PLANTATION, FL, Oct. 12, 2021 Akumin Inc. (NASDAQ: AKU)
(TSX: AKU) ("Akumin") is providing this update on the status of the
management cease trade order granted by the Ontario Securities
Commission (the "OSC"), as principal regulator of Akumin, on
August 20, 2021 (the "MCTO") under
National Policy 12-203 – Management Cease Trader Orders ("NP
12-203"). The MCTO was granted following Akumin's application to
the OSC once it was determined it was not in a position to file its
interim financial report for the quarter ended June 30, 2021 along with the related management's
discussion and analysis and CEO and CFO certificates (collectively,
the "Required Reports") by the reporting deadline of August 16, 2021, as initially announced on
August 15, 2021 (the "Default
Announcement"). The management cease trade order prevents the
officers and/or directors named in the order from trading in
Akumin's securities but does not affect the ability of other
shareholders, including the public, to trade in securities of
Akumin.
For the period ended June 30,
2021, in conjunction with performing its period-end review
of accounts receivable and performing additional review of
historical collection rates using its enhanced reporting and
analytics tools, Akumin identified issues in the recording of
write-offs and cash collections on acquired accounts receivable
balances impacting current and prior periods. In addition, during
the review the Company noted that estimates of historical implicit
price concessions and expected collection rates were not reflective
of the actual cash collections which were occurring and Akumin has
determined that a material change to historical implicit price
concessions recorded as at January 1,
2019, December 31, 2019 and
December 31, 2020 is required. Under
ASC 250, Accounting Changes and Error Corrections, this
change is considered an error for accounting purposes and thus a
restatement of (i) Akumin's annual financial statements for the
period ended December 31, 2020 and
December 31, 2019, and (ii) Akumin's
interim financial statements for the period ended March 31, 2021, in each case together with their
related management's discussion and analysis (collectively, the
"Restated Filings"), will be required, which Restated Filings will
also account for certain adjustments for the tax impact of these
changes, previously uncorrected immaterial misstatements, and other
items impacted by the correction of the error. Although the quantum
of the adjustments is still being finalized, it is currently
expected that the changes in the Restated Filings will result in an
accounts receivable balance as at June 30,
2021 of between $65.0 million and $70.0 million as compared to Akumin's
previously reported March 31, 2021
accounts receivable balance of $95.9 million.
In addition to the foregoing, while integrating the accounting
policies and procedures of Akumin and Alliance HealthCare Services
Inc. ("Alliance") in connection with Akumin's acquisition of
Alliance on September 1, 2021, Akumin
has identified certain differences in recording the capitalization,
as opposed to the repair and maintenance expense, of components
that are replaced when equipment is repaired. As Akumin remains in
the process of finalizing the Required Reports and Restated
Filings, Akumin also intends to reflect any further adjustments
resulting from the review of the accounting treatment of these
components prior to being in a position to file the Required
Reports and Restated Filings, which work remains ongoing. Although
Akumin's review of the impact of these changes remains preliminary,
any adjustments related to such review would be expected to be
reflected as an adjustment to the net book value of property and
equipment and additional repairs and maintenance costs which are
included in operating expenses (any such adjustments,
"Capitalization Adjustments").
Riadh Zine, Akumin's Chairman and
Co-CEO, said, "Akumin is conducting a robust review process
relating to its financial results which is taking more time than
originally envisioned in light of the recent acquisition of
Alliance HealthCare Services that was completed on September 1, 2021. Notwithstanding the
delay in filing our financial statements, we remain confident and
excited about the fundamentals of the combined business and thank
our various stakeholders for their patience."
Added President and Co-CEO Rhonda
Longmore-Grund, "Our leadership team is working very hard to
complete this review in an expeditious manner and is focused on
ensuring we are delivering excellence across the organization as we
integrate the company, with continued focus on consistent and
robust internal controls and policy applications."
Akumin is continuing to work to complete the preparation of the
analysis to conclude and facilitate the review of the Required
Reports and the Restated Filings and expects to complete the
remaining steps in order to file the Required Reports and refile
the Restated Filings at the earliest possible date; however, given
the additional review and analysis required to finalize the impact,
if any, of the Capitalization Adjustments on the Required Reports
and Restated Filings, Akumin no longer expects to be able to file
the Required Reports and Restated Filings by October 15, 2021. Although the timing of such
filings remains to be determined in connection with the completion
of such additional analysis, Akumin anticipates filing the Required
Reports and Restated Filings prior to November 15, 2021, being the filing deadline for
its Q3 interim financial statements and its business acquisition
report related to the Alliance acquisition.
Akumin confirms that since the date of the Default Announcement,
other than as described above: (i) there has been no material
change to the information set out in the Default Announcement that
has not been generally disclosed; (ii) there has been no failure by
Akumin in fulfilling its stated intentions with respect to
satisfying the provisions of the alternative information guidelines
set out in NP 12-203; (iii) there has not been any other
specified default by Akumin under NP 12-203; and (iv)
there is no other material information concerning the affairs of
Akumin that has not been generally disclosed.
Akumin confirms that it will continue to satisfy the provisions
of the alternative information guidelines under NP 12-203 by
issuing bi-weekly default status reports in the form of news
releases for so long as it remains in default of the above-noted
filing requirements and the MCTO continues to apply.
About Akumin Inc.
Akumin is a national partner of choice for U.S. hospitals,
health systems and physician groups, with comprehensive solutions
addressing outsourced radiology and oncology service line needs.
With the acquisition of Alliance HealthCare Services, Akumin now
provides (1) freestanding, fixed-site outpatient diagnostic imaging
services through a network of more than 170 owned and/or operated
independent imaging centers located in 11 states; and (2)
outpatient radiology and oncology solutions to more than 1,000
hospitals and health systems in 46 states. By combining clinical
and operational expertise with the latest advances in technology
and information systems, Akumin and its ~4,000 Team Members
facilitate more efficient and effective diagnosis and treatment for
patients and their providers in 46 states. Akumin's imaging
procedures include MRI, CT, positron emission tomography (PET and
PET/CT), ultrasound, diagnostic radiology (X-ray), mammography, and
other interventional procedures; our cancer care services include a
full suite of radiation therapy and related offerings. For more
information, visit www.akumin.com and
www.alliancehealthcareservices-us.com.
Forward Looking Information
Certain statements contained in this press release may
constitute forward-looking information. These statements relate to
future events or future performance. The use of any of the words
"could", "intend", "expect", "believe", "will", "projected",
"estimated", "proposed" and similar expressions and statements
relating to matters that are not historical facts are intended to
identify forward-looking information and are based on Akumin's
current belief or assumptions as to the outcome and timing of such
future events. In particular, this release contains forward-looking
information relating to the anticipated filing of the Required
Reports and Restated Filings, the impact of certain adjustments on
the Required Reports and Restated Filings and Akumin's intentions
to continue to satisfy the provisions of the alternative
information guidelines under NP 12-203. Such forward-looking
information are subject to risks and uncertainties that may cause
actual results, performance or developments to differ materially
from those contained in the statements, including, but not limited
to, the risks described in greater detail in the "Risk Factors"
section of Akumin's Annual Information Form dated March 31, 2021, which is available at
www.sedar.com and www.sec.gov. These risks are not intended to
represent a complete list of the risks that could affect Akumin;
however, these risks should be considered carefully. Further,
various assumptions or factors are typically applied in drawing
conclusions or making the forecasts or projections set out in
forward-looking information. Those assumptions and factors are
based on information currently available to Akumin. The
forward-looking information contained in this release is made as of
the date hereof and Akumin is not obligated to update or revise any
forward-looking information, whether as a result of new
information, future events or otherwise, except as required by
applicable securities laws. Because of the risks, uncertainties and
assumptions contained herein, investors should not place undue
reliance on forward-looking information. The foregoing statements
expressly qualify any forward-looking information contained
herein.
The TSX has not in any way passed upon the merits of and has
neither approved nor disapproved the contents of this news
release.
SOURCE Akumin Inc.