akumin inc (2018) .akumin inc. condensed interim consolidated balance sheets (unaudited) (expressed

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Akumin Inc.

Condensed Interim Consolidated Financial Statements (Unaudited) September 30, 2018 (expressed in US dollars unless otherwise stated)

Akumin Inc. Table of Contents

CONTENTS

Page

Condensed Interim Consolidated Financial Statements (Unaudited)

Condensed Interim Consolidated Balance Sheets 1

Condensed Interim Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) 2

Condensed Interim Consolidated Statements of Changes in Equity 3

Condensed Interim Consolidated Statements of Cash Flows 4

Notes to Condensed Interim Consolidated Financial Statements 5 - 28

Akumin Inc. Condensed Interim Consolidated Balance Sheets

(Unaudited)

(expressed in US dollars unless otherwise stated)

(1)

Approved by the Board of Directors

(signed) Riadh Zine Director (signed) Tom Davies Director

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

September 30, 2018

$

December 31,2017

$

Assets

Current assetsCash 20,370,228 12,145,481Accounts receivable (note 5) 26,094,634 12,968,010Prepaid expenses 469,048 381,144

46,933,910 25,494,635

Security deposits and other assets 810,044 209,335

Property and equipment (note 6) 51,200,237 42,002,927

Goodwill 118,663,175 100,777,451

Intangible assets 3,175,019 2,264,041

220,782,385 170,748,389

Liabilities

Current liabilitiesAccounts payable and accrued liabilities 14,123,277 14,578,538Finance leases (note 7) 493,764 528,895Senior loans payable (notes 8 and 9) 1,612,615 3,016,958

16,229,656 18,124,391

Finance leases (note 7) 1,725,774 2,062,103

Senior loans payable (notes 8 and 9) 98,129,774 70,156,708

Subordinated note payable (note 10) 1,491,716 -

Subordinated note - Earn-out (note 10) 166,121 -

117,743,041 90,343,202

Shareholders Equity

Common shares (note 11) 120,926,620 83,771,904Warrants (note 11) 1,742,910 1,310,661Contributed surplus 6,670,349 2,205,784

Deficit (28,849,284) (13,223,745)

Equity attributable to shareholders of Akumin Inc. 100,490,595 74,064,604

Non-controlling interests 2,548,749 6,340,583

103,039,344 80,405,187

220,782,385 170,748,389

Commitments and contingencies (note 12)

Subsequent events (note 17)

Akumin Inc. Condensed Interim Consolidated Statements of Net Income (Loss) and

Comprehensive Income (Loss)

(Unaudited)

(expressed in US dollars unless otherwise stated)

(2)

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

Three-month period ended September 30,

2018 $

Three-monthperiod ended

September 30, 2017

$

Nine-month period ended September 30,

2018 $

Nine-month period ended September 30,

2017 $

RevenueService fees - net of allowances and

discounts 38,316,457 23,488,721 107,243,804 54,139,063Other revenue 814,139 618,363 2,086,732 1,441,950

39,130,596 24,107,084 109,330,536 55,581,013

ExpensesEmployee compensation 14,733,517 9,529,177 38,387,117 21,439,479Reading fees 5,142,654 3,994,614 14,795,857 8,744,433Rent and utilities 4,292,354 3,018,759 11,461,327 7,688,979Third party services and professional fees 3,003,890 2,339,452 8,706,414 4,569,338Administrative 1,778,987 1,391,350 6,360,998 2,942,472Medical supplies and other expenses 1,383,446 1,095,726 4,104,805 3,037,536Depreciation and amortization 2,576,851 1,623,417 6,848,850 3,564,185Stock-based compensation 1,423,998 1,980,713 4,464,565 2,442,140Interest expense 1,482,079 1,291,371 4,200,877 3,102,402Impairment of property and equipment - 130,086 638,336 130,086Settlement costs (recoveries) (99,100) 21,000 29,494 29,500Provisions - (30,000) - 700,000Acquisition related costs 255,954 3,412,557 919,602 3,542,117Public offering costs - 498,857 813,545 498,857Financial instruments revaluation,

unrealized foreign exchange loss and other (gains) losses 2,425,933 3,242,555 2,318,994 3,324,490

38,400,563 33,539,634 104,050,781 65,756,014

Income (loss) before income taxes 730,033 (9,432,550) 5,279,755 (10,175,001)

Income tax provision 23,648 1,639 327,038 11,497

Net income (loss) and comprehensive income (loss) for the period 706,385 (9,434,189) 4,952,717 (10,186,498)

Non-controlling interests 511,389 555,217 2,162,027 555,217

Net income (loss) attributable to common shareholders 194,996 (9,989,406) 2,790,690 (10,741,715)

Net income (loss) per shareBasic and diluted (note 16) 0.00 (0.29) 0.05 (0.35)

Akumin Inc. Condensed Interim Consolidated Statements of Changes in Equity

(Unaudited)

(expressed in US dollars unless otherwise stated)

(3)

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

Common shares

$Warrants

$

Contributed surplus

$Deficit

$

Non-controlling

interests $

Total equity

$

Balance - September 30, 2016 11,004,683 475,180 713,560 (4,719,751) - 7,473,672

Net loss and comprehensive loss - - - (341,666) - (341,666)Stock-based compensation expense - - 230,713 - - 230,713

Balance - December 31, 2016 11,004,683 475,180 944,273 (5,061,417) - 7,362,719

Acquisition of non-controlling interests 7,718,242 7,718,242Net loss and comprehensive loss - - - (10,741,715) 555,217 (10,186,498)Issuance of common shares - net of issuance costs 25,099,570 - 1,750,000 - - 26,849,570RSUs and warrants exercised 4,472,936 (292,936) (3,500,000) 680,000Issuance of warrants - 33,229,285 - - - 33,229,285Stock-based compensation expense - - 2,442,140 - - 2,442,140Payment to non-controlling interests (1,678,054) (1,678,054)

Balance - September 30, 2017 40,577,189 33,411,529 1,636,413 (15,803,132) 6,595,405 66,417,404

Balance - December 31, 2017 83,771,904 1,310,661 2,205,784 (13,223,745) 6,340,583 80,405,187

Acquisition of non-controlling interests - - - (18,416,229) (3,074,268) (21,490,497)Net income and comprehensive income - - - 2,790,690 2,162,027 4,952,717Issuance of common shares - net of issuance costs

Acquisition consideration 3,709,588 - - - - 3,709,588Public offering 32,444,362 - - - - 32,444,362

Warrants exercised 1,000,766 (302,130) - - - 698,636Issuance of warrants - 734,379 - - - 734,379Stock-based compensation expense - - 4,464,565 - - 4,464,565Payment to non-controlling interests - - - - (2,879,593) (2,879,593)

Balance - September 30, 2018 120,926,620 1,742,910 6,670,349 (28,849,284) 2,548,749 103,039,344

Akumin Inc. Condensed Interim Consolidated Statements of Cash Flows

(Unaudited)

(expressed in US dollars unless otherwise stated)

(4)

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

Nine-monthperiod ended

September 30, 2018

$

Nine-monthperiod ended

September 30, 2017

$

Cash flows provided by (used in)

Operating activitiesNet income (loss) for the period 4,952,717 (10,186,498)Add

Depreciation and amortization 6,848,850 3,564,185Stock-based compensation 4,464,565 2,442,140Impairment of property and equipment 638,336 130,086Interest expense accretion of debt 475,500 720,005Financial instruments revaluation, unrealized foreign exchange loss

and other (gains) losses 2,318,994 3,324,490Changes in non-cash working capital

Accounts receivable (11,807,476) 1,611,130Prepaid expenses and security deposits and other assets (500,821) 52,099Accounts payable and accrued liabilities (4,545,786) 2,077,584

2,844,879 3,735,221

Investing activitiesProperty and equipment and intangible assets (5,891,514) (3,454,443)Business acquisitions - net of cash acquired (note 4) (23,315,703) (76,146,906)Acquisition of non-controlling interests (note 11) (17,780,909) -

(46,988,126) (79,601,349)

Financing activitiesLoans proceeds 100,000,000 46,759,883Loans repayments (76,029,409) (326,651)Issuance costs - loans (2,211,914) (3,033,591)Finance leases - net (388,467) (86,846)Capital stock - special warrants - 32,929,579Capital stock - common shares 35,698,637 11,176,600Equity issuance costs (1,821,260) (3,347,322)Payment to non-controlling interests (2,879,593) (1,678,054)

52,367,994 82,393,598

Increase in cash during the period 8,224,747 6,527,470

Cash - Beginning of period 12,145,481 4,628,616

Cash - End of period 20,370,228 11,156,086

Supplemental informationInterest paid 3,727,548 2,387,317Income taxes paid 424,653 21,497

Akumin Inc. Notes to Condensed Interim Consolidated Financial Statements

(Unaudited) September 30, 2018

(expressed in US dollars unless otherwise stated)

(5)

1 Presentation of consolidated financial statements and nature of operations

The operations of Akumin Inc. (Akumin or the Company) and its Subsidiaries (defined below) primarily consist

of operating 90 outpatient diagnostic imaging centres located in Florida, Delaware, Pennsylvania, Texas,

Illinois and Kansas. Thirteen of the current 40 Florida imaging centres were acquired from Tri-State Imaging

Group, LP (TSIG) on October 1, 2014. The 26 Delaware and Pennsylvania imaging centres were acquired from

Siemens Financial Services, Inc. (Siemens), in its capacit

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