insiders and insider reporting on SEDI by Reporting Insiders and avoid transactions that are subject to disgorgement under applicable securities laws.

Requests for pre-clearance must be submitted via email to the Compliance Officer at least two business days in advance of each proposed transaction. If the Insider does not receive a response from the Compliance Officer within 24 hours, the Insider must follow up to ensure that the message was received. Each Insider’s request for pre-clearance should include the following information:

●The nature of the proposed transaction.

●The expected date of the transaction.

●The number of shares involved.

●If the transaction involves a stock option exercise in connection with a sale to cover the exercise price or a subsequent sale, or a stock option exercise by way of “cashless exercise”, “net exercise” or “surrender”, the specific option to be exercised.

●Contact information for the broker who will execute the transaction.

●A confirmation that the Insider has carefully considered whether he or she may be aware of any material nonpublic information relating to the Company (describing any borderline matters or items of potential concern) and has concluded that he or she does not.

●Whether the transaction complies with all rules and regulations, including Rule 144, Rule 701, Form S-8, and Section 16 of the Exchange Act or NI 55-104, applicable to securities transactions by the Insider.

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●Any other information that is material to the Compliance Officer’s consideration of the proposed transaction.

The Compliance Officer may withhold or condition pre-clearance in his or her sole discretion. If the proposed transaction is pre-cleared, the Insider may proceed with it on the approved terms within three days of the pre-clearance, provided that he or she complies with all other securities law and Company requirements, such as Rule 144, Section 16 and NI 55-104 reporting obligations, prohibitions regarding trading on the basis of inside information, and compliance with any special trading blackout imposed by the Company prior to the completion of the trade.

Section 2.Pre-Clearance of Automatic Trading ‎Plans Required. Pre-clearance by the Compliance Officer is required for an Insider to enter into or modify a written contract, letter of instruction or plan that complies with the requirements of applicable securities laws (an “Automatic Trading ‎Plan”). Plans that are not pre-cleared may not be used by an Insider. Pre-clearance must be requested at least five full trading days prior to entry into or modification of the Automatic Trading ‎Plan and be accompanied by a copy of the plan. However, pre-clearance will not be required for individual transactions effected pursuant to a pre-cleared Automatic Trading ‎Plan. All Insiders must immediately report the results of transactions effected under a trading plan to the Compliance Officer since they will be reportable following the execution of the trade.

Section 3.Hardship Exemptions. The Compliance Officer may, on a case-by-case basis, exempt a transaction by an Insider from this Policy due to financial or other hardship. Any request for a hardship exemption must be in writing and must describe the amount and nature of the proposed transaction and the circumstances of the hardship. The Insider requesting the hardship exemption must also certify to the Compliance Officer that he or she is not in possession of material nonpublic information concerning the Company or (such as in the case of a gift or other non-monetization transaction to a party who promises not to sell the securities received for some time or to a party subject to this Policy) that the transaction does not misuse the Company’s information. The existence of this process does not in any way obligate the Compliance Officer to approve any hardship exemption requested by an Insider, and all Insiders are cautioned that this exemption is intended to address limited and unusual circumstances.

Section 4.Brokers. All Insiders must ensure that their broker does not execute any transaction for the Insider (other than under a pre-cleared Automatic Trading ‎Plan) until the broker has verified with the Compliance Officer that the transaction has been pre-cleared.

Section 5.Reporting of Transactions Required. To facilitate timely reporting on SEDI and under Section 16 of the Exchange Act, Reporting Insiders and Section 16 Insiders are required to on the same day as the trade date, or, with respect to transactions effected pursuant to an Automatic Trading ‎Plan, on the day the Insider is advised of the terms of the transaction, (a) report the details of each transaction to the Compliance Officer and (b) arrange with persons whose trades must be reported by the Insider under Section 16 (such as immediate family members living in the Insider’s household) to immediately report directly to the Company and to the Insider the following transaction details:

●Transaction date (trade date)

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●Number of shares involved.

●Price per share at which the transaction was executed (before addition or deduction of brokerage commission and other transaction fees).

●For stock option exercises, the specific option exercised.

●Contact information for the broker who executed the transaction.

●Specific representation that the Insider is not in possession of material non-public information.

●Whether the transaction was pursuant to a trading plan or other automatic trading plan.

●For a Section 16 Insider, a specific representation whether the transaction was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

The transaction details must be reported to the Compliance Officer, with copies to Company personnel (if any) who assist the Reporting Insider in preparing his or her insider reports and/or the Section 16 Insider in preparing his or her Form 4, as applicable.

If reports required to be filed on SEDI are filed late, Reporting Insiders will generally be subject to a fine per day, per insider, per issuer.

Section 6.Named Employees Considered Insiders. The Governance Committee of the Board will review, at least annually, those individuals deemed to be “Insiders” for purposes of this Appendix I. Insiders shall include persons subject to insider reporting obligations under NI 55-102 and Section 16 and such other persons as the Governance Committee deems to be Insiders. Generally, Insiders shall be any person who by function of their employment is consistently in possession of material nonpublic information or performs an operational role, such as head of a division or business unit, that is material to the Company as a whole.

Section 7.Special Guidelines for Automatic Trading Plans. An Insider will not be deemed to have violated this Policy for transactions pursuant to an Automatic Trading ‎Plan that has been pre-cleared by the Compliance Officer. The Compliance Officer may withhold or condition pre-clearance of any proposed Automatic Trading ‎Plan (each, a “Proposed Plan”) for any reason, in his or her sole discretion.

A. No earlier than two business days prior to the date that the Proposed Plan is to be adopted, any Insider establishing a Proposed Plan must certify to the Compliance Officer in writing that as of such date and as of the adoption date of the Proposed Plan:

(i) such person is not and to such person’s knowledge, will not be, aware of material nonpublic information concerning the Company;

(ii) all such trades to be made pursuant to the Proposed Plan will be made in accordance with the applicable securities laws and stock exchange rules;

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(iii) such person is adopting the Proposed Plan in good faith and not as part of a plan or scheme to evade the prohibitions of applicable securities laws;

(iv) such person will act in good faith with respect to the Proposed Plan throughout its duration; and

(v) the Proposed Plan complies with the requirements of applicable securities laws.

This certification may be made in an email to the Compliance Officer.  The person establishing the Proposed Plan must notify the Compliance Officer promptly via email and withdraw the certification if any changes of circumstances prior to the adoption date of the Proposed Plan have or will render such certification to be inaccurate as of that time.

B. The Compliance Officer will not pre-clear a Proposed Plan if he or she concludes that the Proposed Plan:

● Fails to comply with the requirements of applicable securities laws, including Rule 10b5-1 and the SEC’s rules thereon, as amended from time to time;

● Would permit a transaction to occur before (A) for Section 16 Insiders and/or Reporting Insiders, as applicable, adopting a Proposed Plan, the later of (i) 90 days after adoption of the Proposed Plan or (ii) two business days after disclosure of the Company’s financial results in a Form 10-Q or Form 10-K for the completed fiscal quarter in which the Proposed Plan was adopted (subject to a maximum of 120 days after adoption of the Proposed Plan), and (B) for all other employees adopting a Proposed Plan that are not Section 16 Insiders or Reporting Insiders, 30 days after adoption.

● Is established during a “closed” window period or a special “blackout” period, or the Insider is unable to represent to the satisfaction of the Compliance Officer that the Insider is not in possession of material nonpublic information regarding the Company.

● Lacks appropriate mechanisms to ensure that the Insider complies with all applicable securities laws, rules and regulations, including Rule 144, Rule 701, Form S-8, and Section 16 of the Exchange Act, applicable to securities transactions by the Insider.

● Does not provide the Company the right to suspend all transactions under the Proposed Plan if the Compliance Officer, in his or her sole discretion, deems such suspension necessary or advisable, including suspensions to comply with any “lock-up” agreement the Company agrees to in connection with a financing or other similar events.

14

● Exposes the Company to liability under any other applicable state or federal rule, regulation or law;

● Creates any appearance of impropriety;

● Fails to meet guidelines established by the Company; or

● Otherwise fails to satisfy the Compliance Officer for any reason.

C. Any modifications or amendments to or deviations from an Automatic Trading ‎Plan are deemed to be the Insider entering into a new Automatic Trading ‎Plan and, accordingly, require pre-clearance of such modification or deviation pursuant to Section 2 of this Appendix I.

D. Any termination of an Automatic Trading ‎Plan must be immediately reported to the Compliance Officer. If an Insider has pre-cleared a new 10b5-1 Plan (the “Second Plan”) intended to succeed an earlier pre-cleared 10b5-1 Plan (the “First Plan”), the Insider may not affirmatively terminate the First Plan without pre-clearance pursuant to Section 2 of this Appendix I, because such termination is deemed to be entering into the Second Plan.

E. No Insider may adopt a single-trade Automatic Trading ‎Plan during the 12-month period immediately following the Insider’s adoption of another single-trade Automatic Trading ‎Plan, subject to the exceptions noted in Rule 10b5-1.

F. An Insider may have no more than one Automatic Trading ‎Plan adopted at any point in time (i.e., multiple concurrent or overlapping plans are prohibited), subject to the express approval by the Compliance Officer and the exceptions noted in Rule 10b5-1. One of these exceptions is for plans authorizing certain “sell-to-cover” transactions.

G. Employees, officers or directors are not allowed to enter into “non-Rule 10b5-1 trading arrangements” (as defined in Regulation S-K Item 408(c) of the Exchange Act) unless otherwise approved in advance by the Compliance Officer.

H. None of the Company, the Compliance Officer, nor any of the Company’s officers, employees or other representatives shall be deemed, solely by their pre-clearance of a Proposed Plan, to have represented that it complies with applicable securities laws, including Rule 10b5-1 or to have assumed any liability or responsibility to the Insider or any other party if the 10b5-1 Plan fails to comply with such laws.

I. Upon entering into or amending a Rule10b5-1 Plan, the director or officer must promptly provide a copy of the plan to the Company and, upon request, confirm the Company’s planned disclosure regarding the entry into or termination of a plan (including the date of adoption or termination of the plan, duration of the plan, and aggregate number of securities to be sold or purchased under the plan).

15

EXHIBIT A
INSIDER EMPLOYEES
(as of October 1, 2024)

●

Michelle Rodprajong

●

Jaynee Tolle

●

Mark Adams

●

Courtney Schoettker

●

Pamela Mattson

●

Martha Raya

●

Carolyn Hunt

●

Sonya Ware

●

Matthew Seals

●

James Atkins

●

Adele Tilzer

●

Nancy Miller

●

Sylvia Williams

●

Lisa Martin

●

Kristine Buchanan

●

Caroline Gross

●

Erica Deramus

●

Noah Belemjian

●

Tyler Terry

●

John Kelly

EX-21

Exhibit 21

Subsidiaries of the Registrant

Subsidiary	State of Incorporation
100 W. Commercial Street, LLC	Missouri
Acadia Medical Supply, Inc.	Maine
Access Respiratory Home Care, L.L.C.	Louisiana
Advanced Medical DME, LLC	Kansas
- dba Focus Respiratory
Alliance Homecare & Mobile Diagnostics, L.L.C.	Arizona
- dba Alliance Homecare
At Home Health Equipment, LLC	Indiana
Black Bear Medical Group, Inc.	Maine
Black Bear Medical NH, Inc.	New Hampshire
Black Bear Medical, Inc.	Maine
Care Medical Atlanta, LLC	Georgia
Care Medical of Athens, Inc.	Georgia
Care Medical of Augusta, LLC	Georgia
Care Medical of Gainesville, LLC	Georgia
Care Medical Partners LLC	Georgia
Care Medical Savannah, LLC	Georgia
- dba Resource Medical Group of Charleston
Central Oxygen, Inc.	Indiana
Coastal Med-Tech Corp.	Maine
Cooley Medical Equipment, Incorporated	Kentucky
Focus Respiratory, LLC	Arizona
Good Night Medical of Ohio, LLC	Ohio
- dba Good Night Medical
Good Night Medical of Texas, Inc	Texas
- dba Good Night Medical
Good Night Medical, LLC	Ohio
Great Elm Healthcare, LLC	Delaware
Health Technology Resources, LLC	Illinois
Heartland Health Therapy, LLC	Arizona
Heckman Healthcare Service & Supplies Inc.	Illinois
Hometown Medical LLC	Mississippi
Legacy Oxygen and Home Care Equipment, LLC	Kentucky
Mayhugh Drugs, Inc.	Florida
- dba Mayhugh’s Medical Equipment
Med Supply Center, Inc.	Mississippi
Medical West Healthcare Center, LLC	Missouri
Metro-Med, Inc.	California
Metro-Med, Inc. - Los Alamitos	California
Metro-Med, Inc. - Ventura	California
NorCal Respiratory, Inc.	California
Northwest Medical, LLC	Oregon
Oxygen Plus	California
Patient Home Monitoring, Inc.	Washington
Patient-Aids, Inc.	Kentucky
- dba Home Respiratory Service

Exhibit 21

- dba Legacy Oxygen and Home Care Equipment
PM Sleep Lab, LLC	Kansas
QHM Holdings Inc.	Delaware
QHM Investments I, LLC	Delaware
Quipt Home Medical Inc.	Delaware
Rejuvenight, LLC	Arizona
Resource Medical Group of Charleston, LLC	South Carolina
Resource Medical Group, LLC	South Carolina
Resource Medical, Inc.	South Carolina
Respicare, Inc.	California
Riverside Medical, Inc.	Tennessee
RTA Homecare, LLC	Arizona
- dba Valley Seating & Mobility
Semo Drugs-Care Plus of Mo., Inc.	Missouri
Sleep Health Diagnostics, LLC	Ohio
Sleepwell, LLC	Georgia
Southeastern Biomedical Services, LLC	Kentucky
Southern Pharmaceutical Corporation	Mississippi
Thrift Home Care, Inc.	Mississippi
Tuscan, Inc.	Ohio
United Respiratory Services, LLC	Arizona
- dba Valley Respiratory Services
West Home Health Care, Inc.	Virginia

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form F-10 (No. 333-276253) and Form S-8 (File No. 333-278648) of Quipt Home Medical Corp. (the Company) of our report dated December 16, 2024, relating to the consolidated financial statements of the Company included in this Annual Report on Form 10-K for the year ended September 30, 2024.

/s/BDO USA, P.C.

Cincinnati, Ohio

December 16, 2024

EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Gregory Crawford, certify that:

1. I have reviewed this Annual Report on Form 10-K of Quipt Home Medical Corp.;

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

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

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

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

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

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

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

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

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

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

December 16, 2024

/s/ GREGORY CRAWFORD

Gregory Crawford

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Hardik Mehta, certify that:

1. I have reviewed this Annual Report on Form 10-K of Quipt Home Medical Corp.;

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

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

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

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

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

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

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

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

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

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

December 16, 2024

/s/ HARDIK MEHTA

Hardik Mehta

Chief Financial Officer

(Principal Financial Officer)

EX-32

EXHIBIT 32

The following certifications are being furnished solely to accompany the Annual Report pursuant to 18 U.S.C. Section 1350 and in accordance with SEC Release No. 33-8238. These certifications shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be incorporated by reference in any filing made by Quipt Home Medical Corp. under the Securities Act of 1933, as amended, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Gregory Crawford, Chief Executive Officer of Quipt Home Medical Corp., a British Columbia corporation (the “Company”), hereby certify that to my knowledge:

(i) the accompanying Annual Report on Form 10-K of the Company for the year ended September 30, 2024 (the “Annual Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 16, 2024

/s/ GREGORY CRAWFORD

Gregory Crawford

Chief Executive Officer

(Principal Executive Officer)

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Hardik Mehta, Chief Financial Officer of the Company, hereby certify that to my knowledge:

(i) the accompanying Annual Report fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

December 16, 2024

/s/ HARDIK MEHTA

Hardik Mehta

Chief Financial Officer

(Principal Financial Officer)

A signed original of this written statement required by Section 906 has been provided to Quipt Home Medical Corp. and will be retained by Quipt Home Medical Corp. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-97

Exhibit 97

QUIPT HOME MEDICAL Corp.

Policy for RECOVERY OF ERRONEOUSLY AWARDED Incentive Compensation

(Adopted as of December 1, 2023)

(Effective, October 2, 2023)

1. INTRODUCTION

Quipt Home Medical Corp. (the “Company”) is adopting this policy (this “Policy”) to provide for the Company’s recovery of certain Incentive Compensation (as defined below) erroneously awarded to Affected Officers (as defined below) under certain circumstances.

This Policy is administered by the Compensation Committee (the “Committee”) of the Company’s Board of Directors (the “Board”). The Committee shall have full and final authority to make any and all determinations required or permitted under this Policy. Any determination by the Committee with respect to this Policy shall be final, conclusive and binding on all parties. The Board may amend or terminate this Policy at any time.

This Policy is intended to comply with Section 10D of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10D-1 thereunder and the applicable rules of any national securities exchange on which the Company’s securities are listed (the “Exchange”) and will be interpreted and administered consistent with that intent.

2. EFFECTIVE DATE

This Policy shall apply to all Incentive Compensation paid or awarded on or after the date of adoption of this Policy, and to the extent permitted or required by applicable law.

3. DEFINITIONS

For purposes of this Policy, the following terms shall have the meanings set forth below:

“Affected Officer” means any current or former “officer” as defined in Exchange Act Rule 16a-1, and any other senior executives as determined by the Committee.

“Erroneously Awarded Compensation” means the amount of Incentive Compensation received that exceeds the amount of Incentive Compensation that otherwise would have been received had it been determined based on the Restatement, computed without regard to any taxes paid.  In the case of Incentive Compensation based on stock price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in the Restatement, the amount shall reflect a reasonable estimate of the effect of the Restatement on the stock price or total shareholder return upon which the Incentive Compensation was received, as determined by the Committee in its sole discretion.  The Committee may determine the form and amount of Erroneously Awarded Compensation in its sole discretion.

“Financial Reporting Measure” means any measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures, whether or not such measure is presented within the financial statements or included in a filing with the Securities and Exchange Commission. Stock price and total shareholder return are Financial Reporting Measures.

“Incentive Compensation” means any compensation that is granted, earned or vested based in whole or in part on the attainment of a Financial Reporting Measure. For purposes of clarity, base salaries, bonuses or equity awards paid solely upon satisfying one or more subjective standards, strategic or operational measures, or continued employment are not considered Incentive Compensation, unless such awards were granted, paid or vested based in part on a Financial Reporting Measure.

“Restatement” means an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements (i.e., a “Big R” restatement), or that would result in a material misstatement if the error was corrected in the current period or left uncorrected in the current period (i.e., a “little r” restatement).

4.RECOVERY

If the Company is required to prepare a Restatement, the Company shall seek to recover and claw back from any Affected Officer reasonably promptly the Erroneously Awarded Compensation that is received by the Affected Officer:

(i) after the person begins service as an Affected Officer;

(ii) who serves as an Affected Officer at any time during the performance period for that Incentive Compensation;

(iii) while the Company has a class of securities listed on the Exchange; and

(iv) during the three completed fiscal years immediately preceding the date on which the Company was required to prepare the Restatement (including any transition period within or immediately following those years that results from a change in the Company’s fiscal year, provided that a transition period of nine to 12 months will be deemed to be a completed fiscal year).

For purposes of this Policy:

● Erroneously Awarded Compensation is deemed to be received in the Company’s fiscal year during which the Financial Reporting Measure specified in the Incentive Compensation is attained, even if the payment or grant of the Incentive Compensation occurs after the end of that period; and

● the date the Company is required to prepare a Restatement is the earlier of (x) the date the Board, the Committee or any officer of the Company authorized to take such action concludes, or reasonably should have concluded, that the Company is required to prepare the Restatement, or (y) the date a court, regulator, or other legally authorized body directs the Company to prepare the Restatement.

For purposes of clarity, in no event shall the Company be required to award any Affected Officers an additional payment or other compensation if the Restatement would have resulted in the grant, payment or vesting of Incentive Compensation that is greater than the Incentive Compensation actually received by the Affected Officer. The recovery of Erroneously Awarded Compensation is not dependent on if or when the Restatement is filed.

2

5.SOURCES OF RECOUPMENT

To the extent permitted by applicable law, the Committee may, in its discretion, seek recoupment from the Affected Officer(s) through any means it determines, which may include any of the following sources: (i) prior Incentive Compensation payments; (ii) future payments of Incentive Compensation; (iii) cancellation of outstanding Incentive Compensation; (iv) direct repayment; and (v) non-Incentive Compensation or securities held by the Affected Officer. To the extent permitted by applicable law, the Company may offset such amount against any compensation or other amounts owed by the Company to the Affected Officer.

6.LIMITED EXCEPTIONS TO RECOVERY

Notwithstanding the foregoing, the Committee, in its discretion, may choose to forgo recovery of Erroneously Awarded Compensation under the following circumstances, provided that the Committee (or a majority of the independent members of the Board) has made a determination that recovery would be impracticable because:

(i) The direct expense paid to a third party to assist in enforcing this Policy would exceed the recoverable amounts; provided that the Company has made a reasonable attempt to recover such Erroneously Awarded Compensation, has documented such attempt and has (to the extent required) provided that documentation to the Exchange;

(ii) Recovery would violate home country law where the law was adopted prior to November 28, 2022, and the Company provides an opinion of home country counsel to that effect to the Exchange that is acceptable to the Exchange; or

(iii) Recovery would likely cause an otherwise tax-qualified retirement plan to fail to meet the requirements of the Internal Revenue Code of 1986, as amended.

7.NO INDEMNIFICATION OR INSURANCE

The Company will not indemnify, insure or otherwise reimburse any Affected Officer against the recovery of Erroneously Awarded Compensation.

8.NO IMPAIRMENT OF OTHER REMEDIES

This Policy does not preclude the Company from taking any other action to enforce an Affected Officer’s obligations to the Company, including termination of employment, institution of civil proceedings, or reporting of any misconduct to appropriate government authorities. This Policy is in addition to the requirements of Section 304 of the Sarbanes-Oxley Act of 2002 that are applicable to the Company’s Chief Executive Officer and Chief Financial Officer.

3

ATTESTATION AND ACKNOWLEDGEMENT OF POLICY FOR THE RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION

By my signature below, I acknowledge and agree that:

● I have received and read the attached Quipt Home Medical Corp. Policy for the Recovery of Erroneously Awarded Compensation (as may be amended, restated, supplemented or otherwise modified from time to time, this “Policy”). Any capitalized terms used in this Acknowledgment without definition shall have the meaning set forth in the Policy.

● I am fully bound by, and subject to, all of the terms and conditions of the Policy. In the event of any inconsistency between the Policy and the terms of any employment agreement to which I am a party, or the terms of any compensation plan, program or agreement under which any compensation has been granted, awarded, earned or paid, the terms of the Policy shall govern.

● In the event it is determined by the Administrator that any amounts granted, awarded, earned or paid to me must be forfeited or reimbursed to the Company, I hereby agree to abide by all of the terms of this Policy both during and after my employment with the Company, including, without limitation, by promptly repaying or returning any Erroneously Awarded Compensation to the Company as determined in accordance with this Policy.

Date:

Agreed and Acknowledged

[Name of Executive Officer]

4

XML

Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Dec. 11, 2024	Mar. 28, 2024
Document and Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Securities Act File Number	001-40413
Entity Registrant Name	QUIPT HOME MEDICAL CORP.
Entity Address, Address Line One	1019 Town Drive
Entity Address, City or Town	Wilder
Entity Address, State or Province	KY
Entity Address, Postal Zip Code	41076
City Area Code	859
Local Phone Number	878-2220
Entity Tax Identification Number	00-0000000
Entity Incorporation, State or Country Code	A1
Title of 12(b) Security	Common Shares, without Par Value
Trading Symbol	QIPT
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	true
Entity Small Business	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 153,207,393
Entity Common Stock, Shares Outstanding		43,091,273
Entity Central Index Key	0001540013
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	BDO USA, P.C.
Auditor Location	Cincinnati, Ohio
Auditor Firm ID	243

XML

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Current assets
Cash	$ 16,174	$ 17,209
Accounts receivable, net	29,116	25,978
Inventory	20,853	18,414
Prepaid and other current assets	6,911	3,832
Total current assets	73,054	65,433
Long-term assets
Property and equipment, net	37,385	35,503
Right of use assets, net	16,475	17,902
Goodwill	50,733	52,825
Intangible assets, net	67,953	74,040
Equity method investment	1,311	1,411
Other assets	337	294
Total long-term assets	174,194	181,975
TOTAL ASSETS	247,248	247,408
Current liabilities
Accounts payable and accrued liabilities	35,363	32,018
Current portion of equipment loans	12,804	14,114
Current portion of lease liabilities	5,867	5,122
Current portion of senior credit facility	3,248	3,352
Deferred revenue	3,568	4,511
Purchase price payable		1,457
Total current liabilities	60,850	60,574
Long-term liabilities
Equipment loans	55	233
Lease liabilities	13,283	14,028
Derivative liability - interest rate swap	1,122
Senior credit facility	64,545	61,114
Deferred income taxes	202	344
TOTAL LIABILITIES	140,057	136,293
Capital stock
Preferred Shares, no par value, unlimited shares authorized, none issued and outstanding as of September 30, 2024 and 2023
Additional paid in-capital	277,762	274,923
Accumulated deficit	(170,571)	(163,808)
TOTAL SHAREHOLDERS' EQUITY	107,191	111,115
TOTAL LIABILITIES AND EQUITY	$ 247,248	$ 247,408

XML

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Parenthetical) - $ / shares	Sep. 30, 2024	Sep. 30, 2023
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Common shares, no par value	$ 0	$ 0
Common shares, shares issued	43,091,273	42,102,471
Common shares, shares outstanding	43,091,273	42,102,471
Preferred shares, no par value	$ 0	$ 0
Preferred shares, shares issued	0	0
Preferred shares, shares outstanding	0	0

XML

CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Revenue
Rentals of medical equipment	$ 94,308	$ 86,172
Sales of medical equipment and supplies	151,607	125,505
Total revenues	245,915	211,677
Cost of inventory sold	68,925	57,897
Operating expenses	122,542	103,224
Right-of-use operating lease amortization and interest	5,974	5,131
Depreciation	38,490	30,901
Amortization of intangible assets	6,091	5,197
Stock-based compensation	2,484	5,280
Acquisition-related costs	401	1,269
Gain on disposals of property and equipment	(107)	(75)
Operating income	1,115	2,853
Interest expense	7,168	5,910
Interest income	(787)	(369)
Loss on extinguishment of debt		30
Gain on foreign currency transactions	(43)	(108)
Share of loss in equity method investment	309	89
Change in fair value of derivative liability - interest rate swap	1,122
Loss before taxes	(6,654)	(2,699)
Provision for income taxes	109	85
Net loss	$ (6,763)	$ (2,784)
Net income (loss) per share (Note 15)
Basic loss per share	$ (0.16)	$ (0.07)
Diluted loss per share	$ (0.16)	$ (0.07)
Weighted average number of common shares outstanding:
Basic	42,501	38,607
Diluted	42,501	38,607

XML

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Number of Shares	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance at Sep. 30, 2022		$ 240,571	$ (161,024)	$ 79,547
Beginning Balance (in shares) at Sep. 30, 2022	35,605
Changes in Shareholder's Equity
Net loss			(2,784)	(2,784)
Acquisition of Great Elm		2,060		2,060
Acquisition of Great Elm (in shares)	432
Issuance of shares, net of issuance costs		27,866		27,866
Issuance of shares, net of issuance costs (in shares)	5,409
Settlement of restricted stock units		(1,338)		(1,338)
Settlement of restricted stock units (in shares)	526
Stock options exercised		484		$ 484
Stock options exercised (in shares)	130			130
Stock-based compensation		5,280		$ 5,280
Ending Balance at Sep. 30, 2023		274,923	(163,808)	111,115
Ending Balance (in shares) at Sep. 30, 2023	42,102
Changes in Shareholder's Equity
Net loss			(6,763)	(6,763)
Settlement of restricted stock units		(213)		(213)
Settlement of restricted stock units (in shares)	469
Stock options exercised		568		$ 568
Stock options exercised (in shares)	519			520
Stock-based compensation		2,484		$ 2,484
Ending Balance at Sep. 30, 2024		$ 277,762	$ (170,571)	$ 107,191
Ending Balance (in shares) at Sep. 30, 2024	43,090

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands	12 Months Ended
	Sep. 30, 2023 USD ($)
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Issuance of shares, issuance costs	$ 3,303

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CONSOLIDATED STATEMENTS OF CASH FLOWS	12 Months Ended
	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Operating activities
Net loss	$ (6,763,000)	$ (2,784,000)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	44,581,000	36,098,000
Stock-based compensation	2,484,000	5,280,000
Gain on disposals of property and equipment	(107,000)	(75,000)
Loss on extinguishment of debt		30,000
Amortization of financing costs and accretion of purchase price payable	551,000	591,000
Gain on foreign currency transactions	(43,000)	(108,000)
Share of loss in equity method investment	309,000	89,000
Change in fair value of derivative liability - interest rate swap	1,122,000
Deferred income taxes	342,000	(548,000)
Right-of-use operating lease amortization and interest	5,974,000	5,131,000
Payments of operating leases, including interest	(5,386,000)	(4,622,000)
Adjustments to purchase price payable	(29,000)	(96,000)
Change in working capital, net of acquisitions:
Net increase in accounts receivable	(3,294,000)	(3,063,000)
Net increase in inventory	(3,420,000)	(60,000)
Net increase in prepaid and other current assets	(3,124,000)	(2,239,000)
Net (decrease) increase in deferred revenue	(943,000)	240,000
Net increase in accounts payables and accrued liabilities	3,127,000	3,116,000
Net cash flow provided by operating activities	35,381,000	36,980,000
Investing activities
Purchase of property and equipment	(10,313,000)	(6,852,000)
Cash proceeds from sale of property and equipment	210,000	65,000
Cash paid for acquisitions, net of cash acquired	(210,000)	(76,038,000)
Net cash flow used in investing activities	(10,313,000)	(82,825,000)
Financing activities
Repayments of equipment loans and SBA loan	(26,792,000)	(20,447,000)
Repayments of finance leases	(1,579,000)	(821,000)
Issuance of delayed-draw term loan under senior credit facility		64,000,000
Repayments of senior credit facility	(3,450,000)	(2,650,000)
Borrowings on the revolving credit facility	17,100,000	16,500,000
Repayments on the revolving credit facility	(10,777,000)	(23,500,000)
Issuance costs relating to credit facility	(60,000)	(581,000)
Issuance of shares, net of issuance costs		27,866,000
Settlement of restricted stock units	(213,000)	(1,338,000)
Proceeds from exercise of stock options	568,000	484,000
Payments of purchase price payable	(944,000)	(5,083,000)
Net cash flow (used in) provided by financing activities	(26,147,000)	54,430,000
Net increase (decrease) in cash	(1,079,000)	8,585,000
Effect of exchange rate changes on cash held in foreign currencies	44,000	108,000
Cash, beginning of year	17,209,000	8,516,000
Cash, end of year	16,174,000	17,209,000
Supplemental cash flow information
Cash paid for interest	(6,826,000)	(6,026,000)
Cash paid for income taxes	(1,249,000)	(680,000)
Operating lease additions	4,229,000	7,938,000
Equipment loan additions	25,304,000	23,615,000
Finance lease additions	1,975,000	$ 1,159,000
Purchases of property and equipment in ending accounts payable	$ 214,000

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Nature of operations

12 Months Ended

Sep. 30, 2024

Nature of operations

Nature of operations

1.Nature of operations

Reporting entity

Quipt Home Medical Corp. (“Quipt” or the “Company”) was incorporated under the Business Corporations Act (Alberta) on March 5, 1997. On December 30, 2013, pursuant to a Certificate of Continuance, the Company changed its jurisdiction of governance by continuing from Alberta into British Columbia. The Company’s head office is located at 1019 Town Drive, Wilder, Kentucky 41076, and its registered office is located at Suite 2700, 1133 Melville Street, Vancouver, British Columbia V6E 4E5.

All significant operating decisions are based on analysis of the Company as a whole; accordingly, the Company operates in one business segment, which is the sale and rental of medical equipment and related devices.

The Company’s common shares are traded on the Nasdaq Capital Market and the Toronto Stock Exchange, both under the symbol “QIPT”.

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Basis of Presentation and summary of significant accounting policies

12 Months Ended

Sep. 30, 2024

Basis of Presentation and summary of significant accounting policies

Basis of Presentation and summary of significant accounting policies

2.Basis of Presentation and summary of significant accounting policies

Basis of accounting

These consolidated financial statements as of and for the years ended September 30, 2024 and 2023 (the “Consolidated Financial Statements”) of the Company were prepared in accordance with accounting principles generally accepted in the US (“GAAP”).

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

Historically, the Company qualified as a foreign private issuer and prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Effective October 1, 2024, the Company no longer qualifies as a foreign private issuer as defined in Rule 405 of Regulation C under the Securities Act and Rule 3b-4 under the Exchange Act and therefore has become a domestic filer and must file this Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and in accordance with GAAP. The Company’s consolidated financial statements were prepared in accordance with GAAP retrospectively for the year ended September 30, 2023.

The consolidated financial statements of the Company are presented in US dollars, which is the Company’s functional currency, determined using management’s judgment that the primary economic environment in which it will derive its revenues and expenses incurred to generate those revenues is the US.

Basis of measurement

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

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated. The Company’s consolidated entities, which all have a functional currency of US dollars and ownership of 100%, are as follows:

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

Use of estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised. Actual results could differ from those estimates.

Estimates where management has made subjective judgments and where there is significant risk of material adjustments to assets and liabilities in future accounting periods include fair value measurements for financial instruments and share-

based transactions, useful lives and impairment of non-financial assets (property and equipment and intangible assets), provision for expected credit losses, fair value measurements for assets and liabilities acquired in business acquisitions, and calculation of deferred taxes.

Accounts receivable

Due to the nature of our industry and the reimbursement environment in which the Company operates, certain estimates are required to record total net revenues and accounts receivable at their net realizable values, including estimating variable consideration. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements, contractual terms, and the uncertainty of reimbursement amounts for certain services may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial, or account review. Net realizable values are estimated based on a number of factors, including age of the receivables, changes in customer payment patterns, historical experience, industry trends, and current economic conditions.

Inventory

Inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. The Company’s inventory consists of finished goods purchased from vendors; therefore, no labor or overhead is included in the inventory cost. Inventory is subsequently recorded within cost of inventory sold sales on the consolidated statements of operations at the time the inventory is sold. Inventory is transferred to property and equipment as rental equipment at the time of rental revenue recognition.

The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to their estimated net realizable value.

Property, equipment, and right-of-use assets

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

The estimated useful lives of the assets are as follows:

Description	Estimated Useful Life
Rental equipment	1	-	5 years
Right-of-use real estate	Life of lease 2	-	11 years
Right-of-use vehicles	Life of lease 2	-	7 years
Vehicles	1	-	5 years
Leasehold improvements	Life of lease 1	-	11 years
Buildings			25 years
Office and technology equipment			5 years

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

Intangible assets

The Company has recorded various intangible assets consisting of customer relationships, customer contracts, trade names and non-compete agreements, in connection with various business acquisitions. Customer relationships are recognized based on the estimated fair value given to the long-term associations with referral sources such as doctors, hospitals, and sleep centers. Customer contracts are recognized at the estimated fair value of the present value of expected future customer billings based on the statistical life of a customer Trade names are recognized at the estimated fair value associated with the trade name of the acquired company. Non-compete agreements are recognized at the estimated fair value associated with the non-compete agreements entered into by the sellers of acquired companies. Definite life intangible assets are amortized on a straight-line basis over the estimated useful lives of the related assets as follows:

Description	Estimated Useful Life
Customer relationships	10	-	20 years
Customer contracts			2 years
Trade names			10 years
Non-compete agreements			5 years

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

The Company periodically evaluates the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk, which are Level 3 unobservable inputs. The Company did not have any long-lived asset impairments in the years ended September 30, 2024 or 2023.

Goodwill impairment

The Company tests goodwill for impairment on an annual basis on July 1, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist. The Company determines the fair value of our reporting unit using the income approach (a Level 3 fair value input) and market approach (a Level 2 fair value input) to valuation, as well as other generally accepted valuation methodologies. The income approach utilizes a discounted cash flow analysis using management’s assumptions. The market approach compares the reporting unit to similar companies with the assumption that companies operating in the same industry will share similar characteristics and that company values will correlate to those characteristics. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized equal to the difference between the carrying amount and the estimated fair value of the reporting unit. The Company concluded that there was no impairment of goodwill during fiscal 2024 or 2023.

The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

Equity method investee

In July 2023, the Company, through QHM Investments I, LLC, acquired an 8.3% ownership in DMEScripts, LLC for $1,500,000. As of September 30, 2024, the Company has cumulatively invested $1,710,000 and has an 8.5% ownership.  DMEScripts, LLC is an independent e-prescribe company in the US that automates the medical equipment ordering process. This technology is dedicated to improving the patient, prescriber, and provider experience by eliminating inefficiencies and reducing paperwork. The investment in DMEScripts, LLC is accounted for using the equity method.

The Company applies the equity method of accounting for investments when it determines it has a significant influence, but not a controlling interest in the investee. Significant influence is determined by considering key factors such as ownership interest, representation on the board of directors, participation in policy making decisions, business relationship and material intra-entity transactions, among other factors.

The equity method investment is reported at cost and adjusted each period for the Company’s share of the investee's income (loss). The Company records “share of loss in equity method investment” on the consolidated statements of income (loss) for its pro rata share ownership percentage of the investee’s net loss.

Foreign currency transactions

Transactions in foreign currencies are initially recorded at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date and exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the average monthly rates of exchange.

Revenue recognition

Revenues are billed to, and collections are received from customers. Because of continuing changes in the health care industry and third-party reimbursement, the consideration receivable from these insurance companies is variable as these billings can be challenged by the payor. Therefore, the amount billed by the Company is reduced to an estimate of the amount that the Company believes will be ultimately allowed by the insurance contract, including co-pays and deductibles. This estimate involves significant judgment including an analysis of past collections and historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting estimated revenue as necessary.

The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities during the years ended September 30, 2024 and 2023.

Rental of medical equipment

Revenue that is generated from equipment that the Company rents to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including

private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancellable lease term.

Sales of medical equipment and supplies

The Company sells equipment, consumable supplies, and replacement parts to customers and recognizes revenue on delivery, as at that point all performance obligations have been met.

Shipping and handling

The Company provides shipping and handling at no charge in sending product to customers. The Company does not consider this a separate performance obligation since these shipping and handling activities occur before the customer obtains control of the goods. The shipping and handling are considered activities to fulfill the entity’s promise to transfer the goods and are expensed as within operating expenses.

Stock-based compensation

The Company grants stock options and restricted stock units to employees, members of the Board of Directors, and consultants. The Company measures equity settled share-based payments based on their fair value at the grant date and recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes Model. In estimating fair value, management is required to make certain assumptions and estimates, such as the expected life of units, volatility of the Company’s future share price, risk-free interest rates, and future dividend yields, at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. The Company has elected to recognize the effect of forfeitures in compensation cost when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Further, the Company has elected to use the contractual term as the expected term. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period for each separately vesting portion of the award.

Fair value measurement

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

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

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

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

There were no transfers between the levels of fair value hierarchy during the years ended September 30, 2024 or September 30, 2023.

Loss per share

The Company presents basic and diluted loss per share data for its ordinary shares. Basic loss per share is calculated by dividing the net loss by the weighted average number of Common Shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the loss per share calculations. The Company’s potentially dilutive common share equivalents are stock options and restricted stock units. The years ended September 30, 2024 and 2023 were periods of net losses, therefore, the potentially dilutive common share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. In order to determine diluted loss per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase common shares at the average market price during the period.

Leases

Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets.

The Company’s operating leases are for real estate and range from 2 to 11 years. The Company’s finance leases are for vehicles and range from 2 to 7 years.

The Company’s leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. Some of the Company’s vehicle lease agreements contain residual value guarantees.

The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset, and the contract conveys the right to control its use. The right-of-use asset is measured at the initial amount of the lease liability. Right-of-use assets are included in property and equipment in the Company's consolidated balance sheets.

Operating lease expense is recognized on a straight-line basis over the term of the lease. Finance lease cost includes a.) depreciation, which is recognized on a straight-line basis over the expected life of the right-of-use asset and included in depreciation in the Company’s consolidated statements of income (loss), and b.) interest expense, which is recognized following an effective interest rate method and is included in interest expense in the Company’s consolidated statements of income (loss).

The Company’s real estate operating leases do not provide an implicit rate that can be easily determined. Therefore, the Company applies its incremental borrowing rate to the lease based on the information available at the commencement date. This estimate impacts the carrying amount of the lease liabilities and the interest expense recorded on the consolidated statement of income (loss). Vehicle finance leases are recorded at the interest rate implicit in the lease based on the current value and the estimated residual value of the vehicle.

Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it is probable that it will choose to extend the lease at the end of the initial lease term. This estimate could affect future results if the Company extends the lease or exercises an early termination option.

The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset.

Income taxes

Deferred taxes are determined based on the differences between the financial statements and the tax bases using rates as enacted in the laws. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized.

Interest and penalties related to unrecognized tax benefits are recognized in the tax provision. Liabilities for uncertain tax positions are recognized when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. There are not any material interest or penalties during any of the years presented.

Business combinations

The Company accounts for business combinations using the acquisition method when control is obtained by the Company. The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date.

Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates at fair value with the corresponding gain or loss being recognized in profit or loss.

Financial instruments concentration of credit risk

The Company maintains cash with various major financial institutions which generally exceeds federally insured limits. The Company performs periodic evaluations of the financial institutions in which its cash is invested.

Derivatives financial instruments

The Company is exposed to risks related to changes in interest rates. The financial risk management program is designed to manage the exposure arising from cash flow variability and uses derivative financial instruments to minimize this risk. The Company does not enter into derivative financial instruments for trading or speculative purposes.

The Company’s derivative instruments consist of interest rate swap contracts. Derivative instruments are recorded in the consolidated balance sheets and the changes in the fair values of these interest rate swap contracts are recorded on the consolidated statements of income/(loss).

Recently adopted accounting pronouncements

On October 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Further, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard. While the adoption of ASC 326 could result in a higher allowance recorded in the future for credit losses on receivables within the scope of the standard due to the prescribed measurement principles, the impact of the adoption on the Company's consolidated financial statements was not material.

Recently issued accounting pronouncements

The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can selectively delay the adoption of all accounting standards until those standards would otherwise apply to private companies. The Company has elected to utilize this exemption and, as a result, the consolidated financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. To date, however, the Company has not delayed the adoption of any accounting standards except as noted below. Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid by jurisdiction. The ASU is effective for public business entities' annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.  

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting ("Topic 280"), which requires disclosure of incremental segment information, including significant segment expenses that are regularly provided to the chief operating decision maker and to disclose how reported measures of segment profit or loss are used in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU No. 2024-01, Compensation-Stock Compensation ("Topic 718"), which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC 718. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the SEC issued its final climate disclosure rule, which requires registrants to provide climate-related disclosures in their annual reports and registration statements. The new disclosure requirements will be effective for the Company beginning with its annual report for the year ending September 30, 2025. In April 2024, the SEC stayed its final climate rule to allow for a judicial review of pending legal challenges. The Company is currently evaluating the impact

these rules will have on its consolidated financial statements and related disclosures and will monitor the litigation progress relating to these rules for possible impacts on the disclosure requirements under the rules.

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Acquisitions of and investment in businesses

12 Months Ended

Sep. 30, 2024

Acquisitions of and investment in businesses

Acquisitions of and investment in businesses

3.Acquisitions of and investment in businesses

Prior year acquisitions

Acquisition of Great Elm Healthcare, LLC

On January 3, 2023, the Company, through QHM Holdings, LLC, acquired Great Elm Healthcare, LLC (“Great Elm”). Great Elm is an Arizona-based company with operations in seven states in the same industry as the Company. The purchase price was $73,569,000, comprised of $72,689,000 in cash at closing to the sellers, plus 431,996 Quipt common shares at a closing price per share of $4.77 for $2,060,000, less $820,000 of cash acquired, and less $360,000 for cash received from a working capital adjustment. The cash at closing was obtained from the delayed-draw term loan and revolving credit facility of the senior credit facility described in Note 9. The Company has determined that the transaction is an acquisition of a business under ASC 805 Business Combinations, and it has been accounted for by applying the acquisition method. The Company expensed $10,000 and $1,238,000 of professional fees in conjunction with the acquisition for the fiscal years ended September 30, 2024 and 2023, respectively.

The pro forma revenues and net income for Great Elm for the year ended September 30, 2023 as if the acquisition had occurred on October 1, 2022, was approximately $67,500,000 and $2,300,000, respectively, of which approximately $50,800,000 and $2,100,000 were recognized in the period from January 3, 2023 to September 30, 2023.

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

Accounts receivable	$	5,531
Inventory		1,398
Prepaid and other current assets		584
Property, equipment, and right of use assets		13,261
Goodwill		22,826
Intangible asset - customer relationships		42,000
Intangible asset - trade name		5,820
Other assets		161
Accounts payable		(6,085)
Accrued liabilities		(3,845)
Deferred revenue		(1,022)
Equipment loans		(4,259)
Lease liabilities		(2,801)
Net assets acquired	$	73,569
Cash paid at closing	$	72,689
Cash received from working capital adjustment		(360)
Cash acquired		(820)
Equity issued at closing		2,060
Consideration paid or payable	$	73,569

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

Acquisition of Southern Pharmaceutical Corporation

On September 1, 2023, the Company, through QHM Holdings, LLC, acquired Southern Pharmaceutical Corporation (“Southern”). Southern is a Mississippi-based company with operations in three states in the same industry as the Company. The purchase price was $3,782,000, comprised of $3,153,000 in cash to the sellers at closing, plus $753,000 of holdbacks paid during the year ended September 30, 2024, less $124,000 of cash acquired. The Company has determined that the transaction is an acquisition of a business under ASC 805, and it has been accounted for by applying the acquisition method. The Company expensed $120,000 and $24,000 of professional fees in conjunction with the acquisition during the fiscal years ended September 30, 2024 and 2023, respectively.

The pro forma revenues and net income for Southern for the year ended September 30, 2023, as if the acquisition had occurred on October 1, 2022, was approximately $10,100,000 and $1,000,000, respectively, of which approximately $800,000 and $200,000 were recognized in the period from September 1, 2023 to September 30, 2023.

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

Accounts receivable	$	845
Inventory		1,374
Prepaid and other current assets		4
Property, equipment, and right of use assets		3,290
Goodwill		243
Intangible asset - customer relationships		2,190
Intangible asset - trade name		300
Intangible asset - non-compete agreements		40
Accounts payable		(1,483)
Accrued liabilities		(196)
Deferred revenue		(212)
Equipment loans		(1,063)
Lease liabilities		(1,142)
Deferred income taxes		(408)
Net assets acquired	$	3,782
Cash paid at closing	$	3,153
Cash acquired		(124)
Cash to be paid after closing, included in purchase price payable		753
Consideration paid or payable	$	3,782

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

Purchase price payable

The purchase price payable included on the consolidated statements of financial position relates to holdbacks of Southern and others from prior years, less payments and adjustments made. Below is the movement in purchase price payable for the years ended September 30, 2024 and 2023:

Balance, September 30, 2022	$	5,778
Addition from acquisitions		1,274
Accretion of interest		128
Derecognition of purchase price payable		(640)
Payments		(5,083)
Balance, September 30, 2023	$	1,457
Accretion of interest		37
Derecognition of purchase price payable		(550)
Payments		(944)
Balance, September 30, 2024	$	—

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Prepaid and other current assets

12 Months Ended

Sep. 30, 2024

Prepaid and other current assets

Prepaid and other current assets

4.Prepaid and other current assets

Following is a summary of prepaid and other current assets as of September 30, 2024 and 2023:

	As at September 30,		As of September 30,
	2024		2023
Vendor rebates	$	2,798	$	2,211
Prepaid insurance		1,904		825
Prepaid income taxes		1,283		424
Other		926		372
Total	$	6,911	$	3,832

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Property, equipment, and right-of-use assets

12 Months Ended

Sep. 30, 2024

Property, equipment, and right-of-use assets

Property, equipment, and right-of-use assets

5.Property, equipment, and right-of-use assets

Following is a summary of property, equipment, and right-of-use assets as of September 30, 2024 and 2023:

	As at September 30,		As of September 30,
	2024		2023
Rental equipment		64,568		61,683
Vehicles		3,296		2,516
Leasehold improvements		2,403		2,117
Office and technology equipment		1,130		1,124
Land		160		160
Buildings		930		930
Projects in process		360		—
Property and equipment, gross		72,847		68,530
Less: accumulated depreciation		(35,462)		(33,027)
Property and equipment, net	$	37,385	$	35,503
Right-of-use real estate	$	23,510	$	21,227
Right-of-use vehicles		5,498		4,211
Right of use, gross		29,008		25,438
Less: accumulated amortization		(12,533)		(7,536)
Right of use, net	$	16,475	$	17,902

Rental equipment transferred from inventory during the fiscal years ended September 30, 2024 and 2023 was $33,566,000 and $29,279,000, respectively. For the years ended September 30, 2024 and 2023, the Company obtained equipment loans (Note 9) of $25,304,000 and $23,615,000, respectively, with the balance of $8,262,000 and $5,664,000 paid in cash, respectively.

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Goodwill and intangible assets

12 Months Ended

Sep. 30, 2024

Goodwill and intangible assets

Goodwill and intangible assets

6.Goodwill and intangible assets

Goodwill continuity

Following is the activity in goodwill for the years ended September 30, 2024 and 2023:

Balance, September 30, 2022	$	28,208
Adjustments to prior year acquisitions		(544)
Acquisitions during the year ended September 30, 2023:
Great Elm		22,826
Southern		2,335
Balance, September 30, 2023	$	52,825
Adjustments related to final purchase price allocation for Southern acquisition		(2,092)
Balance, September 30, 2024	$	50,733

Intangible assets

Following is a summary of intangible assets as of September 30, 2024 and 2023:

	As of September 30,		As of September 30,
	2024		2023
Customer relationships	$	79,088	$	79,088
Trade names		11,581		11,581
Customer contracts		3,851		3,851
Non-compete agreements		710		710
Intangible assets, gross		95,230		95,230
Less: accumulated amortization		(27,277)		(21,190)
Intangible assets, net	$	67,953	$	74,040

As of September 30, 2024, estimated annual amortization for intangible assets for each of the next five years and thereafter is approximately:

	Estimated
Year Ending September 30,	Amortization
2025	$	6,016
2026		5,776
2027		5,723
2028		5,594
2029		5,587
Thereafter		39,257
Intangible assets, net	$	67,953

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Accounts payable and accrued liabilities

12 Months Ended

Sep. 30, 2024

Accounts payable and accrued liabilities

Accounts payable and accrued liabilities

7.Accounts payable and accrued liabilities

Following is a summary of accounts payable and accrued liabilities as of September 30, 2024 and 2023:

	As of September 30,		As of September 30,
	2024		2023
Accounts payable	$	29,310	$	24,736
Accrued compensation		4,576		4,927
Other		1,477		2,355
Total	$	35,363	$	32,018

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Deferred revenue

12 Months Ended

Sep. 30, 2024

Deferred revenue

Deferred revenue

8.Deferred revenue

Activity for deferred revenue for the years ended September 30, 2024 and 2023 is as follows:

	For the year ended		For the year ended
	September 30, 2024		September 30, 2023
Beginning balance	$	4,511	$	3,036
Acquisitions		—		1,234
Operations		(943)		241
Ending balance	$	3,568	$	4,511

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Long-term debt and lease liabilities

12 Months Ended

Sep. 30, 2024

Long-term debt and lease liabilities

Long-term debt and lease liabilities

9.Long-term debt and lease liabilities

Senior credit facility

The Company has a $110,000,000 senior credit facility (“the Facility”) with a group of US banks that matures in September 2027. The Facility consists of a delayed-draw term loan facility of $85,000,000, of which $64,000,000 has been drawn; a term loan of $5,000,000, which was drawn at closing; and a $20,000,000 revolving credit facility. The Facility is secured by substantially all assets of the Company and is subject to certain financial covenants, with which the Company was in compliance as of September 30, 2024.

A summary of the balances on the Facility as of September 30, 2024 and 2023 is as follows:

	As of		As of
	September 30, 2024		September 30, 2023
Delayed-draw term loan	$	58,400	$	61,600
Term loan		4,500		4,750
Revolving credit facility		6,323		—
Total principal		69,223		66,350
Deferred financing costs		(1,430)		(1,884)
Net carrying value	$	67,793	$	64,466
Current portion		3,248		3,352
Long-term portion		64,545		61,114
Net carrying value	$	67,793	$	64,466

As of September 30, 2024, scheduled future repayments of the Facility are as follows:

Year Ending September 30,	Amount
2025	$	3,450
2026		3,450
2027		69,223
Total	$	76,123

The delayed-draw term loan and the term loan are bearing interest at a weighted average 7.6% as of September 30, 2024. The rate is based on a secured overnight financing rate (“SOFR”), with a floor of 0.5%, plus a spread of 2.1% to 2.85% (2.65% as of September 30, 2024) based on the Company’s leverage ratio and will reprice within three months. The revolving credit facility is bearing interest at 7.7% as of September 30, 2024 and will reprice within one month. The Facility also has fees for unused availability. The fair value of the Facility was determined considering market conditions, credit worthiness and the current terms of debt, which is considered Level 2 on the fair value hierarchy. Due to the near-term repricing of the interest rates, the fair value of the Facility approximates the principal value as of September 30, 2024 and 2023.

To manage the risks of the cash flows related to interest expense, the Company entered into several interest rate swaps on $59,000,000 of the principal amount of the Facility. The swaps carry a fixed SOFR of 3.4% to 4.4%, resulting in a weighted combined rate of 6.8%. The swaps are settled quarterly and mature on September 30, 2025, 2026 and at the Facility’s maturity. Any difference between the Facility’s SOFR rate and the swap’s rate is recorded as interest expense. For the year

ended September 30, 2024, a reduction of $311,000 to interest expense was recorded in the consolidated statements of income (loss).

As of September 30, 2024, the fair value of the interest rate swap liability, which was determined using Level 2 inputs of market conditions on future expected interest rates, credit worthiness, and the current terms of debt, was $1,122,000, and is recorded in derivative liability – interest rate swap in the condensed consolidated statements of financial position. The Company has recorded the changes in fair value of derivative liability – interest rate swaps on the consolidated statements of income (loss).

Interest expense on the Facility, including the impact of the interest rate swap agreement, was $5,346,000 and $4,415,000 for the years ended September 30, 2024 and 2023, respectively

The Company has incurred financing costs to obtain and maintain the Facility, which is reflected as a reduction of the outstanding balance and will be amortized as interest expense using the effective interest method over the life of the Facility. During the years ended September 30, 2024 and 2023, $513,000 and $462,000 of amortization of deferred financing costs was recorded, respectively.

Equipment Loans

The Company is offered financing arrangements from the Company’s suppliers and the supplier’s designated financial institution, in which payments for certain invoices or products can be financed and paid over an extended period. The financial institution pays the supplier when the original invoice becomes due, and the Company pays the third-party financial institution over a period of time. In most cases, the supplier accepts a discounted amount from the financial institution and the Company repays the financial institution the face amount of the invoice with no stated interest, in twelve equal monthly installments. The Company uses its incremental borrowing rate of 6.0% to 8.0% to impute interest on these arrangements. The Company has also assumed equipment loans in conjunction with several of its acquisitions.

There are no covenants with the loans and the carrying value of the equipment that is pledged as security against the loans is $22,871,000 and $20,262,000 as of September 30, 2024 and 2023, respectively.

Following is the activity in equipment loans for the years ended September 30, 2024 and 2023:

	Year Ended		Year Ended
	September 30, 2024		September 30, 2023
Beginning Balance	$	14,347		5,707
Additions:
Acquisitions		—		5,322
Operations		25,304		23,615
Repayments		(26,792)		(20,297)
Ending Balance		12,859		14,347
Current portion, due during the year ended September 30, 2025		12,804		14,114
Long-term portion, due during the year ended September 30, 2026	$	55	$	233

Leases Liabilities

The Company enters into leases for real estate and vehicles. Real estate leases are operating leases and are valued at the net present value of the future lease payments at the incremental borrowing rate . Vehicle leases are finance leases and recorded at the rate implicit in the lease based on the current value and the estimated residual value of the vehicle, if any.

Below is the movement in lease liabilities for the years ended September 30, 2024 and 2023 respectively:

	Finance		Operating		Total
Balance, September 30, 2022	$	1,993	$	8,506	$	10,499
Additions during the period:
Acquisitions		583		3,361		3,944
Operations		1,159		7,938		9,097
Lease terminations		—		(13)		(13)
Repayments		(821)		(3,556)		(4,377)
Balance, September 30, 2023	$	2,914	$	16,236	$	19,150
Additions during the period:
Operations		1,975		4,229		6,204
Lease terminations		—		(438)		(438)
Repayments		(1,579)		(4,187)		(5,766)
Balance, September 30, 2024	$	3,310	$	15,840	$	19,150

Future payments pursuant to lease liabilities are as follows:

Year Ending September 30,	Operating		Finance		Total
2025	$	5,518	$	1,537	$	7,055
2026		4,610		1,039		5,649
2027		3,301		682		3,983
2028		2,360		428		2,788
2029		1,697		68		1,765
2030		450		—		450
Thereafter		443		—		443
Gross lease payments		18,379		3,754		22,133
Less amounts relating to interest		(2,539)		(444)		(2,983)
Lease liabilities	$	15,840	$	3,310	$	19,150

The components of finance lease expense are as follows:

		Years ended September, 30
	Classification	2024		2023
Finance lease expense:
Amortization of lease assets	Depreciation	$	1,262	$	983
Interest on lease liabilities	Interest expense		262		187
Total finance lease cost		$	1,524	$	1,170

Other information relating to leases is as follows:

	As of			As of
	September 30, 2024			September 30, 2023
Weighted average remaining lease term (years)
Operating leases		4.1			4.5
Finance leases		2.8			2.3
Weighted average discount rate
Operating leases		7.4	%		7.4	%
Finance leases		8.5	%		8.5	%

SBA Loan

In conjunction with an acquisition in 2021, the Company assumed an SBA Loan. The loan was paid off during the year ended September 30, 2023 and a loss on extinguishment of long-term debt of $30,000 was recorded.

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Shareholders' Equity

12 Months Ended

Sep. 30, 2024

Shareholders' Equity

Shareholders' Equity

10.Shareholders’ Equity

Authorized share capital

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

Issued share capital

The Company has only one class of common shares outstanding. Common shares are classified as equity, and costs related to the issuance of shares are recognized as a reduction of equity.

Issuance of common shares

In April 2023, the Company completed a bought deal public offering and brokered private placement. The Company issued a total of 5,409,000 common shares for aggregate gross proceeds of approximately C$42,500,000, or $31,200,000. Underwriters received a commission of approximately C$2,100,000, or $1,500,000, and other professional fees of approximately $1,800,000 were incurred for net proceeds of approximately $27,900,000. A portion of the net proceeds were used to fully pay down the revolver portion of the Facility during the twelve months ended September 30, 2023.

Employee, director, and consultant options

The Company has a stock option plan, which it uses for grants to directors, officers, employees, and consultants. Options granted under the plan are non-assignable and may be granted for a term not exceeding ten years. Stock options having varying vesting periods, and the options granted during the year ended September 30, 2023 vest quarterly over eight or twelve quarters.

A summary of stock options is provided below:

		Weighted
	Number of options (000’s)	average exercise price
Balance, September 30, 2022	3,751	C$	4.24
Granted	435		8.30
Exercised	(130)		5.01
Expired	(48)		6.94
Forfeited	(51)		7.22
Balance, September 30, 2023	3,957	C$	4.49
Exercised	(520)		1.50
Expired	(31)		7.35
Forfeited	(4)		8.48
Balance, September 30, 2024	3,402	C$	4.91

At September 30, 2024, the Company had 3,158,000 vested stock options with a weighted average exercise price of C$4.66. The weighted average share price on the dates of exercise during the years ended September 30, 2024 and 2023 was C$4.48 and C$8.69, respectively.

The fair value of the stock options granted during the year ended September 30, 2023 was C$5.43. The Company used the Black-Scholes option pricing model calculated using the following assumptions:

	Year Ended
	September 30,
	2023
Share price at grant date		C$8.30
Risk-free interest rate		3.29%
Expected volatility		51.95%
Expected life of option		10 years
Expected dividend yield		Nil

Restricted stock units

The Company also grants restricted stock units to directors, officers, employees, and consultants. Each unit represents the right to ‎receive one common share, and vests over a period of one to two years from the grant date and are generally settled in the calendar year after vesting. The number of shares issued was less than the number of units settled due to the officers’ election to receive a reduced number of shares to satisfy their tax withholding obligations. These tax withholdings resulted in cash outflows of $213,000 and $1,338,000 for the years ended September 30, 2024 and 2023, respectively.

The fair value of the restricted stock units on the date of grant are discounted to reflect the difference between the vesting dates and the expected issuance dates, to be expensed over the respective vesting periods with an increase to contributed surplus.

A summary of restricted stock units is provided below:

	Number	Weighted average
	of units (000’s)	grant-date price
Balance, September 30, 2022	930	C$	8.34
Settled	(727)		8.30
Granted	831		8.30
Balance, September 30, 2023	1,034	C$	8.34
Settled	(515)		8.38
Balance, September 30, 2024	519	C$	8.30

Unrecognized compensation expense related to nonvested shares of stock options, restricted stock, and performance units was $430,000 at September 30, 2024 and will be recognized over a weighted average vesting period of 0.4 years. For the years ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Restricted stock units	$	1,639	$	3,383
Stock options		845		1,897
Stock-based compensation expense	$	2,484	$	5,280

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Commitments and Contingencies

12 Months Ended

Sep. 30, 2024

Commitments and Contingencies

Commitments and Contingencies

11.Commitments and Contingencies

From time to time, the Company is involved in various legal proceedings arising from the ordinary course of business, including governmental investigations or other actions or lawsuits stemming from a failure to comply with laws or regulations.

The Company has received a civil investigative demand from the Department of Justice (“DOJ”) through the U.S. Attorney’s Office for the Northern District of Georgia pursuant to the False Claims Act regarding an investigation concerning whether the Company may have caused the submission of false claims to government healthcare programs for CPAP equipment. The Company is cooperating with the investigation. The DOJ has not indicated to the Company whether it believes the Company engaged in any wrongdoing. In April 2024, the Company received a subpoena from the U.S. Securities and Exchange Commission (the “SEC”) to provide certain documents related to the Company and the DOJ investigation, CID, and financial reporting and disclosure matters (“SEC Subpoena”). Further to the SEC Subpoena, the SEC concluded its investigation in November 2024 and, based on the information it had as at such time, the SEC advised that it did not intend to recommend an enforcement action by it against the Company. Additional governmental agencies could conduct independent investigations relating to this investigation or separate unrelated matters. No assurance can be given as to the timing or outcome of the DOJ’s investigation or that no action may ultimately result from the SEC’s investigation.

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Operating expenses

12 Months Ended

Sep. 30, 2024

Operating expenses

Operating expenses

12.Operating expenses

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Payroll and employee benefits	$	78,905	$	67,720
Facilities, other than leases		5,623		5,000
Billing		11,030		9,140
Professional fees		6,288		3,561
Outbound freight		5,466		4,157
Vehicle fuel and maintenance		4,675		4,166
Bank and credit card fees		2,121		1,752
Technology		1,592		1,461
Insurance		1,549		1,651
All other		5,293		4,616
Total operating expenses	$	122,542	$	103,224

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Income taxes

12 Months Ended

Sep. 30, 2024

Income taxes

Income taxes

13.Income taxes

The Company’s US and foreign income before taxes were as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
US	$	(1,770)	$	2,145
Foreign		(4,884)		(4,844)
	$	(6,654)	$	(2,699)

The details of the Company’s income tax provision (benefit) are set forth below:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Current provision (benefit):
Federal	$	—	$	—
Foreign		—		—
State		(233)		633
		(233)		633
Deferred provision (benefit):
Federal		369		(668)
Foreign		—		—
State		(27)		120
		342		(548)
Provision for income taxes	$	109	$	85

The reconciliation of the Company’s income taxes calculated at the US federal statutory rate to its effective tax rate is set forth below:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
US federal statutory rate	21.0	%	21.0	%
State taxes, net of federal benefit	3.2		(22.9)
Statutory rate differential attributable to foreign operations	1.6		10.7
Executive compensation	(3.4)		(25.3)
Stock-based compensation	3.2		(23.5)
Change in valuation allowances	(24.1)		38.2
Other	(3.1)		(1.3)
Effective income tax rate	(1.6)	%	(3.1)	%

The statutory rate differential attributable to foreign operations is derived from local country taxes levied on the Company’s operations in Canada.

The change in valuation allowance relates to the Company’s deferred tax assets that it generated or utilized during the current year as well as changes in the Company’s assessment regarding its likelihood of using its deferred tax assets. The Company considered all the positive and negative evidence available to determine whether it is more likely than not that tax benefit from utilization of the deferred tax assets will ultimately be realized. Based upon that evidence, the Company determined that only a portion of its deferred tax assets will be utilized in the future to offset taxable income generated by the reversal of its deferred tax liabilities.

Deferred tax

The Company’s deferred tax assets (liabilities) are comprised of the following:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Deferred tax assets:
Net and capital operating loss carryforwards	$	16,469	$	16,524
Lease liabilities		4,777		4,519
Reserve for accounts receivable		2,074		2,481
Accrued and stock-based compensation		3,146		3,107
Goodwill		11,551		13,448
Interest		2,459		1,252
Other		964		621
Share issuance costs		540		839
Total deferred tax assets		41,980		42,791
Deferred tax assets valuation allowances		(19,089)		(17,667)
Deferred tax asset, net	$	22,891	$	25,124
Deferred tax liabilities:
Property, equipment, and right of use assets, net	$	(9,080)	$	(10,153)
Intangible assets, net		(14,013)		(15,313)
Total deferred tax liabilities	$	(23,093)	$	(25,466)
Net deferred tax assets (liabilities)	$	(202)	$	(342)

The activity of the Company’s valuation allowance is as follows:

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Balance at beginning of year	$	(17,667)	$	(8,011)
Increases		(1,422)		(9,656)
Balance at end of year	$	(19,089)	$	(17,667)

The US loss carryforwards of approximately $20,000,000 expire in 2030 through 2038 whereas the remaining US loss of approximately $14,000,000 can be carried forward indefinitely.

The Canadian non-capital loss carry-forwards of approximately $28,000,000 have various expiry dates starting in 2027 through 2044. The net capital losses of approximately $1,000,000 can be carried forward indefinitely.

The Company does not have unrecognized tax benefits due to uncertain tax positions. Management has determined that it is more likely than not that all tax positions that the Company has recorded in its income tax provision and tax returns would be sustained upon examination by the taxing authorities. There are no audits currently in progress.

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Related party transactions

12 Months Ended

Sep. 30, 2024

Related party transactions

Related party transactions

14.Related party transactions

The Company has six leases for office, warehouse, and retail space with a rental company affiliated with the Company’s Chief Executive Officer, the majority of which were entered into in 2015. The leases have a combined area of 74,520 square feet. Lease payments under these leases are approximately $65,000 per month in total beginning October 2022, with increases on October 1 of each year equal to the greater of (i) the Consumer Price Index for All Urban Consumers (CPI-U), and (ii) 3%. One lease expires in June 2026 and the remaining five leases expire on September 30, 2029.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (6,763)	$ (2,784)

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Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation and summary of significant accounting policies (Policies)

12 Months Ended

Sep. 30, 2024

Basis of Presentation and summary of significant accounting policies

Basis of accounting

Basis of accounting

These consolidated financial statements as of and for the years ended September 30, 2024 and 2023 (the “Consolidated Financial Statements”) of the Company were prepared in accordance with accounting principles generally accepted in the US (“GAAP”).

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

Historically, the Company qualified as a foreign private issuer and prepared its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). Effective October 1, 2024, the Company no longer qualifies as a foreign private issuer as defined in Rule 405 of Regulation C under the Securities Act and Rule 3b-4 under the Exchange Act and therefore has become a domestic filer and must file this Form 10-K pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 and in accordance with GAAP. The Company’s consolidated financial statements were prepared in accordance with GAAP retrospectively for the year ended September 30, 2023.

The consolidated financial statements of the Company are presented in US dollars, which is the Company’s functional currency, determined using management’s judgment that the primary economic environment in which it will derive its revenues and expenses incurred to generate those revenues is the US.

Basis of measurement

Basis of measurement

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

Principles of consolidation

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions have been eliminated. The Company’s consolidated entities, which all have a functional currency of US dollars and ownership of 100%, are as follows:

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

Use of estimates

Use of estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s management reviews these estimates, judgments, and assumptions on an ongoing basis, based on experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Revisions to estimates are adjusted prospectively in the period in which the estimates are revised. Actual results could differ from those estimates.

Estimates where management has made subjective judgments and where there is significant risk of material adjustments to assets and liabilities in future accounting periods include fair value measurements for financial instruments and share-

based transactions, useful lives and impairment of non-financial assets (property and equipment and intangible assets), provision for expected credit losses, fair value measurements for assets and liabilities acquired in business acquisitions, and calculation of deferred taxes.

Accounts receivable

Accounts receivable

Due to the nature of our industry and the reimbursement environment in which the Company operates, certain estimates are required to record total net revenues and accounts receivable at their net realizable values, including estimating variable consideration. Inherent in these estimates is the risk that they will have to be revised or updated as additional information becomes available. Specifically, the complexity of many third-party billing arrangements, contractual terms, and the uncertainty of reimbursement amounts for certain services may result in adjustments to amounts originally recorded. Such adjustments are typically identified and recorded at the point of cash application, claim denial, or account review. Net realizable values are estimated based on a number of factors, including age of the receivables, changes in customer payment patterns, historical experience, industry trends, and current economic conditions.

Inventory

Inventory

Inventory is stated at the lower of cost or net realizable value with cost determined using the first-in, first-out method. The Company’s inventory consists of finished goods purchased from vendors; therefore, no labor or overhead is included in the inventory cost. Inventory is subsequently recorded within cost of inventory sold sales on the consolidated statements of operations at the time the inventory is sold. Inventory is transferred to property and equipment as rental equipment at the time of rental revenue recognition.

The Company reviews inventory for obsolete, redundant, and slow-moving goods, and any such inventories are written down to their estimated net realizable value.

Property, equipment, and right-of-use assets

Property, equipment, and right-of-use assets

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

The estimated useful lives of the assets are as follows:

Description	Estimated Useful Life
Rental equipment	1	-	5 years
Right-of-use real estate	Life of lease 2	-	11 years
Right-of-use vehicles	Life of lease 2	-	7 years
Vehicles	1	-	5 years
Leasehold improvements	Life of lease 1	-	11 years
Buildings			25 years
Office and technology equipment			5 years

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

Intangible assets

Intangible assets

The Company has recorded various intangible assets consisting of customer relationships, customer contracts, trade names and non-compete agreements, in connection with various business acquisitions. Customer relationships are recognized based on the estimated fair value given to the long-term associations with referral sources such as doctors, hospitals, and sleep centers. Customer contracts are recognized at the estimated fair value of the present value of expected future customer billings based on the statistical life of a customer Trade names are recognized at the estimated fair value associated with the trade name of the acquired company. Non-compete agreements are recognized at the estimated fair value associated with the non-compete agreements entered into by the sellers of acquired companies. Definite life intangible assets are amortized on a straight-line basis over the estimated useful lives of the related assets as follows:

Description	Estimated Useful Life
Customer relationships	10	-	20 years
Customer contracts			2 years
Trade names			10 years
Non-compete agreements			5 years

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

The Company periodically evaluates the recoverability of long-lived assets whenever events and changes in circumstances indicate that the carrying amount of an asset may not be fully recoverable. When indicators of impairment are present, the carrying values of the assets are evaluated in relation to the operating performance and future undiscounted cash flows of the underlying business. The net book value of the underlying asset is adjusted to fair value if the sum of the expected discounted cash flows is less than book value. Fair values are based on estimates of market prices and assumptions concerning the amount and timing of estimated future cash flows and discount rates, reflecting varying degrees of perceived risk, which are Level 3 unobservable inputs. The Company did not have any long-lived asset impairments in the years ended September 30, 2024 or 2023.

Goodwill impairment

Goodwill impairment

The Company tests goodwill for impairment on an annual basis on July 1, or more frequently if an event occurs or circumstances change that would indicate that impairment may exist. The Company determines the fair value of our reporting unit using the income approach (a Level 3 fair value input) and market approach (a Level 2 fair value input) to valuation, as well as other generally accepted valuation methodologies. The income approach utilizes a discounted cash flow analysis using management’s assumptions. The market approach compares the reporting unit to similar companies with the assumption that companies operating in the same industry will share similar characteristics and that company values will correlate to those characteristics. If the carrying amount of the reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized equal to the difference between the carrying amount and the estimated fair value of the reporting unit. The Company concluded that there was no impairment of goodwill during fiscal 2024 or 2023.

The approach uses cash flow projections based upon a financial forecast approved by management, covering a five-year period. Cash flows for the years thereafter are extrapolated using the estimated terminal growth rate. The risk premiums expected by market participants related to uncertainties about the industry and assumptions relating to future cash flows may differ or change quickly, depending on economic conditions and other events.

Equity method investee

Equity method investee

In July 2023, the Company, through QHM Investments I, LLC, acquired an 8.3% ownership in DMEScripts, LLC for $1,500,000. As of September 30, 2024, the Company has cumulatively invested $1,710,000 and has an 8.5% ownership.  DMEScripts, LLC is an independent e-prescribe company in the US that automates the medical equipment ordering process. This technology is dedicated to improving the patient, prescriber, and provider experience by eliminating inefficiencies and reducing paperwork. The investment in DMEScripts, LLC is accounted for using the equity method.

The Company applies the equity method of accounting for investments when it determines it has a significant influence, but not a controlling interest in the investee. Significant influence is determined by considering key factors such as ownership interest, representation on the board of directors, participation in policy making decisions, business relationship and material intra-entity transactions, among other factors.

The equity method investment is reported at cost and adjusted each period for the Company’s share of the investee's income (loss). The Company records “share of loss in equity method investment” on the consolidated statements of income (loss) for its pro rata share ownership percentage of the investee’s net loss.

Foreign currency transactions

Foreign currency transactions

Transactions in foreign currencies are initially recorded at the foreign currency spot rate or the rate realized in the transaction. Monetary items are translated at the foreign currency spot rate as of the reporting date and exchange differences from monetary items are recognized in profit or loss. Non-monetary items that are not carried at fair value are translated using the exchange rates at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The assets and liabilities of foreign operations are translated into US dollars at the rate of exchange prevailing at the reporting date and their statements of operations are translated at the average monthly rates of exchange.

Revenue recognition

Revenue recognition

Revenues are billed to, and collections are received from customers. Because of continuing changes in the health care industry and third-party reimbursement, the consideration receivable from these insurance companies is variable as these billings can be challenged by the payor. Therefore, the amount billed by the Company is reduced to an estimate of the amount that the Company believes will be ultimately allowed by the insurance contract, including co-pays and deductibles. This estimate involves significant judgment including an analysis of past collections and historical modification rates. Management regularly reviews the actual claims approved by the insurance companies, adjusting estimated revenue as necessary.

The Company does not offer warranties to customers in excess of the manufacturer’s warranty. Any taxes due upon sale of the products or services are not recognized as revenue. The Company does not have any partially or unfilled performance obligations related to contracts with customers and as such, the Company has no contract liabilities during the years ended September 30, 2024 and 2023.

Rental of medical equipment

Revenue that is generated from equipment that the Company rents to patients is primarily recognized over the noncancelable rental period, typically one month, and commences on delivery of the equipment to the patients. Revenues are recorded at amounts estimated to be received under reimbursement arrangements with third-party payors, including

private insurers, prepaid health plans, Medicare, Medicaid and patients. Rental revenue, less estimated adjustments, is recognized as earned on a straight-line basis over the noncancellable lease term.

Sales of medical equipment and supplies

The Company sells equipment, consumable supplies, and replacement parts to customers and recognizes revenue on delivery, as at that point all performance obligations have been met.

Shipping and handling

The Company provides shipping and handling at no charge in sending product to customers. The Company does not consider this a separate performance obligation since these shipping and handling activities occur before the customer obtains control of the goods. The shipping and handling are considered activities to fulfill the entity’s promise to transfer the goods and are expensed as within operating expenses.

Stock-based compensation

Stock-based compensation

The Company grants stock options and restricted stock units to employees, members of the Board of Directors, and consultants. The Company measures equity settled share-based payments based on their fair value at the grant date and recognizes compensation expense on a straight-line basis over the vesting period. Fair value is measured using the Black-Scholes Model. In estimating fair value, management is required to make certain assumptions and estimates, such as the expected life of units, volatility of the Company’s future share price, risk-free interest rates, and future dividend yields, at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results. The Company has elected to recognize the effect of forfeitures in compensation cost when they occur. Previously recognized compensation cost for an award is reversed in the period that the award is forfeited. Further, the Company has elected to use the contractual term as the expected term. Compensation expense is recognized on a straight-line basis, by amortizing the grant date fair value over the vesting period for each separately vesting portion of the award.

Fair value measurement

Fair value measurement

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

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

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

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

There were no transfers between the levels of fair value hierarchy during the years ended September 30, 2024 or September 30, 2023.

Loss per share

Loss per share

The Company presents basic and diluted loss per share data for its ordinary shares. Basic loss per share is calculated by dividing the net loss by the weighted average number of Common Shares outstanding during the period. Contingently issuable shares (including shares held in escrow) are not considered outstanding common shares and consequently are not included in the loss per share calculations. The Company’s potentially dilutive common share equivalents are stock options and restricted stock units. The years ended September 30, 2024 and 2023 were periods of net losses, therefore, the potentially dilutive common share equivalents are excluded in the determination of dilutive net loss per share because their effect is antidilutive. In order to determine diluted loss per share, it is assumed that any proceeds from the exercise of dilutive instruments would be used to repurchase common shares at the average market price during the period.

Leases

Leases

Leases are classified as operating or finance leases based on the terms of the lease agreement and certain characteristics of the identified assets.

The Company’s operating leases are for real estate and range from 2 to 11 years. The Company’s finance leases are for vehicles and range from 2 to 7 years.

The Company’s leases include fixed payments, as well as in some cases, scheduled base rent increases over the term of the lease. Certain leases require variable payments of common area maintenance, operating expenses, and real estate taxes applicable to the property. Variable payments are excluded from the measurements of lease liabilities and are expensed as incurred. Any tenant improvement allowances received from the lessor are recorded as a reduction to rent expense over the term of the lease. Some of the Company’s vehicle lease agreements contain residual value guarantees.

The Company determines if an arrangement is a lease at the inception of the contract. Lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term for those arrangements where there is an identified asset, and the contract conveys the right to control its use. The right-of-use asset is measured at the initial amount of the lease liability. Right-of-use assets are included in property and equipment in the Company's consolidated balance sheets.

Operating lease expense is recognized on a straight-line basis over the term of the lease. Finance lease cost includes a.) depreciation, which is recognized on a straight-line basis over the expected life of the right-of-use asset and included in depreciation in the Company’s consolidated statements of income (loss), and b.) interest expense, which is recognized following an effective interest rate method and is included in interest expense in the Company’s consolidated statements of income (loss).

The Company’s real estate operating leases do not provide an implicit rate that can be easily determined. Therefore, the Company applies its incremental borrowing rate to the lease based on the information available at the commencement date. This estimate impacts the carrying amount of the lease liabilities and the interest expense recorded on the consolidated statement of income (loss). Vehicle finance leases are recorded at the interest rate implicit in the lease based on the current value and the estimated residual value of the vehicle.

Certain leases include one or more options to renew or terminate the lease at the Company’s discretion. When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it is probable that it will choose to extend the lease at the end of the initial lease term. This estimate could affect future results if the Company extends the lease or exercises an early termination option.

The Company accounts for non-lease and lease components to which they relate as a single lease component. Additionally, the Company recognized lease payments under short-term leases with an initial term of twelve months or less, as well as low value assets, as an expense on a straight-line basis over the lease term without recognizing the lease liability and ROU asset.

Income taxes

Income taxes

Deferred taxes are determined based on the differences between the financial statements and the tax bases using rates as enacted in the laws. A valuation allowance is established if it is “more likely than not” that all or a portion of the deferred tax assets will not be realized.

Interest and penalties related to unrecognized tax benefits are recognized in the tax provision. Liabilities for uncertain tax positions are recognized when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. There are not any material interest or penalties during any of the years presented.

Business combinations

Business combinations

The Company accounts for business combinations using the acquisition method when control is obtained by the Company. The Company measures the consideration transferred, the assets acquired, and the liabilities assumed in a business combination at their acquisition-date fair values. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred, and the services are received. The excess of the consideration transferred to obtain control, over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed, is recognized as goodwill as of the acquisition date.

Contingent consideration for a business combination is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as a liability is measured at subsequent reporting dates at fair value with the corresponding gain or loss being recognized in profit or loss.

Financial instruments concentration of credit risk

Financial instruments concentration of credit risk

The Company maintains cash with various major financial institutions which generally exceeds federally insured limits. The Company performs periodic evaluations of the financial institutions in which its cash is invested.

Derivatives financial instruments

Derivatives financial instruments

The Company is exposed to risks related to changes in interest rates. The financial risk management program is designed to manage the exposure arising from cash flow variability and uses derivative financial instruments to minimize this risk. The Company does not enter into derivative financial instruments for trading or speculative purposes.

The Company’s derivative instruments consist of interest rate swap contracts. Derivative instruments are recorded in the consolidated balance sheets and the changes in the fair values of these interest rate swap contracts are recorded on the consolidated statements of income/(loss).

Recently adopted and issued accounting pronouncements

Recently adopted accounting pronouncements

On October 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The standard replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. Further, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-04 and ASU 2019-05 to provide additional guidance on the credit losses standard. While the adoption of ASC 326 could result in a higher allowance recorded in the future for credit losses on receivables within the scope of the standard due to the prescribed measurement principles, the impact of the adoption on the Company's consolidated financial statements was not material.

Recently issued accounting pronouncements

The Company is an “emerging growth company” as defined by the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can selectively delay the adoption of all accounting standards until those standards would otherwise apply to private companies. The Company has elected to utilize this exemption and, as a result, the consolidated financial statements may not be comparable to the financial statements of issuers that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies. To date, however, the Company has not delayed the adoption of any accounting standards except as noted below. Section 107 of the JOBS Act provides that the Company can elect to opt out of the extended transition period at any time, which election is irrevocable.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid by jurisdiction. The ASU is effective for public business entities' annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.  

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting ("Topic 280"), which requires disclosure of incremental segment information, including significant segment expenses that are regularly provided to the chief operating decision maker and to disclose how reported measures of segment profit or loss are used in assessing segment performance and allocating resources. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the FASB issued ASU No. 2024-01, Compensation-Stock Compensation ("Topic 718"), which provides illustrative guidance to help entities determine whether profits interest and similar awards should be accounted for as share-based payment arrangements within the scope of ASC 718. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. The Company is currently evaluating the impact that this standard will have on its consolidated financial statements and related disclosures.

In March 2024, the SEC issued its final climate disclosure rule, which requires registrants to provide climate-related disclosures in their annual reports and registration statements. The new disclosure requirements will be effective for the Company beginning with its annual report for the year ending September 30, 2025. In April 2024, the SEC stayed its final climate rule to allow for a judicial review of pending legal challenges. The Company is currently evaluating the impact

these rules will have on its consolidated financial statements and related disclosures and will monitor the litigation progress relating to these rules for possible impacts on the disclosure requirements under the rules.

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Basis of Presentation and summary of significant accounting policies (Tables)

12 Months Ended

Sep. 30, 2024

Basis of Presentation and summary of significant accounting policies

Schedule of consolidated entities

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

Schedule of estimated useful lives of the assets

Description	Estimated Useful Life
Rental equipment	1	-	5 years
Right-of-use real estate	Life of lease 2	-	11 years
Right-of-use vehicles	Life of lease 2	-	7 years
Vehicles	1	-	5 years
Leasehold improvements	Life of lease 1	-	11 years
Buildings			25 years
Office and technology equipment			5 years

Schedule of useful life of finite-lived intangible assets

Description	Estimated Useful Life
Customer relationships	10	-	20 years
Customer contracts			2 years
Trade names			10 years
Non-compete agreements			5 years

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Acquisitions of and investment in businesses (Tables)

12 Months Ended

Sep. 30, 2024

Goodwill continuity

Schedule of movement in Purchase Price Payable

Balance, September 30, 2022	$	5,778
Addition from acquisitions		1,274
Accretion of interest		128
Derecognition of purchase price payable		(640)
Payments		(5,083)
Balance, September 30, 2023	$	1,457
Accretion of interest		37
Derecognition of purchase price payable		(550)
Payments		(944)
Balance, September 30, 2024	$	—

Great Elm Healthcare, LLC

Goodwill continuity

Schedule of fair value of the acquired assets and liabilities

Accounts receivable	$	5,531
Inventory		1,398
Prepaid and other current assets		584
Property, equipment, and right of use assets		13,261
Goodwill		22,826
Intangible asset - customer relationships		42,000
Intangible asset - trade name		5,820
Other assets		161
Accounts payable		(6,085)
Accrued liabilities		(3,845)
Deferred revenue		(1,022)
Equipment loans		(4,259)
Lease liabilities		(2,801)
Net assets acquired	$	73,569
Cash paid at closing	$	72,689
Cash received from working capital adjustment		(360)
Cash acquired		(820)
Equity issued at closing		2,060
Consideration paid or payable	$	73,569

Southern Pharmaceutical Corporation

Goodwill continuity

Schedule of fair value of the acquired assets and liabilities

Accounts receivable	$	845
Inventory		1,374
Prepaid and other current assets		4
Property, equipment, and right of use assets		3,290
Goodwill		243
Intangible asset - customer relationships		2,190
Intangible asset - trade name		300
Intangible asset - non-compete agreements		40
Accounts payable		(1,483)
Accrued liabilities		(196)
Deferred revenue		(212)
Equipment loans		(1,063)
Lease liabilities		(1,142)
Deferred income taxes		(408)
Net assets acquired	$	3,782
Cash paid at closing	$	3,153
Cash acquired		(124)
Cash to be paid after closing, included in purchase price payable		753
Consideration paid or payable	$	3,782

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Prepaid and other current assets (Tables)

12 Months Ended

Sep. 30, 2024

Prepaid and other current assets

Schedule of prepaid and other current assets

	As at September 30,		As of September 30,
	2024		2023
Vendor rebates	$	2,798	$	2,211
Prepaid insurance		1,904		825
Prepaid income taxes		1,283		424
Other		926		372
Total	$	6,911	$	3,832

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Property, equipment, and right-of-use assets (Tables)

12 Months Ended

Sep. 30, 2024

Property, equipment, and right-of-use assets

Schedule of property, equipment, and right-of-use assets

	As at September 30,		As of September 30,
	2024		2023
Rental equipment		64,568		61,683
Vehicles		3,296		2,516
Leasehold improvements		2,403		2,117
Office and technology equipment		1,130		1,124
Land		160		160
Buildings		930		930
Projects in process		360		—
Property and equipment, gross		72,847		68,530
Less: accumulated depreciation		(35,462)		(33,027)
Property and equipment, net	$	37,385	$	35,503
Right-of-use real estate	$	23,510	$	21,227
Right-of-use vehicles		5,498		4,211
Right of use, gross		29,008		25,438
Less: accumulated amortization		(12,533)		(7,536)
Right of use, net	$	16,475	$	17,902

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Goodwill and intangible assets (Tables)

12 Months Ended

Sep. 30, 2024

Goodwill and intangible assets

Schedule of activity in goodwill

Balance, September 30, 2022	$	28,208
Adjustments to prior year acquisitions		(544)
Acquisitions during the year ended September 30, 2023:
Great Elm		22,826
Southern		2,335
Balance, September 30, 2023	$	52,825
Adjustments related to final purchase price allocation for Southern acquisition		(2,092)
Balance, September 30, 2024	$	50,733

Schedule of intangible assets

	As of September 30,		As of September 30,
	2024		2023
Customer relationships	$	79,088	$	79,088
Trade names		11,581		11,581
Customer contracts		3,851		3,851
Non-compete agreements		710		710
Intangible assets, gross		95,230		95,230
Less: accumulated amortization		(27,277)		(21,190)
Intangible assets, net	$	67,953	$	74,040

Schedule of annual amortization of intangible asset

	Estimated
Year Ending September 30,	Amortization
2025	$	6,016
2026		5,776
2027		5,723
2028		5,594
2029		5,587
Thereafter		39,257
Intangible assets, net	$	67,953

XML

Accounts payable and accrued liabilities (Tables)

12 Months Ended

Sep. 30, 2024

Accounts payable and accrued liabilities

Schedule of accounts payable and accrued liabilities

	As of September 30,		As of September 30,
	2024		2023
Accounts payable	$	29,310	$	24,736
Accrued compensation		4,576		4,927
Other		1,477		2,355
Total	$	35,363	$	32,018

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Deferred revenue (Tables)

12 Months Ended

Sep. 30, 2024

Deferred revenue

Schedule of deferred revenue arrangements

	For the year ended		For the year ended
	September 30, 2024		September 30, 2023
Beginning balance	$	4,511	$	3,036
Acquisitions		—		1,234
Operations		(943)		241
Ending balance	$	3,568	$	4,511

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Long-term debt and lease liabilities (Tables)

12 Months Ended

Sep. 30, 2024

Long-term debt and lease liabilities

Summary of the balances on the Facility

	As of		As of
	September 30, 2024		September 30, 2023
Delayed-draw term loan	$	58,400	$	61,600
Term loan		4,500		4,750
Revolving credit facility		6,323		—
Total principal		69,223		66,350
Deferred financing costs		(1,430)		(1,884)
Net carrying value	$	67,793	$	64,466
Current portion		3,248		3,352
Long-term portion		64,545		61,114
Net carrying value	$	67,793	$	64,466

Schedule future repayments of the Facility

Year Ending September 30,	Amount
2025	$	3,450
2026		3,450
2027		69,223
Total	$	76,123

Schedule of activity in equipment loans

	Year Ended		Year Ended
	September 30, 2024		September 30, 2023
Beginning Balance	$	14,347		5,707
Additions:
Acquisitions		—		5,322
Operations		25,304		23,615
Repayments		(26,792)		(20,297)
Ending Balance		12,859		14,347
Current portion, due during the year ended September 30, 2025		12,804		14,114
Long-term portion, due during the year ended September 30, 2026	$	55	$	233

Schedule of movement in lease liabilities

	Finance		Operating		Total
Balance, September 30, 2022	$	1,993	$	8,506	$	10,499
Additions during the period:
Acquisitions		583		3,361		3,944
Operations		1,159		7,938		9,097
Lease terminations		—		(13)		(13)
Repayments		(821)		(3,556)		(4,377)
Balance, September 30, 2023	$	2,914	$	16,236	$	19,150
Additions during the period:
Operations		1,975		4,229		6,204
Lease terminations		—		(438)		(438)
Repayments		(1,579)		(4,187)		(5,766)
Balance, September 30, 2024	$	3,310	$	15,840	$	19,150

Schedule of future payments pursuant to lease liabilities

Year Ending September 30,	Operating		Finance		Total
2025	$	5,518	$	1,537	$	7,055
2026		4,610		1,039		5,649
2027		3,301		682		3,983
2028		2,360		428		2,788
2029		1,697		68		1,765
2030		450		—		450
Thereafter		443		—		443
Gross lease payments		18,379		3,754		22,133
Less amounts relating to interest		(2,539)		(444)		(2,983)
Lease liabilities	$	15,840	$	3,310	$	19,150

Schedule of components of finance lease expense and other information relating to leases

		Years ended September, 30
	Classification	2024		2023
Finance lease expense:
Amortization of lease assets	Depreciation	$	1,262	$	983
Interest on lease liabilities	Interest expense		262		187
Total finance lease cost		$	1,524	$	1,170

	As of			As of
	September 30, 2024			September 30, 2023
Weighted average remaining lease term (years)
Operating leases		4.1			4.5
Finance leases		2.8			2.3
Weighted average discount rate
Operating leases		7.4	%		7.4	%
Finance leases		8.5	%		8.5	%

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Shareholders' Equity (Tables)

12 Months Ended

Sep. 30, 2024

Shareholders' Equity

Schedule of stock option activity

		Weighted
	Number of options (000’s)	average exercise price
Balance, September 30, 2022	3,751	C$	4.24
Granted	435		8.30
Exercised	(130)		5.01
Expired	(48)		6.94
Forfeited	(51)		7.22
Balance, September 30, 2023	3,957	C$	4.49
Exercised	(520)		1.50
Expired	(31)		7.35
Forfeited	(4)		8.48
Balance, September 30, 2024	3,402	C$	4.91

Schedule of assumptions used in valuation of stock options

	Year Ended
	September 30,
	2023
Share price at grant date		C$8.30
Risk-free interest rate		3.29%
Expected volatility		51.95%
Expected life of option		10 years
Expected dividend yield		Nil

Schedule of restricted stock units activity

	Number	Weighted average
	of units (000’s)	grant-date price
Balance, September 30, 2022	930	C$	8.34
Settled	(727)		8.30
Granted	831		8.30
Balance, September 30, 2023	1,034	C$	8.34
Settled	(515)		8.38
Balance, September 30, 2024	519	C$	8.30

Schedule of stock-based compensation expense

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Restricted stock units	$	1,639	$	3,383
Stock options		845		1,897
Stock-based compensation expense	$	2,484	$	5,280

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Operating expenses (Tables)

12 Months Ended

Sep. 30, 2024

Operating expenses

Schedule of operating expenses

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Payroll and employee benefits	$	78,905	$	67,720
Facilities, other than leases		5,623		5,000
Billing		11,030		9,140
Professional fees		6,288		3,561
Outbound freight		5,466		4,157
Vehicle fuel and maintenance		4,675		4,166
Bank and credit card fees		2,121		1,752
Technology		1,592		1,461
Insurance		1,549		1,651
All other		5,293		4,616
Total operating expenses	$	122,542	$	103,224

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Income taxes (Tables)

12 Months Ended

Sep. 30, 2024

Income taxes

Schedule of the company's US and foreign income before taxes

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
US	$	(1,770)	$	2,145
Foreign		(4,884)		(4,844)
	$	(6,654)	$	(2,699)

Schedule of income tax provision (benefit)

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Current provision (benefit):
Federal	$	—	$	—
Foreign		—		—
State		(233)		633
		(233)		633
Deferred provision (benefit):
Federal		369		(668)
Foreign		—		—
State		(27)		120
		342		(548)
Provision for income taxes	$	109	$	85

Schedule of reconciliation of the Company's income taxes calculated at the US federal statutory rate to its effective tax rate

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
US federal statutory rate	21.0	%	21.0	%
State taxes, net of federal benefit	3.2		(22.9)
Statutory rate differential attributable to foreign operations	1.6		10.7
Executive compensation	(3.4)		(25.3)
Stock-based compensation	3.2		(23.5)
Change in valuation allowances	(24.1)		38.2
Other	(3.1)		(1.3)
Effective income tax rate	(1.6)	%	(3.1)	%

Schedule of deferred tax assets (liabilities)

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Deferred tax assets:
Net and capital operating loss carryforwards	$	16,469	$	16,524
Lease liabilities		4,777		4,519
Reserve for accounts receivable		2,074		2,481
Accrued and stock-based compensation		3,146		3,107
Goodwill		11,551		13,448
Interest		2,459		1,252
Other		964		621
Share issuance costs		540		839
Total deferred tax assets		41,980		42,791
Deferred tax assets valuation allowances		(19,089)		(17,667)
Deferred tax asset, net	$	22,891	$	25,124
Deferred tax liabilities:
Property, equipment, and right of use assets, net	$	(9,080)	$	(10,153)
Intangible assets, net		(14,013)		(15,313)
Total deferred tax liabilities	$	(23,093)	$	(25,466)
Net deferred tax assets (liabilities)	$	(202)	$	(342)

Schedule of valuation allowance activity

	Year Ended		Year Ended
	September 30,		September 30,
	2024		2023
Balance at beginning of year	$	(17,667)	$	(8,011)
Increases		(1,422)		(9,656)
Balance at end of year	$	(19,089)	$	(17,667)

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Nature of operations (Details)	12 Months Ended
	Sep. 30, 2024 segment
Nature of operations
Number of business segments	1

XML

Basis of Presentation and summary of significant accounting policies (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Basis of Presentation and summary of significant accounting policies
Goodwill impairment	$ 0	$ 0
Projected cash flows period	5 years
Contract liabilities	$ 0	0
Fair value assets, transfers from level 1 to 2	0	0
Fair value assets, transfers from level 2 to 1	0	0
Fair value assets, transfers into or out of level 3	0	0
Fair value liabilities, transfers from level 1 to 2	$ 0	$ 0

XML

Basis of Presentation and summary of significant accounting policies - Property, equipment, and right-of-use assets (Details)	12 Months Ended
	Sep. 30, 2024
Rental equipment | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	5 years
Rental equipment | Minimum
Property, equipment, and right-of-use assets
Estimated Useful Life	1 year
Right-of-use real estate | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	11 years
Right-of-use real estate | Minimum
Property, equipment, and right-of-use assets
Estimated Useful Life	2 years
Right-of-use vehicles | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	7 years
Right-of-use vehicles | Minimum
Property, equipment, and right-of-use assets
Estimated Useful Life	2 years
Vehicles | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	5 years
Vehicles | Minimum
Property, equipment, and right-of-use assets
Estimated Useful Life	1 year
Leasehold Improvements | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	11 years
Leasehold Improvements | Minimum
Property, equipment, and right-of-use assets
Estimated Useful Life	1 year
Buildings | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	25 years
Office and technology equipment | Maximum
Property, equipment, and right-of-use assets
Estimated Useful Life	5 years

XML

Basis of Presentation and summary of significant accounting policies - Intangible assets (Details)	Sep. 30, 2024
Customer relationships | Maximum
Summary of intangible assets
Estimated useful lives	20 years
Customer relationships | Minimum
Summary of intangible assets
Estimated useful lives	10 years
Customer contracts
Summary of intangible assets
Estimated useful lives	2 years
Trade names
Summary of intangible assets
Estimated useful lives	10 years
Non-compete agreements
Summary of intangible assets
Estimated useful lives	5 years

XML

Basis of Presentation and summary of significant accounting policies - Equity method investee (Details) - USD ($)	1 Months Ended
	Jul. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Equity method investee
Cumulative investments		$ 1,311,000	$ 1,411,000
DMEScripts, LLC
Equity method investee
Percentage of equity interest acquired	8.30%	8.50%
Payments to acquire equity interest	$ 1,500,000
Cumulative investments		$ 1,710,000

XML

Basis of Presentation and summary of significant accounting policies - Leases (Details)	Sep. 30, 2024
Maximum
Leases
Operating lease real estate term	11 years
Finance lease vehicles term	7 years
Minimum
Leases
Operating lease real estate term	2 years
Finance lease vehicles term	2 years

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Acquisitions of and investment in businesses (Details)			1 Months Ended	9 Months Ended	12 Months Ended
	Sep. 01, 2023 USD ($) state	Jan. 03, 2023 USD ($) state $ / shares shares	Sep. 30, 2023 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Goodwill continuity
Acquisition-related costs					$ 401,000	$ 1,269,000
Great Elm Healthcare, LLC
Goodwill continuity
Number of states in which operations are based | state		7
Total purchase price		$ 73,569,000
Purchase price in cash		$ 72,689,000
Shares issued in business combination | shares		431,996
Price per share | $ / shares		$ 4.77
Purchase price in Quipt common shares		$ 2,060,000
Cash acquired		820,000
Cash received from working capital adjustment		$ 360,000
Acquisition-related costs					10,000	1,238,000
Pro forma revenues				$ 50,800,000		67,500,000
Pro forma net income				$ 2,100,000		2,300,000
Southern Pharmaceutical Corporation
Goodwill continuity
Number of states in which operations are based | state	3
Total purchase price	$ 3,782,000
Purchase price in cash	3,153,000
Cash acquired	124,000
Acquisition-related costs					$ 120,000	24,000
Pro forma revenues			$ 800,000			10,100,000
Pro forma net income			$ 200,000			$ 1,000,000
Holdbacks paid during the year	$ 753,000

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Acquisitions of and investment in businesses - Fair value of the acquired assets and liabilities (Details) - USD ($)	Sep. 01, 2023	Jan. 03, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Goodwill continuity
Goodwill			$ 50,733,000	$ 52,825,000	$ 28,208,000
Great Elm Healthcare, LLC
Goodwill continuity
Accounts receivable		$ 5,531,000
Inventory		1,398,000
Prepaid and other current assets		584,000
Property, equipment, and right of use assets		13,261,000
Goodwill		22,826,000
Other assets		161,000
Accounts payable		(6,085,000)
Accrued liabilities		(3,845,000)
Deferred revenue		(1,022,000)
Equipment loans		(4,259,000)
Lease liabilities		(2,801,000)
Net assets acquired		73,569,000
Cash paid at closing		72,689,000
Cash received from working capital adjustment		(360,000)
Cash acquired		(820,000)
Equity issued at closing		2,060,000
Consideration paid or payable		73,569,000
Great Elm Healthcare, LLC | Trade names
Goodwill continuity
Intangible asset		5,820,000
Great Elm Healthcare, LLC | Customer relationships
Goodwill continuity
Intangible asset		$ 42,000,000
Southern Pharmaceutical Corporation
Goodwill continuity
Accounts receivable	$ 845,000
Inventory	1,374,000
Prepaid and other current assets	4,000
Property, equipment, and right of use assets	3,290,000
Goodwill	243,000
Accounts payable	(1,483,000)
Accrued liabilities	(196,000)
Deferred revenue	(212,000)
Equipment loans	(1,063,000)
Lease liabilities	(1,142,000)
Deferred income taxes	(408,000)
Net assets acquired	3,782,000
Cash paid at closing	3,153,000
Cash acquired	(124,000)
Cash to be paid after closing, included in purchase price payable	753,000
Consideration paid or payable	3,782,000
Southern Pharmaceutical Corporation | Trade names
Goodwill continuity
Intangible asset	300,000
Southern Pharmaceutical Corporation | Customer relationships
Goodwill continuity
Intangible asset	2,190,000
Southern Pharmaceutical Corporation | Non-compete agreements
Goodwill continuity
Intangible asset	$ 40,000

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Acquisitions of and investment in businesses - Movement in Purchase Price Payable (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Purchase price payable
Balance, beginning	$ 1,457	$ 5,778
Addition from acquisitions		1,274
Accretion of interest	37	128
Derecognition of purchase price payable	(550)	(640)
Payments	$ (944)	(5,083)
Balance, ending		$ 1,457

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Prepaid and other current assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Prepaid and other current assets
Vendor rebates	$ 2,798	$ 2,211
Prepaid insurance	1,904	825
Prepaid income taxes	1,283	424
Other	926	372
Total	$ 6,911	$ 3,832

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Property, equipment, and right-of-use assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Property, equipment, and right-of-use assets
Property and equipment, gross	$ 72,847	$ 68,530
Less: accumulated depreciation	(35,462)	(33,027)
Property and equipment, net	37,385	35,503
Right of use, gross	29,008	25,438
Less: accumulated amortization	(12,533)	(7,536)
Right of use, net	16,475	17,902
Rental equipment
Property, equipment, and right-of-use assets
Property and equipment, gross	64,568	61,683
Vehicles
Property, equipment, and right-of-use assets
Property and equipment, gross	3,296	2,516
Leasehold Improvements
Property, equipment, and right-of-use assets
Property and equipment, gross	2,403	2,117
Office and technology equipment
Property, equipment, and right-of-use assets
Property and equipment, gross	1,130	1,124
Land
Property, equipment, and right-of-use assets
Property and equipment, gross	160	160
Buildings
Property, equipment, and right-of-use assets
Property and equipment, gross	930	930
Projects in process
Property, equipment, and right-of-use assets
Property and equipment, gross	360
Right-of-use real estate
Property, equipment, and right-of-use assets
Right of use, gross	23,510	21,227
Right-of-use vehicles
Property, equipment, and right-of-use assets
Right of use, gross	$ 5,498	$ 4,211

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Property, equipment, and right-of-use assets - Narrative (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Property, equipment, and right-of-use assets
Balance of equipment value paid in cash	$ 10,313,000	$ 6,852,000
Rental equipment
Property, equipment, and right-of-use assets
Rental equipment transferred from inventory	33,566,000	29,279,000
Balance of equipment value paid in cash	8,262,000	5,664,000
Rental equipment | Equipment loans
Property, equipment, and right-of-use assets
Principal amount of debt	$ 25,304,000	$ 23,615,000

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Goodwill and intangible assets - Goodwill continuity (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Activity in goodwill
Goodwill, Beginning balance	$ 52,825	$ 28,208
Adjustments		(544)
Goodwill, Ending balance	50,733	52,825
Great Elm
Activity in goodwill
Acquisitions		22,826
Southern
Activity in goodwill
Adjustments	$ (2,092)
Acquisitions		$ 2,335

XML

Goodwill and intangible assets - Summary of intangible assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Summary of intangible assets
Intangible assets, gross	$ 95,230	$ 95,230
Less: accumulated amortization	(27,277)	(21,190)
Total intangible assets, net	67,953	74,040
Customer relationships
Summary of intangible assets
Intangible assets, gross	79,088	79,088
Trade names
Summary of intangible assets
Intangible assets, gross	11,581	11,581
Customer contracts
Summary of intangible assets
Intangible assets, gross	3,851	3,851
Non-compete agreements
Summary of intangible assets
Intangible assets, gross	$ 710	$ 710

XML

Goodwill and intangible assets - Schedule of annual amortization of intangible asset (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Annual amortization of intangible assets
2025	$ 6,016
2026	5,776
2027	5,723
2028	5,594
2029	5,587
Thereafter	39,257
Total intangible assets, net	$ 67,953	$ 74,040

XML

Accounts payable and accrued liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Accounts payable and accrued liabilities
Accounts payable	$ 29,310	$ 24,736
Accrued compensation	4,576	4,927
Other	1,477	2,355
Total	$ 35,363	$ 32,018

XML

Deferred revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Activity for deferred revenue
Beginning balance	$ 4,511	$ 3,036
Acquisitions		1,234
Operations	(943)	241
Ending balance	$ 3,568	$ 4,511

XML

Long-term debt and lease liabilities - Senior credit facility (Details) - USD ($)		12 Months Ended
	Jan. 03, 2023	Sep. 30, 2024	Sep. 30, 2023
Long-term debt
Issuance of delayed-draw term loan under senior credit facility			$ 64,000,000
Floor rate		0.50%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]		us-gaap:SecuredOvernightFinancingRateSofrMember
Interest rate		0.00%
Reduction of interest expense		$ 311,000
Derivative liability - interest rate swap		1,122,000
Interest expense		5,346,000	4,415,000
Amortization of deferred financing costs		513,000	$ 462,000
Interest rate swap
Long-term debt
Notional amount		59,000,000
Derivative liability - interest rate swap		$ 1,122,000
Minimum | Interest rate swap
Long-term debt
Fixed SOFR rate		3.40%
Maximum | Interest rate swap
Long-term debt
Fixed SOFR rate		4.40%
Weighted average | Interest rate swap
Long-term debt
Fixed SOFR rate		6.80%
Senior credit facility
Long-term debt
Borrowing capacity	$ 110,000,000
Delayed-draw term loan
Long-term debt
Borrowing capacity	85,000,000
Issuance of delayed-draw term loan under senior credit facility	64,000,000
Term loan
Long-term debt
Issuance of delayed-draw term loan under senior credit facility	5,000,000
Revolving credit facility
Long-term debt
Borrowing capacity	$ 20,000,000
Repricing period		1 month
Interest rate		7.70%
Delayed Draw Term Loan and Term Loan
Long-term debt
Weighted average interest rate		7.60%
Spread rate		2.65%
Repricing period		3 months
Delayed Draw Term Loan and Term Loan | Minimum
Long-term debt
Spread rate		2.10%
Delayed Draw Term Loan and Term Loan | Maximum
Long-term debt
Spread rate		2.85%

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Long-term debt and lease liabilities - Summary of the balances on the Facility (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023
Long-term debt
Total principal	$ 69,223	$ 66,350
Deferred financing costs	(1,430)	(1,884)
Net carrying value	67,793	64,466
Current portion	3,248	3,352
Long-term portion	64,545	61,114
Delayed-draw term loan
Long-term debt
Total principal	58,400	61,600
Term loan
Long-term debt
Total principal	4,500	$ 4,750
Revolving credit facility
Long-term debt
Total principal	$ 6,323

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Long-term debt and lease liabilities - Future repayments (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Long-Term Debt, Fiscal Year Maturity
2025	$ 3,450
2026	3,450
2027	69,223
Total	$ 76,123

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Long-term debt and lease liabilities - Equipment Loans (Details)	12 Months Ended
	Sep. 30, 2024 USD ($) installment	Sep. 30, 2023 USD ($)
Long-term debt
Interest rate	0.00%
Equipment Loan
Long-term debt
Number of installments | installment	12
Carrying value of secured equipment | $	$ 22,871,000	$ 20,262,000
Equipment Loan | Minimum
Long-term debt
Incremental borrowing rate	6.00%
Equipment Loan | Maximum
Long-term debt
Incremental borrowing rate	8.00%

XML

Long-term debt and lease liabilities - Activity in equipment loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Long-term debt and lease liabilities
Beginning Balance	$ 14,347	$ 5,707
Acquisitions		5,322
Operations	25,304	23,615
Repayments	(26,792)	(20,297)
Ending Balance	12,859	14,347
Current portion, due during the year	12,804	14,114
Long-term portion, due during the year	$ 55	$ 233

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Long-term debt and lease liabilities - Movement in lease liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Finance
Beginning balance	$ 2,914	$ 1,993
Acquisitions		583
Operations	1,975	1,159
Repayments of finance leases	(1,579)	(821)
Ending balance	$ 3,310	$ 2,914
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Ending balance	Ending balance	Ending balance
Operating
Beginning balance	$ 16,236	$ 8,506
Acquisitions		3,361
Operations	4,229	7,938
Lease terminations	(438)	(13)
Repayments	4,187	3,556
Ending balance	$ 15,840	$ 16,236
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Ending balance	Ending balance	Ending balance
Total
Beginning balance	$ 19,150	$ 10,499
Acquisitions		3,944
Operations	6,204	9,097
Lease terminations	(438)	(13)
Repayments	(5,766)	(4,377)
Ending balance	$ 19,150	$ 19,150

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Long-term debt and lease liabilities - Future payments pursuant to lease liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Operating
2025	$ 5,518
2026	4,610
2027	3,301
2028	2,360
2029	1,697
2030	450
Thereafter	443
Gross lease payments	18,379
Less amounts relating to interest	(2,539)
Lease liabilities	$ 15,840	$ 16,236	$ 8,506
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Lease liabilities	Lease liabilities	Lease liabilities
Finance
2025	$ 1,537
2026	1,039
2027	682
2028	428
2029	68
Gross lease payments	3,754
Less amounts relating to interest	(444)
Lease liabilities	$ 3,310	$ 2,914	$ 1,993
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration]	Lease liabilities	Lease liabilities	Lease liabilities
Total
2025	$ 7,055
2026	5,649
2027	3,983
2028	2,788
2029	1,765
2030	450
Thereafter	443
Gross lease payments	22,133
Less amounts relating to interest	(2,983)
Lease liabilities	$ 19,150	$ 19,150	$ 10,499

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Long-term debt and lease liabilities - Components of finance lease expense and other information relating to leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Long-term debt and lease liabilities
Finance lease expense: Amortization of lease assets	$ 1,262	$ 983
Finance lease expense: Interest on lease liabilities	262	187
Total finance lease cost	$ 1,524	$ 1,170
Operating leases, weighted average remaining lease term (in years)	4 years 1 month 6 days	4 years 6 months
Finance leases, weighted average remaining lease term (in years)	2 years 9 months 18 days	2 years 3 months 18 days
Operating leases, weighted average discount rate (in percent)	7.40%	7.40%
Finance leases, weighted average discount rate (in percent)	8.50%	8.50%

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Long-term debt and lease liabilities - SBA Loan (Details)	12 Months Ended
	Sep. 30, 2023 USD ($)
Long-term debt
Loss on extinguishment of debt	$ (30,000)
SBA Loan
Long-term debt
Loss on extinguishment of debt	$ (30,000)

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Shareholders' Equity - Issuance of common shares (Details)	1 Months Ended		12 Months Ended
	Apr. 30, 2023 USD ($) shares	Apr. 30, 2023 CAD ($) shares	Sep. 30, 2024 item	Sep. 30, 2023 USD ($)
Shareholders' Equity
Number of class of common stock outstanding | item			1
Number of shares issued | shares	5,409,000	5,409,000
Proceeds from issuance of common stock	$ 31,200,000	$ 42,500,000		$ 27,866,000
Payment of underwriter commission	1,500,000	$ 2,100,000
Payment of other professional fees	1,800,000
Net proceeds from issuance of common stock	$ 27,900,000

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Shareholders' Equity - Employee, Director and Consultant Options (Details) - Employee Stock Option - item	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Minimum
Shareholders' Equity
Number of quarters for vesting		8
Maximum
Shareholders' Equity
Award term (in years)	10 years
Number of quarters for vesting		12

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Shareholders' Equity - Stock Option Activity (Details) - $ / shares	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Number of options
Beginning Balance	3,957,000	3,751,000
Granted		435,000
Exercised	(520,000)	(130,000)
Expired	(31,000)	(48,000)
Forfeited	(4,000)	(51,000)
Ending Balance	3,402,000	3,957,000
Weighted average exercise price
Beginning Balance	$ 4.49	$ 4.24
Granted		8.3
Exercised	1.5	5.01
Expired	7.35	6.94
Forfeited	8.48	7.22
Ending Balance	$ 4.91	4.49
Additional Disclosures
Number of options vested	3,158,000
Weighted average exercise price of options vested	$ 4.66
Fair value per share of stock options granted		5.43
Weighted average
Additional Disclosures
Weighted average share price	$ 4.48	$ 8.69

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Shareholders' Equity - Option Valuation Assumptions (Details) - Employee Stock Option	12 Months Ended
	Sep. 30, 2023 $ / shares
Shareholders' Equity
Share price at grant date	$ 8.3
Risk-free interest rate	3.29%
Expected volatility	51.95%
Expected life of option	10 years
Expected dividend yield	0.00%
Share-Based Payment Arrangement, Valuation Technique [Extensible Enumeration]	us-gaap:ValuationTechniqueOptionPricingModelMember

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Shareholders' Equity - Restricted Stock Units (Details) - USD ($)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Shareholders' Equity
Payments for tax withholding for share based compensation	$ 213,000	$ 1,338,000
Compensation expense related to nonvested	$ 430,000
Weighted average vesting period	4 months 24 days
Restricted stock units
Shareholders' Equity
Number of shares per unit of RSU	1
Payments for tax withholding for share based compensation	$ 213,000	$ 1,338,000
Restricted stock units | Minimum
Shareholders' Equity
Vesting period (in years)	1 year
Restricted stock units | Maximum
Shareholders' Equity
Vesting period (in years)	2 years

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Shareholders' Equity - Restricted Stock Unit Activity (Details) - Restricted stock units - $ / shares shares in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Number of units
Beginning balance	1,034	930
Settled	(515)	(727)
Granted		831
Ending balance	519	1,034
Weighted average grant-date price
Beginning balance	$ 8.34	$ 8.34
Settled	8.38	8.3
Granted		8.3
Ending balance	$ 8.3	$ 8.34

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Shareholders' Equity - Stock-based compensation expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Shareholders' Equity
Stock-based compensation	$ 2,484	$ 5,280
Restricted stock units
Shareholders' Equity
Stock-based compensation	1,639	3,383
Employee Stock Option
Shareholders' Equity
Stock-based compensation	$ 845	$ 1,897

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Operating expenses (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating expenses
Payroll and employee benefits	$ 78,905	$ 67,720
Facilities, other than leases	5,623	5,000
Billing	11,030	9,140
Professional fees	6,288	3,561
Outbound freight	5,466	4,157
Vehicle fuel and maintenance	4,675	4,166
Bank and credit card fees	2,121	1,752
Technology	1,592	1,461
Insurance	1,549	1,651
All other	5,293	4,616
Total operating expenses	$ 122,542	$ 103,224

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Income taxes - Income before taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Income taxes
US	$ (1,770)	$ 2,145
Foreign	(4,884)	(4,844)
Total	$ (6,654)	$ (2,699)

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Income taxes - Income tax provision (benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Current provision (benefit):
State	$ (233)	$ 633
Total	(233)	633
Deferred provision (benefit):
Federal	369	(668)
State	(27)	120
Total	342	(548)
Provision for income taxes	$ 109	$ 85

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Income taxes - Reconciliation of US federal statutory rate to its effective tax rate (Details)	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Income taxes
US federal statutory rate	21.00%	21.00%
State taxes, net of federal benefit	3.20%	(22.90%)
Statutory rate differential attributable to foreign operations	1.60%	10.70%
Executive compensation	(3.40%)	(25.30%)
Stock-based compensation	3.20%	(23.50%)
Change in valuation allowances	(24.10%)	38.20%
Other	(3.10%)	(1.30%)
Effective income tax rate	(1.60%)	(3.10%)

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Income taxes - Company's deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2022
Deferred tax assets:
Net and capital operating loss carryforwards	$ 16,469	$ 16,524
Lease liabilities	4,777	4,519
Reserve for expected credit losses	2,074	2,481
Accrued and stock-based compensation	3,146	3,107
Goodwill	11,551	13,448
Interest	2,459	1,252
Other	964	621
Share issuance costs	540	839
Total deferred tax assets	41,980	42,791
Deferred tax assets valuation allowances	(19,089)	(17,667)	$ (8,011)
Deferred tax asset, net	22,891	25,124
Deferred tax liabilities:
Property, equipment, and right of use assets, net	(9,080)	(10,153)
Intangible assets, net	(14,013)	(15,313)
Net deferred tax assets (liabilities)	(23,093)	(25,466)
Net deferred tax liabilities	$ (202)	$ (342)

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Income taxes - Valuation allowance activity (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
The details of the Company's valuation allowance activity
Balance at beginning of year	$ (17,667)	$ (8,011)
Increases	(1,422)	(9,656)
Balance at end of year	$ (19,089)	$ (17,667)

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Income taxes (Details)	Sep. 30, 2024 USD ($)
Federal
Operating Loss Carryforwards [Line Items]
Loss carryforwards that are subject to expire	$ 20,000,000
Loss carryforwards that are carried indefinitely	14,000,000
Foreign
Operating Loss Carryforwards [Line Items]
Non capital loss carryforwards that are subject to expiration	28,000,000
Net capital losses	$ 1,000,000

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Related party transactions (Details) - Rental Company	1 Months Ended	12 Months Ended
	Oct. 31, 2022 USD ($)	Sep. 30, 2024 ft² lease
Related party transactions
Number of leases		6
Combined area | ft²		74,520
Lease payments per month | $	$ 65,000
Minimum percentage increase in lease rent		3.00%
Lease expires in June 2026
Related party transactions
Number of leases		1
Lease Expires in September 2029
Related party transactions
Number of leases		5