AirSculpt Q3 2026 revenue falls 8.7% to $31.9M
A $39.0 million funded term loan replaces the prior credit agreement, alongside a $5.0 million revolving facility and a November 2031 maturity.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
AirSculpt Technologies, Inc. (AIRS) reported third-quarter 2026 revenue of $31.944 million, down 8.7% from a year earlier. It performed 2,483 cases, compared with 2,780, while revenue per case was $12,865 versus $12,587. Net loss narrowed to $7.173 million from $9.512 million, while Adjusted EBITDA was $393,000 versus $3.039 million.
For the nine months ended September 30, 2026, revenue was $114.233 million, down 3.5%, and operating cash flow was $558,000 compared with $5.627 million. Cash and equivalents were $15.182 million as of September 30, 2026. The company attributed the quarterly revenue decline primarily to a 9.6% decrease in same-center cases, partly offset by a 2.3% increase in same-center average selling price.
On November 5, 2026, AirSculpt entered a Blue Torch Financing Agreement with a $39.0 million senior secured term loan, funded in full at closing, and a revolving facility of up to $5.0 million, undrawn at closing. Proceeds repaid all debt under and terminated the prior Credit Agreement, and paid financing fees and expenses. The new agreement matures November 5, 2031.
1 point · 0 major0 major · 3 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQuarterly net loss narrowed to $7.173 million from $9.512 million year over year.
Negative
- Moderate pointThird-quarter revenue fell 8.7% year over year.
- Moderate pointThird-quarter Adjusted EBITDA was $393,000, versus $3.039 million a year earlier.
- Moderate pointNine-month operating cash flow was $558,000, compared with $5.627 million.
Filing Explained
Refinancing removed the old requirement to send half of equity proceeds to term-loan repayment; only specified covenant-cure equity remains subject to mandatory prepayment.
AirSculpt reports that by
The ATM permits gradual sales at market prices at the company’s discretion; shares sold increase the share count and reduce existing holders’ ownership percentages, while the remaining amount is capacity, not an issuance. The filing says the prior credit agreement’s requirement to use 50% of net equity proceeds to repay term loans ended when that debt was repaid and terminated; the Blue Torch loan has no general equity-proceeds prepayment requirement, except for equity issued to cure specified financial-covenant defaults.
Key Figures
Revenue: $31.944 million
Net loss: $7.173 million loss
Adjusted EBITDA: $393,000
+5 more
8 metrics
Revenue
$31.944 million
Three months ended September 30, 2026; down 8.7% year over year
Net loss
$7.173 million loss
Three months ended September 30, 2026; compared with $9.512 million loss in 2025
Adjusted EBITDA
$393,000
Three months ended September 30, 2026; compared with $3.039 million in 2025
Operating cash flow
$558,000
Nine months ended September 30, 2026; compared with $5.627 million in 2025
Cash and cash equivalents
$15.182 million
As of September 30, 2026
Cases performed
2,483 cases
Three months ended September 30, 2026; compared with 2,780 in 2025
Senior secured term loan
$39.0 million
Funded in full at closing on November 5, 2026
Revolving loan facility
Up to $5.0 million
Blue Torch Financing Agreement; none drawn at closing
Key Terms
Adjusted EBITDA, same-center case growth, at-the-market offering program, Term SOFR, +1 more
5 terms
Adjusted EBITDA financial
"we define Adjusted EBITDA as net loss excluding"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
same-center case growth financial
"We define same-center case and revenue growth as"
at-the-market offering program financial
"in connection with an at-the-market offering program"
An at-the-market offering program lets a company sell newly issued shares directly into the open market at current trading prices through a broker, rather than issuing a large block of stock all at once. It matters to investors because it provides the company a flexible way to raise cash over time, which can dilute existing shares gradually and affect earnings per share and stock price depending on how much and when shares are sold—think of it as a faucet the company can open or close to add supply to the market.
Term SOFR financial
"borrowings bear interest at a rate of Term SOFR"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
baby shelf rules regulatory
"referred to as the “baby shelf rules.”"
A baby shelf rule lets a smaller or emerging issuer pre-clear a modest amount of securities with regulators so it can sell them quickly later without a full new approval each time. For investors, it matters because it makes fundraising faster and more flexible for the company—affecting the timing of new share issues, potential dilution, and how easily the company can access cash when opportunities or needs arise, similar to a pre-approved short-term credit line.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was AIRS revenue in the third quarter of 2026?
AIRS reported revenue of $31.944 million for the three months ended September 30, 2026, down 8.7% from the same period in 2025. It performed 2,483 cases, versus 2,780, and revenue per case was $12,865, compared with $12,587.
Why did AIRS revenue decline in the third quarter?
Same-center cases fell 9.6% in the third quarter of 2026, while same-center average selling price increased 2.3%. AirSculpt also said the prior-year period included revenue from its London clinic, which closed as of December 31, 2025.
What are the terms of AIRS's new financing agreement?
The Blue Torch Financing Agreement provides a $39.0 million senior secured term loan, funded in full at closing, and a revolving facility of up to $5.0 million, with none drawn at closing. It matures November 5, 2031; proceeds repaid and terminated the prior Credit Agreement and paid financing fees and expenses.
How much remained available under AIRS's ATM program?
As of September 30, 2026, approximately $16.6 million remained available for sale under the ATM Agreement. AirSculpt had sold 11,504,516 shares under the agreement for gross proceeds of approximately $33.4 million.
AI-generated analysis. How Rhea-AI works. Not financial advice.
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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
For the quarterly period ended September 30, 2026
OR
For the transition period from __________ to __________.
Commission file number: 001-40973
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code: (786 ) 709-9690
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | ||||||||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The registrant had 73,925,997 shares of common stock outstanding as of November 6, 2026.
Table of Contents
TABLE OF CONTENTS
| Page | ||||||||
PART I FINANCIAL INFORMATION | ||||||||
Item 1. | Financial Statements | 2 | ||||||
Condensed Consolidated Balance Sheets as of September 30, 2026 (Unaudited) and December 31, 2025 | 2 | |||||||
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 3 | |||||||
Condensed Consolidated Statements of Other Comprehensive Loss for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 4 | |||||||
Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three and Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 5 | |||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2026 and 2025 (Unaudited) | 6 | |||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 7 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 28 | ||||||
Item 4. | Controls and Procedures | 28 | ||||||
PART II OTHER INFORMATION | ||||||||
Item 1. | Legal Proceedings | 31 | ||||||
Item 1A. | Risk Factors | 31 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 32 | ||||||
Item 3. | Defaults Upon Senior Securities | 32 | ||||||
Item 4. | Mine Safety Disclosures | 32 | ||||||
Item 5. | Other Information | 32 | ||||||
Item 6. | Exhibits | 33 | ||||||
Signatures | 34 | |||||||
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
We have made statements in the sections titled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in other sections of this Quarterly Report that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. You are cautioned that there are important risks and uncertainties, many of which are beyond our control, that could cause our actual results, level of activity, performance or achievements to differ materially from the projected results, level of activity, performance or achievements that are expressed or implied by such forward-looking statements, including those factors discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. We qualify all of our forward-looking statements by these cautionary statements.
Our future results could be affected by a variety of other factors, including, but not limited to, inability to sell equity or other securities in the future at a time when we might otherwise wish to effect sales; inability to raise capital on commercially reasonable terms, if at all; the risk that any future financings may dilute our stockholders or restrict our business; our ability to repay or refinance our indebtedness under our credit agreement on or prior to its November 15, 2027 maturity and to comply with the requirements of the August 2026 amendment to our credit agreement, including mandatory prepayments from equity proceeds; limitations on our ability to sell securities under our shelf registration statement; failure to stabilize and grow same-center performance; not being able to optimize our marketing investment, go-to-market strategy and sales process; not having the ability to expand our financing options for consumers; being unsuccessful in further product innovations; failure to operate centers in a cost-effective manner; increased operating expenses due to rising inflation; increased competition in the weight loss and obesity solutions market, including as a result of recent regulatory action, and increased market acceptance, availability and customer awareness of weight-loss drugs; shortages or quality control issues with third-party manufacturers or suppliers; competition for surgeons; litigation or medical malpractice claims; inability to protect the confidentiality of our proprietary information; changes in laws governing the corporate practice of medicine or fee-splitting; changes in regulatory, macroeconomic conditions, including inflation and the threat of recession, economic and other conditions of the states and jurisdictions where our facilities are located; and business disruption or other losses from natural disasters, war, pandemics, terrorist acts or political unrest.
We discussed many of these risks and uncertainties in the section titled “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, as updated in Part II, Item 1A of this Quarterly Report, and in other filings we make from time to time with the U.S. Securities and Exchange Commission. There also may be other risks and uncertainties that are currently unknown to us or that we are unable to predict at this time.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Forward-looking statements represent our estimates and assumptions only as of the date they were made and are inherently subject to change. We are under no duty and we assume no obligation to update any of the forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, after the date of this Quarterly Report or to conform our prior statements to actual results or revised expectations, except as required by law. Given these uncertainties, investors should not place undue reliance on these forward-looking statements.
1
Table of Contents
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
AirSculpt Technologies, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
| ($000s, except for shares) | September 30, 2026 | December 31, 2025 | |||||||||
| (Unaudited) | |||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Taxes receivable | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Other long-term assets | |||||||||||
| Right of use operating lease assets | |||||||||||
| Intangible assets, net | |||||||||||
| Goodwill | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and Stockholders' Equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued payroll and benefits | |||||||||||
| Current portion of long-term debt | |||||||||||
| Deferred revenue and patient deposits | |||||||||||
| Accrued and other current liabilities | |||||||||||
| Current operating lease liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net | |||||||||||
| Deferred tax liability, net | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingent liabilities (Note 9) | |||||||||||
| Stockholders' equity | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total stockholders' equity | |||||||||||
| Total liabilities and stockholders' equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Table of Contents
AirSculpt Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| (in $000s, except for shares and per share figures) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
| Cost of service (exclusive of depreciation and amortization) | |||||||||||||||||||||||||||||
| Selling, general and administrative | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Loss on impairment of long-lived assets | |||||||||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||||||||
| Loss from operations | ( | ( | ( | ( | |||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Unrealized loss | |||||||||||||||||||||||||||||
| Pre-tax net loss | ( | ( | ( | ( | |||||||||||||||||||||||||
| Income tax expense/(benefit) | ( | ( | |||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Loss per share of common stock | |||||||||||||||||||||||||||||
| Basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
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AirSculpt Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Other Comprehensive Loss (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| ($000s) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Other comprehensive income/(loss): | |||||||||||||||||||||||||||||
| Change in foreign currency translation adjustment | ( | ( | ( | ||||||||||||||||||||||||||
| Total other comprehensive income/(loss) | ( | ( | ( | ||||||||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
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AirSculpt Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | ||||||||||||||||||||||||||||||||||||
| ($000s, except shares and per share figures) | Shares | Amount | Accumulated Deficit | Total | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock through unit vesting | — | — | — | |||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Payment of taxes withheld through vested equity-based compensation | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2025 | $ | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||
| Issuance of common stock through unit vesting | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Issuance of common stock through public offerings, net | — | — | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Other | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2025 | $ | — | — | — | ( | — | ( | — | ||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Other | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Balance at September 30, 2025 | $ | — | $ | $ | — | $ | $ | — | $ | ( | $ | — | $ | ( | $ | — | $ | |||||||||||||||||||||
Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
| Issuance of common stock through unit vesting | — | — | — | |||||||||||||||||||||||||||||||||||
| Issuance of common stock through public offerings, net | — | — | ||||||||||||||||||||||||||||||||||||
| Payment of taxes withheld through vested equity-based compensation | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Other | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at March 31, 2026 | $ | — | — | ( | — | ( | — | |||||||||||||||||||||||||||||||
| Issuance of common stock through public offerings, net | — | — | ||||||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
Balance at June 30, 2026 | $ | — | $ | — | — | ( | — | ( | — | |||||||||||||||||||||||||||||
| Issuance of common stock through public offerings, net | — | — | ||||||||||||||||||||||||||||||||||||
| Payment of taxes withheld through vested equity-based compensation | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
| Equity-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Other | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2026 | $ | — | $ | $ | — | $ | $ | — | $ | ( | $ | — | $ | ( | $ | — | $ | |||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
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AirSculpt Technologies, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | |||||||||||||||||
| ($000s) | 2026 | 2025 | |||||||||||||||
| Cash flows from operating activities | |||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Equity-based compensation | |||||||||||||||||
| Non-cash interest expense; amortization of debt costs | |||||||||||||||||
| Deferred income tax provision | |||||||||||||||||
| Loss on impairment of long-lived assets | |||||||||||||||||
| Changes in assets and liabilities | |||||||||||||||||
| Taxes receivable | ( | ( | |||||||||||||||
| Prepaid expense and other current assets | ( | ( | |||||||||||||||
| Other assets | ( | ||||||||||||||||
| Accounts payable | ( | ||||||||||||||||
| Deferred revenue and patient deposits | ( | ||||||||||||||||
| Accrued and other liabilities | ( | ( | |||||||||||||||
| Net cash provided by operating activities | |||||||||||||||||
| Cash flows from investing activities | |||||||||||||||||
| Purchases of property and equipment, net | ( | ( | |||||||||||||||
| Net cash used in investing activities | ( | ( | |||||||||||||||
| Cash flows from financing activities | |||||||||||||||||
| Payment on term loans | ( | ( | |||||||||||||||
| Payments for debt modification | ( | ||||||||||||||||
| Proceeds from public offerings, net | |||||||||||||||||
| Payments on revolving credit facility | ( | ||||||||||||||||
| Payment of taxes withheld through vested equity-based compensation | ( | ( | |||||||||||||||
| Other financing activity | ( | ||||||||||||||||
| Net cash provided by/(used in) financing activities | ( | ||||||||||||||||
| Net increase/(decrease) in cash and cash equivalents | ( | ||||||||||||||||
| Cash and cash equivalents | |||||||||||||||||
| Beginning of period | |||||||||||||||||
| End of period | $ | $ | |||||||||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||||||
| Cash paid for interest | $ | $ | |||||||||||||||
| Cash paid for income taxes, net of refunds | $ | $ | ( | ||||||||||||||
| Supplemental disclosure of non-cash investing information: | |||||||||||||||||
| Property and equipment included in accounts payable and accrued expenses | $ | $ | |||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
AirSculpt Technologies, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
NOTE 1 – ORGANIZATION AND SUMMARY OF KEY ACCOUNTING POLICIES
AirSculpt Technologies, Inc. (“AirSculpt” or the "Company"), was formed as a Delaware corporation on June 30, 2021. The Company's revenues are concentrated in the specialty, minimally invasive liposuction market. The Company and its consolidated subsidiaries are referred to collectively in these condensed consolidated financial statements as “we,” “our,” and “us.” Solely for convenience, some of the copyrights, trade names and trademarks referred to in these condensed consolidated financial statements are listed without their ©, ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks.
The Company, through its wholly-owned subsidiaries, is a provider of practice management services to professional associations (“PAs”) located throughout the United States and Canada. The Company owns and operates non-clinical assets and provides its management services to the PAs through management services agreements (“MSAs”). Management services provide for the administration of the non-clinical aspects of the medical operations and include, but are not limited to, financial, administrative, technical, marketing, and personnel services. Pursuant to the MSA, the PA is responsible for all clinical aspects of the medical operations of the practice.
Principles of Consolidation
These consolidated financial statements present the financial position and results of operations of the Company, its wholly-owned domestic and international subsidiaries, and its variable interest in the managed PAs in the United States (the "Domestic PAs"), which are under the control of the Company and are considered variable interest entities in which the Company is the primary beneficiary.
All intercompany accounts and transactions have been eliminated in consolidation.
Interim Financial Statement Presentation
The accompanying condensed consolidated financial statements and accompanying notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).
Variable Interest Entities
The Company has a variable interest in the Domestic PAs where it has a long-term and unilateral controlling financial interest over their assets and operations. The Company has the ability to direct the activities that most significantly affect the Domestic PAs’ economic performance via the MSAs and related agreements. The Company is a practice management service organization and does not engage in the practice of medicine. These services are provided by licensed professionals at each of the Domestic PAs. Certain key features of the MSAs and related agreements enable the Company to assign the member interests of certain of the Domestic PAs to another member designated by the Company (i.e. “nominee shareholder”) for a nominal value in certain circumstances at the Company’s sole discretion. The MSA does not allow the Company to be involved in, or provide guidance on, the clinical operations of the Domestic PAs. The Company consolidates the Domestic PAs into the financial statements. All of the Company’s revenue is earned from services provided by the Domestic PAs and its wholly-owned foreign subsidiary in Canada. The only assets and liabilities held by the Domestic PAs included in the accompanying consolidated balance sheets are clinical related. The clinical assets and liabilities are not material to the Company as a whole.
Accounting Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Concentration of Credit Risk
The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company’s revenues are concentrated in the specialty, minimally invasive liposuction market.
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The Company maintains cash balances at financial institutions which may at times exceed the amount covered by the Federal Deposit Insurance Corporation. The Company has not experienced any losses in such accounts.
Deferred Financing Costs, Net
Long-Lived Assets
Loss on long-lived assets in the period ended September 30, 2025 were related to impairment of property, plant, and equipment at the closed London location of $2.3 million, and Salesforce software implementation project of $4.6 million.
Fair Value
ASC Topic 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and expands disclosure requirements about fair value measurements.
ASC Topic 820 defines three categories for the classification and measurement of assets and liabilities carried at fair value:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or observable inputs that are corroborated by market data.
Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions.
The fair value of financial instruments is generally estimated through the use of public market prices, quotes from financial institutions and other available information. Judgment is required in interpreting data to develop estimates of market value and, accordingly, amounts are not necessarily indicative of the amounts that could be realized in a current market exchange.
Short-term financial instruments, including cash, prepaid expenses and other current assets, accounts payable, and other liabilities, consist primarily of instruments without extended maturities, for which the fair value, based on management’s estimates, approximates their carrying values. Borrowings bear interest at what is estimated to be current market rates of interest, accordingly, carrying value approximates fair value.
Earnings Per Share
Basic earnings per share of common stock is computed by dividing net loss for the three and nine months ended September 30, 2026 and 2025 by the weighted-average number of shares of common stock outstanding during the same period. Diluted earnings per share of common stock is computed by dividing net loss for the three and nine months ended
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Advertising Costs
Income Taxes
The Company applies the provisions of ASC 740-10, Accounting for Uncertain Tax Positions (“ASC 740-10”). Under these provisions, companies must determine and assess all material positions existing as of the reporting date, including all significant uncertain positions, for all tax years that are open to assessment or challenge under tax statutes. Additionally, those positions that have only timing consequences are analyzed and separated based on ASC 740-10’s recognition and measurement model.
As required by the uncertain tax position guidance, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not 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 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The Company applied the uncertain tax position guidance to all tax positions for which the statute of limitations remained open and determined that there are no uncertain tax positions as of September 30, 2026 or December 31, 2025.
The Company has an effective tax rate of approximately (33.2 )% and 14.7 % for the three months ended September 30, 2026 and 2025, respectively, and approximately (12.9 )% and 14.5 % for the nine months ended September 30, 2026 and 2025, respectively, inclusive of all applicable U.S. federal and state income taxes.
Recent Accounting Pronouncements
NOTE 2 – GOODWILL AND INTANGIBLES, NET
During the three months ended September 30, 2026, the Company identified a triggering event with respect to its finite-lived intangible assets, which consist of technology and know-how and trademarks and trade names and had a combined carrying amount of $33.3 million at September 30, 2026. The triggering event resulted from a current-period operating loss combined with a history of operating and net losses, lower case volumes and revenue in the third quarter of 2026 compared to the prior year, and a reduction in the Company’s expected 2026 financial results.
The Company evaluated the recoverability of the asset group that includes these intangible assets by comparing its carrying amount to the undiscounted cash flows expected to result from the use of the asset group over the remaining useful life of the primary asset, which is approximately seven years . Based on this evaluation, the Company concluded that the carrying amount of the asset group is recoverable and, accordingly, no impairment loss was recognized during the three and nine months ended September 30, 2026.
The Company had goodwill of $81.7
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Intangible assets consisted of the following at September 30, 2026 and December 31, 2025 (in 000’s):
| September 30, 2026 | December 31, 2025 | Useful Life | |||||||||||||||
| Technology and know-how | $ | $ | |||||||||||||||
| Trademarks and tradenames | |||||||||||||||||
| Accumulated amortization of technology and know-how | ( | ( | |||||||||||||||
| Accumulated amortization of tradenames and trademarks | ( | ( | |||||||||||||||
| Total intangible assets | $ | $ | |||||||||||||||
Amortization of intangible assets will be $4.8
Aggregate amortization expense on intangible assets was approximately $1.2 3.6
NOTE 3 – PROPERTY AND EQUIPMENT, NET
As of September 30, 2026 and December 31, 2025 property and equipment consists of the following (in 000’s):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Medical equipment | $ | $ | |||||||||
| Office and computer equipment | |||||||||||
| Furniture and fixtures | |||||||||||
| Leasehold improvements | |||||||||||
| Construction in progress | |||||||||||
| Less: Accumulated depreciation | ( | ( | |||||||||
| Property and equipment, net | $ | $ | |||||||||
NOTE 4 – DEBT
On November 7, 2022, the Company entered into a credit agreement with a syndicate of lenders (the "Credit Agreement") originally maturing November 7, 2027. Pursuant to the Credit Agreement, there is (i) an $85.0 million original aggregate principal amount of term loans and (ii) a revolving loan facility with an aggregate principal amount of up to $5.0 million. On September 29, 2023, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand. During the quarter ended March 31, 2026, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand.
On March 12, 2025, the Company entered into an amendment to the Credit Agreement (the "Third Amendment"). Under the terms of the Third Amendment, the parties thereto agreed to modify certain financial condition covenants made by the Company in the Credit Agreement, such that (i) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025 and June 30, 2025 must be no less than 0.50 x and 1.10 x, respectively, and no less than 1.25 x on the last day of the fiscal quarters ending September 30, 2025 and thereafter, instead of 1.10 x as of March 31, 2025 and 1.25 x as of June 30, 2025 and thereafter, as previously set forth in the Credit Agreement; (ii) the Consolidated Leverage Ratio (as defined in the Credit Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025, June 30, 2025, September 30, 2025, December 31, 2025 and March 31, 2026, must not exceed 4.25 x, 3.50 x, 3.25 x, 3.25 x, and 2.75 x, respectively, and the Consolidated Leverage Ratio as of the last day of each fiscal quarter thereafter must not exceed 2.25 x, instead of 3.25 x as of March 31, 2025, 2.75 x as of June 30, 2025, and 2.25 x thereafter, as previously set forth in the Credit Agreement; (iii) the Company and its subsidiaries will be required to maintain minimum Liquidity (as defined in the
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Credit Agreement) of not less than (A) $3.0 million as of the last day of the month ending March 31, 2025, (B) $5.0 million as of the last day of the month ending April 30, 2025, and (C) $7.5 million as of the last day of the months ending May 31, 2025 and thereafter (or the last day of each fiscal quarter thereafter upon the satisfaction of certain financial tests described therein); and (iv) new liquidity and financial reporting requirements have been added.
In addition to revising the covenants listed above, the Third Amendment revised or added new terms such that (i) for outstanding loans, beginning on or about July 1, 2025, the applicable per annum margin would be increased to 3.75 % or 4.75 % for base rate or SOFR (as defined in the Credit Agreement), respectively, if the Company's total leverage ratio was equal to or greater than 3.00 x, 3.50 % or 4.50 % for base rate or SOFR, respectively, if the Company's total leverage ratio was equal to or greater than 2.00 x and less than 3.00 x, and 3.25 % or 4.25 % for base rate or SOFR, respectively, if the Company's total leverage ratio was below 2.00 x, (ii) the term loan and revolving credit facility will mature on May 11, 2027 (instead of November 7, 2027); (iii) Liquidity in excess of $3.0 million will be used to repay the outstanding funds drawn on the revolving credit facility on a monthly basis beginning April 30, 2025; (iv) revolver draws will be subject to compliance with the minimum Liquidity covenant; (v) the Company will be required to reimburse Silicon Valley Bank ("SVB") for certain fees and expenses relating to the engagement of a financial advisor, and (vi) 100 % of the first $10.0 million of any equity proceeds will be used to repay the term loan and revolving credit facility, subject to the following carve-outs (A) the first $3.0 million of equity proceeds; and (B) any equity proceeds received from Vesey Street Capital Partners, L.L.C., our private equity sponsor (“Sponsor”). In consideration for the Third Amendment, the Company paid a fee equal to 0.15 % of the outstanding loans to consenting Lenders (as defined in the Credit Agreement) and a $0.125 million arrangement fee to SVB. On March 12, 2025 in connection with the Third Amendment, the Company, SVB and our Sponsor (through certain affiliated entities) entered into that certain limited guarantee by and among Vesey Street Capital Partners Healthcare Fund, L.P., Vesey Street Capital Partners Healthcare Fund-A, L.P., SVB, and the Company (the "Limited Guarantee"), pursuant to which our Sponsor agreed to provide a $10.0 million limited guaranty of the Company’s obligations under the Credit Agreement. The Limited Guarantee was callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company had not prepaid the term loans (excluding regularly scheduled amortization) by $10.0 million as of such date. On June 13, 2025, the Company made a $10.0 million principal payment on the term loans in accordance with the Third Amendment using proceeds from its underwritten public offering completed on June 11, 2025. The Limited Guarantee automatically terminated on March 12, 2026 following the prepayment of the term loans in an aggregate amount of $20.0 million since the date of the Limited Guarantee.
On August 7, 2026, the Company entered into a further amendment to the Credit Agreement (the "Fourth Amendment") to, among other things: (i) extend the maturity date of the term loan and revolving credit facility to November 15, 2027 (approximately a six-month extension from the previous May 11, 2027 maturity date); (ii) require the Company to make a $2.5 million payment to the Lenders upon signing of the Fourth Amendment; (iii) require the Company to make an additional $2.5 million payment on or before September 30, 2026; (iv) require that 50 % of the net proceeds of any future equity issuances (other than issuances under our equity incentive plans) be applied to prepay the term loans, in addition to amounts otherwise required to be applied under the Credit Agreement; (v) require the Company to provide biweekly updates on a conference call with the Lenders with respect to the status of its efforts to refinance; and (vi) require the Company, if the refinance has not occurred by October 31, 2026, to retain one or more investment banks reasonably satisfactory to the Administrative Agent to assist the Company with a refinance, whether by obtaining replacement debt financing or otherwise.
Since the execution of the Fourth Amendment on August 7, 2026, the Company has made all required payments under the Credit Agreement, including the $2.5 million payment due upon signing and the additional $2.5 million payment due on or before September 30, 2026. The Company has also applied 50 % of the net proceeds from equity issuances under its at-the-market (ATM) offering to prepay the term loans, as required by the Fourth Amendment. During the quarter ended September 30, 2026, the Company prepaid $0.7 million on the term loan from ATM net proceeds. On October 20, 2026, the Company made a prepayment of $1.7 million from ATM net proceeds.
On November 5, 2026, the Company entered into a financing agreement (the "Blue Torch Financing Agreement") with a syndicate of lenders and Blue Torch Finance LLC ("Blue Torch"), as administrative agent and collateral agent, maturing on November 5, 2031. Under the Blue Torch Financing Agreement, there is a senior secured (i) term loan facility with an aggregate principal amount of $39.0 million, which was funded in full at closing, and (ii) revolving loan facility with an aggregate commitment of up to $5.0 million, none of which was drawn at closing. Pursuant to the Blue Torch Financing Agreement, borrowings bear interest at a rate of Term SOFR (as defined in the Blue Torch Financing Agreement) plus an applicable margin of 7.75 %, which may be decreased to 6.75 % based on leverage level. The lenders party to the Blue Torch Financing Agreement have been granted a first-priority security interest in substantially all assets of the Company. The Blue Torch Financing Agreement contains customary affirmative and negative covenants for transactions of this type, including limitations on indebtedness, liens, investments, restricted payments, asset sales, and affiliate transactions. The Blue Torch Financing Agreement also includes customary events of default and financial maintenance covenants, including (a) a maximum Leverage Ratio (as defined in the Blue Torch Financing Agreement) of 4.50 :1.00 for each fiscal quarter
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ending December 31, 2026 through September 30, 2027, stepping down over time to 2.00 :1.00 for each fiscal quarter ending December 31, 2030 and thereafter, (b) a minimum Fixed Charge Coverage Ratio (as defined in the Blue Torch Financing Agreement) of 1.00 :1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, increasing to 1.10 :1.00 for each fiscal quarter ending December 31, 2027 through September 30, 2028 and 1.20 :1.00 for each fiscal quarter ending December 31, 2028 and thereafter, and (c) minimum average weekly Liquidity (as defined in the Blue Torch Financing Agreement) of $7.5 million prior to September 30, 2027 and $5.0 million thereafter. The Blue Torch Financing Agreement requires mandatory prepayments of the loans from excess cash flow for each fiscal year beginning with fiscal year 2027, payable following delivery of the audited annual financial statements for that fiscal year, in percentages ranging from 0 % to 75 % depending on the Company's gross leverage ratio, and from the net proceeds of certain asset dispositions, incurrences of indebtedness and extraordinary receipts, and from the proceeds of equity issued to cure certain financial covenant defaults. Proceeds from the Blue Torch Financing Agreement were used to repay in full all indebtedness under, and terminate, the Credit Agreement and to pay fees and expenses related to the Blue Torch Financing Agreement.
As of September 30, 2026, the interest rate under the Credit Agreement was 8.15 %.
Total borrowings as of September 30, 2026 and December 31, 2025 were as follows (in 000’s):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Term loans | $ | $ | |||||||||
| Unamortized debt discounts and issuance costs | ( | ( | |||||||||
| Total debt, net | |||||||||||
| Less: Current portion | ( | ( | |||||||||
| Long-term debt, net | $ | $ | |||||||||
As of September 30, 2026 and December 31, 2025, the Company had $5.0
The scheduled future maturities of long-term debt as of September 30, 2026 are as follows (in 000’s):
Year ending December 31, | |||||
| 2026 | $ | ||||
| 2027 | |||||
| Total maturities | $ | ||||
All borrowings under the Credit Agreement are cross collateralized by substantially all assets of the Company and are subject to certain restrictive covenants including quarterly total leverage ratio and fixed charge ratio requirements discussed above. The Company is in compliance with all covenants and has no letter of credit outstanding as of September 30, 2026.
NOTE 5 – LEASES
The Company’s operating leases are primarily for real estate, including medical office suites and corporate offices. For the three months ended September 30, 2026 and 2025, the Company incurred rent expense of $1.3 million and $2.8 million, respectively, for its medical office suites. For the nine months ended September 30, 2026 and 2025, the Company incurred rent expense of $4.7 million and $6.3 million, respectively, related to its medical office suites. The Company’s rent expense related to its medical office suites is classified in cost of services within the Company’s condensed consolidated statements of operations. The Company incurred rent expense of $59,521 and $63,853 for the three months ended September 30, 2026 and 2025, respectively, and $189,596 and $218,809 for the nine months ended September 30, 2026 and 2025, respectively, related to the corporate offices which is classified in selling, general and administrative expenses. The Company currently does not have any finance leases.
Real estate lease agreements typically have initial terms of five to ten years and may include one or more options to renew. The useful life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any material residual value guarantees, restrictions or covenants.
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The following table presents supplemental cash flow information for the nine months ended September 30, 2026 and 2025 (in 000’s):
| September 30, 2026 | September 30, 2025 | ||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||
| Operating cash outflows from operating leases | $ | $ | |||||||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||||||||
| Operating leases | $ | $ | |||||||||||||||
Future minimum rental payments under all non-cancellable operating lease agreements for the succeeding five years are as follows, excluding common area maintenance charges that may be required by the agreements (in 000’s):
Year ending December 31, | |||||
2026 (remaining as of September 30, 2026) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total lease payments | |||||
| Less: imputed interest | ( | ||||
| Total lease obligations | $ | ||||
NOTE 6 – STOCKHOLDERS' EQUITY AND EQUITY-BASED COMPENSATION
During the three and nine months ended September 30, 2026, the Company granted 0 and 2,103,098 restricted stock units ("RSUs") to executive officers and employees under the 2021 Equity Incentive Plan, respectively. During the three and nine months ended September 30, 2025, the Company granted 18,634 and 1,082,717 RSUs, respectively. These RSUs are not considered outstanding until vested. These RSUs have a time-based vesting condition. These units will vest one-third per year over three years . Vesting and payment of these RSUs are generally subject to continuing service of the employee or non-employee director over the requisite vesting periods beginning one year from the date of grant to three years after the date of grant. The fair values of these RSUs were determined based on the closing price of the Company’s common stock on the trading date immediately prior to the grant date.
During the three and nine months ended September 30, 2026, the Company also granted 0 and 682,773 performance based stock units ("PSUs"), respectively, which have market-based vesting conditions. In the three and nine months ended September 30, 2025, the Company granted 0 and 899,919 PSUs, respectively. The vesting of the PSUs is based on achievement of a total shareholder return relative to a specified peer group (“rTSR”) within the three year performance period. Based on the rTSR, the PSUs can settle in shares in a range from 0 % to 200 %. Additionally, during the three and nine months ended September 30, 2025, our CEO was granted 0 and 220,836 PSUs, respectively, with vesting conditioned on the attainment of a 60-day volume weighted average price ("VWAP") in relation to the per share closing price on the date of grant. These awards are structured with one-fourth vesting at 125 % VWAP, one-fourth vesting at 175 % VWAP, one-fourth vesting at 200 % VWAP, and the final one-fourth vesting at 225 % VWAP. In addition to the achievement of the performance conditions, all PSUs are generally subject to the continuing service of the employee over the requisite vesting period from the earned date continuing through the settlement of the shares, subject to exceptions (in whole or in part) upon certain qualifying terminations of service, as provided in the applicable award agreement. For these PSUs, the shares settle in the first quarter of the year following the year in which the vesting criteria are met. The performance criterion is based on the Company’s actual performance condition results as compared to the targets. These PSUs are not considered outstanding until settled. The fair values of PSUs with a market-based vesting condition were estimated using a Monte Carlo simulation model.
The Company recorded equity-based compensation expense of $1.1 million and $1.1 million for the three months ended September 30, 2026 and 2025, respectively, and $2.6 million and $3.7 million for the nine months ended September 30,
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2026 and 2025, respectively, in selling, general and administrative expenses on the condensed consolidated statements of operations. Forfeitures are recognized as incurred.
At-the-Market Common Offering Program
On March 14, 2025, the Company entered into a sales agreement (the “ATM Agreement”) with Leerink Partners LLC ("Leerink"), as sales agent, in connection with an at-the-market offering program under which the Company may offer and sell, from time to time in our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million at prices and on terms to be determined by market conditions at the time of offering. The $50.0 million of common stock that may be offered, issued and sold under the ATM Agreement is included in the $100.0 million of securities that may be offered, issued and sold by us under our Registration Statement on Form S-3 (File No. 333-285825). The Company and Leerink each have the right to suspend or terminate the ATM Agreement in each party’s sole discretion at any time. As of September 30, 2026, the Company had sold 11,504,516 shares of common stock under the ATM Agreement for gross proceeds of approximately $33.4 million, and approximately $16.6 million remained available for sale under the ATM Agreement.
In the three and nine months ended September 30, 2026, the Company sold the following quantities of our common stock pursuant to the ATM Agreement for total net proceeds of approximately $7.2 million and $26.7 million, respectively:
| Date | Shares (in thousands) | |||||||
| Q1 Total | ||||||||
| Q2 Total | ||||||||
| Q3 Total | ||||||||
| Total | ||||||||
NOTE 7 – EARNINGS PER SHARE
Basic earnings per share of common stock is computed by dividing net loss for the three and nine months ended September 30, 2026 and 2025 by the weighted-average number of shares of common stock outstanding during the same period. Diluted earnings per share of common stock is computed by dividing net loss for the three and nine months ended September 30, 2026 and 2025 by the weighted-average number of shares of common stock adjusted to give effect to potentially dilutive securities.
A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of common stock is as follows (in 000’s except for shares and per share figures):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Numerator: | |||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
| Denominator: | |||||||||||||||||
| Weighted average shares of common stock outstanding - basic | |||||||||||||||||
| Add: Effect of dilutive securities | |||||||||||||||||
| Weighted average shares of common stock outstanding - diluted | |||||||||||||||||
| Loss per share of common stock outstanding - basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||
The following number of potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive.
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||
| Restricted stock units | |||||||||||||||||
| Performance and market-based stock units | |||||||||||||||||
NOTE 8 – INCOME TAXES
The Company's income tax (benefit)/expense for the three months ended September 30, 2026 and 2025 was $1.8 million and $(1.6 ) million, respectively, and the income tax (benefit)/expense for the nine months ended September 30, 2026 and 2025 was $1.2 million and $(2.2 ) million, respectively. The 2026 amounts include $2.7 million of discrete income tax expense recorded in the third quarter related to an increase in the valuation allowance on federal and state net operating loss deferred tax assets. The effective tax rate for the three months ended September 30, 2026 and 2025 was (33.2 )% and 14.7 %, respectively. The effective tax rate for the nine months ended September 30, 2026 and 2025 was (12.9 )% and 14.5 %, respectively. The quarterly income tax expense is based on an updated projection of the Company’s annual effective tax rate. This updated annual effective tax rate is applied to the year-to-date consolidated pre-tax income to determine the interim provision for income taxes. The impact of any change in the projected annual effective tax rate from the prior quarter is reflected in the quarterly income tax expense. The change in the effective tax rate before discrete items each period is impacted by a number of factors, including adjustments to the valuation allowances. The actual year-end 2026 effective tax rate may vary from the currently projected tax rate due to changes in these factors.
The Company evaluates the realizability of its deferred tax assets each reporting period, considering all available positive and negative evidence, including cumulative losses in recent years, the expected timing of reversals of existing temporary differences, tax planning strategies, and projected future taxable income. During the three months ended September 30, 2026, the Company entered into a three-year cumulative loss position and had limited sources of future taxable income. Based on this evaluation, the Company concluded that it is more likely than not that a portion of its deferred tax assets will not be realized, and the Company recorded a valuation allowance against those deferred tax assets, including federal and state net operating loss carryforwards. The valuation allowance increased to $3.3 million as of September 30, 2026, compared to none as of December 31, 2025.
Of the $3.3 million valuation allowance, $2.7 million relates to federal ($2.0 million) and state ($0.7 million) net operating loss deferred tax assets that existed as of December 31, 2025. Because this reflects a change in judgment about the realizability of beginning-of-year deferred tax assets, the $2.7 million portion of the valuation allowance increase was recognized discretely in the third quarter. The remaining $0.6 million relates to losses generated in 2026 and is reflected in the estimated annual effective tax rate.
There are no uncertain tax positions as of September 30, 2026.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
Professional Liability
In the ordinary course of business, the Company becomes involved in pending and threatened legal actions and proceedings, most of which involve claims of medical malpractice related to medical services provided by the PAs' employed and affiliated physicians. The Company may also become subject to other lawsuits which could involve large claims and significant costs. The Company believes, based upon a review of pending actions and proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on its business, financial condition, results of operations, and cash flows. The outcome of such actions and proceedings, however, cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.
Although the Company currently maintains liability insurance coverage intended to cover professional liability and certain other claims, the Company cannot assure that its insurance coverage will be adequate to cover liabilities arising out of claims asserted against it in the future where the outcomes of such claims are unfavorable. Liabilities in excess of the Company’s insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.
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NOTE 10 – SEGMENT INFORMATION
The Company has one operating and one reportable segment: direct medical procedure services. This segment is made up of facilities and medical staff that provide the Company’s patented AirSculpt® procedures to patients. The accounting policies of the direct medical procedure services segment are the same as those presented in Note 1 - Organization and Summary of Key Accounting Policies. The Company’s chief operating decision maker (“CODM”) is the Company’s chief executive officer. The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources. The Company’s CODM reviews revenue, gross profit, Adjusted EBITDA and net loss. The CODM uses Adjusted EBITDA as the primary profit metric to evaluate income generated from operations in deciding where to spend additional marketing dollars or allocate additional resources. Gross profit is defined as revenues less cost of service incurred and Adjusted EBITDA is defined as net loss excluding depreciation and amortization, net interest expense, unrealized loss, income tax expense/(benefit), restructuring and related severance costs, certain other non-recurring costs, and equity-based compensation. Segment information is presented below showing revenue, significant expenses and net loss (the closest GAAP measure to Adjusted EBITDA), in the same manner that the CODM reviews the operating results in assessing performance and allocating resources.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Revenue | $ | $ | $ | $ | |||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||
Cost of service (exclusive of depreciation and amortization) (1) | |||||||||||||||||||||||||||||
| Advertising cost | |||||||||||||||||||||||||||||
| Facility selling, general, and administrative expense | |||||||||||||||||||||||||||||
| Corporate selling, general, and administrative expense | |||||||||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||||||||
| Loss on impairment of long-lived assets | |||||||||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||||||||
| Net loss from operations | ( | ( | ( | ( | |||||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||||||||
| Unrealized loss | |||||||||||||||||||||||||||||
| Pre-tax net loss | ( | ( | ( | ( | |||||||||||||||||||||||||
| Income tax expense/(benefit) | ( | ( | |||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
| Segment assets | $ | $ | $ | $ | |||||||||||||||||||||||||
| (1) | Cost of services includes the costs of physicians, nursing, supplies and rent directly related to the performance of procedures at the facility level. | ||||
NOTE 11 – ACCRUED AND OTHER CURRENT LIABILITIES
As of September 30, 2026 and December 31, 2025 accrued and other current liabilities consist of the following (in 000’s):
| September 30, 2026 | December 31, 2025 | ||||||||||
| Credit card payable | |||||||||||
| Accrued severance | |||||||||||
| Other | |||||||||||
| Accrued and other current liabilities | $ | $ | |||||||||
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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 together with our financial statements and related notes and other financial information appearing in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) on March 31, 2026 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) as amended by the Form 10-K/A filed with the SEC on April 6, 2026. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See the section entitled "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including those risks. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report. You should read this Quarterly Report completely, including Part II, Item 1A (Risk Factors) of this Quarterly Report and the section titled “Cautionary Note Regarding Forward-Looking Statements” in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by our forward-looking statements contained in the following discussion and analysis. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report to the “Company,” “AirSculpt,” “we,” “us” and “our” refer to AirSculpt Technologies, Inc. and its consolidated subsidiaries and its related Professional Associations.
Overview
AirSculpt is an experienced national provider of body contouring procedures delivering a premium consumer experience. We provide custom body contouring using our proprietary AirSculpt® method that removes unwanted fat and tightens skin in a minimally invasive procedure, producing dramatic results. We deliver our AirSculpt® procedures through a nationwide footprint of 31 centers across 20 states and Canada as of November 6, 2026.
For the three and nine months ended September 30, 2026, we performed 2,483 and 8,941 cases, respectively, compared to 2,780 and 9,248 for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2026, we generated approximately $31.9 million and $114.2 million of revenue, respectively, compared to $35.0 million and $118.4 million for the three and nine months ended September 30, 2025, respectively. This represents an approximately 8.7% decline in revenue for the three months ended September 30, 2026 over the same period in the prior year and an approximately 3.5% decline in revenue for the nine months ended September 30, 2026 over the same period in the prior year.
Key Operational and Business Metrics
In addition to the measures presented in our condensed consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions:
Cases Performed and Revenue per Case
Our case volumes in the table below, which are used for calculating revenue per case, represent one patient visit although, a patient may have multiple areas treated during one visit. We believe this provides the best approach for assessing our revenue performance and trends.
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Total Case and Revenue Metrics
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||||||
| Cases | 2,483 | 2,780 | 8,941 | 9,248 | |||||||||||||||||||||||||
| Case growth | (10.7) | % | N/A | (3.3) | % | N/A | |||||||||||||||||||||||
| Revenue per case | $ | 12,865 | $ | 12,587 | $ | 12,776 | $ | 12,800 | |||||||||||||||||||||
| Revenue per case growth | 2.2 | % | N/A | (0.2) | % | N/A | |||||||||||||||||||||||
| Number of facilities | 31 | 32 | 31 | 32 | |||||||||||||||||||||||||
| Number of total procedure rooms | 65 | 67 | 65 | 67 | |||||||||||||||||||||||||
Same-Center Case and Revenue Metrics
Same-Center Information
For the three months ended September 30, 2026 and 2025, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that were owned and operated during the three months ended September 30, 2026 and 2025, respectively. At facilities that were not owned or operated for the entirety of the prior year period, the current year period has been pro-rated to reflect only growth experienced during the portion of the three months ended September 30, 2026 in which such facilities were owned and operated during the three months ended September 30, 2025. We define same-center facilities and procedure rooms based on whether a facility was owned or operated as of September 30, 2025.
For the nine months ended September 30, 2026 and 2025, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that were owned and operated during the nine months ended September 30, 2026 and 2025, respectively. At facilities that were not owned or operated for the entirety of the prior year period, the current year period has been pro-rated to reflect only growth experienced during the portion of the nine months ended September 30, 2026 in which such facilities were owned and operated during the nine months ended September 30, 2025. We define same-center facilities and procedure rooms based on whether a facility was owned or operated as of September 30, 2025.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cases | 2,483 | 2,748 | 8,941 | 9,137 | |||||||||||||||||||
| Case growth | (9.6) | % | N/A | (2.1) | % | N/A | |||||||||||||||||
| Revenue per case | $ | 12,865 | $ | 12,574 | $ | 12,776 | $ | 12,777 | |||||||||||||||
| Revenue per case growth | 2.3 | % | N/A | — | % | N/A | |||||||||||||||||
| Number of facilities | 31 | 31 | 31 | 31 | |||||||||||||||||||
| Number of total procedure rooms | 65 | 65 | 65 | 65 | |||||||||||||||||||
Non-GAAP Financial Measures—Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Net Income per Share
We report our financial results in accordance with generally accepted accounting principles in the United States of America ("GAAP"), however, management believes the evaluation of our ongoing operating results may be enhanced by a presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income per Share, which are non-GAAP financial measures.
We define Adjusted EBITDA as net loss excluding depreciation and amortization, net interest expense, income tax expense/(benefit), restructuring and related severance costs, certain other non-recurring costs, unrealized (gain)/loss, and equity-based compensation.
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We define Adjusted Net Income as net loss excluding restructuring and related severance costs, equity-based compensation, loss on impairment of long-lived assets, certain other non-recurring costs, and the tax effect of these adjustments.
We include Adjusted EBITDA and Adjusted Net Income because they are important measures which our management uses and believes investors should use to assess our operating performance. We consider Adjusted EBITDA and Adjusted Net Income to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis. However, Adjusted EBITDA has limitations as an analytical tool including that it: (i) does not include results from equity-based compensation and (ii) does not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments. Similarly, Adjusted Net Income has limitations as an analytical tool because it does not include results from equity-based compensation.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. We define Adjusted Net Income per Share as Adjusted Net Income divided by weighted average basic and diluted shares. We included Adjusted EBITDA Margin and Adjusted Net Income per Share because they are important measures that our management uses, and believes investors should use to assess our operating performance. We consider Adjusted EBITDA Margin and Adjusted Net Income per Share to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net loss, the most directly comparable GAAP financial measure:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Net loss | $ | (7,173) | $ | (9,512) | $ | (10,682) | $ | (12,950) | |||||||||||||||||||||
| Plus | |||||||||||||||||||||||||||||
| Equity-based compensation | 1,095 | 1,125 | 2,566 | 3,716 | |||||||||||||||||||||||||
| Restructuring and related severance costs | 33 | 1,310 | 1,307 | 2,516 | |||||||||||||||||||||||||
| One-time SOX compliance and other related costs | 497 | — | 1,543 | — | |||||||||||||||||||||||||
| Depreciation and amortization | 2,902 | 3,217 | 8,864 | 9,705 | |||||||||||||||||||||||||
| Loss on impairment of long-lived assets | 5 | 7,137 | 5 | 7,245 | |||||||||||||||||||||||||
| Litigation settlements | — | — | 325 | — | |||||||||||||||||||||||||
| Interest expense, net | 1,244 | 1,407 | 3,485 | 4,594 | |||||||||||||||||||||||||
| Income tax expense/(benefit) | 1,789 | (1,645) | 1,223 | (2,197) | |||||||||||||||||||||||||
| Unrealized loss | 1 | — | 4 | — | |||||||||||||||||||||||||
| Adjusted EBITDA | $ | 393 | $ | 3,039 | $ | 8,640 | $ | 12,629 | |||||||||||||||||||||
| Adjusted EBITDA Margin | 1.2 | % | 8.7 | % | 7.6 | % | 10.7 | % | |||||||||||||||||||||
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The following table reconciles Adjusted Net Loss and Adjusted Net Loss per Share to net loss, the most directly comparable GAAP financial measure:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||
| Net loss | $ | (7,173) | $ | (9,512) | $ | (10,682) | $ | (12,950) | |||||||||||||||||||||
| Plus | |||||||||||||||||||||||||||||
| Equity-based compensation | 1,095 | 1,125 | 2,566 | 3,716 | |||||||||||||||||||||||||
| Loss on impairment of long-lived assets | 5 | 7,137 | 5 | 7,245 | |||||||||||||||||||||||||
| Litigation settlements | — | — | 325 | — | |||||||||||||||||||||||||
| Restructuring and related severance costs | 33 | 1,310 | 1,307 | 2,516 | |||||||||||||||||||||||||
| One-time SOX compliance and other related costs | 497 | — | 1,543 | — | |||||||||||||||||||||||||
Tax effect of adjustments (2) | (565) | (2,462) | (1,385) | (2,850) | |||||||||||||||||||||||||
| Adjusted net loss | $ | (6,108) | $ | (2,402) | $ | (6,321) | $ | (2,323) | |||||||||||||||||||||
Adjusted net loss per share of common stock (1) | |||||||||||||||||||||||||||||
| Basic | $ | (0.08) | $ | (0.04) | $ | (0.09) | $ | (0.04) | |||||||||||||||||||||
| Diluted | $ | (0.08) | $ | (0.04) | $ | (0.09) | $ | (0.04) | |||||||||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||||||||
| Basic | 72,538,877 | 62,436,670 | 70,943,909 | 60,202,169 | |||||||||||||||||||||||||
| Diluted | 72,538,877 | 62,436,670 | 70,943,909 | 60,202,169 | |||||||||||||||||||||||||
(1) Diluted Adjusted Net Loss Per Share is computed by dividing adjusted net loss by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.
(2) Tax effect of adjustments represents the estimated income tax impact of the non-GAAP adjustments presented above and is presented as a separate adjustment. The tax effect is calculated by applying the U.S. federal statutory income tax rate to each adjustment that is deductible for income tax purposes. The tax effect does not reflect changes in the Company’s valuation allowance. Accordingly, the discrete valuation allowance charge of $2.7 million recorded during the three months ended September 30, 2026 is not adjusted and remains included in Adjusted net loss.
Components of Results of Operations
Revenue
Our revenue is generated from AirSculpt® procedures, which incorporate certain patented technologies and techniques, performed on our patients. We are 100% self-pay and do not accept payments from the U.S. federal government or payer organizations. We assist patients, as needed, by providing third-party financing options to pay for procedures. We have arrangements with various financing companies to facilitate this option. There is a financing transaction fee based on a set percentage of the amount financed. We recognize revenue based on the expected transaction price which is reduced for financing fees.
Our policy is to require full payment for services in advance of performing a procedure. Payments received for which services have yet to been performed for all reported periods are included in deferred revenue and patient deposits on our balance sheets.
Cost of Service (excluding depreciation and amortization)
Cost of service is comprised of all service and product costs related to the delivery of procedures, including but not limited to compensation to our physicians and clinical staff, medical supply costs, and facility-related rent expense.
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Operating Expense
Selling, General and Administrative
Selling, general and administrative consists of marketing and advertising expenses we incur to market our patented AirSculpt® procedures to potential patients and general and administrative costs, including rent for our corporate offices.
Selling Expenses
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Our advertising costs include both national and site-based advertising used to generate greater awareness and engagement among our current and potential patients. Our advertising costs include social media, digital marketing and traditional advertising. Selling expenses include salaries and commissions for employees engaged in marketing and sales. We define our customer acquisition costs as the total selling expenses per case.
We evaluate our selling expense as compared to growth in our sales volume and will invest accordingly to the extent we believe we can position ourselves for future growth without materially negatively impacting our Adjusted EBITDA Margins.
General and Administrative
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service and the salaries and commissions of sales and marketing employees), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources.
Interest Expense
Interest expense, net consists primarily of interest costs on our outstanding borrowings under our debt.
Results of Operations
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods. The table also shows the percentage relationship to revenue for the periods indicated:
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| ($ in 000s) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||
| Revenue | $ | 31,944 | 100.0 | % | $ | 34,993 | 100.0 | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of service | 12,914 | 40.4 | % | 14,864 | 42.5 | % | |||||||||||||||||
| Selling, general and administrative | 20,262 | 63.4 | % | 19,525 | 55.8 | % | |||||||||||||||||
| Depreciation and amortization | 2,902 | 9.1 | % | 3,217 | 9.2 | % | |||||||||||||||||
| Loss on impairment of long-lived assets | 5 | — | % | 7,137 | 20.4 | % | |||||||||||||||||
| Total operating expenses | 36,083 | 113.0 | % | 44,743 | 127.9 | % | |||||||||||||||||
| Loss from operations | (4,139) | (13.0) | % | (9,750) | (27.9) | % | |||||||||||||||||
| Interest expense, net | 1,244 | 3.9 | % | 1,407 | 4.0 | % | |||||||||||||||||
| Unrealized loss | 1 | N/A | — | N/A | |||||||||||||||||||
| Pre-tax net loss | (5,384) | (16.9) | % | (11,157) | (31.9) | % | |||||||||||||||||
| Income tax expense/( benefit) | 1,789 | 5.6 | % | (1,645) | (4.7) | % | |||||||||||||||||
Net loss | $ | (7,173) | (22.5) | % | $ | (9,512) | (27.2) | % | |||||||||||||||
Revenue— Our revenue decreased $3.0 million, or 8.7%, compared to the same period in 2025. This decline was driven primarily by a 9.6% decrease in cases on a same-center basis, partially offset by a 2.3% increase in average selling price on
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a same-center basis. Revenue in the prior-year period also benefited from the operations of the London clinic, which was closed as of December 31, 2025.
Cost of Service— Our cost of services decreased $2.0 million, or 13.1%, compared to the same period in 2025. The decrease was driven by a $0.8 million decrease in physician fees, a $0.4 million decrease in facility rent, a $0.4 million decrease in medical supplies, and a $0.4 million decrease in nursing payroll, reflecting efficiencies in personnel costs and the elimination of one center. Cost of service was 40.4% and 42.5% as a percentage of revenue for the three months ended September 30, 2026 and 2025, respectively.
Selling, General and Administrative Expenses— Selling, general and administrative expenses increased $0.7 million, or 3.8%, for the three months ended September 30, 2026 compared to the same period in 2025. This increase is driven primarily by a $1.4 million increase in professional and legal fees, a $0.3 million increase in advertising expense and a $0.3 million increase in IT expenses. These increases were partially offset by a $1.1 million decrease in rent expense, reflecting the non-recurrence of rent acceleration recorded in the prior-year period in connection with the closure of our London facility, and a $0.2 million decrease in payroll expense, which included reversals of previously accrued severance and bonuses. Selling, general and administrative expenses as a percent of revenue was 63.4% and 55.8% for the three months ended September 30, 2026 and 2025, respectively.
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $9.4 million and $8.8 million for the three months ended September 30, 2026 and 2025, respectively. Our customer acquisition costs were approximately $3,767 and $3,145 per customer in the three months ended September 30, 2026 and 2025, respectively. Selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expenses were approximately $10.9 million and $10.8 million for the three months ended September 30, 2026 and 2025, respectively.
Depreciation and Amortization— Depreciation and amortization decreased to approximately $2.9 million for the three months ended September 30, 2026 compared to $3.2 million for the same period in 2025. This decrease is driven primarily by the net reduction of one clinic location and one office location during the three months ended September 30, 2026 as compared to the 2025 period.
Interest Expense, net— Interest expense was $1.2 million and $1.4 million for the three months ended September 30, 2026 and 2025, respectively. The $0.2 million decrease was related to a $0.4 million decrease in interest on our outstanding debt resulting from principal prepayments, partially offset by a $0.3 million increase in loan and finance costs.
Income Tax Expense— Our effective tax rate was (33.2)% and 14.7% for the three months ended September 30, 2026 and 2025, respectively. The main drivers of the difference between the effective and statutory rate for the three and nine months ended September 30, 2026 are the increase in the valuation allowance, non-deductible executive compensation under Section 162(m) of the Internal Revenue Code, and state taxes.
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Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods. The table also shows the percentage relationship to revenue for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| ($ in 000s) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||||||||||||||
| Revenue | $ | 114,233 | 100.0 | % | $ | 118,376 | 100.0 | % | |||||||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||||||||||||||
| Cost of service | 45,069 | 39.5 | % | 48,015 | 40.6 | % | |||||||||||||||||||||||||||||
| Selling, general and administrative | 66,265 | 58.0 | % | 63,964 | 54.0 | % | |||||||||||||||||||||||||||||
| Depreciation and amortization | 8,864 | 7.8 | % | 9,705 | 8.2 | % | |||||||||||||||||||||||||||||
| Loss on impairment of long-lived assets | 5 | — | % | 7,245 | 6.1 | % | |||||||||||||||||||||||||||||
| Total operating expenses | 120,203 | 105.3 | % | 128,929 | 108.9 | % | |||||||||||||||||||||||||||||
| Loss from operations | (5,970) | (5.2) | % | (10,553) | (8.9) | % | |||||||||||||||||||||||||||||
| Interest expense, net | 3,485 | 3.1 | % | 4,594 | 3.9 | % | |||||||||||||||||||||||||||||
| Unrealized loss | 4 | N/A | — | N/A | |||||||||||||||||||||||||||||||
| Pre-tax net loss | (9,459) | (8.3) | % | (15,147) | (12.8) | % | |||||||||||||||||||||||||||||
| Income tax expense/(benefit) | 1,223 | 1.1 | % | (2,197) | (1.9) | % | |||||||||||||||||||||||||||||
| Net loss | $ | (10,682) | (9.4) | % | $ | (12,950) | (10.9) | % | |||||||||||||||||||||||||||
Revenue—Our revenue decreased $4.1 million, or 3.5%, for the nine months ended September 30, 2026 compared to the same period in 2025. This decline was driven primarily by 2.1% decrease in same center volume and a .2% decrease in average selling price on a same-center basis. Revenue in the prior-year period also benefited from the operations of the London clinic, which was closed as of December 31, 2025.
Cost of Service—Our cost of service decreased $2.9 million, or 6.1%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease was driven by a $1.1 million decrease in physician fees, a $0.8 million decrease in nursing payroll, a $0.6 million decrease in facility rent, and a $0.4 million decrease in medical supplies, reflecting the elimination of one center in the current period and efficiencies gained in personnel, medical and supply costs. Cost of service was 39.5% and 40.6% as a percentage of revenue for the nine months ended September 30, 2026 and 2025, respectively.
Selling, General and Administrative Expenses—Selling, general and administrative expenses increased $2.3 million, or 3.6%, for the nine months ended September 30, 2026 compared to the same period in 2025. This increase relates to a $2.4 million increase in advertising expense, a $1.7 million increase in professional and legal fees, a $0.6 million increase in payroll expenses, a $0.4 million increase in insurance expense, a $0.5 million increase in bank and processing fees, and a $0.2 million increase in legal settlement expense. These increases were partially offset by a $1.3 million decrease in rent expense, a $1.2 million decrease in stock compensation expense, a $0.5 million decrease in licenses and business taxes, a $0.4 million decrease in other selling expenses, and a $0.2 million decrease in miscellaneous income. Selling, general and administrative expenses as a percent of revenue were 58.0% and 54.0% for the nine months ended September 30, 2026 and 2025, respectively.
Selling expenses consist of advertising costs for social, digital and traditional marketing and for sales and marketing personnel. Total selling expenses were approximately $31.5 million and $28.2 million for the nine months ended September 30, 2026 and 2025, respectively. Our customer acquisition costs were approximately $3,526 and $3,050 per customer in the nine months ended September 30, 2026 and 2025, respectively. Additionally, selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical costs included in cost of service), equity-based compensation, technology, operations, finance, legal,
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corporate office rent and human resources. General and administrative expense were approximately $34.7 million and $35.7 million for the nine months ended September 30, 2026 and 2025, respectively.
Depreciation and Amortization—Depreciation and amortization decreased to approximately $8.9 million for the nine months ended September 30, 2026 compared to $9.7 million for the same period in 2025.
Interest Expense, net—Interest expense was $3.5 million and $4.6 million for the nine months ended September 30, 2026 and 2025, respectively. The $1.1 million decrease was related to a $1.3 million decrease in interest on our outstanding debt resulting from principal prepayments and a $0.1 million increase in interest income, partially offset by a $0.3 million increase in loan and finance costs.
Income Tax Expense— Our effective tax rate was (12.9)% and 14.5% for the nine months ended September 30, 2026 and 2025, respectively. The main drivers of the difference between the effective and statutory rate for the three and nine months ended September 30, 2026 are the increase in the valuation allowance, non-deductible executive compensation under Section 162(m) of the Internal Revenue Code, and state taxes.
Liquidity and Capital Resources
Our principal sources of liquidity are cash on hand, proceeds from sales of our common stock under our at-the-market offering program, and, if needed, up to $5.0 million in revolving loans under our revolving credit facility, subject to minimum liquidity draw requirements. In March 2025, we filed a Registration Statement on Form S-3 (File No. 333-285825) which covers the offer, issuance and sale, for an aggregate initial offering price not to exceed $100.0 million, of shares of common stock and preferred stock; debt securities; warrants to purchase common stock, preferred stock and/or debt securities; and units. We also commenced an at-the-market offering program, with Leerink Partners LLC (“Leerink”) acting as sales agent. This at-the-market offering program provides us with additional access to capital, as needed, subject to market conditions. During the quarter ended September 30, 2026, the Company sold approximately 2.4 million shares of common stock through its at-the-market offering program for total net proceeds of approximately $7.19 million.
The amount of securities we may sell under our shelf registration statement on Form S-3 may be limited. Under current SEC regulations, if the aggregate market value of our common stock held by non-affiliates (our “public float”) is less than $75.0 million, and for so long as our public float remains less than $75.0 million, the amount we can raise through primary public offerings of securities in any 12-month period using shelf registration statements on Form S-3 is limited to one-third of our public float, which is referred to as the “baby shelf rules.” We may be subject to the baby shelf rules, which would limit the amount of securities we could sell under our shelf registration statement, other than shares remaining available for sale under our existing at-the-market offering program, and could limit our ability to raise equity capital, including to repay or refinance our indebtedness under the Credit Agreement.
Our primary uses of cash are for payroll, marketing and advertisements, rent, debt service, information technology and infrastructure, including our corporate office. Our cash flows are closely tied to the receipt of patient payments, and we have experienced revenue declines in the two most recent years due to a decline in overall cases performed. Our ability to improve operating results depends upon a significant number of factors, some of which are beyond our control. If we are unable to realize the anticipated savings or benefits of our growth strategies, or otherwise fail to implement those strategies successfully, the operating results and liquidity may be adversely affected.
We believe that the cash expected to be generated from operations will be sufficient for our working capital requirements, liquidity obligations, and payments due under our existing credit facilities for at least the next 12 months. The term loans under our Credit Agreement, which had an outstanding principal balance of $37.2 million as of September 30, 2026, mature on November 15, 2027.
On November 5, 2026, the Company entered into a financing agreement (the “Blue Torch Financing Agreement”) with a syndicate of lenders and Blue Torch Finance LLC (“Blue Torch”), as administrative agent and collateral agent, maturing on November 5, 2031. Under the Blue Torch Financing Agreement, there is a senior secured (i) term loan facility with an aggregate principal amount of $39.0 million, which was funded in full at closing, and (ii) revolving loan facility with an aggregate commitment of up to $5.0 million, none of which was drawn at closing. Pursuant to the Blue Torch Financing Agreement, borrowings bear interest at a rate of Term SOFR (as defined in the Blue Torch Financing Agreement) plus an applicable margin of 7.75%, which may be decreased to 6.75% based on leverage level. The lenders party to the Blue Torch Financing Agreement have been granted a first-priority security interest in substantially all assets of the borrower and guarantor parties thereto, subject to customary exclusions. The Blue Torch Financing Agreement contains customary affirmative and negative covenants for transactions of this type, including limitations on indebtedness, liens, investments,
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restricted payments, asset sales, and affiliate transactions. The Blue Torch Financing Agreement also includes customary events of default and financial maintenance covenants, including (a) a maximum Leverage Ratio (as defined in the Blue Torch Financing Agreement) of 4.50:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, stepping down over time to 2.00:1.00 for each fiscal quarter ending December 31, 2030 and thereafter, (b) a minimum Fixed Charge Coverage Ratio (as defined in the Blue Torch Financing Agreement) of 1.00:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, increasing to 1.10:1.00 for each fiscal quarter ending December 31, 2027 through September 30, 2028 and 1.20:1.00 for each fiscal quarter ending December 31, 2028 and thereafter, and (c) minimum average weekly Liquidity (as defined in the Blue Torch Financing Agreement) of $7.5 million prior to September 30, 2027 and $5.0 million thereafter. The Blue Torch Financing Agreement requires mandatory prepayments of the loans from excess cash flow, for each fiscal year beginning with fiscal year 2027, payable following delivery of the audited annual financial statements for that fiscal year, in percentages ranging from 0% to 75% depending on the Company's gross leverage ratio, and from the net proceeds of certain asset dispositions, incurrences of indebtedness, and extraordinary receipts and cure equity, and from the proceeds of equity issued to cure certain financial covenant defaults. Proceeds from the Blue Torch Financing Agreement were used to repay in full all indebtedness under, and terminate, the Credit Agreement and to pay fees and expenses related to the Blue Torch Financing Agreement. Proceeds of any revolving loans will be used for working capital and general corporate purposes. The foregoing description is qualified in its entirety by reference to the Blue Torch Financing Agreement, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 6, 2026.
As of September 30, 2026, we had $15.2 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of September 30, 2026.
As of September 30, 2025, we had $5.4 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of September 30, 2025.
The following table summarizes the net cash provided by (used for) operating activities, investing activities and financing activities for the periods indicated:
| Nine Months Ended September 30, | |||||||||||||||||
| ($ in 000s) | 2026 | 2025 | |||||||||||||||
| Cash Flows Provided By (Used For): | |||||||||||||||||
| Operating activities | $ | 558 | $ | 5,627 | |||||||||||||
| Investing activities | (505) | (2,346) | |||||||||||||||
| Financing activities | 6,680 | (6,111) | |||||||||||||||
| Net increase/(decrease) in cash and cash equivalents | 6,733 | (2,830) | |||||||||||||||
Operating Activities
The primary source of our operating cash flow is the collection of patient payments received prior to performing surgical procedures. For the nine months ended September 30, 2026, our operating cash flow decreased by $5.1 million compared to the same period in 2025. The decrease is primarily attributed to weaker than expected revenue performance during the nine months ended September 30, 2026 as compared to the prior year period.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $0.5 million and $2.3 million, respectively. Investing activities in the nine months ended September 30, 2026 relate primarily to capitalized software. Investing activities during the nine months ended September 30, 2025 relate primarily to final payments on our White Plains, NY location that opened in December 2024.
Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2026 was $6.7 million. During the nine months ended September 30, 2026, we received net proceeds of $26.7 million from the at-the-market offering, made principal payments on our debt of $19.8 million and made payments of taxes withheld through vested equity-based compensation of $0.2 million.
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Net cash used in financing activities for the nine months ended September 30, 2025 was $6.1 million. For the nine months ended September 30, 2025, we received net proceeds of $13.8 million from an underwritten public offering and made principal payments on our debt of $12.9 million, payments for debt modification of $0.3 million and payments of taxes withheld through vested equity-based compensation of $0.1 million.
At-the-Market Common Offering Program
On March 14, 2025, the Company entered into a sales agreement (the “ATM Agreement”) with Leerink, as sales agent, in connection with an at-the-market offering program under which the Company may offer and sell, from time to time in our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million at prices and on terms to be determined by market conditions at the time of offering. The $50.0 million of common stock that may be offered, issued and sold under the ATM Agreement is included in the $100.0 million of securities that may be offered, issued and sold by us under our Registration Statement on Form S-3 (File No. 333-285825). The Company and Leerink each have the right to suspend or terminate the ATM Agreement in each party’s sole discretion at any time. As of September 30, 2026, the Company had sold an aggregate of 11,504,516 shares of common stock under the ATM Agreement for aggregate gross proceeds of approximately $33.4 million, and approximately $16.6 million remained available for sale under the ATM Agreement.
In addition, under the Fourth Amendment, which was executed on August 7, 2026, 50% of the net cash proceeds of any issuance of our equity securities after that date (other than issuances under our equity incentive plans) must be applied to prepay the term loans. As a result, only approximately half of the net cash proceeds we raised under our at-the-market offering program after August 7, 2026 per the Fourth Amendment will be available to fund our operations and other general corporate purposes. The Credit Agreement was repaid in full and terminated in connection with the closing of the Blue Torch Financing Agreement, and the Blue Torch Financing Agreement does not require us to apply the net proceeds of equity issuances generally to prepay the loans, other than the proceeds of equity issued to cure certain financial covenant defaults. The Fourth Amendment also required us to make $5.0 million of mandatory term-loan payments in 2026 ($2.5 million paid upon signing and an additional $2.5 million paid on or before September 30, 2026).
In the three and nine months ended September 30, 2026, the Company sold the following quantities of our common stock pursuant to the ATM Agreement for total net proceeds of approximately $7.2 million and $26.7 million:
| Date | Shares (in thousands) | |||||||
| Q1 Total | 5,894 | |||||||
| Q2 Total | 973 | |||||||
| Q3 Total | 2,407 | |||||||
| YTD Total | 9,274 | |||||||
Long-Term Debt
The carrying value of our total indebtedness was $36.7 million and $56.0 million, which includes unamortized deferred financing costs and issuance discount of $0.5 million and $0.9 million as of September 30, 2026 and December 31, 2025, respectively.
On November 7, 2022, the Company entered into a credit agreement with a syndicate of lenders (the "Credit Agreement") originally maturing November 7, 2027. Pursuant to the Credit Agreement, there is (i) an $85.0 million original aggregate principal amount of term loans and (ii) a revolving loan facility with an aggregate principal amount of up to $5.0 million. On September 29, 2023, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand. During the quarter-ended March 31, 2026, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand.
On March 12, 2025, the Company entered into an amendment to the Credit Agreement (the "Third Amendment"). Under the terms of the Third Amendment, the parties thereto agreed to modify certain financial condition covenants made by the Company in the Credit Agreement, such that (i) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025 and June 30, 2025 must be no less than 0.50x and 1.10x, respectively, and no less than 1.25x on the last day of the fiscal quarters ending September 30, 2025 and thereafter, instead of 1.10x as of March 31, 2025 and 1.25x as of June 30, 2025 and thereafter, as previously set forth in the Credit Agreement; (ii) the Consolidated Leverage Ratio (as defined in the Credit
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Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025, June 30, 2025, September 30, 2025, December 31, 2025 and March 31, 2026, must not exceed 4.25x, 3.50x, 3.25x, 3.25x, and 2.75x, respectively, and the Consolidated Leverage Ratio as of the last day of each fiscal quarter thereafter must not exceed 2.25x, instead of 3.25x as of March 31, 2025, 2.75x as of June 30, 2025, and 2.25x thereafter, as previously set forth in the Credit Agreement; (iii) the Company and its subsidiaries will be required to maintain minimum Liquidity (as defined in the Credit Agreement) of not less than (A) $3.0 million as of the last day of the month ending March 31, 2025, (B) $5.0 million as of the last day of the month ending April 30, 2025, and (C) $7.5 million as of the last day of the months ending May 31, 2025 and thereafter (or the last day of each fiscal quarter thereafter upon the satisfaction of certain financial tests described therein); and (iv) new liquidity and financial reporting requirements have been added.
In addition to revising the covenants listed above, the Third Amendment revised or added new terms such that (i) for outstanding loans, beginning on or about July 1, 2025, the applicable per annum margin would be increased to 3.75% or 4.75% for base rate or SOFR (as defined in the Credit Agreement), respectively, if the Company's total leverage ratio was equal to or greater than 3.00x, 3.50% or 4.50% for base rate or SOFR, respectively, if the Company's total leverage ratio was equal to or greater than 2.00x and less than 3.00x, and 3.25% or 4.25% for base rate or SOFR, respectively, if the Company's total leverage ratio was below 2.00x, (ii) the term loan and revolving credit facility will mature on May 11, 2027 (instead of November 7, 2027); (iii) Liquidity in excess of $3.0 million will be used to repay the outstanding funds drawn on the revolving credit facility on a monthly basis beginning April 30, 2025; (iv) revolver draws will be subject to compliance with the minimum Liquidity covenant; (v) the Company will be required to reimburse Silicon Valley Bank ("SVB") for certain fees and expenses relating to the engagement of a financial advisor, and (vi) 100% of the first $10.0 million of any equity proceeds will be used to repay the term loan and revolving credit facility, subject to the following carve-outs (A) the first $3.0 million of equity proceeds; and (B) any equity proceeds received from Vesey Street Capital Partners, L.L.C., our private equity sponsor ("Sponsor"). In consideration for the Third Amendment, the Company paid a fee equal to 0.15% of the outstanding loans to consenting Lenders (as defined in the Credit Agreement) and a $0.125 million arrangement fee to SVB. On March 12, 2025, in connection with the Third Amendment, the Company, SVB and our Sponsor (through certain affiliated entities) entered into that certain limited guarantee by and among Vesey Street Capital Partners Healthcare Fund, L.P., Vesey Street Capital Partners Healthcare Fund-A, L.P., SVB, and the Company (the "Limited Guarantee"), pursuant to which our Sponsor agreed to provide a $10.0 million limited guaranty of the Company’s obligations under the Credit Agreement. The Limited Guarantee was callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company had not prepaid the term loans (excluding regularly scheduled amortization) by $10.0 million as of such date. On June 13, 2025, the Company made a $10.0 million principal payment on the term loans in accordance with the Third Amendment using proceeds from its underwritten public offering completed on June 11, 2025. The Limited Guarantee automatically terminated on March 12, 2026 following the prepayment of the term loans in an aggregate amount of $20.0 million since the date of the Limited Guarantee.
On August 7, 2026, the Company entered into a further amendment to the Credit Agreement (the "Fourth Amendment") to, among other things: (i) extend the maturity date of the term loan and revolving credit facility to November 15, 2027 (approximately a six-month extension from the previous May 11, 2027 maturity date); (ii) require the Company to make a $2.5 million payment to the Lenders upon signing of the Fourth Amendment; (iii) require the Company to make an additional $2.5 million payment on or before September 30, 2026; (iv) require that 50% of the net proceeds of any future equity issuances (other than issuances under our equity incentive plans) be applied to prepay the term loans, in addition to amounts otherwise required to be applied under the Credit Agreement; (v) require the Company to provide biweekly updates on a conference call with the Lenders with respect to the status of its efforts to cause the Discharge of Obligations (as defined in the Credit Agreement); and (vi) require the Company, if the Discharge of Obligations has not occurred by October 31, 2026, to retain one or more investment banks reasonably satisfactory to the Administrative Agent (as defined in the Credit Agreement) to cause the Discharge of Obligations to occur, whether by obtaining replacement debt financing or otherwise. The Company determined the amendment is a modification.
Since the execution of the Fourth Amendment on August 7, 2026, the Company has made all required payments under the Credit Agreement, including the $2.5 million payment due upon signing and the additional $2.5 million payment due on or before September 30, 2026. The Company has also applied 50% of the net proceeds from equity issuances under its at-the-market (ATM) offering to prepay the term loans, as required by the Fourth Amendment.
As of September 30, 2026, the Company had prepaid $0.7 million of the term loans from net proceeds of ATM equity issuances. Subsequent to quarter-end, on October 20, 2026, the Company made an additional prepayment of $1.7 million from ATM net proceeds.
On November 5, 2026, the Company entered into a financing agreement (the "Blue Torch Financing Agreement") with a syndicate of lenders and Blue Torch Finance LLC ("Blue Torch"), as administrative agent and collateral agent, maturing on
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November 5, 2031. Under the Blue Torch Financing Agreement, there is a senior secured (i) term loan facility with an aggregate principal amount of $39.0 million, which was funded in full at closing, and (ii) revolving loan facility with an aggregate commitment of up to $5.0 million, none of which was drawn at closing. Pursuant to the Blue Torch Financing Agreement, borrowings bear interest at a rate of Term SOFR (as defined in the Blue Torch Financing Agreement) plus an applicable margin of 7.75%, which may be decreased to 6.75% based on leverage level. The lenders party to the Blue Torch Financing Agreement have been granted a first-priority security interest in substantially all assets of the Company. The Blue Torch Financing Agreement contains customary affirmative and negative covenants for transactions of this type, including limitations on indebtedness, liens, investments, restricted payments, asset sales, and affiliate transactions. The Blue Torch Financing Agreement also includes customary events of default and financial maintenance covenants, including (a) a maximum Leverage Ratio (as defined in the Blue Torch Financing Agreement) of 4.50:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, stepping down over time to 2.00:1.00 for each fiscal quarter ending December 31, 2030 and thereafter, (b) a minimum Fixed Charge Coverage Ratio (as defined in the Blue Torch Financing Agreement) of 1.00:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, increasing to 1.10:1.00 for each fiscal quarter ending December 31, 2027 through September 30, 2028 and 1.20:1.00 for each fiscal quarter ending December 31, 2028 and thereafter, and (c) minimum average weekly Liquidity (as defined in the Blue Torch Financing Agreement) of $7.5 million prior to September 30, 2027 and $5.0 million thereafter. The Blue Torch Financing Agreement requires mandatory prepayments of the loans from excess cash flow for each fiscal year beginning with fiscal year 2027, payable following delivery of the audited annual financial statements for that fiscal year, in percentages ranging from 0% to 75% depending on the Company's gross leverage ratio, and from the net proceeds of certain asset dispositions, incurrences of indebtedness and extraordinary receipts, and from the proceeds of equity issued to cure certain financial covenant defaults. Proceeds from the Blue Torch Financing Agreement were used to repay in full all indebtedness under, and terminate, the Credit Agreement and to pay fees and expenses related to the Blue Torch Financing Agreement. Proceeds of any revolving loans will be used for working capital and general corporate purposes.
As of September 30, 2026, the interest rate under the Credit Agreement was 8.15%.
Critical Accounting Policies and Estimates
A summary of significant accounting policies is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 under the caption “Critical Accounting Policies and Estimates” in the Management’s Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes in the nature of our critical accounting policies and estimates or the application of those policies since the date of that report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.
Item 4. Controls and Procedures
Management’s Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act) as of September 30, 2026.
Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2026 due to the material weaknesses in our internal control over financial reporting described below, which were previously identified in our Annual Report on Form 10‑K for the year ended December 31, 2025 and have not yet been remediated.
Material Weaknesses in Internal Control Over Financial Reporting
•General Accounting and Financial Reporting Processes
As previously disclosed in our Form 10‑K for the year ended December 31, 2025, management identified the following material weaknesses in internal control over financial reporting, each of which continued to exist as of September 30, 2026:
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Management identified a material weakness in controls related to aspects of the Company’s general accounting and financial reporting processes, design and maintenance of formal accounting policies, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting, and disclosures, including controls over the preparation and review of account reconciliations.
•Lease Accounting under ASC 842
Management also identified material weakness related to controls over the accounting for leases, specifically the subsequent measurement and recording of lease transactions under ASC 842. The control deficiency resulted in errors in the measurement and presentation of right‑of‑use assets and lease liabilities, which required revision of previously issued financial statements. The Company did not maintain a sufficient complement of personnel possessing the appropriate technical accounting competency, training, and experience to address, review, and record financial reporting transactions under U.S. GAAP.
Remediation Efforts
Management has initiated remediation plans to address the material weaknesses described above. During the nine months ended September 30, 2026, remediation efforts included, among other actions:
•Enhancing controls over the review and approval of lease accounting, including subsequent measurement and periodic reassessment procedures;
•Improving documentation and precision of controls related to complex accounting areas;
•Engaging external accounting advisors to assist management in evaluating technical accounting matters, implementing enhanced controls, and providing additional support during the financial close and reporting process.
In addition to implementing and refining the above activities, we expect to continue to engage in additional activities in fiscal year 2026 including:
•We will continue to evaluate the realignment of existing personnel and the addition of both internal and external resources to strengthen management’s review and documentation over internal control over financial reporting. As needed, we intend to hire qualified resources with the requisite background and knowledge to assist with accounting and financial reporting.
•We will continue to assess the specific training needs for newly hired and existing personnel and intend to deliver additional training programs designed to uphold our internal control standards.
•We will continue to review our current processes, procedures and systems to identify opportunities to enhance the design of our financial reporting controls.
•We will continue to assess the design and maintenance of formal accounting policies, procedures, and controls to achieve complete, accurate, and timely financial accounting, reporting, and disclosures, including controls over the preparation and review of account reconciliations.
•We will continue to report regularly to the audit committee on the progress and results of the remediation plan, including the identification, status, and resolution of internal control material weaknesses and deficiencies.
Management believes these actions are responsive to the identified material weaknesses; however, the remediation efforts are ongoing.
Current Status of Remediation
As of September 30, 2026, the remediation actions described above had not been fully implemented and had not operated for a sufficient period of time to allow management to conclude that the material weaknesses have been fully remediated. Accordingly, the material weaknesses in internal control over financial reporting continued to exist as of the end of the period covered by this Quarterly Report on Form 10‑Q.
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Changes in Internal Controls Over Financial Reporting
Other than the remediation efforts described above, there were no changes in the Company’s internal control over financial reporting during the quarter ended September 30, 2026 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
Limitations on the Effectiveness of Controls
Our management, including the Chief Executive Officer and the Chief Financial Officer, recognizes that any set of controls and procedures, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, with the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of controls. For these reasons, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings
During the ordinary course of business, we have become and may in the future become subject to pending and threatened legal actions and proceedings, including with respect to the quality of our services. All of the current legal actions and proceedings that we are a party to are of an ordinary or routine nature incidental to our operations, the resolution of which should not have a material adverse effect on our financial condition, results of operations or cash flows. These claims, to the extent they exceed our insurance deductibles, are covered by insurance, but there can be no assurance that our insurance coverage will be adequate to cover any such liability.
Item 1A. Risk Factors
Except to the extent updated below or to the extent additional factual information disclosed elsewhere in this Quarterly Report on Form 10-Q relates to such risk factors (including, without limitation, the matters discussed in Part I, "Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations"), there were no material changes to the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025.
Our indebtedness under the Blue Torch Financing Agreement contains financial maintenance and other covenants, and a failure to comply could result in an event of default.
Our obligations under the Blue Torch Financing Agreement are secured by substantially all of our assets and require us to comply with a maximum Leverage Ratio, a minimum Fixed Charge Coverage Ratio and a minimum average weekly Liquidity requirement, each as described in Part I, Item 2 of this Quarterly Report and in our Current Report on Form 8-K filed on November 5, 2026. The Leverage Ratio and Fixed Charge Coverage Ratio covenants are first tested for the fiscal quarter ending December 31, 2026. Our results have declined in recent periods, and we may be unable to comply with these covenants. Our right to cure a breach of the Leverage Ratio or Fixed Charge Coverage Ratio covenant with equity may be exercised no more than five times and not in consecutive fiscal quarters, does not extend to the minimum Liquidity covenant, and requires that the proceeds be applied to prepay the loans. If we breach a covenant or otherwise default, the lenders could accelerate the loans and exercise their remedies against substantially all of our assets, which would have a material adverse effect on our business, financial condition and results of operations. Borrowings bear interest at a floating rate based on Term SOFR plus an applicable margin of up to 7.75%, which is higher than the 8.15% rate in effect under the Credit Agreement as of September 30, 2026, and certain prepayments may be subject to a premium.
Our ability to raise capital under our shelf registration statement may be limited by the SEC’s “baby shelf rules.”
Under current SEC regulations, if our public float is less than $75.0 million, and for so long as our public float remains less than $75.0 million, the amount we can raise through primary public offerings of securities in any 12-month period using shelf registration statements on Form S-3 is limited to one-third of our public float. We may be subject to these limitations, other than with respect to shares remaining available for sale under our existing at-the-market offering program. If our ability to sell securities under our shelf registration statement is limited, we may need to conduct offerings under a registration statement on Form S-1 or in transactions exempt from registration, which would likely take more time and be more costly, and we may be unable to raise capital when needed, including to repay or refinance our indebtedness under the Credit Agreement.
Changes in how consumers search for information, including the increasing use of generative AI, may reduce traffic to our website and adversely affect our ability to attract new patients.
Our patient acquisition depends significantly on prospective patients finding our website and scheduling consultations through search engine results and digital marketing. Search engines and other platforms are increasingly integrating generative artificial intelligence (“AI”) features, and consumers are increasingly using AI chatbots, that provide direct answers to queries without directing users to the websites of the underlying providers. As a result, our website has experienced, and may continue to experience, lower search-driven traffic and fewer consultation requests. We do not control how AI-driven search tools select, rank, or present information about our services, and we may be unable to adapt our marketing strategy quickly or cost-effectively enough to maintain our visibility. If we are unable to maintain or increase our visibility in AI-generated responses, or if we must increase our marketing spend to offset reduced organic traffic, our patient acquisition costs may rise, our revenues may decline, and our business, financial condition and results of operations could be adversely affected.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the quarter ended September 30, 2026, none of our directors or officers adopted terminated
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Item 6. Exhibits
Exhibit Number | Description of Exhibit | ||||
| 10.1* | Financing Agreement, dated as of November 5, 2026, by and among AirSculpt Technologies, Inc., EBS Intermediate Parent LLC, EBS Enterprises LLC, the lenders from time to time party thereto, and Blue Torch Finance LLC, as administrative agent and collateral agent (filed herewith). | ||||
| 31.1* | Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
| 31.2* | Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
| 32.1† | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
| 32.2† | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
| 101.INS* | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH* | Inline XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
__________________________________
* Filed herewith.
† The certifications attached as Exhibit 32.1 and Exhibit 32.2 that accompany this Quarterly Report on Form 10-Q are being furnished herewith and are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing, except to the extent that the registrant specifically incorporates them by reference.
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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.
| AIRSCULPT TECHNOLOGIES, INC. | |||||||||||
| By: | /s/ Michael Arthur | ||||||||||
| Michael Arthur | |||||||||||
| Chief Financial Officer | |||||||||||
| (Principal Financial Officer and Principal Accounting Officer) | |||||||||||
Date: November 6, 2026
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