美国
证券交易委员会
华盛顿特区20549
表格
截止季度结束日期：
or
过渡期从到
委托文件编号：001-39866
(根据其章程规定的注册人准确名称)
| ||
（国家或其他管辖区的 公司成立或组织） | （IRS雇主 唯一识别号码） | |
(总部地址和邮编) | ||
( | ||
(注册人电话号码，包括区号) |
在法案第12(b)条的规定下注册的证券：
每一类的名称 | 交易标志 | 在其上注册的交易所的名称 |
在过去的12个月内（或者在公司被要求提交这些报告的较短时间内），是否已提交交易所法规中第13或15（d）条陈述所要求的所有报告，并且在过去90天中是否一直遵守这些报告要求。
请在复选框中表明注册者是否在过去的12个月内向规定S-t法规（本章第232.405条）提交了要求提交的每个互动数据文件（或者对于注册者需要提交这些文件的较短时期）。
在交易所法案第120亿.2条中，勾选表示报告人为大型加速文件提交人、加速文件提交人、非加速文件提交人、小型报告公司或新成长公司。请参阅“大型加速文件提交者”、“加速文件提交者”、“小型报告公司”和“新兴成长公司”的定义。
| |||||||
大型加速文件申报人 | ☐ | ☑ | 非急速申报人 | ◻ | |||
较小的报告公司 | 新兴成长公司 |
如果是新兴成长型企业，请勾选复选标记，表明注册者已选择不使用延长过渡期来符合根据证券交易法第13(a)条规定提供的任何新财务会计准则。 ◻
请在选项前打勾，表示注册申报人是否为空壳公司（根据证券交易所法案第12b-2条定义）。 是
2
前瞻性信息
除历史事实陈述外，本10-Q表季度报告中包含的所有陈述，包括有关我们的业务、运营和财务业绩和状况的陈述，以及我们对业务、运营和财务业绩和状况的计划、目标和期望，均为前瞻性陈述。在某些情况下，你可以通过以下词语来识别前瞻性陈述：“预测”、“相信”、“继续”、“可能”、“估计”、“预期”、“打算”、“可能”、“正在进行”、“计划”、“潜在”、“预测”、“项目”、“应该”、“目标”、“将”，或这些条款或其他类似条款的否定值术语，尽管并非所有前瞻性陈述都包含这些词语。前瞻性陈述涉及已知和未知的风险、不确定性和其他因素，这些因素可能导致我们的业绩、活动水平、业绩或成就与本10-Q季度报告中前瞻性陈述所表达或暗示的信息存在重大差异。这些风险、不确定性和其他因素包括但不限于：
| ● | 我们能够从第三方付款人那里获得我们产品的补偿； |
| ● | 通货膨胀、利率上升或衰退的影响； |
| ● | 我们的流动性是否足以实现我们的业务目标； |
| ● | 不利的经济条件或激烈的竞争； |
| ● | 用品和零部件价格上涨； |
| ● | 工资和零部件价格上涨； |
| ● | 关键供应商的损失； |
| ● | 新的竞争对手和产品的进入； |
| ● | 联邦、州和地方政府法规的遵守和变化； |
| ● | 主要高管的流失或退休，包括与我们最近首席执行官变动相关的过渡事宜； |
| ● | 我们产品的技术过时； |
| ● | 我们的研究和产品存在技术问题； |
| ● | 我们通过战略收购扩大业务的能力； |
| ● | 我们整合收购和相关业务的能力； |
| ● | 当前和未来的美国和对外贸易政策及关税行动的影响；以及 |
| ● | 无法开展研究、开发和商业化计划。 |
您应阅读 “风险因素” 中描述的事项以及我们截至2023年12月31日止年度的10-k表年度报告以及随后的10-Q表季度报告中做出的其他警示性声明。我们无法向您保证本报告中的前瞻性陈述将被证明是准确的，因此我们鼓励您不要过分依赖前瞻性陈述。实际业绩或事件可能与我们在前瞻性陈述中披露的计划、意图和预期存在重大差异。我们敦促您仔细审查和考虑我们在本报告中以及向美国证券交易委员会（“SEC”）提交的其他文件中披露的各种信息，这些文件表明了可能影响我们业务的风险和因素。除法律要求外，我们没有义务更新或修改这些前瞻性陈述，无论是由于新信息、未来事件还是其他原因。我们的前瞻性陈述不反映我们未来可能进行的任何收购、合并、处置、合资企业或投资的潜在影响。
3
第一部分—财务信息
项目1.基本报表
tactile systems technology，inc。 | ||||||
汇编的综合资产负债表 | ||||||
(未经审计) | ||||||
| 9月30日， |
| 12月31日, | |||
（以千为单位，除股份数及每股数据） |
| 2024 |
| 2023 | ||
资产 | ||||||
流动资产 | ||||||
现金及现金等价物 | $ | | $ | | ||
应收账款 |
| |
| | ||
净租赁投资 |
| |
| | ||
存货 |
| |
| | ||
预付费用和其他流动资产 |
| |
| | ||
总流动资产 |
| |
| | ||
非流动资产 | ||||||
资产和设备，净值 |
| |
| | ||
租赁资产操作权 |
| |
| | ||
无形资产, 净额 |
| |
| | ||
商誉 | | | ||||
应收账款，非流动资产 |
| |
| | ||
延迟所得税 |
| |
| | ||
其他非流动资产 |
| |
| | ||
总非流动资产 |
| |
| | ||
资产总额 | $ | | $ | | ||
负债和股东权益 | ||||||
流动负债 | ||||||
应付账款 | $ | | $ | | ||
应付票据 | | | ||||
应计的工资和相关税费 |
| |
| | ||
应计费用 |
| |
| | ||
应付所得税 |
| |
| | ||
营业租赁负债 |
| |
| | ||
其他流动负债 |
| |
| | ||
流动负债合计 |
| |
| | ||
非流动负债 | ||||||
应付账款、长期 | | | ||||
应计保修准备金、长期 |
| |
| | ||
应付所得税，非流动负债 |
| |
| | ||
非流动经营租赁负债 | |
| | |||
所有非流动负债 |
| |
| | ||
负债合计 |
| |
| | ||
股东权益: | ||||||
优先股，$ |
|
| ||||
普通股，$ |
| |
| | ||
额外实收资本 |
| |
| | ||
保留盈余 |
| |
| | ||
股东权益总额 |
| |
| | ||
负债和股东权益总额 | $ | | $ | | ||
附带说明是这些未经审计的简化合并财务报表的组成部分。
4
触觉系统技术有限公司 | |||||||||||||
简明合并运营报表 | |||||||||||||
（未经审计） | |||||||||||||
三个月已结束 | 九个月已结束 | ||||||||||||
九月三十日 | 九月三十日 | ||||||||||||
（以千计，股票和每股数据除外） |
| 2024 |
| 2023 |
| 2024 |
| 2023 |
| ||||
收入 | |||||||||||||
销售收入 | $ | | $ | | $ | | $ | | |||||
租金收入 |
| |
| |
| |
| | |||||
总收入 |
| |
| |
| |
| | |||||
收入成本 | |||||||||||||
销售收入成本 |
| |
| |
| |
| | |||||
租金收入成本 |
| |
| |
| |
| | |||||
总收入成本 |
| |
| |
| |
| | |||||
毛利润 | |||||||||||||
毛利润-销售收入 |
| |
| |
| |
| | |||||
毛利润-租金收入 |
| |
| |
| |
| | |||||
毛利润 |
| |
| |
| |
| | |||||
运营费用 | |||||||||||||
销售和营销 |
| |
| |
| |
| | |||||
研究和开发 |
| |
| |
| |
| | |||||
一般和行政报销 |
| |
| |
| |
| | |||||
无形资产摊销和收益 | | ( | | ( | |||||||||
运营费用总额 |
| |
| |
| |
| | |||||
运营收入 |
| |
| |
| |
| | |||||
其他收入（支出） |
| |
| ( |
| |
| ( | |||||
所得税前收入 |
| |
| |
| |
| | |||||
所得税支出（福利） |
| |
| ( |
| |
| ( | |||||
净收入 | $ | | $ | | $ | | $ | | |||||
普通股每股净收益 | |||||||||||||
基本 | $ | $ | $ | $ | |||||||||
稀释 | $ | $ | $ | $ | |||||||||
用于计算每股普通股净收益的加权平均普通股 | |||||||||||||
基本 | | | | | |||||||||
稀释 | | | | | |||||||||
所附附附注是这些未经审计的简明合并财务报表不可分割的一部分。
5
tactile systems technology，inc。 | ||||||||||||||
股东权益的简化合并报表 | ||||||||||||||
(未经审计) | ||||||||||||||
留存收益 | ||||||||||||||
额外的 | 收益 | |||||||||||||
普通股 | 实缴 | （累计 | ||||||||||||
% |
| 股份 |
| 面值 |
| 资本 |
| 赤字） |
| 总计 | ||||
2024年6月30日的余额 | | $ | | $ | | $ | | $ | | |||||
基于股票的报酬 | — | — | | — | | |||||||||
7% | | — | — | — | — | |||||||||
净利润 | — | — | — | | | |||||||||
2024年9月30日余额 | | $ | | $ | | $ | | $ | | |||||
2023年12月31日结余 | | $ | | $ | | $ | | $ | | |||||
基于股票的报酬 | — | — | | — | | |||||||||
行使普通股期权以及绩效和受限制股单位的归属 | | — | | — | | |||||||||
Research and Development Expenses | | — | | — | | |||||||||
净利润 | — | — | — | | | |||||||||
2024年9月30日余额 | | $ | | $ | | $ | | $ | | |||||
2023年6月30日的余额 | | $ | | $ | | $ | ( | $ | | |||||
基于股票的报酬 | — | — | | — | | |||||||||
行使普通股期权并释放绩效和限制性股份单位 | | — | | — | | |||||||||
净利润 | — | — | — | | | |||||||||
2023年9月30日余额 | | $ | | $ | | $ | | $ | | |||||
2022年12月31日的余额 | | $ | | $ | | $ | ( | $ | | |||||
基于股票的报酬 | — | — | | — | | |||||||||
行使普通股期权并激励绩效和限制股单位的归属 | | — | | — | | |||||||||
$ | | | | — | | |||||||||
员工股票购买计划发行的普通股 | | — | | — | | |||||||||
净利润 | — | — | — | | | |||||||||
2023年9月30日余额 | | $ | | $ | | $ | | $ | | |||||
附带说明是这些未经审计的简化合并财务报表的组成部分。
6
触觉系统技术有限公司 | ||||||
简明合并现金流量表 | ||||||
（未经审计） | ||||||
截至9月30日的九个月 | ||||||
（以千计） |
| 2024 |
| 2023 | ||
来自经营活动的现金流 | ||||||
净收入 |
| $ | |
| $ | |
为使净收入与经营活动提供的净现金保持一致而进行的调整： |
|
| ||||
折旧和摊销 | | | ||||
递延所得税 | ( | ( | ||||
股票薪酬支出 | | | ||||
处置财产、设备和无形资产的损失 | | | ||||
盈利负债公允价值的变化 | — | ( | ||||
扣除收购后的资产负债变动： |
| |||||
应收账款 |
| | | |||
租赁净投资 |
| | | |||
库存 |
| | ( | |||
所得税 |
| ( | ( | |||
预付费用和其他资产 |
| ( | ( | |||
经营租赁资产的使用权 |
| ( | | |||
应收账款，非流动账款 |
| | | |||
应付账款 |
| | ( | |||
应计工资和相关税 |
| ( | ( | |||
应计费用和其他负债 |
| ( | ( | |||
经营活动提供的净现金 |
| | | |||
来自投资活动的现金流 |
| |||||
购买财产和设备 | ( | ( | ||||
出售财产和设备的收益 | | — | ||||
无形资产支出 | ( | ( | ||||
用于投资活动的净现金 |
| ( | ( | |||
来自融资活动的现金流 |
| |||||
发行应付票据的收益 | — | | ||||
盈利支付 | — | ( | ||||
应付票据付款 | ( | ( | ||||
循环信贷额度的付款 | — | ( | ||||
延期债务发行费用的支付 | — | ( | ||||
行使普通股期权的收益 |
| | | |||
从员工股票购买计划中发行普通股的收益 |
| | | |||
在市场上发行普通股的收益 | — | | ||||
融资活动提供的（用于）净现金 |
| ( | | |||
现金和现金等价物的净增长 |
| | | |||
现金和现金等价物 — 期初 | | | ||||
现金和现金等价物-期末 | $ | | $ | | ||
补充现金流披露 | ||||||
支付利息的现金 | $ | | $ | | ||
缴纳税款的现金 | $ | | $ | | ||
已发生但尚未支付的资本支出 | $ | | $ | | ||
所附附附注是这些未经审计的简明合并财务报表不可分割的一部分。
7
tactile systems technology，inc。
简明合并财务报表附注
(未经审计)
(1)
tactile systems technology公司（以下简称“我们”、“我们”、“我们”和“公司”）生产和分发医疗设备，用于治疗家庭中患有未被满足的慢性疾病患者。 我们提供Flexitouch® Plus和Entre™ Plus系统，这些系统通过我们的直接销售团队为美国各地血管、伤口和淋巴水肿诊所出具的处方，在家中控制淋巴水肿等慢性进行性医疗控件的症状。
(2)
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
On February 27, 2023，我们完成了一次公开发行
我们的业务受季节影响。每年第一季度，大多数患者已经开始了新的保险年度，但还没有达到他们的年度自付费用义务，我们的产品需求大幅下降。每年第三和第四季度，我们通常会经历较高的营业收入，因为患者已经支付了他们的年度保险免赔额，从而减少了他们购买我们产品的自费成本，并且患者希望在年底用尽他们的灵活支出账户。这种季节性仅适用于商业保险覆盖的患者对我们产品的购买和租赁，不适用于医疗保险、医疗或退伍军人管理局，因为这些支付者要么没有计划在计划年度内减少免赔额，要么不涉及购买或租赁我们产品的患者的自费额。
附注2.报告的基础
附表未经审计的简明综合财务报表是根据美国普遍接受的会计原则（“GAAP”）编制的用于中期财务报告，并根据SEC的规则和法规编制的。因此，它们不包括GAAP为完整财务报表所要求的所有信息和脚注。在管理层看来，已包括了对中期财务信息进行公平呈现所需的所有调整（包括常规和重复的调整）。
2024年9月30日结束的九个月的结果未必能预示2024年12月31日结束的年度或任何其他中期期间或任何未来年度的结果。简明综合中期财务报表应与包括在我们截至2023年12月31日年度报告的已审计财务报表及附注一起阅读。
8
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Note 3. Summary of Significant Accounting Policies
Significant Accounting Policies
There were no material changes in our significant accounting policies during the nine months ended September 30, 2024. See Note 3 – “Summary of Significant Accounting Policies” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2023, for information regarding our significant accounting policies.
Accounting Pronouncement Not Yet Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” which requires entities to enhance disclosures around segment reporting. The guidance is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.
Note 4. Inventories
Inventories consisted of the following:
(In thousands) |
| At September 30, 2024 |
| At December 31, 2023 | ||
Finished goods | $ | | $ | | ||
Component parts and work-in-process |
| |
| | ||
Total inventories | $ | | $ | | ||
Note 5. Goodwill and Intangible Assets
Goodwill
In the third quarter of fiscal 2021, we completed the AffloVest Acquisition. The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $
9
Intangible Assets
Our patents and other intangible assets are summarized as follows:
Weighted- | At September 30, 2024 | ||||||||||
Average | Gross | ||||||||||
Amortization | Carrying | Accumulated | Net | ||||||||
(In thousands) |
| Period | Amount | Amortization | Amount | ||||||
Definite-lived intangible assets: | |||||||||||
Patents | $ | | $ | | $ | | |||||
Defensive intangible assets | | | | ||||||||
Customer accounts | — | | | — | |||||||
Customer relationships | | | | ||||||||
Developed technology | | | | ||||||||
Subtotal | | | | ||||||||
Unamortized intangible assets: | |||||||||||
Tradenames | | — | | ||||||||
Patents pending | | — | | ||||||||
Total intangible assets | $ | | $ | | $ | | |||||
Weighted- | At December 31, 2023 | ||||||||||
Average | Gross | ||||||||||
Amortization | Carrying | Accumulated | Net | ||||||||
(In thousands) |
| Period | Amount | Amortization | Amount | ||||||
Definite-lived intangible assets: | |||||||||||
Patents | $ | | $ | | $ | | |||||
Defensive intangible assets | | | | ||||||||
Customer accounts | — |
| |
| |
| — | ||||
Customer relationships | | | | ||||||||
Developed technology | | | | ||||||||
Subtotal | | | | ||||||||
Unamortized intangible assets: | |||||||||||
Tradenames | | — | | ||||||||
Patents pending | | — | | ||||||||
Total intangible assets | $ | | $ | | $ | | |||||
Amortization expense was $
(In thousands) | |||
2024 (October 1 - December 31) |
| $ | |
2025 | | ||
2026 |
| | |
2027 |
| | |
2028 |
| | |
Thereafter |
| | |
Total | $ | |
In the third quarter of 2024, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No. 2021-03, “Intangibles—Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events.” Based on the testing using the qualitative approach, it was determined that it was not more likely than not that the fair value of the reporting
10
unit was less than the carrying value. As a result, it was not deemed necessary to proceed to the quantitative test and
Note 6. Accrued Expenses
Accrued expenses consisted of the following:
(In thousands) |
| At September 30, 2024 |
| At December 31, 2023 | ||
Warranty | $ | | $ | | ||
Legal and consulting | | | ||||
In-transit inventory | | | ||||
Travel | | | ||||
Clinical studies | | | ||||
Sales and use tax | | | ||||
Other |
| |
| | ||
Total | $ | | $ | | ||
Note 7. Warranty Reserves
The activity in the warranty reserve during and as of the end of the reporting periods presented was as follows:
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In thousands) |
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Beginning balance | $ | | $ | | $ | | $ | | ||||
Warranty provision |
| |
| |
| |
| | ||||
Processed warranty claims |
| ( |
| ( |
| ( |
| ( | ||||
Ending balance | $ | | $ | | $ | | $ | | ||||
Accrued warranty reserve, current | $ | | $ | | $ | | $ | | ||||
Accrued warranty reserve, non-current | | | | | ||||||||
Total accrued warranty reserve | $ | | $ | | $ | | $ | | ||||
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Note 8. Credit Agreement
On April 30, 2021, we entered into an Amended and Restated Credit Agreement (the “Restated Credit Agreement”) with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as Administrative Agent. The 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 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 $
On September 8, 2021, in connection with the closing of the AffloVest Acquisition, we borrowed the $
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 $
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
Following the Third Amendment, the term loan and amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus
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 under the Credit Agreement such that the undrawn portions of the revolving credit facility are subject to an unused line fee at a rate per annum from
12
additional term loan in the amount of $
On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which further amended the Credit Agreement. The Fifth Amendment permits the Company to make payments to repurchase shares of its common stock, as long as the Company is not in default before and after giving effect to such repurchases, and as long as such repurchases do not exceed $
On December 21, 2023, we made a payment of $
As of September 30, 2024, we had outstanding borrowings of $
(In thousands) |
| Amount | |
2024 (October 1 - December 31) | $ | | |
2025 | | ||
2026 | | ||
Total | | ||
Less: Deferred financing fees | ( | ||
Net Note Payable | | ||
Less: Current portion of note payable | ( | ||
Non-current portion of note payable | $ | | |
Our obligations under the 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 September 30, 2024, the Credit Agreement contained a number of restrictions and covenants, including that we maintain compliance with a maximum consolidated total leverage ratio, a minimum fixed charge coverage ratio and a minimum consolidated EBITDA covenant. As of September 30, 2024, we were in compliance with all covenants under the Credit Agreement.
Note 9. Commitments and Contingencies
Lease Obligations
We lease property and equipment under operating leases, typically with terms greater than
We classify our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Condensed Consolidated Balance Sheets.
13
None of our lease agreements contain material restrictive covenants or residual value guarantees.
Buildings
We lease certain office and warehouse space at various locations in the United States where we provide services. These leases are typically greater than one year with fixed, escalating rents over the noncancelable terms and, therefore, ROU operating lease assets and operating lease liabilities are recorded on the Condensed Consolidated Balance Sheets, with rent expense recognized on a straight-line basis over the term of the lease. The remaining lease terms vary from approximately to
We entered into a lease (“initial lease”) in October 2018, for approximately
Computer and Office Equipment
We also have operating lease agreements for certain computer and office equipment. The remaining lease terms as of September 30, 2024, ranged from less than
14
Lease Position, Undiscounted Cash Flow and Supplemental Information
The table below presents information related to our ROU operating lease assets and operating lease liabilities that we have recorded:
(In thousands) |
| At September 30, 2024 |
| At December 31, 2023 | ||
$ | | $ | | |||
Operating lease liabilities: | ||||||
$ | | $ | | |||
| |
| | |||
Total | $ | | $ | | ||
Operating leases: | ||||||
Weighted average remaining lease term |
| |||||
Weighted average discount rate | ||||||
Nine Months Ended September 30, | ||||||
2024 | 2023 | |||||
Supplemental cash flow information for our operating leases: | ||||||
Cash paid for operating lease liabilities | $ | | $ | | ||
Non-cash right of use assets obtained in exchange for new operating lease obligations | $ | | $ | | ||
The table below reconciles the undiscounted cash flows for the periods presented to the operating lease liabilities recorded on the Condensed Consolidated Balance Sheet for the periods presented:
(In thousands) | |||
2024 (October 1 - December 31) |
| $ | |
2025 | | ||
2026 |
| | |
2027 |
| | |
2028 |
| | |
Thereafter |
| | |
Total minimum lease payments | | ||
Less: Amount of lease payments representing interest | ( | ||
Present value of future minimum lease payments | | ||
Less: Current obligations under operating lease liabilities | ( | ||
Non-current obligations under operating lease liabilities | $ | |
Operating lease costs were $
Major Vendors
We had purchases from
15
Purchase Commitments
We issued purchase orders prior to September 30, 2024, totaling $
Retirement Plan
We maintain a 401(k) retirement plan for our employees in which eligible employees can contribute a percentage of their pre-tax compensation. We recorded an expense related to our discretionary contributions to the 401(k) plan of $
Legal Proceedings
From time to time, we are subject to various claims and legal proceedings arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
On May 24, 2022, a stockholder derivative lawsuit was filed in the United States District Court for the District of Minnesota, purportedly on behalf of the Company against certain of our present and former officers and directors and the Company (as a nominal defendant), captioned Jack Weaver v. Moen, et al., File No. 0:22-cv-01403-NEB-BRT (the “Weaver Lawsuit”). The Weaver Lawsuit generally arises out of the same subject matter as a previously settled securities class action captioned Brian Mart v. Tactile Sys. Tech., Inc., et al., File No. 0:20-cv-02074-NEB-BRT (D. Minn.) (the “Mart Lawsuit”), which alleged, inter alia, that we and
On June 6, 2024, the parties entered into a Stipulation of Settlement in the Weaver Lawsuit. On June 7, 2024, the plaintiff filed an unopposed motion for preliminary approval of the settlement. On June 27, 2024, the Court entered an order granting the motion for preliminary approval of the settlement. The final settlement hearing occurred on August 28, 2024, and on September 4, 2024, the Court entered its order approving the settlement, including the agreed upon attorneys’ fees and expense awards to plaintiffs’ counsel and service awards to the shareholder plaintiffs. Pursuant to the settlement, we are adopting, implementing, and maintaining certain corporate governance reforms. The attorneys’ fees and expense award of approximately $
On October 25, 2024, the United States District Court, District of Massachusetts (Boston) unsealed two qui tam complaints against us. The first complaint is captioned United States ex. rel. Benjaman Scarborough vs. Tactile Systems Technology, Inc., Case No. 1:21-cv-10813-IT, and was filed under seal on May 17, 2021, on behalf of the United States by a former employee (the “Scarborough Complaint”). The Scarborough Complaint alleges that we submitted false claims and made false statements in connection with the Medicare
16
programs, in violation of the Federal False Claims Act. The second complaint is captioned United States ex. rel. Jackie Gorham, an individual, and Dustin Gast, an individual, vs. Tactile Systems Technology, Inc. Case No. 1:21-cv-11809-IT, and was filed under seal on September 1, 2021, on behalf of the United States by two former employees (the “Gorham Complaint”). The Gorham Complaint alleges that we submitted false claims and made false statements in connection with the Medicare, Medicare Advantage plans, Medicaid and other government payers, in violation of the Federal False Claims Act and submitted false claims resulting from kickbacks in violation of the Federal False Claims Act and the Federal Anti-Kickback Statute. Both complaints seek damages, statutory penalties, attorneys’ fees, and costs.
Note 10. Stockholders' Equity
Stock-Based Compensation
Our 2016 Equity Incentive Plan (the “2016 Plan”) authorizes us to grant stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards to employees, non-employee directors and certain consultants and advisors. There were up to
Upon adoption and approval of the 2016 Plan, all of our previous equity incentive compensation plans were terminated. However, existing awards under those plans continue to vest in accordance with the original vesting schedules and will expire at the end of their original terms.
We recorded stock-based compensation expense of $
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In thousands) |
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Cost of revenue | $ | | $ | | $ | | $ | | ||||
Sales and marketing expenses | | | | | ||||||||
Research and development expenses | | | | | ||||||||
Reimbursement, general and administrative expenses | | | | | ||||||||
Total stock-based compensation expense | $ | | $ | | $ | | $ | | ||||
Stock Options
Stock options issued to participants other than non-employees typically vest over or
17
Our stock option activity for the nine months ended September 30, 2024, was as follows:
| Weighted- | Weighted- | ||||||||
Average | Average | Aggregate | ||||||||
Options | Exercise Price | Remaining | Intrinsic | |||||||
(In thousands except options and per share data) | Outstanding | Per Share (1) | Contractual Life | Value (2) | ||||||
Balance at December 31, 2023 | | $ | | $ | | |||||
Exercised | ( | $ | | $ | | |||||
Cancelled/Expired | ( | $ | | |||||||
Balance at September 30, 2024 | | $ | | $ | | |||||
Options exercisable at September 30, 2024 | | $ | | $ | | |||||
| (1) | The exercise price of each option granted during the period shown was equal to the market price of the underlying stock on the date of grant. |
| (2) | The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period. |
Options exercisable of
Time-Based Restricted Stock Units
We have granted time-based restricted stock units to certain participants under the 2016 Plan that are stock-settled with common shares. Time-based restricted stock units granted under the 2016 Plan vest over to
Our time-based restricted stock unit activity for the nine months ended September 30, 2024, was as follows:
Weighted- | ||||||||
|
| Average Grant |
| Aggregate | ||||
Units | Date Fair Value | Intrinsic | ||||||
(In thousands except unit and per unit data) | Outstanding | Per Unit | Value (1) | |||||
Balance at December 31, 2023 | | $ | | $ | | |||
Granted | | $ | | |||||
Vested | ( | $ | | |||||
Cancelled | ( | $ | | |||||
Balance at September 30, 2024 | | $ | | $ | | |||
| (1) | The aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the period. |
Performance-Based Restricted Stock Units
We have granted performance-based restricted stock units (“PSUs”) to certain participants under the 2016 Plan. These PSUs have both performance-based and time-based vesting features. The PSUs granted in 2023 have
18
achieved in 2024 (ranging from
Stock-based compensation expense recognized for PSUs was $
Our PSU activity for the nine months ended September 30, 2024, was as follows:
Weighted- | ||||||||
|
| Average Grant |
| Aggregate | ||||
PSUs | Date Fair Value | Intrinsic | ||||||
(In thousands except unit and per unit data) | Outstanding | Per Unit | Value (1) | |||||
Balance at December 31, 2023 | | $ | | $ | | |||
Granted | | $ | | |||||
Vested | ( | $ | | |||||
Cancelled | ( | $ | | |||||
Balance at September 30, 2024 | | $ | | $ | | |||
| (1) | The aggregate intrinsic value of PSUs outstanding was based on our closing stock price on the last trading day of the period. |
Employee Stock Purchase Plan
Our employee stock purchase plan (“ESPP”), which was approved by our Board of Directors on April 27, 2016, and by our stockholders on June 20, 2016, allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The ESPP is available to all of our employees and employees of participating subsidiaries. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to
A total of
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Note 11. Revenue
We derive our revenue from the sale and rental of our products to our customers in the United States. The following table presents our revenue, inclusive of sales and rental revenue, disaggregated by product line:
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In thousands) |
| 2024 | 2023 | 2024 | 2023 | |||||||
Revenue | ||||||||||||
Lymphedema products | $ | | $ | | $ | | $ | | ||||
Airway clearance products | | | | | ||||||||
Total | $ | | $ | | $ | | $ | | ||||
Percentage of total revenue | ||||||||||||
Lymphedema products |
|
|
|
| ||||||||
Airway clearance products | ||||||||||||
Total |
|
|
|
| ||||||||
Our revenue by channel, inclusive of sales and rental revenue, for the three and nine months ended September 30, 2024 and 2023, are summarized in the following table:
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In thousands) |
| 2024 | 2023 | 2024 | 2023 | |||||||
Private insurers and other payers | $ | | $ | | $ | | $ | | ||||
Veterans Administration | | | | | ||||||||
Medicare | | | | | ||||||||
Durable medical equipment distributors | | | | | ||||||||
Total | $ | | $ | | $ | | $ | | ||||
Our rental revenue is derived from rent-to-purchase arrangements that typically range from to
The revenue and associated cost of revenue of sales-type leases are recognized on the lease commencement date and a net investment in leases is recorded on the Condensed Consolidated Balance Sheets. We bill the patients’ insurance payers monthly over the duration of the rental term. We record the net investment in leases and recognize revenue upon commencement of the lease in the amount of the expected consideration to be received through the monthly payments. Similar to our sales revenue, the transaction price is impacted by multiple factors, including the terms and conditions contracted by third-party payers. As the rental contract resides with the patients, we have elected the portfolio approach, at the payer level, to determine the expected consideration, which considers the impact of early terminations. While the contract is with the patient, in certain circumstances, the third-party payer elects an initial rental period with an option to extend. We assess the likelihood of extending the lease at the onset of the lease to determine if the option is reasonably certain to be exercised. As the lease is short-term in nature, we anticipate collection of substantially all of the net investment within the first year of the lease agreement. Completion of these payments represents the fair market value of the equipment, and as such, interest income is not applicable.
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Rental revenue for the three and nine months ended September 30, 2024 and 2023, was primarily from private insurers. Sales-type lease revenue and the associated cost of revenue for the three and nine months ended September 30, 2024 and 2023, was:
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
(In thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
Sales-type lease revenue | $ | | $ | | $ | | $ | | ||||
Cost of sales-type lease revenue |
| |
| |
| |
| | ||||
Gross profit | $ | | $ | | $ | | $ | | ||||
Note 12. Income Taxes
We record our interim provision for income taxes by applying our estimated annual effective tax rate to our year-to-date pre-tax income (loss) and adjusting for discrete tax items recorded in the period. Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. These differences relate primarily to different methods used for income tax reporting purposes, including for depreciation and amortization, warranty and vacation accruals, and deductions related to allowances for doubtful accounts receivable and inventory reserves. Our provision for income taxes includes current federal and state income tax expense, as well as deferred federal and state income tax expense.
The effective tax rate for the three months ended September 30, 2024, was an expense of
The effective tax rate for the nine months ended September 30, 2024, was an expense of
We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority is more-likely-than-not to sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.
The Company currently is not under examination in any jurisdictions.
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Note 13. Net Income Per Share
The following table sets forth the computation of our basic and diluted net income per share:
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(In thousands, except share and per share data) |
| 2024 |
| 2023 |
| 2024 |
| 2023 | ||||
Net income | $ | | $ | | $ | | $ | | ||||
Weighted-average shares outstanding | | | | | ||||||||
Weighted-average shares used to compute diluted net income per share | | | | | ||||||||
Net income per share - Basic | $ | $ | $ | $ | ||||||||
Net income per share - Diluted | $ | $ | $ | $ | ||||||||
The following common stock equivalents were excluded from the computation of diluted net income per share for the periods presented because including them would have been anti-dilutive:
Three Months Ended | Nine Months Ended | |||||||
September 30, | September 30, | |||||||
| 2024 |
| 2023 |
| 2024 |
| 2023 | |
Restricted stock units | | | | | ||||
Common stock options | | | | | ||||
Performance stock units | | — | | | ||||
Employee stock purchase plan | | — | — | — | ||||
Total | | | | | ||||
Note 14. Fair Value Measurements
We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1). The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2). The lowest priority is given to unobservable inputs (Level 3).
As of September 30, 2024, our obligations under the AffloVest Acquisition earn-out arrangements had been paid in full. Prior to the determination of the actual amount of the earn-out, the earn-out liability was valued by employing a Monte Carlo Simulation model in a risk-neutral framework, which is a Level 3 input. The underlying simulated variable included recognized revenue. The recognized revenue volatility estimate was based on a study of historical asset volatility for a set of comparable public companies. The model included other assumptions including the market price of risk, which was calculated as the weighted average cost of capital less the long-term risk-free rate. The earn-out liability was adjusted to fair value at each reporting date until the end of the earn-out period, which was September 30, 2023. Changes in fair value were included in intangible asset amortization and earn-out expenses in our Condensed Consolidated Statements of Operations.
22
Changes in the earn-out liability measured at fair value using Level 3 inputs were as follows:
(In thousands) | |||
Earn-out liability at December 31, 2022 | $ | | |
Payment on earn-out | ( | ||
Fair value adjustments | ( | ||
Earn-out liability at September 30, 2023 | $ | | |
On May 25, 2023, the Company paid $
The carrying amounts of financial instruments such as cash equivalents, accounts receivable, other assets, accounts payable, accrued expenses and other liabilities approximate their related fair values due to the short-term maturities of these items. Non-financial assets, such as equipment and leasehold improvements, and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired.
Note 15. Subsequent Event
On October 30, 2024, our Board of Directors authorized a program to repurchase up to $
23
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 provides innovative medical devices for the treatment of underserved chronic diseases. 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 setting 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.
Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl systems and our airway clearance product is the AffloVest. A predecessor to our Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, and we introduced the system to address the many limitations of self-administered home-based manual lymphatic drainage therapy. We began selling our more advanced Flexitouch system after receiving 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. In June 2017, we announced that we received 510(k) clearance from the FDA for the Flexitouch Plus, the third-generation version of our Flexitouch system. In December 2020, we received 510(k) clearance for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. We introduced our Entre system in the United States in February 2013 and the second generation, Entre Plus, in March 2023. The Entre Plus system is sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device such as our Flexitouch Plus system. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and, beginning in October 2024, is commercially available throughout the United States for the treatment of upper extremity lymphedema. Sales and rentals of our lymphedema products represented 88% of our revenue in each of the nine months ended September 30, 2024 and 2023.
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 nine months ended September 30, 2024 and 2023, sales of AffloVest represented 12% of our revenue.
To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of our direct sales force, training resources, reimbursement capabilities and clinical expertise. We market our lymphedema products in the United States using a direct-to-patient and -provider 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 also 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 September 30, 2024, we employed 270 field sales representatives for our lymphedema products and a team of 19 supporting our airway clearance products. This compares to 246 field sales representatives for our lymphedema products and a team of 13 specialists supporting our airway clearance products as of September 30, 2023.
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
24
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 September 30, 2024, we generated revenue of $73.1 million and had net income of $5.2 million, compared to revenue of $69.6 million and net income of $22.3 million for the three months ended September 30, 2023. For the nine months ended September 30, 2024, we generated revenue of $207.4 million and had net income of $7.2 million, compared to revenue of $196.8 million and net income of $20.3 million for the nine months ended September 30, 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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Results of Operations
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
The following table presents our results of operations for the periods indicated:
Three Months Ended | ||||||||||||||||||
September 30, | Change | |||||||||||||||||
(In thousands) | 2024 | 2023 | $ | % | ||||||||||||||
Condensed Consolidated Statement | % of | % of | ||||||||||||||||
of Operations Data: | revenue | revenue | ||||||||||||||||
Revenue | ||||||||||||||||||
Sales revenue | $ | 63,168 | 86 | % | $ | 58,866 | 85 | % | $ | 4,302 | 7 | % | ||||||
Rental revenue | 9,925 | 14 | % | 10,720 | 15 | % | (795) | (7) | % | |||||||||
Total revenue | 73,093 | 100 | % | 69,586 | 100 | % | 3,507 | 5 | % | |||||||||
Cost of revenue | ||||||||||||||||||
Cost of sales revenue | 15,603 | 21 | % | 17,016 | 24 | % | (1,413) | (8) | % | |||||||||
Cost of rental revenue | 2,703 | 4 | % | 3,211 | 5 | % | (508) | (16) | % | |||||||||
Total cost of revenue | 18,306 | 25 | % | 20,227 | 29 | % | (1,921) | (9) | % | |||||||||
Gross profit | ||||||||||||||||||
Gross profit - sales revenue | 47,565 | 65 | % | 41,850 | 61 | % | 5,715 | 14 | % | |||||||||
Gross profit - rental revenue | 7,222 | 10 | % | 7,509 | 10 | % | (287) | (4) | % | |||||||||
Gross profit | 54,787 | 75 | % | 49,359 | 71 | % | 5,428 | 11 | % | |||||||||
Operating expenses | ||||||||||||||||||
Sales and marketing | 26,838 | 37 | % | 26,030 | 37 | % | 808 | 3 | % | |||||||||
Research and development | 2,417 | 3 | % | 1,964 | 3 | % | 453 | 23 | % | |||||||||
Reimbursement, general and administrative | 18,118 | 25 | % | 16,449 | 24 | % | 1,669 | 10 | % | |||||||||
Intangible asset amortization and earn-out | 633 | 1 | % | (3,073) | (4) | % | 3,706 | (121) | % | |||||||||
Total operating expenses | 48,006 | 66 | % | 41,370 | 60 | % | 6,636 | 16 | % | |||||||||
Income from operations | 6,781 | 9 | % | 7,989 | 11 | % | (1,208) | (15) | % | |||||||||
Other income (expense) | 452 | 1 | % | (404) | (1) | % | 856 | N.M. | % | |||||||||
Income before income taxes | 7,233 | 10 | % | 7,585 | 10 | % | (352) | (5) | % | |||||||||
Income tax expense (benefit) | 2,078 | 3 | % | (14,714) | (21) | % | 16,792 | (114) | % | |||||||||
Net income | $ | 5,155 | 7 | % | $ | 22,299 | 31 | % | $ | (17,144) | (77) | % | ||||||
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Nine Months Ended | ||||||||||||||||||
September 30, | Change | |||||||||||||||||
(In thousands) | 2024 | 2023 | $ | % | ||||||||||||||
Condensed Consolidated Statement | % of | % of | ||||||||||||||||
of Operations Data: | revenue | revenue | ||||||||||||||||
Revenue | ||||||||||||||||||
Sales revenue | $ | 180,742 | 87 | % | $ | 171,459 | 87 | % | $ | 9,283 | 5 | % | ||||||
Rental revenue | 26,657 | 13 | % | 25,312 | 13 | % | 1,345 | 5 | % | |||||||||
Total revenue | 207,399 | 100 | % | 196,771 | 100 | % | 10,628 | 5 | % | |||||||||
Cost of revenue | ||||||||||||||||||
Cost of sales revenue | 46,810 | 23 | % | 48,523 | 24 | % | (1,713) | (4) | % | |||||||||
Cost of rental revenue | 8,270 | 4 | % | 9,122 | 5 | % | (852) | (9) | % | |||||||||
Total cost of revenue | 55,080 | 27 | % | 57,645 | 29 | % | (2,565) | (4) | % | |||||||||
Gross profit | ||||||||||||||||||
Gross profit - sales revenue | 133,932 | 64 | % | 122,936 | 63 | % | 10,996 | 9 | % | |||||||||
Gross profit - rental revenue | 18,387 | 9 | % | 16,190 | 8 | % | 2,197 | 14 | % | |||||||||
Gross profit | 152,319 | 73 | % | 139,126 | 71 | % | 13,193 | 9 | % | |||||||||
Operating expenses | ||||||||||||||||||
Sales and marketing | 82,803 | 40 | % | 80,538 | 41 | % | 2,265 | 3 | % | |||||||||
Research and development | 6,794 | 3 | % | 6,030 | 3 | % | 764 | 13 | % | |||||||||
Reimbursement, general and administrative | 51,158 | 24 | % | 46,874 | 24 | % | 4,284 | 9 | % | |||||||||
Intangible asset amortization and earn-out | 1,898 | 1 | % | (557) | — | % | 2,455 | N.M. | % | |||||||||
Total operating expenses | 142,653 | 68 | % | 132,885 | 68 | % | 9,768 | 7 | % | |||||||||
Income from operations | 9,666 | 5 | % | 6,241 | 3 | % | 3,425 | 55 | % | |||||||||
Other income (expense) | 832 | — | % | (2,235) | (1) | % | 3,067 | (137) | % | |||||||||
Income before income taxes | 10,498 | 5 | % | 4,006 | 2 | % | 6,492 | 162 | % | |||||||||
Income tax expense (benefit) | 3,254 | 2 | % | (16,307) | (8) | % | 19,561 | (120) | % | |||||||||
Net income | $ | 7,244 | 3 | % | $ | 20,313 | 10 | % | $ | (13,069) | (64) | % | ||||||
Revenue
Revenue increased $3.5 million, or 5%, to $73.1 million in the three months ended September 30, 2024, compared to $69.6 million in the three months ended September 30, 2023. The increase in total revenue was attributable to an increase of $2.8 million, or 4%, in sales and rentals of the lymphedema product line and an increase of $0.7 million, or 10%, in sales of the airway clearance product line in the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Revenue increased $10.6 million, or 5%, to $207.4 million in the nine months ended September 30, 2024, compared to $196.8 million in the nine months ended September 30, 2023. The increase in total revenue was attributable to an increase of $10.0 million, or 6%, in sales and rentals of the lymphedema product line, and an increase of $0.6 million, or 2%, in sales of the airway clearance product line in the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
The increase in the lymphedema product line revenue in each of the three and nine months ended September 30, 2024, was attributable to the growth of our field sales team and ongoing technology and workflow initiatives. The increase in the airway clearance product line revenue in the three and nine months ended September 30, 2024, was primarily attributable to the onboarding of a new DME partner in 2024.
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The following table summarizes our revenue by product line for the three and nine months ended September 30, 2024 and 2023, both in dollars and percentage of total revenue:
Three Months Ended | |||||||||||
September 30, | Change | ||||||||||
(In thousands) |
| 2024 | 2023 | $ | % | ||||||
Revenue | |||||||||||
Lymphedema products | $ | 65,282 | $ | 62,506 | $ | 2,776 | 4% | ||||
Airway clearance products | 7,811 | 7,080 | 731 | 10% | |||||||
Total | $ | 73,093 | $ | 69,586 | $ | 3,507 | 5% | ||||
Percentage of total revenue | |||||||||||
Lymphedema products |
| 89% |
| 90% |
| ||||||
Airway clearance products | 11% | 10% | |||||||||
Total |
| 100% |
| 100% |
| ||||||
Nine Months Ended | |||||||||||
September 30, | Change | ||||||||||
(In thousands) |
| 2024 | 2023 | $ | % | ||||||
Revenue | |||||||||||
Lymphedema products | $ | 182,278 | $ | 172,257 | $ | 10,021 | 6% | ||||
Airway clearance products | 25,121 | 24,514 | 607 | 2% | |||||||
Total | $ | 207,399 | $ | 196,771 | $ | 10,628 | 5% | ||||
Percentage of total revenues | |||||||||||
Lymphedema products |
| 88% |
| 88% |
| ||||||
Airway clearance products | 12% | 12% | |||||||||
Total |
| 100% |
| 100% |
| ||||||
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 patients have met their annual insurance deductibles, thereby reducing their out-of-pocket costs for our products, and have an increasing 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.
Cost of Revenue and Gross Margin
Cost of revenue decreased $1.9 million, or 9%, to $18.3 million in the three months ended September 30, 2024, compared to $20.2 million in the three months ended September 30, 2023. Cost of revenue decreased $2.6 million, or 4%, to $55.1 million in the nine months ended September 30, 2024, compared to $57.6 million in the nine months ended September 30, 2023. The decrease in cost of revenue in both periods was primarily attributable to lower manufacturing and warranty costs.
Gross margin was 75.0% and 70.9% in the three months ended September 30, 2024 and 2023, respectively, and 73.4% and 70.7% in the nine months ended September 30 2024 and 2023, respectively.
Sales and Marketing Expenses
Sales and marketing expenses increased $0.8 million, or 3%, to $26.8 million in the three months ended September 30, 2024, compared to $26.0 million in the three months ended September 30, 2023. The increase
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was primarily attributable to a $0.5 million increase in travel and entertainment expenses and a $0.4 million increase in personnel-related compensation expenses, partially offset by a decrease of $0.1 million in tradeshow related expenses.
Sales and marketing expenses increased $2.3 million, or 3%, to $82.8 million in the nine months ended September 30, 2024, compared to $80.5 million in the nine months ended September 30, 2023. The increase was primarily attributable to a $1.1 million increase in travel and entertainment expenses, a $0.7 million increase in personnel-related compensation expenses and a $0.5 million increase in meetings, seminars and tradeshow related expenses.
Research and Development Expenses
Research and development (“R&D”) expenses increased $0.5 million, or 23%, to $2.4 million in the three months ended September 30, 2024, compared to $2.0 million in the three months ended September 30, 2023. The increase was primarily attributable to a $0.4 million increase in professional fees and a $0.2 million increase in personnel-related compensation expenses, partially offset by a $0.1 million decrease in clinical study related expenses.
R&D expenses increased $0.8 million, or 13%, to $6.8 million in the nine months ended September 30, 2024, compared to $6.0 million in the nine months ended September 30, 2023. The increase was primarily attributable to a $0.5 million increase in professional fees, a $0.2 million increase in personnel-related compensation expenses, and a $0.1 million increase in clinical study related expenses.
Reimbursement, General and Administrative Expenses
Reimbursement, general and administrative expenses increased $1.7 million, or 10%, to $18.1 million in the three months ended September 30, 2024, compared to $16.5 million in the three months ended September 30, 2023. This increase was primarily attributable to a $1.2 million increase in personnel-related compensation expenses and a $0.9 million increase in IT related expenses, partially offset by a $0.4 million decrease in occupancy costs, depreciation expense and professional fees.
Reimbursement, general and administrative expenses increased $4.3 million, or 9%, to $51.2 million in the nine months ended September 30, 2024, compared to $46.9 million in the nine months ended September 30, 2023. This increase was primarily attributable to a $2.3 million increase in personnel-related compensation expenses, and a $2.0 million increase in IT related expenses.
Intangible Asset Amortization and Earn-out Expense
Intangible asset amortization and earn-out expense increased $3.7 million to an expense of $0.6 million in the three months ended September 30, 2024, compared to a benefit of $3.1 million in the three months ended September 30, 2023. The increase in expense was related to there being no earn-out expense in the three months ended September 30, 2024, as final payment under the AffloVest Acquisition earn-out arrangement was made on November 28, 2023, and therefore there was no change in fair value of an earn-out expense recorded in the three months ended September 30, 2024, compared to a decrease in the fair value of the earn-out expense of $3.7 million for the three months ended September 30, 2023, due to the lower than expected airway clearance product revenue.
Intangible asset amortization and earn-out expense increased $2.5 million to an expense of $1.9 million in the nine months ended September 30, 2024, compared to a benefit of $0.6 million in the nine months ended September 30, 2023. The increase was related to there being no earn-out expense in the nine months ended September 30, 2024, as final payment under the AffloVest Acquisition earn-out arrangement was made on November 28, 2023, and therefore there was no change in fair value of an earn-out expense recorded in the nine months ended September 30, 2024, compared to a decrease in the fair value of the earn-out expense of $2.5 million for the nine months ended September 30, 2023, due to the lower than expected airway clearance product revenue.
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Other Income (Expense), Net
We recorded other income, net of $0.5 million and other expense, net of $0.4 million for the three months ended September 30, 2024 and 2023, respectively. The primary drivers of the change were a decrease in interest expense of $0.4 million and an increase in interest income of $0.4 million.
We recorded other income, net of $0.8 million and other expense, net of $2.2 million for the nine months ended September 30, 2024 and 2023, respectively. The primary drivers of the change were a decrease in interest expense of $1.6 million and an increase in interest income of $1.4 million.
Income Taxes
We recorded income tax expense of $2.1 million and an income tax benefit $14.7 million for the three months ended September 30, 2024 and 2023, respectively. The primary driver of the change was the fact that we did not have a full valuation allowance on our deferred tax assets for the current year period, while in the prior year period there was a release of a valuation allowance to recognize the full value of our deferred tax assets.
We recorded an income tax expense of $3.3 million and an income tax benefit of $16.3 million for the nine months ended September 30, 2024 and 2023, respectively. The primary driver of the change was the fact that we did not have a full valuation allowance on our deferred tax assets for the current year period, while in the prior year period there was a release of a valuation allowance to recognize the full value of our deferred tax assets.
Liquidity and Capital Resources
Cash Flows
On September 30, 2024, our principal sources of liquidity were cash and cash equivalents of $82.1 million and net accounts receivable of $43.2 million. This compares to cash and cash equivalents of $66.0 million and net accounts receivable of $58.5 million at September 30, 2023.
The following table summarizes our cash flows for the periods indicated:
Nine Months Ended | ||||||
September 30, | ||||||
(In thousands) |
| 2024 |
| 2023 | ||
Net cash provided by (used in): | ||||||
Operating activities |
| $ | 24,322 | $ | 17,503 | |
Investing activities | (2,005) | (1,541) | ||||
Financing activities | (1,204) | 28,145 | ||||
Net increase in cash and cash equivalents |
| $ | 21,113 | $ | 44,107 | |
Operating Activities
Net cash provided by operating activities during the nine months ended September 30, 2024 was $24.3 million, resulting from non-cash net income adjustments of $11.0 million, net income of $7.2 million and a net increase in operating assets and liabilities of $6.1 million. The positive non-cash net income adjustments consisted primarily of $6.0 million of stock-based compensation expense and $5.1 million of depreciation. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $10.5 million, a decrease in inventories of $1.4 million and a $0.6 million increase in accounts payable, partially offset by a decrease in accrued payroll and related taxes of $3.7 million, an increase in prepaid
30
expenses and other assets of $1.8 million, a decrease in income taxes payable of $0.8 million and a decrease in accrued expenses and other liabilities of $0.3 million.
Net cash provided by operating activities during the nine months ended September 30, 2023 was $17.5 million, resulting from net income of $20.3 million and a net increase in operating assets and liabilities of $9.9 million, which were partially offset by non-cash net income adjustments of $12.7 million. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $19.3 million and a decrease in net investment in leases of $2.5 million, partially offset by a decrease in accrued expenses of $5.5 million, a decrease in accounts payable of $3.6 million, a decrease in accrued payroll and related taxes of $2.3 million, and an increase in prepaid expenses and inventories of $0.7 million. The negative non-cash net loss adjustments consisted primarily of $20.7 million of deferred income taxes and a $2.5 million change in the fair value of earn-out liability, offset by $5.6 million of stock-based compensation expense and $4.9 million of depreciation and amortization expense.
Investing Activities
Net cash used in investing activities during the nine months ended September 30, 2024, was $2.0 million, consisting of purchases of property and equipment primarily related to tenant improvements, and patent costs.
Net cash used in investing activities during the nine months ended September 30, 2023, was $1.5 million, consisting of purchases of property and equipment, and patent costs.
Financing Activities
Net cash used in financing activities during the nine months ended September 30, 2024, was $1.2 million, primarily consisting of a $2.3 million payment made on our term loan, partially offset by $1.0 million in proceeds from the issuance of common stock under the ESPP.
Net cash provided by financing activities during the nine months ended September 30, 2023, was $28.1 million, primarily consisting of net proceeds from the offering of our common stock of $34.6 million and $1.0 million in proceeds from the issuance of common stock under the ESPP, partially offset by a payment of $5.0 million on the AffloVest earn-out and a $2.3 million payment made on our term loan.
Credit Agreement
On April 30, 2021, we entered into an Amended and Restated Credit Agreement (the “Restated Credit Agreement”) with the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as Administrative Agent. The 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 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 Restated Credit Agreement. The term loan is reflected on our condensed 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.
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On February 22, 2022, we entered into a Second Amendment Agreement (the “Second Amendment”), which further amends 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 permits the Company to make payments to repurchase shares of its common stock, as long as the Company is not in default before and after giving effect to such repurchases, and as long as such repurchases do not exceed $30.0 million.
On December 21, 2023, we made a payment of $16.8 million to repay in full the outstanding balance on the revolving credit facility.
As of September 30, 2024, we had outstanding borrowings of $27.0 million under the Credit Agreement, comprised entirely of the term loan. The principal of the term loan is required to be repaid in quarterly installments of $750,000.
For additional information regarding the Credit Agreement, including interest rates, fees and maturities, see Note 8 – “Credit Agreement” of the condensed consolidated financial statements contained in this report.
Share Repurchase Program
On October 30, 2024, our Board of Directors authorized a program to repurchase up to $30.0 million of 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 our common stock, general business and market conditions and other investment considerations and factors. The share repurchase program expires on October 31, 2026. The program does not obligate us to repurchase any specific number of shares and may be suspended or discontinued at any time without prior notice. We intend to finance the share repurchase program with cash on hand.
Future Cash Requirements
For a discussion of our material estimated future cash requirements under our contractual obligations and commercial commitments, in total and disaggregated into current and long-term, see “Future Cash Requirements” included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes since December 31, 2023.
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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 impacts 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; |
| ● | 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, cash equivalents and cash flows from operations will be sufficient to meet our working capital, capital expenditure, debt repayment and related interest, 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 quarter ended September 30, 2024, and we do not expect that inflation or changing prices will materially affect our business for at least the next twelve months.
Recent Accounting Pronouncements
Refer to Note 3 – “Summary of Significant Accounting Policies” of the condensed consolidated financial statements contained in this report for a description of recently issued accounting pronouncements that are applicable to our business.
Critical Accounting Estimates
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. For additional information, please see the discussion of our most critical accounting estimates under “Critical Accounting Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
For a discussion on our market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” included in our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes since December 31, 2023.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of September 30, 2024, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended September 30, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
Information pertaining to certain legal proceedings in which we are involved can be found in Note 9 – “Commitments and Contingencies” to our condensed consolidated financial statements included in Part I, Item 1 of this report and is incorporated herein by reference.
Item 1A. Risk Factors.
In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from those disclosed in that report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
Not applicable.
34
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Fifth Amendment to Credit Agreement
Because we are filing this Quarterly Report on Form 10-Q within four business days after the triggering event, we are making the following disclosure under this Item 5 instead of filing a Current Report on Form 8-K under Item 1.01, Entry into a Material Definitive Agreement and Item 2.03, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant:
On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which amends the Amended and Restated Credit Agreement, dated as of April 30, 2021, as amended by the First Amendment Agreement dated as of September 8, 2021, the Second Amendment Agreement dated as of February 22, 2022, the Third Amendment Agreement dated as of June 21, 2023, and the Fourth Amendment Agreement dated as of August 1, 2023 (as further amended by the Fifth Amendment, the “Credit Agreement”), by and among us, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent.
The Credit Agreement restricts the Company from making certain payments, including any payments to repurchase shares of its common stock. The Fifth Amendment provides for an exception to this restriction by permitting the Company to make payments to repurchase shares of its common stock, as long as the Company is not in default before and after giving effect to such repurchases, and as long as such repurchases do not exceed $30.0 million.
The foregoing description of the Fifth Amendment is a summary, does not purport to be complete, and is qualified in its entirety by reference to the Fifth Amendment, a copy of which is attached to this Quarterly Report on Form 10-Q as Exhibit 10.2 and is incorporated herein by reference.
Trading Arrangements
During the quarter ended September 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
Item 6. Exhibits.
The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index below.
35
EXHIBIT INDEX
Incorporated by Reference | ||||||||||
Exhibit |
| Exhibit |
| Filed | ||||||
Number | Description of Exhibit | Form |
| Date of Filing | Number | Herewith | ||||
3.1 | 10-Q | 08/05/2024 | 3.3 | |||||||
3.2 | 10-K | 02/21/2023 | 3.2 | |||||||
10.1 | X | |||||||||
10.2 | X | |||||||||
31.1 | X | |||||||||
31.2 | X | |||||||||
32.1 | X | |||||||||
32.2 | X | |||||||||
101.1 | Inline XBRL for the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024: (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Stockholders’ Equity, (iv) Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements; and for the information set forth in Part II, Item 5. | X | ||||||||
104.1 | Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1) | X | ||||||||
36
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Tactile Systems Technology, Inc. | ||
Date: November 4, 2024 | By: | /s/ Elaine M. Birkemeyer | |
Elaine M. Birkemeyer | |||
Chief Financial Officer | |||
(Principal financial and accounting officer) | |||
37