Executive Summary

Q1 2023 net revenue was $3.552M, down 24% year-over-year; gross revenue was $4.790M and gross margin was $0.179M. Net loss widened to $(4.314)M and Adjusted EBITDA was $(3.087)M as reimbursement headwinds persisted .
Operating expenses fell 26% y/y to $3.523M and were down 19% sequentially on a normalized basis, reflecting cost actions started in 2022 and early 2023; managed cases increased slightly to ~5,200 .
Collections and cash conversion improved: management cited approximately $4.5M cash collected and a 16-day improvement in time-to-first payment in the press release, while the call referenced ~$5.0M and 15 days—both indicate better velocity versus Q4 2022 (61 days → ~46 days), a positive near-term cash flow catalyst .
Near-term catalysts include: expected ~$3.3M ERC refund, resolution of Louisiana reimbursement litigation (jury trial scheduled July 2023), continued transition away from MSA revenue-sharing, and expansion into Montana (estimated ~150 annual cases) .

What Went Well and What Went Wrong

What Went Well

Operating discipline drove expenses down 26% y/y to $3.523M and ~19% q/q normalized (ex-Q4 2022 one-time non-cash charges), supporting the path to breakeven on Adjusted EBITDA and positive operating cash flow later in 2023 .
Cash collections velocity and process improved: “We collected approximately $4.5 million of cash and reduced our average days to collect the first payment on services rendered by 16 days” (press release); the call reiterated ~$5M collected and a reduction from 61 to 46 days, backed by data-driven revenue cycle management .
Volume resilience and market expansion: managed cases were ~5,200 (+~2% y/y), and the company performed its first case in Montana with plans to scale to ~150 annual cases in Bozeman and Livingston; focus on adding scale in high-performing TX and CO markets .

What Went Wrong

Revenue/margin pressure: net revenue fell to $3.552M (from $4.701M), and gross margin compressed to $0.179M as reimbursement softness persisted and seasonality reduced commercial mix; Adjusted EBITDA loss widened to $(3.087)M .
Reimbursement delays/backlog: approximately 400 claims filed in the federal portal awaiting adjudication under the No Surprises Act; time from submission to resolution remains longer than expected, extending cash conversion cycles industry-wide .
Credit quality and AR reserve: as of March 31, 2023, total AR reserve of ~$15.2M represented ~54% of gross AR (vs. ~$14.0M and ~50% at Dec 31, 2022), reflecting cautious accruals amid reimbursement uncertainties .

Financial Results

Summary P&L vs prior year

Metric (USD)	Q1 2022	Q1 2023
Gross Revenue ($000s)	$9,136	$4,790
Accounts Receivable Reserve (Quarterly charge) ($000s)	$(4,435)	$(1,238)
Revenue, net ($000s)	$4,701	$3,552
Gross Margin ($000s)	$824	$179
Total Operating Expenses ($000s)	$4,751	$3,523
Net Income (Loss) ($000s)	$(2,459)	$(4,314)
Adjusted EBITDA ($000s)	$(1,661)	$(3,087)
Basic EPS ($)	$(3.81)	$(4.09)
Diluted EPS ($)	$(3.81)	$(4.09)

Segment revenue breakdown

Revenue by Segment ($000s)	Q1 2022	Q1 2023
Technical Services	$1,396	$1,234
Professional Services	$2,473	$1,874
Other	$832	$444
Total Revenue	$4,701	$3,552

KPIs and cash conversion

KPI	Q3 2022	Q4 2022	Q1 2023
Managed Cases (count)	5,300	—	~5,200
Cash Collected ($000s)	$7,200	$4,300	~$4,500 (press) / ~$5,000 (call)
Avg Days to First Payment	—	61 days (Q4 baseline)	~46 days (improvement by 15–16 days)
Total AR Reserve & % of Gross AR	—	~$14.0M (~50%) (as of Dec 31, 2022)	~$15.2M (~54%) (as of Mar 31, 2023)

Note: Where Q4 2022 quarterly metrics were not reported in press releases, we present those cited by management on the Q1 2023 call .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA (non-GAAP)	FY 2023 (2H timing)	Aim to be EBITDA positive (2023)	Target positive Adjusted EBITDA in latter part of 2023	Maintained (timing specified)
Operating Cash Flow	FY 2023 (2H timing)	Positive CFO in 2023	Target positive cash from operations in latter part of 2023	Maintained (timing specified)
Cost of Delivery per Patient	FY 2023	Reduce below ~$1,100	“Less than $11 per patient” cited on call ; prior disclosure was ~$1,100	Inconsistency; likely transcription error—anchor to ~$1,100 prior
MSA Revenue-Sharing Exit	Q2 2023	Transition away from MSA model	Plan to be out of MSA agreements by end of Q2 2023; >70% volume transitioned	Maintained; timeline affirmed
ERC Refund	FY 2023	—	Expect ~$3.3M IRS cash refund (file amended 2020/2021 returns)	New positive
Litigation (Louisiana)	FY 2023	—	Multi-million reimbursement lawsuits; first jury trial scheduled late July 2023	New potential upside
Market Expansion (Montana)	FY 2023	Enter lucrative NE/NJ (Q3 2022 context)	First case performed; ~150 annual cases potential across Bozeman/Livingston	New geography

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2022 and FY 2022)	Current Period (Q1 2023)	Trend
Reimbursement environment	TX state arbitration rate down >60%; payors pressuring lower reimbursement; pivot to arbitration/in-network path	Continued weakness in reimbursement rates; backlog under No Surprises Act; federal process slower than expected	Persistent headwind; timing delays
Revenue Cycle Management (RCM)	In-sourced, analytics-driven RCM; strong collections 65% in 6 months/85% in 12 months for wholly-owned entities	Collections exceeded internal forecast; higher first pass rates; days to pay reduced	Improving process/velocity
Cost actions	Strategic cost reductions → $5M+ annualized savings; exiting underperforming markets	Opex -26% y/y; -19% q/q normalized; continued lean operations	Sustained discipline
MSA transition	Moving away from shared-revenue MSA model	Out of MSA by end Q2; >70% of remaining volume transitioned	Execution nearing completion
Cash collections/cash runway	FY 2022 collections $21M; system-wide $27.5M; raised ~$6M offering in late 2022	~$5M collected in Q1; new underwritten offering closed May 16; ERC refund expected	Strengthened liquidity
Legal/regulatory	Leveraging state arbitration; awaiting federal process	~400 federal portal claims pending; Louisiana lawsuits; trial scheduled	Potential cash upside but timing uncertain
Market expansion	Entered NJ; plan scale in high-reimbursement geographies	First Montana case; plan ~150 annual cases; scale TX/CO	Incremental case growth

Management Commentary

CEO: “We collected approximately $4.5 million of cash and reduced our average days to collect the first payment…by 16 days in the first quarter… we have continued making strides towards improving our cash receipts and reducing days to collect despite the challenging reimbursement environment that persists across the industry.”
CEO: “Our operating expenses in the first quarter were down 26% compared to a year-ago and 19% sequentially, when normalized for $6.6 million in one-time, non-cash expenses in the fourth quarter of 2022.”
CFO: “Gross revenue…was negatively impacted by weakness in reimbursement rates… and continued backlog of cases eligible for federal arbitration… As of March 31, 2023, the total accounts receivable reserve was approximately $15.2 million or 54% of our outstanding gross accounts receivable…”
CEO: “Our plan is to be out of the MSA revenue sharing agreements by the end of the second quarter of 2023. Currently, over 70% of the remaining MSA volume is being transitioned…”
CEO: “We performed our first neuromonitoring case in the State of Montana… an opportunity to increase our cases by approximately 150 cases annually across Bozeman and Livingston.”
CEO: “We have filed for the employee retention credit (ERC)… we expect that we could receive a cash refund… of approximately $3.3 million.”

Q&A Highlights

The retrieved transcript contained prepared remarks only; Q&A content was not accessible due to a document retrieval limitation. As a result, specific analyst questions and management clarifications during Q&A cannot be summarized here –.

Estimates Context

Wall Street consensus estimates (EPS and revenue) via S&P Global were unavailable due to a missing Capital IQ mapping for IONM; therefore, comparisons to consensus could not be performed. Values would normally be retrieved from S&P Global; consensus was not available in our tools at this time.*

Key Takeaways for Investors

Operating discipline and RCM enhancements are improving cash conversion and reducing opex; this underpins the company’s target for positive Adjusted EBITDA and operating cash flow in the latter part of 2023 .
Revenue/margin pressures from reimbursement continue; investors should watch the pace of federal No Surprises Act adjudications and AR reserve trajectory (~54% of gross AR as of 3/31) for signal on accrual quality and future write-down risk .
Catalysts: ERC refund (~$3.3M), Louisiana litigation outcomes (trial July 2023), completion of MSA transition by end-Q2, and expansion in Montana/TX/CO—each could materially affect cash and growth trajectory in 2H 2023 .
Volume resilience (5,200 managed cases) amid reimbursement headwinds suggests demand robustness; scaling in higher-reimbursement markets and remote neurology may incrementally improve unit economics .
Cross-document discrepancies (e.g., ~$4.5M vs ~$5.0M collections; 16 vs 15 days improvement; “<$11 per patient” vs “<$1,100”) should be reconciled in the forthcoming 10-Q; anchor to audited/official filings for modeling and risk control .
Near-term trading lens: outcomes on ERC/litigation and updates on federal arbitration timelines are likely stock-moving; monitor 8-Ks and 10-Q for quantified impacts and any guidance updates .

*Values retrieved from S&P Global would normally be used for consensus; estimates were unavailable due to mapping limitations in our tools.

Assure Holdings Corp. (IONM)·Q1 2023 Earnings Summary