Assure Holdings Corp. Announces Update

PARKER, Colo., March 21, 2018 (GLOBE NEWSWIRE) — Assure Holdings Corp. (the “Company” or “Assure”) (TSXV:IOM) (OTCQB:ARHH), a provider of intraoperative neuromonitoring services is providing the following update with respect to the resignation of its auditors, the delayed filing of its audited financial statements and MD&A for 2017 and the filing of a management cease trade order. In addition, Assure is announcing the resignation of Mr. Matthew Willer (“Mr. Willer”), as the President of the Company. Effective immediately, Mr. Willer is no longer with the Company.

Assure’s Founder, Chairman and Chief Executive Officer Preston Parsons commented: “While the last several days have been challenging for our shareholders, board of directors, management and partners, Assure will emerge as a much stronger company especially with respect to corporate governance and internal controls. It is important to note that our 2016 audited financial statements are not in question by the former auditor and we look forward to engaging a new auditor to complete our 2017 audit. With the support of our strong operational and business development teams, our business currently is and will continue to operate in the normal course to provide quality intraoperative neuromonitoring services during invasive surgeries, and we continue to work to expand our reach throughout the United States.”

Update relating to Resignation of Auditor

As previously disclosed on March 12, 2018, the board of directors (the “Board”), the audit committee (the “Audit Committee”) and when deemed constructive or necessary by the Board, management of the Company, have engaged in a dialogue with EKS&H LLLP (the “Former Auditor”) to better understand the circumstances surrounding their resignation. The Audit Committee and the Board are currently actively engaged in interviewing a suitable replacement and will provide an update as soon as an auditor has been appointed.

In accordance with National Instrument 51-102 – Ongoing Requirements for Issuers and Insiders (“NI 51-102”), the notice of change of auditor, together with the required letter from the Former Auditor (the “Reporting Package”) have been reviewed and accepted by the Board on the date hereof and filed on www.sedar.com. That pursuant to the Reporting Package, both the Former Auditor and the Company agree that there are no reservations or modifications to the Former Auditor’s reports on the Company’s financial statements relating to the period during which the Former Auditor was the Company’s auditor, and there are no “disagreements” or “consultations”, as such terms are defined in National Instrument 51-102 – Ongoing Requirements for Issuers and Insiders (“NI 51-102”) in connection with the resignation of the Former Auditor.

The “reportable events”, as such term is defined in NI 51-102, which were communicated by the Former Auditor to the Board and the Audit Committee in writing are as follows:

  1. Mr. Willer failed to provide a draft of the financial statements of the Company for the quarter ended September 30, 2017 (the “Q3 Financial Statements”). The Former Auditor did not advise the Audit Committee or the Board of Mr. Willer’s apparent repeated failure to respond to their requests. For reasons that are not clear, the Former Auditor decided not to contact an alternative executive in the Company who could have provided the Q3 Financial Statements.
     
  2. Mr. Willer used his position as a fiduciary within the Company to access funds in excess of those due and owing to him. The Board became aware of Mr. Willer’s unauthorized use of Company funds and created an independent special committee to undertake an internal investigation. The amount of the Company funds accessed by Mr. Willer was not material. However, Mr. Willer’s breach of his position as a fiduciary was of concern to the Audit Committee and Board. As a precautionary measure pending completion of the internal investigation, the Audit Committee advised the Board to remove Mr. Willer’s access to Company funds.  The Board did so.
     
  3. Shortly prior to commencing the audit fieldwork with the Former Auditor, the Audit Committee disclosed to the Former Auditor the results of the internal investigation and specifically Mr. Willer’s unauthorized use of Company funds. Unfortunately, the Former Auditor did not provide the Audit Committee with an opportunity to consider or respond to their concern prior to the delivery of their resignation letter dated March 7, 2018.
     
  4. In addition to Mr. Willer’s unauthorized use of Company funds, Mr. Willer engaged in actions apparently designed to conceal other inappropriate conduct. A lack of internal controls allowed Mr. Willer to conceal from the Company the service of a garnishment order arising out of a settled litigation claim unrelated to the Company.  The steps taken by Mr. Willer prevented the Company from discovering the existence of, and responding in a timely manner to, the garnishment order. 
     
  5. The Former Auditor concern regarding the significant increase in amounts owed to the Company by Mr. Parsons and Mr. Willer, as presented in the December 31, 2017 preliminary trial balance and as previously disclosed in the Q3 Financial Statements. These amounts represent a commingling of personal and business expenses charged to the Company’s credit card, the majority of which are owed by Mr. Parsons. The Company is currently working to reconcile these charges to determine the exact amounts. Mr. Parsons has committed to repaying these amounts. Controls are being implemented to prevent commingling of funds in the future.
     
  6. The Audit Committee requested an opportunity for a representative of the Company to first inform the recently appointed Chief Financial Officer, Peter Csapo of the results of the internal investigation pertaining to Mr. Willer’s conduct prior to the Former Auditor discussing such details with Mr. Csapo. To that end, the Audit Committee requested that the Former Auditor allow them a reasonable period of time to do so. The Former Auditor interpreted the Audit Committee’s request as a direction to withhold the results of the investigation from the new Chief Financial Officer for an indeterminate amount of time. The Audit Committee rejects this position.

As a result of the events outlined above, the Company, at the direction of the Audit Committee, has taken the following steps:

  1. Retained Rubin Brown LLP, as a forensic accountant to address some of the material concerns of the Former Auditor.
     
  2. Launched a search to find one or several additional directors with corporate governance expertise to join the Audit Committee and the Board following the resignation of Mr. Willer.
     
  3. Engaged an internal review of processes to ensure that best practices are in place throughout the Company.

The Company is committed to remediating its control environment over financial reporting and has committed to resolving the material weaknesses leading to the errors mentioned above. The Company has already implemented controls related to its cash accounts. Mr. Peter Csapo, the Company’s newly appointed Chief Financial Officer, has significant regulatory and risk management experience with public healthcare companies in the United States. Mr. Csapo, at the direction of the Audit Committee, is currently assessing the review processes related to financial reporting, as well as management oversight and tone at the top, and mitigating controls.   

Resignation of Matthew Willer

Mr. Willer submitted his resignation as President and Corporate Secretary of the Company. Effective immediately, Mr. Willer is no longer with the Company. As previously disclosed on March 12, 2018, Mr. Willer resigned from the Board and the Audit Committee. The Board has resolved that the position of President of the Company is not immediately required from an operational standpoint and that the current management team of the Company, led by Mr. Parsons and including Mr. Peter Csapo, as the Chief Financial Officer, Alex Rasmussen, as the Executive Vice-President of Operations and George Sims, the Director of Business Development are appropriately suited to lead the Company and execute its business plan.

Management Cease Trade Order

On March 12, 2018, in accordance with National Policy 12-203 – Management Cease Trade Orders (“NP-12-203”), the Company, in consultation with the Audit Committee, applied to the British Columbia Securities Commission, as its principal regulator, to obtain a management cease trade order (“MCTO”). There can be no certainty that the MCTO will be granted. If an MCTO is issued, the MCTO will not generally affect the ability of shareholders who are not insiders of the Company to trade their securities. The Company intends to satisfy the provisions of the “alternative information guidelines” set out in NP 12-203, including the requirement to file bi-weekly status reports in the form of news releases containing prescribed updated information until the Company’s Audited Financial Statements and MD&A are filed. The Company has currently issued a black-out policy in accordance with its insider trading policy and as a result, no directors, officers or consultants are able to trade in any of the securities of the Company until at least 10 days after the Audited Financial Statements and MD&A are filed and the default is remedied.

About Assure Holdings Corp.

Assure Holdings Corp. is a Colorado-based company that works with neurosurgeons and orthopedic spine surgeons to provide a turnkey suite of services that support intraoperative neuromonitoring activities during invasive surgeries. Assure employs its own staff of technologists and uses its own state-of-the-art monitoring equipment, handles 100% of intraoperative neuromonitoring scheduling and setup, and bills for all technical services provided. While Assure focuses primarily on supporting spinal and vascular surgeries, plans are in place to support other classes of medicine that rely on the standard of care that intraoperative neuromonitoring provides. For more information, visit the Company’s website at assureIOM.com.

Forward-Looking Statements

This news release contains certain statements that may constitute forward-looking information under applicable securities laws. All statements, other than those of historical fact, which address activities, events, outcomes, results, developments, performance or achievements that Assure anticipates or expects may or will occur in the future (in whole or in part) should be considered forward-looking information. Such information may involve, but is not limited to, comments with respect to strategies, expectations, planned operations and future actions of the Company. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or variations (including negative variations) of such words and phrases, or statements formed in the future tense or indicating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or other variations of the forgoing) be taken, occur, be achieved, or come to pass. Forward looking statements in this news release include: the Company anticipating that it will hire a new audit firm; that it will be in a position to remedy the default and file Audited Financial Statements and MD&A; that the Company will be able to implement improved corporate governance and internal controls; that the Company will “emerge” as a much stronger Company”; and that the Company will continue to work to expand its reach throughout the United States. Forward-looking information is based on currently available competitive, financial and economic data and operating plans, strategies or beliefs as of the date of this news release, but involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of Assure to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Such factors may be based on information currently available to Assure, including information obtained from third-party industry analysts and other third-party sources, and are based on management’s current expectations or beliefs regarding future growth, results of operations, future capital (including the amount, nature and sources of funding thereof) and expenditures. Any and all forward-looking information contained in this press release is expressly qualified by this cautionary statement.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities of the Corporation have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Contacts

Peter Csapo, Chief Financial Officer
Assure Holdings Corp.
(720) 287-3093
Peter.Csapo@assureiom.com

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