TACTILE SYSTEMS TECHNOLOGY INC (TCMD)

CIK: 0001027838. SIC: 3841 Surgical & Medical Instruments & Apparatus. Latest 10-K as of: 2026-02-17.

SIC breadcrumb: Manufacturing > SIC Major Group 38 > SIC 3841 Surgical & Medical Instruments & Apparatus

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1027838. Latest filing source: 0001104659-26-016380.

Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	329,522,000	USD	2025	2026-02-17
Net income	19,086,000	USD	2025	2026-02-17
Assets	273,942,000	USD	2025	2026-02-17

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-17. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001027838.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue	84,542,000	109,283,000	143,751,000	189,492,000	187,130,000	208,057,000	246,785,000	274,423,000	292,984,000	329,522,000
Net income	2,879,000	5,855,000	6,623,000	10,971,000	-620,000	-11,811,000	-17,866,000	28,515,000	16,960,000	19,086,000
Operating income	4,272,000	3,898,000	2,990,000	10,498,000	-3,628,000	-1,762,000	-12,758,000	18,041,000	22,181,000	29,279,000
Gross profit	61,602,000	80,268,000	102,258,000	134,236,000	132,810,000	148,213,000	175,976,000	195,133,000	216,688,000	250,146,000
Diluted EPS	0.15	0.31	0.34	0.56	-0.03	-0.60	-0.89	1.23	0.70	0.82
Operating cash flow	7,033,000	4,192,000	9,007,000	2,510,000	2,794,000	2,631,000	5,209,000	35,855,000	40,655,000	42,811,000
Capital expenditures	775,000	3,746,000	4,196,000	5,446,000	2,059,000	2,103,000	1,780,000	2,324,000	2,392,000	2,380,000
Share buybacks		493,000							3,508,000	26,561,000
Assets	73,935,000	88,447,000	107,071,000	151,752,000	174,087,000	244,270,000	254,996,000	281,438,000	297,924,000	273,942,000
Liabilities	14,296,000	15,660,000	17,801,000	39,157,000	49,337,000	116,043,000	133,596,000	87,796,000	81,327,000	55,040,000
Stockholders' equity	59,639,000	72,787,000	89,270,000	112,595,000	124,750,000	128,227,000	121,400,000	193,642,000	216,597,000	218,902,000
Cash and cash equivalents	30,701,000	23,968,000	20,099,000	22,770,000	47,855,000	28,229,000	21,929,000	61,033,000	94,367,000	83,446,000
Free cash flow	6,258,000	446,000	4,811,000	-2,936,000	735,000	528,000	3,429,000	33,531,000	38,263,000	40,431,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Net margin	3.41%	5.36%	4.61%	5.79%	-0.33%	-5.68%	-7.24%	10.39%	5.79%	5.79%
Operating margin	5.05%	3.57%	2.08%	5.54%	-1.94%	-0.85%	-5.17%	6.57%	7.57%	8.89%
Return on equity	4.83%	8.04%	7.42%	9.74%	-0.50%	-9.21%	-14.72%	14.73%	7.83%	8.72%
Return on assets	3.89%	6.62%	6.19%	7.23%	-0.36%	-4.84%	-7.01%	10.13%	5.69%	6.97%
Liabilities / equity	0.24	0.22	0.20	0.35	0.40	0.90	1.10	0.45	0.38	0.25
Current ratio	4.66	5.29	5.28	5.06	4.63	3.29	1.86	3.54	4.36	4.03

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001027838.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarter	End Date	Revenue	Net Income	Diluted EPS	Method
2022-Q2	2022-06-30			-0.23	reported discrete quarter
2022-Q3	2022-09-30			-0.11	reported discrete quarter
2023-Q1	2023-03-31			-0.09	reported discrete quarter
2023-Q2	2023-06-30	68,339,000	-100,000	0.00	reported discrete quarter
2023-Q3	2023-09-30	69,586,000	22,299,000	0.94	reported discrete quarter
2023-Q4	2023-12-31	77,652,000	8,202,000		derived Q4 = FY annual - nine-month YTD
2024-Q1	2024-03-31	61,088,000	-2,209,000	-0.09	reported discrete quarter
2024-Q2	2024-06-30	73,218,000	4,298,000	0.18	reported discrete quarter
2024-Q3	2024-09-30	73,093,000	5,155,000	0.21	reported discrete quarter
2024-Q4	2024-12-31	85,585,000	9,716,000		derived Q4 = FY annual - nine-month YTD
2025-Q1	2025-03-31	61,268,000	-2,974,000	-0.13	reported discrete quarter
2025-Q2	2025-06-30	78,905,000	3,217,000	0.14	reported discrete quarter
2025-Q3	2025-09-30	85,755,000	8,209,000	0.36	reported discrete quarter
2025-Q4	2025-12-31	103,594,000	10,634,000		derived Q4 = FY annual - nine-month YTD
2026-Q1	2026-03-31	75,267,000	-1,763,000	-0.08	reported discrete quarter

Quarterly Charts

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
MSPUS - Median Sales Price of Houses Sold for the United States
HSN1F - New One Family Houses Sold: United States
RHORUSQ156N - Homeownership Rate in the United States
TTLCONS - Total Construction Spending: Total Construction in the United States
RRVRUSQ156N - Rental Vacancy Rate in the United States
TOTALSL - Total Consumer Credit Owned and Securitized
REVOLSL - Revolving Consumer Credit Owned and Securitized
DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
GDP - Gross Domestic Product
GPDI - Gross Private Domestic Investment
GCE - Government Consumption Expenditures and Gross Investment
PCEC - Personal Consumption Expenditures
NETEXP - Net Exports of Goods and Services
GFDEBTN - Federal Debt: Total Public Debt
GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
FYFSD - Federal Surplus or Deficit
FGRECPT - Federal Government Current Receipts
FGEXPND - Federal Government: Current Expenditures
MANEMP - All Employees, Manufacturing
USCONS - All Employees, Construction
USTRADE - All Employees, Retail Trade
USFIRE - All Employees, Financial Activities
USGOVT - All Employees, Government
AWHAETP - Average Weekly Hours of All Employees, Total Private
DGORDER - Manufacturers' New Orders: Durable Goods
NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
BUSINV - Total Business Inventories
EXPGS - Exports of Goods and Services
IMPGS - Imports of Goods and Services
IR - Import Price Index (End Use): All Commodities
PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001104659-26-054877.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-04. Report date: 2026-03-31.

Item 2. 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 the condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this report.

Overview

We are a medical technology company that develops and commercializes medical devices in the United States. Our mission is to help people suffering from chronic diseases live better and care for themselves at home. We focus our efforts on advancing the standard of care in treating underserved chronic diseases in the home to improve patient outcomes and quality of life and help control rising healthcare expenditures. Our areas of therapeutic focus are (1) vascular disease, with a goal of advancing the standard of care in treating lymphedema and chronic venous insufficiency, (2) oncology, where lymphedema is a common consequence among cancer survivors and (3) providing airway clearance therapy for those suffering from chronic respiratory conditions. We possess a unique, scalable platform to deliver at-home healthcare solutions throughout the United States. This evolving home care delivery model is recognized by policymakers and insurance payers as a key for controlling rising healthcare costs. Our solutions deliver cost-effective, clinically proven, long-term treatment for people with these chronic diseases. We generally employ a direct-to-patient and -provider model within our lymphedema portfolio, through which we obtain patient referrals from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions directly to patients and train them on the proper use of our solutions. This model allows us to engage directly with patients and clinicians, which are both critical audiences to which we can provide clinical evidence and education. For our respiratory therapy product, we have a durable medical equipment (“DME”) distribution model, through which we sell the AffloVest product to accredited DME providers, whose representatives gather and submit documentation for payer reimbursement, train patients on use of the device, and provide ongoing patient support.

Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl pneumatic compression pump systems and our airway clearance product is a High-Frequency Chest Wall Oscillation (“HFCWO”) device called AffloVest. The Flexitouch system product line is considered an advanced pneumatic compression device. The first generation Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, introducing a medical device technology to address the many limitations of self-administered home-based manual lymphatic drainage therapy. A second generation Flexitouch system received 510(k) clearance from the FDA in October 2006. In September 2016, we received 510(k) clearance from the FDA for the Flexitouch system in treating lymphedema of the head and neck. A third generation, Flexitouch Plus, received 510(k) clearance from the FDA in June 2017. In December 2020, we received 510(k) clearance from the FDA for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. The Entre system product line and Nimbl product line are considered basic, or simple, pneumatic compression devices. These systems are sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device e.g., a Flexitouch Plus system. We introduced the Entre system in the United States in February 2013, this device was manufactured by Thermotek, Inc. and received FDA clearance in 2010. In 2015, we received FDA clearance for our own first generation Entre system and the second generation, Entre Plus, was released in March 2023. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025. Nimbl has replaced most orders for our Entre system and we expect will continue to do so. Sales and rentals of our lymphedema products represented 83% of our revenue in each of the three months ended March 31, 2026 and 2025.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line. AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders. For each of the three months ended March 31, 2026 and 2025, sales of AffloVest represented 17% of our revenue.

To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a lymphedema and respiratory sales force, marketing team including clinical education programs, patient education team, reimbursement capabilities and clinical expertise. We market our lymphedema products using

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a direct-to-patient and -clinician model. The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product. We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest. As of March 31, 2026, we employed 172 account managers and 163 specialists for our lymphedema products and a team of 18 specialists supporting our airway clearance products. This compares to 161 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of March 31, 2025.

We invest in our reimbursement function to improve operational efficiencies and enhance individual payer expertise, while continuing our strategic focus of payer development. Our payer relations function focuses on payer policy development, education, contract negotiations, and data analysis. Our reimbursement operations function is responsible for verifying patient insurance benefits, individual patient case development, prior authorization submissions, case follow-up, and appeals when necessary.

We also have a clinical team, consisting of a scientific advisory board, in-house therapists and nurses, and a Chief Medical Officer, that serves as a resource to clinicians and patients and guides the development of clinical evidence in support of our products. Most clinical studies require observation and interaction with clinicians and patients to monitor results and progress.

We rely on third-party contract manufacturers for the sourcing of parts, the assembly of our controllers and the manufacturing of the garments used with our systems. We conduct final assembly of the garments used with our products, perform quality assurance and ship our products from our facility in Minnesota. We also manufacture and ship the AffloVest device from our Minnesota-based facility.

In July 2022, we launched Kylee™ a free mobile app that makes it easier for patients to manage their conditions by tracking treatments and symptoms, as well as having direct access to educational resources. Flexitouch Plus and Nimbl devices include Bluetooth technology, which is viewable using Kylee.

For the three months ended March 31, 2026, we generated revenue of $75.3 million and had a net loss of $1.8 million, compared to revenue of $61.3 million and net loss of $3.0 million for the three months ended March 31, 2025. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.

We operate in one segment for financial reporting purposes.



25

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Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table presents our results of operations for the periods indicated:











































Three Months Ended

















March 31,



Change

(In thousands)



2026



2025



$



%

Condensed Consolidated Statement









% of









% of













of Operations Data:









revenue









revenue













Revenue





































Sales revenue



$

66,966



89

%



$

52,469



86

%



$

14,497



28

%

Rental revenue





8,301



11

%





8,799



14

%





(498)



(6)

%

Total revenue





75,267



100

%





61,268



100

%





13,999



23

%

Cost of revenue





































Cost of sales revenue





15,259



20

%





13,891



23

%





1,368



10

%

Cost of rental revenue





2,394



3

%





2,031



3

%





363



18

%

Total cost of revenue





17,653



23

%





15,922



26

%





1,731



11

%

Gross profit





































Gross profit - sales revenue





51,707



69

%





38,578



63

%





13,129



34

%

Gross profit - rental revenue





5,907



8

%





6,768



11

%





(861)



(13)

%

Gross profit





57,614



77

%





45,346



74

%





12,268



27

%

Operating expenses





































Sales and marketing





32,732



43

%





27,516



45

%





5,216



19

%

Research and development





2,776



4

%





1,741



3

%





1,035



59

%

Reimbursement, general and administrative





23,044



31

%





19,998



32

%





3,046



15

%

Intangible asset amortization





596



1

%





633



1

%





(37)



(6)

%

Total operating expenses





59,148



79

%





49,888



81

%





9,260



19

%

Loss from operations





(1,534)



(2)

%





(4,542)



(7)

%





3,008



(66)

%

Interest income





666



1

%





895



1

%





(229)



(26)

%

Interest expense





(28)



—

%





(424)



(1)

%





396



(93)

%

Loss before income taxes





(896)



(1)

%





(4,071)



(7)

%





3,175



(78)

%

Income tax expense (benefit)





867



1

%





(1,097)



(2)

%





1,964



(179)

%

Net loss



$

(1,763)



(2)

%



$

(2,974)



(5)

%



$

1,211



(41)

%





26

Table of Contents













































Revenue

Revenue increased $14.0 million, or 23%, to $75.3 million in the three months ended March 31, 2026, compared to $61.3 million in the three months ended March 31, 2025. The increase in total revenue was attributable to an increase of $11.7 million, or 23%, in sales and rentals of the lymphedema product line and an increase of $2.3 million, or 22%, in sales of the airway clearance product line in the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

The increase in the lymphedema product line revenue in the three months ended March 31, 2026, was driven by accelerating commercial momentum from our strong partnerships, execution of our go-to-market commercial strategy and disciplined focus on sales force productivity. The increase in the airway clearance product line revenue was primarily driven by strong partnerships and prioritized placement agreements with our top 10 respiratory DME providers.

The following table summarizes our revenue by product line for the three months ended March 31, 2026 and 2025, both in dollars and percentage of total revenue:





























Three Months Ended















March 31,



Change

(In thousands)

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-02-17. Report date: 2025-12-31.

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 our consolidated financial statements and the accompanying notes thereto included elsewhere in this report.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations focuses on discussion of year-over-year comparisons between 2025 and 2024. Discussion of 2023 results and year-over-year comparisons between 2024 and 2023 that are not included in this Annual Report on Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 18, 2025.

Overview

We are a medical technology company that develops and commercializes medical devices in the United States. Our mission is to help people suffering from chronic diseases live better and care for themselves at home. We focus our efforts on advancing the standard of care in treating underserved chronic diseases in the home to improve patient outcomes and quality of life and help control rising healthcare expenditures. Our areas of therapeutic focus are (1) vascular disease, with a goal of advancing the standard of care in treating lymphedema and chronic venous insufficiency, (2) oncology, where lymphedema is a common consequence among cancer survivors and (3) providing airway clearance therapy for those suffering from chronic respiratory conditions. We possess a unique, scalable platform to deliver at-home healthcare solutions throughout the United States. This evolving home care delivery model is recognized by policymakers and insurance payers as a key for controlling rising healthcare costs. Our solutions deliver cost-effective, clinically proven, long-term treatment for people with these chronic diseases. We generally employ a direct-to-patient and -provider model within our lymphedema portfolio, through which we obtain patient referrals from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions directly to patients and train them on the proper use of our solutions. This model allows us to engage directly with patients and clinicians, which are both critical audiences to which we can provide clinical evidence and education. For our respiratory therapy product, we have a durable medical equipment (“DME”) distribution model, through which we sell the AffloVest product to accredited DME providers, whose representatives gather and submit documentation for payer reimbursement, train patients on use of the device, and provide ongoing patient support.

Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl pneumatic compression pump systems and our airway clearance product is a High-Frequency Chest Wall Oscillation (“HFCWO”) device called AffloVest. The Flexitouch system product line is considered an advanced pneumatic compression device. The first generation Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, introducing a medical device technology to address the many limitations of self-administered home-based manual lymphatic drainage therapy. A second generation Flexitouch system received 510(k) clearance from the FDA in October 2006. In September 2016, we received 510(k) clearance from the FDA for the Flexitouch system in treating lymphedema of the head and neck. A third generation, Flexitouch Plus, received 510(k) clearance from the FDA in June 2017. In December 2020, we received 510(k) clearance from the FDA for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. The Entre system product line and Nimbl product line are considered basic, or simple, pneumatic compression devices. These systems are sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device e.g., a Flexitouch Plus system. We introduced the Entre system in the United States in February 2013, this device was manufactured by Thermotek, Inc. and received FDA clearance in 2010. In 2015, we received FDA clearance for our own first generation Entre system and the second generation, Entre Plus, was released in March 2023. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025. Nimbl has replaced most orders for our Entre system and we

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expect to continue to do so. Sales and rentals of our lymphedema products represented 84% and 89% of our revenue in the years ended December 31, 2025 and 2024, respectively.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line. AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders. For the years ended December 31, 2025 and 2024, sales of AffloVest represented 16% and 11% of our revenue, respectively.

To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a separate lymphedema and respiratory sales force, marketing team including clinical education programs, patient education team, reimbursement capabilities and clinical expertise. We market our lymphedema products using a direct-to-patient and -clinician model. The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product. We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest. As of December 31, 2025, we employed 166 account managers and 166 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products. This compares to 169 account managers and 111 specialists for our lymphedema products and a team of 18 specialists supporting our airway clearance products as of December 31, 2024.

We invest in our reimbursement function to improve operational efficiencies and enhance individual payer expertise, while continuing our strategic focus of payer development. Our payer relations function focuses on payer policy development, education, contract negotiations, and data analysis. Our reimbursement operations function is responsible for verifying patient insurance benefits, individual patient case development, prior authorization submissions, case follow-up, and appeals when necessary.

We also have a clinical team, consisting of a scientific advisory board, in-house therapists and nurses, and a Chief Medical Officer, that serves as a resource to clinicians and patients and guides the development of clinical evidence in support of our products. Most clinical studies require observation and interaction with clinicians and patients to monitor results and progress.

We rely on third-party contract manufacturers for the sourcing of parts, the assembly of our controllers and the manufacturing of the garments used with our systems. We conduct final assembly of the garments used with our products, perform quality assurance and ship our products from our facility in Minnesota. We also manufacture and ship the AffloVest device from our Minnesota-based facility.

In July 2022, we launched Kylee™ a free mobile app that makes it easier for patients to manage their conditions by tracking treatments and symptoms, as well as having direct access to educational resources. Flexitouch Plus and Nimbl devices include Bluetooth technology, which is viewable using Kylee. 



For the year ended December 31, 2025, we generated revenue of $329.5 million and had net income of $19.1 million, compared to revenue of $293.0 million and net income of $17.0 million for the year ended December 31, 2024, and revenue of $274.4 million and net income of $28.5 million for the year ended December 31, 2023. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.

We operate in one segment for financial reporting purposes.

Current Economic Conditions

General global economic downturns and macroeconomic trends, including heightened inflation, capital market volatility, interest rate fluctuations, increased unemployment and economic slowdown or recession, may result in unfavorable conditions that could negatively affect demand for our products and exacerbate some of the other risks that affect our business, financial condition and results of operations.

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Components of our Results of Operations

Revenue

We derive revenue from sales and rentals of our Flexitouch Plus, Entre Plus and Nimbl systems to patients in the United States. Revenue growth has been driven by increased clinician, patient and payer awareness of lymphedema and the clinical efficacy of our Flexitouch Plus system, the launch of our Entre Plus system in March 2023, and the launch of Nimbl in October 2024. We have expanded our direct sales force, which helps us drive and support our revenue growth and intend to continue this expansion. However, any reversal in these recent trends could have a negative impact on our future revenue.

We sell or rent our lymphedema systems either directly to patients or to the Veterans Administration on behalf of patients, who are referred to us by physicians, clinical lymphatic therapists or nurses. We bill payers, such as private insurers, Medicare, or Medicaid, on behalf of our patients and bill patients directly for their cost-sharing amounts, including any portion of an unsatisfied deductible and any copayments or co-insurance. We bill the Veterans Administration directly for the purchase or lease of our product on behalf of the patient. Approximately 9% of our revenue in 2025 and 11% of our revenue in 2024 came from the Veterans Administration. Approximately 24% of our revenue in 2025 and 18% of our revenue in 2024 came from Medicare patients. Changes to the level of Medicare coverage for our products could reduce the number of Medicare patients who have access to our products. Our products currently are not subject to the competitive bidding process for supplying covered items to Medicare recipients.

We also derive revenue from sales of our AffloVest product to accredited DME providers. These respiratory DME providers provide a full range of solutions for these patients with complex diseases, and represent a large, developed channel. Respiratory DME partners serve the role of receiving prescriptions, verifying coverage criteria, shipping, billing and training the patient. We intend to expand and support our respiratory DME partners, in an effort to help demonstrate HFCWO as a staple among the host of treatments they bring to chronic respiratory patients, thereby allowing us to continue to grow revenue from this product offering.

Our revenue has fluctuated, and we expect our revenue to continue to fluctuate, from quarter to quarter due to a variety of factors, including seasonality. See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Seasonality” for a further discussion of factors contributing to our seasonality. Further, our revenue is impacted by fluctuations in the mix of products being sold and rented during each period and changes in the mix of our payers and contract pricing.

Furthermore, we expect our revenue to continue to increase in the future as a result of increased awareness of our solutions, expansion of our direct sales force, our DME partners, enhanced marketing and customer support efforts, continued focus on developing clinical and economic outcomes data, and efforts related to expanded third-party reimbursement. However, we also anticipate pricing pressure from private insurers, which will result in continued downward pressure on our revenue growth rate.

Cost of Revenue and Gross Margin

Cost of revenue consists primarily of component costs, direct labor, overhead costs, product warranties, provisions for slow-moving and obsolete inventory, delivery costs for items sold or rented, and amortization related to the intangible assets related to our products. Overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management. Cost of revenue also includes depreciation expense for product tooling and equipment as well as shipping costs. We expect overhead costs as a percentage of revenue to decrease as a result of expected increases in production volume and yields. We expect cost of revenue to increase in absolute dollars primarily if, and to the extent, our revenue grows.

We provide a warranty for our products against defects in material and workmanship for a period of one to five years. We record a liability for future warranty claims at the time of sale for the warranty period offered to a customer in cost of revenue. If the assumptions used in calculating the provision were to materially change, such as incurring higher than anticipated warranty claims, an additional provision may be required.

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We calculate gross margin as gross profit divided by revenue. Our gross margin has been and will continue to be affected by a variety of factors, including product and payer mix, production volumes, manufacturing costs, and cost-reduction strategies. We continue to work to reduce product manufacturing costs through enhanced product design efforts, supply chain initiatives in an effort to offset anticipated price erosion and improving product quality. Our gross margin will likely fluctuate from quarter to quarter.

Sales and Marketing Expenses

Our sales and marketing expenses consist primarily of personnel-related expenses, including salaries, bonuses, commissions and benefits for employees. They also include expenses for patient training, social media and advertising, informational kits, public relations and other promotional and marketing activities, field sales travel and entertainment expenses, trade shows and conferences, stock-based compensation, as well as customer service. We expect sales and marketing expenses to continue to increase in absolute dollars as we expand our commercial infrastructure to drive and support our planned revenue growth. To the extent our revenue grows, we expect sales and marketing expenses to decrease as a percentage of revenue over time.

Research and Development Expenses

Research and development, or R&D, expenses consist primarily of personnel-related expenses, third-party product development costs, laboratory supplies, consulting fees and related costs, clinical research expenses, expenses related to clinical and regulatory affairs, patent amortization costs, stock-based compensation and patent legal fees, including defense costs, and testing costs for new product launches. Clinical research expenses include clinical trial management and monitoring, payment to clinical investigators, consulting fees, data management, stock-based compensation, travel expenses and the cost of manufacturing products for clinical trials. We have made substantial investments in R&D since our inception. Our R&D efforts have focused primarily on activities designed to enhance our technologies and to support development and commercialization of new and existing products. We expect R&D expenses to increase for the foreseeable future as we continue to develop, enhance and commercialize new products and expand clinical trial efforts. We expect R&D expenses as a percentage of our revenue to vary over time depending on the level and timing of initiating new product development efforts, as well as our clinical trial activities.

Intangible Asset Amortization and Earn-Out

Amortization of intangible assets includes the amortization expense of our definite-lived intangible assets, consisting of patents, customer relationships, customer accounts, developed technology and defensive intangible assets. The costs of definite-lived intangibles are amortized to expense over their useful lives. Indefinite-lived intangible assets, such as goodwill and tradenames, are not amortized; we test for impairment on these assets annually.

The fair value of the earn-out, which was payable based on certain U.S. revenues of AffloVest being met, was recorded as a liability. On a quarterly basis the earn-out was revalued to fair value until the end of the earn-out period, which was September 30, 2023. Any gain or loss related to the revaluation was recorded through the income statement.

Reimbursement, General and Administrative Expenses

Reimbursement, general and administrative expenses consist primarily of compensation, including salaries, bonuses and benefits for employees in our patient services and advocacy, billing and collections, case management, payer relations and governmental affairs and reimbursement operations departments, as well as finance, human resources and administration, information technology, business development and general management functions, and facilities costs. Reimbursement expenses also include consulting, travel to payer case manager seminars, professional development and training, and certification expenses. General and administrative expenses also include professional services such as legal, consulting and accounting services, stock-based compensation, travel expenses, insurance and acquisition costs.

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Interest Income (Expense)

Interest income consists primarily of interest income related to investment income earned on our invested capital portfolio and interest expense consists primarily of interest expense related to our debt obligations.

Income Tax Expense (Benefit)

Our income tax expense (benefit) consists primarily of permanent differences related to share-based compensation activity, as well as deferred income taxes resulting from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, and related disclosure of contingent assets and liabilities, revenue and expenses at the date of the financial statements. Generally, we base our estimates on historical experience and on various other assumptions in accordance with GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates and such differences could be material to our financial position and results of operations. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations.

While our significant accounting policies are more fully described in Note 3 to our consolidated financial statements included elsewhere in this report, we believe the following discussion addresses our most critical accounting estimates, which involve significant subjectivity and judgment, and changes to such estimates or assumptions could have a material impact on our financial condition or operating results. Therefore, we consider an understanding of the variability and judgment required in making these estimates and assumptions to be critical in fully understanding and evaluating our reported financial results.

Revenue Recognition

We derive lymphedema product revenue from the sales and rentals of our proprietary line of Flexitouch Plus, Entre Plus and Nimbl systems. We recognize revenue when control of the product has been transferred to our customer, in the amount of the expected consideration to be received for the product. Expected consideration is estimated as follows:

●

Flexitouch Plus, Entre Plus and Nimbl systems. Expected consideration to be received is estimated based on a detailed review of historical pricing adjustments and collections. Specifically, payment history of the applicable payer, as well as historical patient collections, serve as primary sources of information in estimating expected consideration.

We update our assessment of collectability on a quarterly basis, with any adjustments for Flexitouch Plus, Entre Plus and Nimbl systems being reflected as sales and rental revenue in the Consolidated Statements of Operations in the period of adjustment.

If in the future we determine that another method is more reasonable, or if another method for calculating these input assumptions is prescribed by authoritative guidance, the expected consideration associated with the sales and rentals of our products could change significantly. Changes in contractual pricing, payment trends and rebate structures would impact, either positively or negatively, our sales and rental revenue.

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Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table presents our results of operations for the periods indicated:









































Year Ended

















December 31,



Change

(In thousands)



2025



2024



$



%

Condensed Consolidated Statement









% of









% of













of Operations Data:









revenue









revenue













Revenue





































Sales revenue



$

292,593



89

%



$

256,012



87

%



$

36,581



14

%

Rental revenue





36,929



11

%





36,972



13

%





(43)



(0)

%

Total revenue





329,522



100

%





292,984



100

%





36,538



12

%

Cost of revenue





































Cost of sales revenue





68,686



21

%





64,815



22

%





3,871



6

%

Cost of rental revenue





10,690



3

%





11,481



4

%





(791)



(7)

%

Total cost of revenue





79,376



24

%





76,296



26

%





3,080



4

%

Gross profit





































Gross profit - sales revenue





223,907



68

%





191,197



65

%





32,710



17

%

Gross profit - rental revenue





26,239



8

%





25,491



9

%





748



3

%

Gross profit





250,146



76

%





216,688



74

%





33,458



15

%

Operating expenses





































Sales and marketing





121,237



37

%





112,009



38

%





9,228



8

%

Research and development





8,481



3

%





8,832



3

%





(351)



(4)

%

Reimbursement, general and administrative





88,705



27

%





71,135



23

%





17,570



25

%

Intangible asset amortization





2,444



1

%





2,531



1

%





(87)



(3)

%

Total operating expenses





220,867



67

%





194,507



65

%





26,360



14

%

Income from operations





29,279



9

%





22,181



8

%





7,098



(32)

%

Interest income





3,097



1

%





3,384



1

%





(287)



(8)

%

Interest expense





(1,038)



—

%





(2,085)



(1)

%





1,047



50

%

Other income





1



—

%





9



—

%





(8)



(89)

%

Income before income taxes





31,339



10

%





23,489



8

%





7,850



(33)

%

Income tax expense





12,253



4

%





6,529



2

%





5,724



88

%

Net income



$

19,086



6

%



$

16,960



7

%



$

2,126



(13)

%





Revenue

Revenue increased $36.5 million, or 12%, to $329.5 million in the year ended December 31, 2025, compared to $293.0 million in the year ended December 31, 2024. The increase in revenue was attributable to an increase of $19.0 million, or 7%, in sales and rentals of the lymphedema product line and an increase of $17.5 million, or 52%, in sales of the airway clearance product line in the year ended December 31, 2025, compared to the year ended December 31, 2024.



The increase in the lymphedema product line revenue in the year ended December 31, 2025, was driven by accelerating commercial momentum from our strong partnerships, execution of our go-to-market commercial strategy and disciplined focus on sales force productivity. The increase in the airway clearance product line revenue was primarily driven by strong partnerships and prioritized placement agreements with our top 10 respiratory DME providers.



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Revenue from the Veterans Administration represented 9% and 11% of total revenue for the years ended December 31, 2025 and 2024, respectively. Revenue from Medicare represented 24% and 18% of total revenue for the years ended December 31, 2025 and 2024, respectively.



The following table summarizes our revenue by product line for the years ended December 31, 2025 and 2024, both in dollars and percentage of total revenue:





























Year Ended















December 31,



Change

(In thousands)



2025



2024



$



%

Revenue























Lymphedema products



$

278,380



$

259,361



$

19,019



7%

Airway clearance products





51,142





33,623





17,519



52%

Total



$

329,522



$

292,984



$

36,538



12%

























Percentage of total revenue























Lymphedema products



84%



89%









Airway clearance products





16%





11%











Total



100%



100%











Cost of Revenue and Gross Margin

Cost of revenue increased $3.1 million, or 4%, to $79.4 million during the year ended December 31, 2025, compared to $76.3 million during the year ended December 31, 2024. The increase in cost of revenue was primarily attributable to higher sales.

Gross margin was 76% and 74% in the years ended December 31, 2025 and 2024, respectively.

Sales and Marketing Expenses

Sales and marketing expenses increased $9.2 million, or 8%, to $121.2 million during the year ended December 31, 2025, compared to $112.0 million during the year ended December 31, 2024. The increase was primarily attributable to a:

●

$7.4 million increase in personnel-related compensation expense;

●

$1.1 million increase in travel and entertainment expenses;

●

$0.4 million increase in expenses related to meetings and tradeshows;

●

$0.2 million increase in expenses for demonstration units; and

●

$0.1 million increase in educational grants expense.

Research and Development Expenses

Research and development (“R&D”) expenses decreased $0.4 million, or 4%, to $8.5 million during the year ended December 31, 2025, compared to $8.8 million during the year ended December 31, 2024, which was primarily attributable to a $0.9 million decrease in clinical study-related expenses and a $0.1 million decrease in personnel-related expenses. These decreases were partially offset by a $0.6 million increase in professional fees.



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Reimbursement, General and Administrative Expenses

Reimbursement, general and administrative expenses increased $17.6 million, or 25%, to $88.7 million during the year ended December 31, 2025, compared to $71.1 million during the year ended December 31, 2024. The increase was primarily attributable to a:

●

$12.0 million increase in personnel-related compensation expense as a result of increased headcount in our reimbursement operations, payer relations and corporate functions;

●

$3.8 million increase in IT-related-expenses;

●

$1.0 million increase occupancy costs, depreciation expense and professional fees; and

●

$0.8 million increase in expenses related to meetings and seminars.

Intangible Asset Amortization

Intangible asset amortization expense decreased $0.1 million to $2.4 million during the year ended December 31, 2025, compared to $2.5 million during the year ended December 31, 2024.

Interest Income and Interest Expense

Interest income decreased $0.3 million, or 8%, to $3.1 million during the year ended December 31, 2025, compared to $3.4 million during the year ended December 31, 2024, primarily due to a lower cash balance and the higher yielding Institutional Insured Liquid Deposit demand account decreasing the rates. Interest expense decreased $1.0 million, or 50%, to $1.0 million during the year ended December 31, 2025, compared to $2.1 million during the year ended December 31, 2024, primarily due to the decrease in the outstanding balance of our term loan.

Income Tax Expense

Income tax expense increased $5.7 million, or 88%, to $12.3 million during the year ended December 31, 2025, compared to $6.5 million during the year ended December 31, 2024. The primary drivers of the increase were the increase to net income in 2025 and an out-of-period adjustment of $2.8 million recorded to income tax expense during the year ended December 31, 2025. For additional information regarding the out-of-period adjustment, see Note 3 – “Summary of Significant Accounting Policies” of the consolidated financial statements contained in this report.

Seasonality

Our business is affected by seasonality. In the first quarter of each year, when most patients have started a new insurance year and have not yet met their annual out-of-pocket payment obligations, we experience substantially reduced demand for our products. We typically experience higher revenue in the third and fourth quarters of the year when more patients have met their annual insurance deductibles, thereby reducing their out-of-pocket costs for our products, and because patients desire to exhaust their flexible spending accounts at year end. This seasonality applies only to purchases and rentals of our products by patients covered by commercial insurance and is not relevant to Medicare, Medicaid or the Veterans Administration, as those payers either do not have plans that have declining deductibles over the course of the plan year and/or do not have plans that include patient deductibles for purchases or rentals of our products.

Liquidity and Capital Resources

Overview

As of December 31, 2025, we had cash of $83.4 million and net accounts receivable of $43.9 million compared to cash of $94.4 million and net accounts receivable of $44.9 million as of December 31, 2024. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.

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Cash Flows

The following table summarizes our cash flows for the periods indicated:



















Year Ended





December 31,

(In thousands)

    

2025

    

2024

Net cash provided by (used in):













Operating activities

$

42,811



$

40,655

Investing activities





(2,535)





(2,497)

Financing activities





(51,197)





(4,824)

Net (decrease) increase in cash

$

(10,921)



$

33,334



Net Cash Provided by Operating Activities

Net cash provided by operating activities during the year ended December 31, 2025, was $42.8 million, resulting from non-cash net income adjustments of $23.6 million, net income of $19.1 million and a change in operating assets and liabilities of $0.1 million. The positive non-cash net income adjustments consisted primarily of $8.5 million of deferred income taxes, $8.4 million of stock-based compensation expense, $6.6 million of depreciation and amortization expense and $0.1 million of loss on disposal of property and equipment and intangibles. Cash provided relating to minimal change in operating assets and liabilities primarily consisted of a decrease in inventories of $4.6 million, an increase in accrued payroll and related taxes of $1.5 million, an increase in income taxes payable of $1.2 million, a decrease in accounts receivable of $1.1 million and an increase in accrued expenses and other liabilities of $0.8 million, partially offset by an increase in prepaid expenses and other assets of $6.9 million, an increase in net investment in leases of $1.2 million, a decrease in accounts payable of $0.8 million and an increase in right of use operating leases of $0.1 million.

Net cash provided by operating activities during the year ended December 31, 2024, was $40.7 million, resulting from net income of $17.0 million, non-cash net income adjustments of $16.0 million and a change in operating assets and liabilities of $7.7 million. The positive non-cash net income adjustments consisted primarily of $7.8 million of stock-based compensation expense, $6.8 million of depreciation and amortization expense, $1.1 million of deferred income taxes and $0.3 million of loss on disposal of property and equipment and intangibles. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $9.2 million, a decrease in inventories of $3.9 million and an increase in accrued payroll and related taxes of $1.1 million, partially offset by an increase in prepaid expenses and other assets of $3.9 million, a decrease in income taxes payable of $1.4 million and a decrease in accounts payable of $1.1 million.

Net Cash Used in Investing Activities

Net cash used in investing activities during the year ended December 31, 2025, was $2.5 million, primarily consisting of $2.4 million in purchases of property and equipment primarily related to tenant improvements, production tooling and office equipment and $0.2 million related to the acquisition of patents and other intangible assets.

Net cash used in investing activities during the year ended December 31, 2024, was $2.5 million, primarily consisting of $2.4 million in purchases of property and equipment primarily related to tenant improvements, production tooling and office equipment and $0.1 million related to the acquisition of patents and other intangible assets.

Net Cash Used in Financing Activities

Net cash used in financing activities during the year ended December 31, 2025, was $51.2 million, primarily consisting of payments of $26.6 million for the repurchase of our common stock and payments of $26.2 million on our term loan, partially offset by $1.4 million in proceeds from the issuance of common stock

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under our Employee Stock Purchase Plan (the “ESPP”) and $0.2 million in proceeds from exercises of common stock options.

Net cash used in financing activities during the year ended December 31, 2024, was $4.8 million, primarily consisting of payments of $3.5 million for the repurchase of our common stock and payments of $3.0 million on our term loan, partially offset by $1.7 million in proceeds from the issuance of common stock under the ESPP.

Credit Agreement

On April 30, 2021, we entered into an Amended and Restated Credit Agreement (the “2021 Restated Credit Agreement”) with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as Administrative Agent. The 2021 Restated Credit Agreement amended and restated in its entirety our prior credit agreement.

On September 8, 2021, we entered into a First Amendment Agreement (the “Amendment”), which amended the 2021 Restated Credit Agreement (as amended by the Amendment, the “Credit Agreement”) with the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent. The Amendment, among other things, added a $30.0 million incremental term loan to the $25.0 million revolving credit facility provided by the 2021 Restated Credit Agreement. The term loan is reflected on our consolidated financial statements as a note payable. The Credit Agreement provides that, subject to satisfaction of certain conditions, we may increase the amount of the revolving loans available under the Credit Agreement and/or add one or more term loan facilities in an amount not to exceed $25.0 million in the aggregate, such that the total aggregate principal amount of loans available under the Credit Agreement (including under the revolving credit facility) does not exceed $80.0 million.



On September 8, 2021, in connection with the closing of the acquisition of the AffloVest business, we borrowed the $30.0 million term loan and utilized that borrowing, together with a draw of $25.0 million under the revolving credit facility and cash on hand, to fund the purchase price.



On February 22, 2022, we entered into a Second Amendment Agreement (the “Second Amendment”), which further amended the Credit Agreement. The Second Amendment modified the maximum leverage ratio, the minimum fixed charge coverage ratio and the minimum consolidated EBITDA covenants under the Credit Agreement, and added a minimum liquidity covenant, through the quarter ended June 30, 2023. The Second Amendment also increased the applicable margin for LIBOR rate loans under the Credit Agreement during the period commencing on the date of the Second Amendment and ending on the last day of the fiscal quarter ending June 30, 2023. Pursuant to the Second Amendment, we made a mandatory principal prepayment of the term loan of $3.0 million on February 22, 2022.



On June 21, 2023, we entered into a Third Amendment Agreement (the “Third Amendment”) that replaced the interest rate benchmark under the Credit Agreement from LIBOR to the term Secured Overnight Financing Rate (“SOFR”). All tenors of term SOFR are subject to a credit spread adjustment of 0.10% (“Adjusted Term SOFR”).



On August 1, 2023, we entered into a Fourth Amendment Agreement (the “Fourth Amendment”), which further amended the Credit Agreement. The Fourth Amendment, among other things, decreased the commitment fees payable under the revolving credit facility and eliminated the temporary increase in the applicable margin for Adjusted Term SOFR loans. The Fourth Amendment also eliminated the liquidity financial covenant and modified the remaining financial covenants to reflect the termination of the temporary covenant relief period that was in place until June 30, 2023 pursuant to the Second Amendment. In addition, the Fourth Amendment provided for an additional term loan in the amount of $8.25 million, which we used for a paydown of the revolving credit facility. The Fourth Amendment also extended the maturity date of the term loans and revolving credit facility under the Credit Agreement from September 8, 2024 to August 1, 2026.



On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which further amended the Credit Agreement. The Fifth Amendment permitted the Company to make payments to repurchase shares of its common stock, subject to certain limitations.

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On July 31, 2025, we entered into an Amended and Restated Credit Agreement (the “2025 Restated Credit Agreement”), which amended and restated the Credit Agreement in its entirety. The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable based on pricing levels determined by our consolidated total leverage ratio that range from 1.75% to 2.75% under the revolving credit facility, and revised the commitment fee to a rate per annum ranging from 0.125% to 0.250% for the unused portion of the revolving credit facility, also depending on our consolidated total leverage ratio. The 2025 Restated Credit Amendment also expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.

The 2025 Restated Credit Agreement also eliminated the minimum consolidated EBITDA financial covenant, such that the financial covenants now consist of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant. In addition, the 2025 Restated Credit Agreement revised certain negative covenants, including the restricted payment covenant, which now permits the Company to repurchase shares of its common stock and make certain other payments, as long as the Company is not in default under the 2025 Restated Credit Agreement, has a consolidated total leverage ratio of no greater than 1.75 to 1.00, and has liquidity of not less than $30.0 million, in each case both before and after giving effect to such stock repurchases or the making of such payments.

In connection with the entry into the 2025 Restated Credit Agreement, on July 31, 2025, we paid off the full amount outstanding under the term loan, which was $24.4 million (inclusive of principal and interest), using cash on hand. The 2025 Restated Credit Agreement removes the provisions from the Credit Agreement related to a committed term loan, such that the only term loan related provisions in the 2025 Restated Credit Agreement relate to our ability to request uncommitted incremental term loan facilities and/or an increase in the amount of the revolving loans available under the 2025 Restated Credit Agreement in an amount not to exceed $25.0 million in the aggregate, subject to the satisfaction of certain conditions.

As of December 31, 2025, we had no outstanding borrowings under the 2025 Restated Credit Agreement.

Our obligations under the 2025 Restated Credit Agreement are secured by a security interest in substantially all of our and our subsidiary’s assets and are also guaranteed by our subsidiary. As of December 31, 2025, the 2025 Restated Credit Agreement contained a number of restrictions and covenants, including that we maintain compliance with a maximum consolidated total leverage ratio and a minimum fixed charge coverage ratio. As of December 31, 2025, we were in compliance with all covenants under the 2025 Restated Credit Agreement.

For additional information regarding the 2025 Restated Credit Agreement, including interest rates, fees and maturities, see Note 10 – “Credit Agreement” of the consolidated financial statements contained in this report.

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Share Repurchase Program

On November 4, 2024, we announced that our board of directors authorized a program to repurchase shares of our common stock in the open market or in privately negotiated purchases, or both, in an aggregate amount not to exceed $30.0 million. The share repurchase program became effective on October 30, 2024 and was scheduled to expire on October 31, 2026. Upon purchase of the shares, we reduce our common stock for the par value of the shares with the excess cost applied against additional paid-in capital.

As of June 24, 2025, the Company had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program. In aggregate under the program, the Company repurchased a total of 2,338,617 shares of common stock at a total cost of $30.0 million.

Repurchases were funded through available cash balances and ongoing business operating cash generation and could have been suspended or discontinued at any time. Shares of stock repurchased under the program were immediately retired. Repurchases under our share repurchase program reduce the weighted-average number of shares of common stock outstanding for basic and diluted earnings per share calculations.

On October 16, 2025, our Board of Directors authorized a new program to repurchase up to $25.0 million of our common stock. Under the program, purchases may be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased will be based on the price of the Company's common stock, general business and market conditions and other investment considerations and factors. This share repurchase program expires on November 3, 2027. The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice.

We made repurchases under the share repurchase program in the following periods, which include the market price of the shares, commissions and excise tax:























Year Ended









December 31,



(In thousands, except share and per share data)





2025





2024



Number of shares repurchased





2,143,099





195,518



Total shares repurchased cost



$

26,752



$

3,508



Average total cost per repurchased share



$

12.48



$

17.94





Future Cash Requirements

Our material estimated future cash requirements under our contractual obligations and commercial commitments as of December 31, 2025, in total and disaggregated into current (payable in 2026) and long-term (payable after 2026) obligations, are summarized as follows:





































Payments Due By Period



    



    

Less Than

    



    



    

More Than

(In thousands)

    

Total

    

1 Year

    

1-3 Years

    

3-5 Years

    

5 Years

Purchase commitments (1)



$

31,921



$

31,921



$

—



$

—



$

—

Operating lease obligations (2)





17,395





3,808





6,586





6,649





352

Commitment Fees (3)





131





51





80





—





—

Total



$

49,447



$

35,780



$

6,666



$

6,649



$

352

(1)

We issued purchase orders in 2025 totaling $31.9 million for goods that we expect to receive and pay for in 2026.

(2)

We currently lease approximately 150,000 square feet of office space for our corporate headquarters in Minneapolis, Minnesota, under a lease that expires in February 2031 and approximately 63,000 square feet of office, assembly and warehouse space at another facility near Minneapolis, Minnesota, under a lease that expires in March 2027. Furthermore, we lease office equipment from time-to-time based on our needs and these commitments are classified as operating leases.

(3)

Represents commitment fees under the 2025 Restated Credit Agreement, due to no amounts outstanding under the agreement as of December 31, 2025.

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Adequacy of Resources

Our future cash requirements may vary significantly from those now planned and will depend on many factors, including:

●

the impact of inflation, rising interest rates or a recession on our business;

●

sales and marketing resources needed to further penetrate our market;

●

expansion of our operations;

●

IT investments to scale our business;

●

response of competitors to our solutions and applications;

●

costs associated with clinical research activities;

●

increases in interest rates;

●

labor shortages and wage inflation;

●

component price inflation;

●

costs to develop and implement new products; and

●

use of capital for acquisitions or licenses, if any.

Historically, we have experienced increases in our expenditures consistent with the growth in our revenue, operations and personnel, and we anticipate that our expenditures will continue to increase as we expand our business.

We believe our cash and cash flows from operations will be sufficient to meet our working capital, capital expenditures, debt repayment and related obligations, and other cash requirements for at least the next twelve months.

Inflation and changing prices did not have a material effect on our business during the year ended December 31, 2025, and we do not expect that inflation or changing prices will materially affect our business for at least the next twelve months.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under the applicable regulations.

Recent Accounting Pronouncements

Refer to Note 3 - “Summary of Significant Accounting Policies,” of our consolidated financial statements contained in this report for a description of recently issued accounting pronouncements that are applicable to our business.