[10-Q] Tactile Systems Technology, Inc. Quarterly Earnings Report

P1YP3YP7Yhttp://fasb.org/us-gaap/2025#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2025#OperatingLeaseRightOfUseAssethttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityCurrenthttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityCurrenthttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityNoncurrenthttp://fasb.org/us-gaap/2025#OperatingLeaseLiabilityNoncurrentP1Y0001027838--12-312025Q2falseP3M0.33330.3333P1Y0.33330.33330.333300010278382024-11-042025-06-240001027838us-gaap:CommonStockMember2025-04-012025-06-300001027838us-gaap:CommonStockMember2025-01-012025-06-300001027838us-gaap:CommonStockMember2024-04-012024-06-300001027838us-gaap:CommonStockMember2024-01-012024-06-300001027838us-gaap:RetainedEarningsMember2025-06-300001027838us-gaap:AdditionalPaidInCapitalMember2025-06-300001027838us-gaap:RetainedEarningsMember2025-03-310001027838us-gaap:AdditionalPaidInCapitalMember2025-03-310001027838us-gaap:RetainedEarningsMember2024-12-310001027838us-gaap:AdditionalPaidInCapitalMember2024-12-310001027838us-gaap:RetainedEarningsMember2024-06-300001027838us-gaap:AdditionalPaidInCapitalMember2024-06-300001027838us-gaap:RetainedEarningsMember2024-03-310001027838us-gaap:AdditionalPaidInCapitalMember2024-03-310001027838us-gaap:RetainedEarningsMember2023-12-310001027838us-gaap:AdditionalPaidInCapitalMember2023-12-3100010278382025-03-3100010278382024-03-310001027838us-gaap:CommonStockMember2025-06-300001027838us-gaap:CommonStockMember2025-03-310001027838us-gaap:CommonStockMember2024-12-310001027838us-gaap:CommonStockMember2024-06-300001027838us-gaap:CommonStockMember2024-03-310001027838us-gaap:CommonStockMember2023-12-310001027838tcmd:FollowOnPublicOfferingMember2023-02-270001027838us-gaap:IPOMember2016-08-020001027838us-gaap:EmployeeStockOptionMember2024-01-012024-12-310001027838us-gaap:EmployeeStockOptionMember2024-12-310001027838us-gaap:EmployeeStockOptionMember2024-06-300001027838tcmd:EquityIncentivePlan2025Member2025-06-300001027838tcmd:EquityIncentivePlan2016Member2025-05-070001027838tcmd:EquityIncentivePlan2025Member2025-05-070001027838us-gaap:EmployeeStockMember2025-01-012025-01-010001027838us-gaap:EmployeeStockMember2024-01-012024-01-010001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2024-12-310001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMembertcmd:EquityIncentivePlan2016Member2024-12-310001027838tcmd:TwoThousandTwentyFourPsuMembertcmd:EquityIncentivePlan2016Memberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2025-01-012025-06-300001027838tcmd:TwoThousandTwentyFourPsuMembertcmd:EquityIncentivePlan2016Memberus-gaap:ShareBasedCompensationAwardTrancheOneMember2025-01-012025-06-300001027838tcmd:TwoThousandTwentyFivePsuMembertcmd:EquityIncentivePlan2016Memberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2025-01-012025-06-300001027838tcmd:TwoThousandTwentyFivePsuMembertcmd:EquityIncentivePlan2016Memberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2025-01-012025-06-300001027838tcmd:TwoThousandTwentyFivePsuMembertcmd:EquityIncentivePlan2016Memberus-gaap:ShareBasedCompensationAwardTrancheOneMember2025-01-012025-06-300001027838srt:MinimumMembertcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838srt:MaximumMembertcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838srt:MinimumMemberus-gaap:EmployeeStockOptionMember2025-01-012025-06-300001027838srt:MaximumMemberus-gaap:EmployeeStockOptionMember2025-01-012025-06-300001027838tcmd:TimeBasedRestrictedStockUnitsRsusMember2025-01-012025-06-300001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMember2025-01-012025-06-300001027838tcmd:VeteransAdministrationMember2025-04-012025-06-300001027838tcmd:PrivateInsurersMember2025-04-012025-06-300001027838tcmd:MedicareMember2025-04-012025-06-300001027838tcmd:DurableMedicalEquipmentDistributorsMember2025-04-012025-06-300001027838tcmd:VeteransAdministrationMember2025-01-012025-06-300001027838tcmd:PrivateInsurersMember2025-01-012025-06-300001027838tcmd:MedicareMember2025-01-012025-06-300001027838tcmd:DurableMedicalEquipmentDistributorsMember2025-01-012025-06-300001027838tcmd:VeteransAdministrationMember2024-04-012024-06-300001027838tcmd:PrivateInsurersMember2024-04-012024-06-300001027838tcmd:MedicareMember2024-04-012024-06-300001027838tcmd:DurableMedicalEquipmentDistributorsMember2024-04-012024-06-300001027838tcmd:VeteransAdministrationMember2024-01-012024-06-300001027838tcmd:PrivateInsurersMember2024-01-012024-06-300001027838tcmd:MedicareMember2024-01-012024-06-300001027838tcmd:DurableMedicalEquipmentDistributorsMember2024-01-012024-06-300001027838tcmd:TermLoanMemberus-gaap:SubsequentEventMember2025-07-312025-07-310001027838tcmd:TermLoanMember2023-08-012023-08-010001027838tcmd:FollowOnPublicOfferingMember2023-02-272023-02-2700010278382024-01-012024-12-310001027838us-gaap:RetainedEarningsMember2025-04-012025-06-300001027838us-gaap:RetainedEarningsMember2025-01-012025-06-300001027838us-gaap:RetainedEarningsMember2024-04-012024-06-300001027838us-gaap:RetainedEarningsMember2024-01-012024-06-300001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMember2025-07-312025-07-310001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMember2025-07-302025-07-300001027838srt:MinimumMemberus-gaap:RevolvingCreditFacilityMember2023-08-012023-08-010001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMember2023-08-012023-08-010001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMember2025-07-310001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMember2025-07-300001027838us-gaap:RevolvingCreditFacilityMember2021-09-080001027838srt:MinimumMemberus-gaap:EquipmentMember2025-06-300001027838srt:MinimumMemberus-gaap:BuildingMember2025-06-300001027838srt:MaximumMemberus-gaap:EquipmentMember2025-06-300001027838srt:MaximumMemberus-gaap:BuildingMember2025-06-300001027838srt:MinimumMember2025-06-300001027838us-gaap:EquipmentMember2025-01-012025-06-300001027838us-gaap:TradeNamesMember2025-06-300001027838us-gaap:PatentsMember2025-06-300001027838us-gaap:TradeNamesMember2024-12-310001027838us-gaap:PatentsMember2024-12-310001027838tcmd:AfflovestPMember2021-09-300001027838srt:MaximumMembertcmd:DefensiveIntangibleAssetsMember2024-12-310001027838us-gaap:PatentsMember2025-06-300001027838us-gaap:DevelopedTechnologyRightsMember2025-06-300001027838us-gaap:CustomerRelationshipsMember2025-06-300001027838us-gaap:CustomerContractsMember2025-06-300001027838tcmd:DefensiveIntangibleAssetsMember2025-06-300001027838us-gaap:PatentsMember2024-12-310001027838us-gaap:DevelopedTechnologyRightsMember2024-12-310001027838us-gaap:CustomerRelationshipsMember2024-12-310001027838us-gaap:CustomerContractsMember2024-12-310001027838tcmd:DefensiveIntangibleAssetsMember2024-12-310001027838us-gaap:EmployeeStockOptionMember2025-06-300001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2025-06-300001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMembertcmd:EquityIncentivePlan2016Member2025-06-300001027838tcmd:DefinedContribution401kRetirementPlanMember2025-04-012025-06-300001027838tcmd:DefinedContribution401kRetirementPlanMember2025-01-012025-06-300001027838tcmd:DefinedContribution401kRetirementPlanMember2024-04-012024-06-300001027838tcmd:DefinedContribution401kRetirementPlanMember2024-01-012024-06-300001027838tcmd:TermLoanMember2025-01-012025-06-300001027838tcmd:TermLoanMember2021-09-080001027838tcmd:TermLoanMember2025-06-300001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMemberus-gaap:BaseRateMember2025-07-312025-07-310001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SubsequentEventMemberus-gaap:BaseRateMember2025-07-302025-07-300001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2025-01-012025-06-300001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2023-08-012023-08-010001027838srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2023-06-212023-06-210001027838srt:MinimumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2023-06-212023-06-210001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:SecuredOvernightFinancingRateSofrMember2023-06-212023-06-210001027838srt:MaximumMemberus-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2023-06-212023-06-210001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:FederalFundsEffectiveSwapRateMember2023-06-212023-06-210001027838us-gaap:RevolvingCreditFacilityMemberus-gaap:BaseRateMember2023-06-212023-06-210001027838us-gaap:SecuredOvernightFinancingRateSofrMember2023-06-212023-06-2100010278382023-06-212023-06-210001027838us-gaap:ProductMember2025-04-012025-06-300001027838tcmd:RentalProductServiceMember2025-04-012025-06-300001027838us-gaap:ProductMember2025-01-012025-06-300001027838tcmd:RentalProductServiceMember2025-01-012025-06-300001027838us-gaap:ProductMember2024-04-012024-06-300001027838tcmd:RentalProductServiceMember2024-04-012024-06-300001027838us-gaap:ProductMember2024-01-012024-06-300001027838tcmd:RentalProductServiceMember2024-01-012024-06-300001027838us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMembertcmd:VendorOneMember2025-04-012025-06-300001027838us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMembertcmd:VendorOneMember2025-01-012025-06-300001027838us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMembertcmd:VendorOneMember2024-04-012024-06-300001027838us-gaap:CostOfGoodsTotalMemberus-gaap:SupplierConcentrationRiskMembertcmd:VendorOneMember2024-01-012024-06-300001027838us-gaap:EmployeeStockMember2025-06-300001027838us-gaap:EmployeeStockMember2016-04-2700010278382024-06-3000010278382023-12-3100010278382024-07-012024-09-300001027838tcmd:CorporateHeadQuarterSecondLeaseMember2018-12-310001027838tcmd:CorporateHeadQuarterInitialLeaseMember2018-10-310001027838us-gaap:RestrictedStockUnitsRSUMember2025-04-012025-06-300001027838us-gaap:PerformanceSharesMember2025-04-012025-06-300001027838us-gaap:EmployeeStockOptionMember2025-04-012025-06-300001027838us-gaap:RestrictedStockUnitsRSUMember2025-01-012025-06-300001027838us-gaap:PerformanceSharesMember2025-01-012025-06-300001027838us-gaap:EmployeeStockOptionMember2025-01-012025-06-300001027838us-gaap:RestrictedStockUnitsRSUMember2024-04-012024-06-300001027838us-gaap:EmployeeStockOptionMember2024-04-012024-06-300001027838us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-06-300001027838us-gaap:PerformanceSharesMember2024-01-012024-06-300001027838us-gaap:EmployeeStockOptionMember2024-01-012024-06-300001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2025-04-012025-06-300001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMembertcmd:EquityIncentivePlan2016Member2025-04-012025-06-300001027838us-gaap:SellingAndMarketingExpenseMember2025-04-012025-06-300001027838us-gaap:ResearchAndDevelopmentExpenseMember2025-04-012025-06-300001027838us-gaap:GeneralAndAdministrativeExpenseMember2025-04-012025-06-300001027838us-gaap:EmployeeStockOptionMember2025-04-012025-06-300001027838us-gaap:EmployeeStockMember2025-04-012025-06-300001027838us-gaap:CostOfSalesMember2025-04-012025-06-300001027838us-gaap:SellingAndMarketingExpenseMember2025-01-012025-06-300001027838us-gaap:ResearchAndDevelopmentExpenseMember2025-01-012025-06-300001027838us-gaap:GeneralAndAdministrativeExpenseMember2025-01-012025-06-300001027838us-gaap:EmployeeStockOptionMember2025-01-012025-06-300001027838us-gaap:CostOfSalesMember2025-01-012025-06-300001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2024-04-012024-06-300001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMembertcmd:EquityIncentivePlan2016Member2024-04-012024-06-300001027838us-gaap:SellingAndMarketingExpenseMember2024-04-012024-06-300001027838us-gaap:ResearchAndDevelopmentExpenseMember2024-04-012024-06-300001027838us-gaap:GeneralAndAdministrativeExpenseMember2024-04-012024-06-300001027838us-gaap:EmployeeStockOptionMember2024-04-012024-06-300001027838us-gaap:EmployeeStockMember2024-04-012024-06-300001027838us-gaap:CostOfSalesMember2024-04-012024-06-300001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2024-01-012024-06-300001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMembertcmd:EquityIncentivePlan2016Member2024-01-012024-06-300001027838us-gaap:SellingAndMarketingExpenseMember2024-01-012024-06-300001027838us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-06-300001027838us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-06-300001027838us-gaap:EmployeeStockOptionMember2024-01-012024-06-300001027838us-gaap:EmployeeStockMember2024-01-012024-06-300001027838us-gaap:CostOfSalesMember2024-01-012024-06-300001027838us-gaap:AdditionalPaidInCapitalMember2025-04-012025-06-300001027838us-gaap:AdditionalPaidInCapitalMember2025-01-012025-06-300001027838us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001027838us-gaap:AdditionalPaidInCapitalMember2024-01-012024-06-300001027838srt:MinimumMembertcmd:TwoThousandTwentyFourPsuMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838srt:MinimumMembertcmd:TwoThousandTwentyFivePsuMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838srt:MaximumMembertcmd:TwoThousandTwentyFourPsuMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838srt:MaximumMembertcmd:TwoThousandTwentyFivePsuMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838tcmd:TwoThousandTwentyFourPsuMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838tcmd:TwoThousandTwentyFivePsuMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838tcmd:TimeBasedRestrictedStockUnitsRsusMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838tcmd:PerformanceBasedStockSettledRestrictedStockUnitsMembertcmd:EquityIncentivePlan2016Member2025-01-012025-06-300001027838srt:MinimumMember2025-01-012025-06-300001027838srt:MaximumMember2025-01-012025-06-300001027838tcmd:LymphedemaProductsMember2025-04-012025-06-300001027838tcmd:AirwayClearanceProductsMember2025-04-012025-06-300001027838tcmd:LymphedemaProductsMember2025-01-012025-06-300001027838tcmd:AirwayClearanceProductsMember2025-01-012025-06-300001027838tcmd:LymphedemaProductsMember2024-04-012024-06-300001027838tcmd:AirwayClearanceProductsMember2024-04-012024-06-300001027838tcmd:LymphedemaProductsMember2024-01-012024-06-300001027838tcmd:AirwayClearanceProductsMember2024-01-012024-06-300001027838us-gaap:SupplierConcentrationRiskMember2025-06-300001027838tcmd:VendorOneMember2025-06-300001027838us-gaap:SupplierConcentrationRiskMember2024-06-300001027838tcmd:VendorOneMember2024-06-3000010278382021-09-082021-09-080001027838us-gaap:IPOMember2016-08-022016-08-020001027838us-gaap:SubsequentEventMember2025-07-042025-07-040001027838us-gaap:EmployeeStockMember2025-01-012025-06-300001027838tcmd:TermLoanMember2022-02-222022-02-2200010278382021-09-080001027838us-gaap:SubsequentEventMember2025-07-3100010278382024-04-012024-06-3000010278382024-01-012024-06-300001027838tcmd:CorporateHeadQuarterThirdLeaseMember2019-12-310001027838tcmd:CorporateHeadQuarterSecondLeaseMember2019-12-3100010278382025-06-3000010278382024-12-3100010278382024-11-040001027838us-gaap:RevolvingCreditFacilityMember2024-11-0100010278382025-04-012025-06-3000010278382025-07-3100010278382025-01-012025-06-30xbrli:sharesiso4217:USDutr:sqftiso4217:USDxbrli:sharesxbrli:puretcmd:itemtcmd:segment

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2025

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-37799

Tactile Systems Technology, Inc.

(Exact name of registrant as specified in its charter)

Delaware	3701 Wayzata Blvd, Suite 300	41-1801204
(State or other jurisdiction of incorporation or organization)	Minneapolis, Minnesota 55416	(I.R.S. Employer Identification No.)
​	(Address and zip code of principal executive offices)	​
​	​	​
​	(612) 355-5100	​
​	(Registrant’s telephone number, including area code)	​

​

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, Par Value $0.001 Per Share	TCMD	The Nasdaq Stock Market

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 ☑  No ◻

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 ☑  No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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	☐	​	Accelerated filer	☑	​	Non-accelerated filer	◻
​	​	​	​	​	​	​	​
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. ◻

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐  No ☑

22,292,145 shares of common stock, par value $0.001 per share, were outstanding as of July 31, 2025.

​

Table of Contents

TABLE OF CONTENTS

	​		​
	​	PART I—FINANCIAL INFORMATION	​
​	​	​	​	​
Item 1.	​	Financial Statements	​	4
Item 2.	​	Management’s Discussion and Analysis of Financial Condition and Results of Operations	​	22
Item 3.	​	Quantitative and Qualitative Disclosures About Market Risk	​	33
Item 4.	​	Controls and Procedures	​	33
	​		​	​
	​	PART II—OTHER INFORMATION	​	​
	​		​	​
Item 1.	​	Legal Proceedings	​	34
Item 1A.	​	Risk Factors	​	34
Item 2.	​	Unregistered Sales of Equity Securities and Use of Proceeds	​	34
Item 3.	​	Defaults Upon Senior Securities	​	34
Item 4.	​	Mine Safety Disclosures	​	35
Item 5.	​	Other Information	​	35
Item 6.	​	Exhibits	​	36

​

​

2

Table of Contents

Forward-Looking Information

All statements, other than statements of historical facts, contained in this Quarterly Report on Form 10-Q, including statements regarding our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition, are forward-looking statements. In some cases, you can identify forward-looking statements by the following words: "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "might," "ongoing," "plan," "potential," "predict," "project," "should," "target," "will," "would," or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our results, levels of activity, performance or achievements to be materially different from the information expressed or implied by the forward-looking statements in this Quarterly Report on Form 10-Q. These risks, uncertainties and other factors include, but are not limited to:

● our ability to obtain reimbursement from third-party payers for our products;

● adverse economic conditions, including inflation, rising interest rates or recession;

● the adequacy of our liquidity to pursue our business objectives;

● price increases for supplies and components;

● wage and component price inflation;

● loss of a key supplier or other supply chain disruptions;

● entry of new competitors and/or competitive products;

● compliance with and changes in federal, state and local government laws and regulations;

● technological obsolescence of, or quality issues with, our products;

● our ability to expand our business through strategic acquisitions;

● our ability to integrate acquisitions and related businesses;

● the effects of current and future U.S. and foreign trade policy and tariff actions; and

● the inability to carry out research, development and commercialization plans.

You should read the matters described in "Risk Factors" and the other cautionary statements made in our Annual Report on Form 10-K for the year ended December 31, 2024, and in subsequent Quarterly Reports on Form 10-Q. We cannot assure you that the forward-looking statements in this report will prove to be accurate and therefore you are encouraged not to place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. You are urged to carefully review and consider the various disclosures made by us in this report and in other filings with the Securities and Exchange Commission (the “SEC”) that advise of the risks and factors that may affect our business. Other than as required by law, we undertake no obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

​

3

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

​	​	​	​	​	​	​
Tactile Systems Technology, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
​		June 30,			December 31,
(In thousands, except share and per share data)		2025			2024
Assets	​	​		​	​	​
Current assets	​	​	​	​	​	​
Cash	​	$	81,528	​	$	94,367
Accounts receivable, net	​		33,086	​		44,937
Net investment in leases	​		14,457	​		14,540
Inventories	​		17,111	​		18,666
Income taxes receivable	​		457	​		—
Prepaid expenses and other current assets	​		6,348	​		5,053
Total current assets	​		152,987	​		177,563
Non-current assets	​	​	​	​	​	​
Property and equipment, net	​		4,897	​		5,603
Right of use operating lease assets	​		15,462	​		16,633
Intangible assets, net	​		40,904	​		42,789
Goodwill	​	​	31,063	​	​	31,063
Deferred income taxes	​		18,333	​		18,311
Other non-current assets	​		9,402	​		5,962
Total non-current assets	​		120,061	​		120,361
Total assets	​	$	273,048	​	$	297,924
Liabilities and Stockholders' Equity	​	​	​	​	​	​
Current liabilities	​	​	​	​	​	​
Accounts payable	​	$	8,025	​	$	5,648
Note payable	​	​	2,956	​	​	2,956
Accrued payroll and related taxes	​		12,678	​		17,923
Accrued expenses	​		8,180	​		7,780
Income taxes payable	​		—	​		270
Operating lease liabilities	​		3,095	​		2,980
Other current liabilities	​		5,469	​		3,147
Total current liabilities	​		40,403	​		40,704
Non-current liabilities	​	​	​	​	​	​
Note payable, non-current	​	​	21,743	​	​	23,220
Accrued warranty reserve, non-current	​		1,241	​		1,209
Income taxes payable, non-current	​		355	​		239
Operating lease liabilities, non-current	​	​	14,380	​		15,955
Total non-current liabilities	​		37,719	​		40,623
Total liabilities	​		78,122	​		81,327
​	​	​	​	​	​	​
Stockholders’ equity:	​	​	​	​	​	​
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of June 30, 2025 and December 31, 2024	​		—	​		—
Common stock, $0.001 par value, 300,000,000 shares authorized; 22,292,145 shares issued and outstanding as of June 30, 2025; 23,883,475 shares issued and outstanding as of December 31, 2024	​		22	​		24
Additional paid-in capital	​		158,807	​		180,719
Retained earnings	​		36,097	​		35,854
Total stockholders’ equity	​		194,926	​		216,597
Total liabilities and stockholders’ equity	​	$	273,048	​	$	297,924

​

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

​

4

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Tactile Systems Technology, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(In thousands, except share and per share data)

2025

2024

2025

2024

Revenue

​

​

​

​

​

​

​

​

​

​

​

​

Sales revenue

​

$

70,531

​

$

64,267

​

$

123,000

​

$

117,574

Rental revenue

​

8,374

​

8,951

​

17,173

​

16,732

Total revenue

​

78,905

​

73,218

​

140,173

​

134,306

Cost of revenue

​

​

​

​

​

​

​

​

​

​

​

​

Cost of sales revenue

​

17,483

​

16,263

​

31,374

​

31,207

Cost of rental revenue

​

2,629

​

2,852

​

4,660

​

5,567

Total cost of revenue

​

20,112

​

19,115

​

36,034

​

36,774

Gross profit

​

​

​

​

​

​

​

​

​

​

​

​

Gross profit - sales revenue

​

53,048

​

48,004

​

91,626

​

86,367

Gross profit - rental revenue

​

5,745

​

6,099

​

12,513

​

11,165

Gross profit

​

58,793

​

54,103

​

104,139

​

97,532

Operating expenses

​

​

​

​

​

​

​

​

​

​

​

​

Sales and marketing

​

30,039

​

28,608

​

57,555

​

55,965

Research and development

​

2,018

​

2,234

​

3,759

​

4,377

Reimbursement, general and administrative

​

22,034

​

16,779

​

42,032

​

33,040

Intangible asset amortization

​

​

619

​

​

633

​

​

1,252

​

​

1,265

Total operating expenses

​

54,710

​

48,254

​

104,598

​

94,647

Income (loss) from operations

​

4,083

​

5,849

​

(459)

​

2,885

Interest income

​

​

850

​

​

754

​

​

1,745

​

​

1,467

Interest expense

​

​

(410)

​

​

(529)

​

​

(834)

​

​

(1,096)

Other income

​

1

​

—

​

1

​

9

Income before income taxes

​

4,524

​

6,074

​

453

​

3,265

Income tax expense

​

1,307

​

1,776

​

210

​

1,176

Net income

​

$

3,217

​

$

4,298

​

$

243

​

$

2,089

Net income per common share

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

$

0.14

​

$

0.18

​

$

0.01

​

$

0.09

Diluted

​

$

0.14

​

$

0.18

​

$

0.01

​

$

0.09

Weighted-average common shares used to compute net income per common share

​

​

​

​

​

​

​

​

​

​

​

​

Basic

​

​

23,092,469

​

​

23,873,379

​

​

23,399,848

​

​

23,769,604

Diluted

​

​

23,237,671

​

​

24,099,047

​

​

23,679,220

​

​

24,073,986

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

​

5

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Tactile Systems Technology, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Additional

​

​

​

​

​

​

​

Common Stock

​

Paid-In

​

Retained

​

​

​

(In thousands, except share data)

Shares

Par Value

Capital

Earnings

Total

Balances, March 31, 2025

​

23,584,471

​

$

24

​

$

172,727

​

$

32,880

​

$

205,631

Stock-based compensation

​

—

​

​

—

​

​

1,939

​

​

—

​

​

1,939

Exercise of common stock options and vesting of performance and restricted stock units

​

112,411

​

​

—

​

​

—

​

​

—

​

​

—

Share repurchases

​

(1,507,496)

​

​

(2)

​

​

(16,702)

​

​

—

​

​

(16,704)

Common shares issued for employee stock purchase plan

​

102,759

​

​

—

​

​

843

​

​

—

​

​

843

Net income for the period

​

—

​

​

—

​

​

—

​

​

3,217

​

​

3,217

Balances, June 30, 2025

​

22,292,145

​

$

22

​

$

158,807

​

$

36,097

​

$

194,926

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances, December 31, 2024

​

23,883,475

​

$

24

​

$

180,719

​

$

35,854

​

$

216,597

Stock-based compensation

​

—

​

​

—

​

​

4,005

​

​

—

​

​

4,005

Exercise of common stock options and vesting of performance and restricted stock units

​

449,010

​

​

—

​

​

10

​

​

—

​

​

10

Share repurchases

​

(2,143,099)

​

​

(2)

​

​

(26,770)

​

​

—

​

​

(26,772)

Common shares issued for employee stock purchase plan

​

102,759

​

​

—

​

​

843

​

​

—

​

​

843

Net income for the period

​

—

​

​

—

​

​

—

​

​

243

​

​

243

Balances, June 30, 2025

​

22,292,145

​

$

22

​

$

158,807

​

$

36,097

​

$

194,926

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances, March 31, 2024

​

23,761,897

​

$

24

​

$

176,764

​

$

16,685

​

$

193,473

Stock-based compensation

​

—

​

​

—

​

​

1,860

​

​

—

​

​

1,860

Exercise of common stock options and vesting of performance and restricted stock units

​

96,944

​

​

—

​

​

1

​

​

—

​

​

1

Common shares issued for employee stock purchase plan

​

107,907

​

​

—

​

​

1,044

​

​

—

​

​

1,044

Net income for the period

​

—

​

​

—

​

​

—

​

​

4,298

​

​

4,298

Balances, June 30, 2024

​

23,966,748

​

$

24

​

$

179,669

​

$

20,983

​

$

200,676

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Balances, December 31, 2023

​

23,600,584

​

$

24

​

$

174,724

​

$

18,894

​

$

193,642

Stock-based compensation

​

—

​

​

—

​

​

3,899

​

​

—

​

​

3,899

Exercise of common stock options and vesting of performance and restricted stock units

​

258,257

​

​

—

​

​

2

​

​

—

​

​

2

Common shares issued for employee stock purchase plan

​

107,907

​

​

—

​

​

1,044

​

​

—

​

​

1,044

Net income for the period

​

—

​

​

—

​

​

—

​

​

2,089

​

​

2,089

Balances, June 30, 2024

​

23,966,748

​

$

24

​

$

179,669

​

$

20,983

​

$

200,676

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

6

Table of Contents

​

​	​	​	​	​	​	​
Tactile Systems Technology, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
​	​	​
​	​	Six Months Ended June 30,
(In thousands)		2025			2024
Cash flows from operating activities	​	​	​	​	​	​
Net income	​	$	243	​	$	2,089
Adjustments to reconcile net income to net cash provided by operating activities:	​	​	​	​	​	​
Depreciation and amortization	​	​	3,385	​	​	3,345
Deferred income taxes	​	​	(22)	​	​	(30)
Stock-based compensation expense	​	​	4,005	​	​	3,899
Loss on disposal of property and equipment and intangibles	​	​	68	​	​	54
Changes in assets and liabilities, net of acquisition:	​	​	​	​	​	​
Accounts receivable, net	​	​	11,851	​	​	1,238
Net investment in leases	​	​	83	​	​	644
Inventories	​	​	1,555	​	​	3,681
Income taxes	​	​	(611)	​	​	(922)
Prepaid expenses and other assets	​	​	(4,735)	​	​	(364)
Right of use operating lease assets	​	​	(289)	​	​	(2)
Accounts receivable, non-current	​	​	—	​	​	6,425
Accounts payable	​	​	2,319	​	​	(1,592)
Accrued payroll and related taxes	​	​	(5,245)	​	​	(4,699)
Accrued expenses and other liabilities	​	​	2,567	​	​	300
Net cash provided by operating activities	​	​	15,174	​	​	14,066
Cash flows from investing activities	​	​	​	​	​	​
Purchases of property and equipment	​	​	(748)	​	​	(982)
Proceeds from sale of property and equipment	​	​	—	​	​	12
Intangible assets expenditures	​	​	(56)	​	​	(57)
Net cash used in investing activities	​	​	(804)	​	​	(1,027)
Cash flows from financing activities	​	​	​	​	​	​
Payments on note payable	​	​	(1,500)	​	​	(1,500)
Proceeds from exercise of common stock options	​	​	10	​	​	2
Proceeds from the issuance of common stock from the employee stock purchase plan	​	​	843	​	​	1,044
Payments for repurchases of common stock	​	​	(26,562)	​	​	—
Net cash used in financing activities	​	​	(27,209)	​	​	(454)
Net (decrease) increase in cash	​	​	(12,839)	​	​	12,585
Cash – beginning of period	​	​	94,367	​	​	61,033
Cash – end of period	​	$	81,528	​	$	73,618
​	​	​	​	​	​	​
Supplemental cash flow disclosure	​	​	​	​	​	​
Cash paid for interest	​	$	828	​	$	1,099
Cash paid for taxes	​	$	892	​	$	2,177
Accrued excise tax on stock repurchases	​	$	210	​	$	—
Capital expenditures incurred but not yet paid	​	$	58	​	$	27

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

7

Table of Contents

​

Tactile Systems Technology, Inc.

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Nature of Business and Operations

Tactile Systems Technology, Inc. (“we,” “us,” “our,” and the “Company”) manufactures and distributes medical devices for the treatment of patients with underserved chronic diseases at home. Our lymphedema product portfolio includes Flexitouch® Plus, Entre™ Plus and Nimbl compression device systems.  These products help control the symptoms of lymphedema, a chronic and progressive condition.  Our lymphedema products are sold in the United States through a direct sales force that calls on vascular disease clinicians, vein and wound centers and oncology providers and clinicians, including lymphedema therapists.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance business (“AffloVest Acquisition”). AffloVest is a portable, wearable vest that treats patients with chronic respiratory conditions. We sell this device through home medical equipment and durable medical equipment (“DME”) providers throughout the United States. 

We were originally incorporated in Minnesota under the name Tactile Systems Technology, Inc. on January 30, 1995. During 2006, we established a merger corporation and subsequently, on July 21, 2006, merged with and into this merger corporation, resulting in our reincorporation as a Delaware corporation. The resulting corporation assumed the name Tactile Systems Technology, Inc. In September 2013, we began doing business as “Tactile Medical”.

On August 2, 2016, we closed the initial public offering of our common stock, which resulted in the sale of 4,120,000 shares of our common stock at a public offering price of $10.00 per share. We received net proceeds from the initial public offering of approximately $35.4 million, after deducting underwriting discounts and approximately $2.9 million of transaction expenses.

On February 27, 2023, we closed on a public offering of 2,875,000 shares of our common stock at a public offering price of $13.00 per share. We received net proceeds from this offering of $34.6 million after deducting underwriting discounts, commissions, and offering expenses.

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

Note 2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included.

The results for the six months ended June 30, 2025, are not necessarily indicative of results to be expected for the year ending December 31, 2025, or for any other interim period or for any future year. The condensed consolidated interim financial statements should be read in conjunction with the audited financial

8

Table of Contents

statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 3. Summary of Significant Accounting Policies

Significant Accounting Policies  

There were no material changes in our significant accounting policies during the six months ended June 30, 2025. See Note 3 – “Summary of Significant Accounting Policies” to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024, for information regarding our significant accounting policies.

Business Segments  

The Company operates as one operating segment. The Company's Chief Operating Decision Maker ("CODM") is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net income (loss) as the measure of segment profit or loss. Significant segment expenses are those expenses reported in the Consolidated Statement of Operations. The CODM assesses performance for the segment, allocates resources and monitors budget versus actual results using consolidated revenue and net income (loss) which is reflected in the Consolidated Statement of Operations.

Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” which requires entities to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis. The guidance is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the effect that this standard will have on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” which requires entities to enhance disclosures around income taxes. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the effect this standard will have on its consolidated financial statements and related disclosures.

​

9

Table of Contents

Note 4. Inventories

Inventories consisted of the following:

​

​	​	​	​	​	​	​
(In thousands)		At June 30, 2025			At December 31, 2024
Finished goods	​	$	6,930	​	$	6,149
Component parts and work-in-process	​		10,181	​		12,517
Total inventories	​	$	17,111	​	$	18,666

​

​

​

​

Note 5. Goodwill and Intangible Assets

Goodwill

In the third quarter of fiscal 2021, we completed the AffloVest Acquisition. The purchase price of the AffloVest product line exceeded the net acquisition-date estimated fair value amounts of the identifiable assets acquired and the liabilities assumed by $31.1 million, which was assigned to goodwill. 

Intangible Assets

​

Our patents and other intangible assets are summarized as follows:

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Weighted-	​	At June 30, 2025
​	​	Average	​	Gross		​	​		​	​
​	​	Amortization	​	Carrying		​	Accumulated		​	Net
(In thousands)		Period	​	Amount		​	Amortization		​	Amount
Definite-lived intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Patents	​	11 years	​	$	1,065	​	$	315	​	$	750
Defensive intangible assets	​	—	​	​	1,125	​	​	1,125	​	​	—
Customer accounts	​	—	​	​	125	​	​	125	​	​	—
Customer relationships	​	9 years	​	​	31,000	​	​	9,088	​	​	21,912
Developed technology	​	7 years	​	​	13,000	​	​	4,504	​	​	8,496
Subtotal	​	​	​	​	46,315	​	​	15,157	​	​	31,158
Unamortized intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Tradenames	​	​	​	​	9,500	​	​	—	​	​	9,500
Patents pending	​	​	​	​	246	​	​	—	​	​	246
Total intangible assets	​	​	​	$	56,061	​	$	15,157	​	$	40,904

​

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Weighted-	​	At December 31, 2024
​	​	Average	​	Gross		​	​		​	​
​	​	Amortization	​	Carrying		​	Accumulated		​	Net
(In thousands)		Period	​	Amount		​	Amortization		​	Amount
Definite-lived intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Patents	​	12 years	​	$	1,148	​	$	333	​	$	815
Defensive intangible assets	​	< 1 year	​	​	1,125	​	​	1,065	​	​	60
Customer accounts	​	—	​	​	125	​	​	125	​		—
Customer relationships	​	10 years	​	​	31,000	​	​	7,896	​	​	23,104
Developed technology	​	8 years	​	​	13,000	​	​	3,913	​	​	9,087
Subtotal	​	​	​	​	46,398	​	​	13,332	​	​	33,066
Unamortized intangible assets:	​	​	​	​	​	​	​	​	​	​	​
Tradenames	​	​	​	​	9,500	​	​	—	​	​	9,500
Patents pending	​	​	​	​	223	​	​	—	​	​	223
Total intangible assets	​	​	​	$	56,121	​	$	13,332	​	$	42,789

​

​

10

Table of Contents

Amortization expense was $0.9 million and $1.0 million for the three months ended June 30, 2025 and 2024, respectively, and $1.9 million for each of the six months ended June 30, 2025 and 2024, of which $0.3 million in each of the three months ended June 30, 2025 and 2024, and $0.6 million in each of the six months ended June 30, 2025 and 2024, was recorded in cost of sales revenue. Future amortization expenses are expected as follows:

​

​	​	​	​
(In thousands)	​	​	​
2025 (July 1 - December 31)		$	1,825
2026	​	​	3,646
2027	​		3,638
2028	​		3,637
2029	​		3,632
Thereafter	​		14,780
Total	​	$	31,158

​

In the third quarter of 2024, we performed our annual goodwill impairment test utilizing both the qualitative and quantitative approach described in FASB ASU No. 2021-03, “Intangibles—Goodwill and Other (Topic 350) – Accounting Alternative for Evaluating Triggering Events.” Based on the testing using the qualitative approach, it was determined that it was not more likely than not that the fair value of the reporting unit was less than the carrying value. As a result, it was not deemed necessary to proceed to the quantitative test and no impairment was recognized.

Note 6. Accrued Expenses

Accrued expenses consisted of the following:

​

​	​	​	​	​	​	​
(In thousands)		At June 30, 2025			At December 31, 2024
In-transit inventory	​	$	2,256	​	$	1,013
Sales and use tax	​	​	1,765	​	​	802
Warranty	​	​	1,395	​	​	1,784
Travel	​	​	1,106	​	​	1,120
Legal and consulting	​	​	872	​	​	1,318
Clinical studies	​	​	34	​	​	304
Other	​		752	​		1,439
Total	​	$	8,180	​	$	7,780

​

​

​

Note 7. Warranty Reserves

The activity in the warranty reserve during and as of the end of the reporting periods presented was as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(In thousands)

2025

2024

2025

2024

Beginning balance

​

$

2,774

​

$

3,836

​

$

2,993

​

$

4,038

Warranty provision

​

441

​

902

​

921

​

1,742

Processed warranty claims

​

(579)

​

(1,046)

​

(1,278)

​

(2,088)

Ending balance

​

$

2,636

​

$

3,692

​

$

2,636

​

$

3,692

​

​

​

​

​

​

​

​

​

​

​

​

​

Accrued warranty reserve, current

​

$

1,395

​

$

2,131

​

$

1,395

​

$

2,131

Accrued warranty reserve, non-current

​

​

1,241

​

​

1,561

​

​

1,241

​

​

1,561

Total accrued warranty reserve

​

$

2,636

​

$

3,692

​

$

2,636

​

$

3,692

​

​

11

Table of Contents

Note 8. Credit Agreement

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

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

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

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

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

Following the Third Amendment, the term loan and amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) Adjusted Term SOFR for a one-month tenor plus 1% (the “Base Rate”) plus an applicable margin or (b) Adjusted Term SOFR for an interest period of one, three or six months, at our option, plus the applicable margin. The applicable margin is 0.75% to 2.25% on loans bearing interest at the Base Rate and 1.75% to 3.25% on loans bearing interest at Adjusted Term SOFR, in each case depending on our consolidated total leverage ratio; except that, pursuant to the Second Amendment and the Third Amendment, during the period commencing on February 22, 2022 and ending on the last day of the fiscal quarter ending June 30, 2023, the applicable margin for LIBOR rate loans and Adjusted Term SOFR loans, as applicable, was 3.50%. As of June 30, 2025, all outstanding borrowings were subject to interest at a rate calculated at Adjusted Term SOFR plus an applicable margin, for an interest rate of 6.13%.

On August 1, 2023, we entered into a Fourth Amendment Agreement (the “Fourth Amendment”), which further amended the Credit Agreement. The Fourth Amendment, among other things, decreased the commitment fees payable under the revolving credit facility under the Credit Agreement such that the undrawn portions of the revolving credit facility are subject to an unused line fee at a rate per annum from 0.125% to 0.200%, depending on our consolidated leverage ratio, and eliminated the language providing that the applicable margin for Adjusted Term SOFR loans was 3.50%, such that the interest rates are in effect as set forth in the above paragraph. The Fourth Amendment also eliminated the liquidity financial covenant and modified the remaining financial covenants to reflect the termination of the temporary covenant relief period that was in place until June 30, 2023 pursuant to the Second Amendment, such that the financial covenants

12

Table of Contents

now include a maximum consolidated total leverage ratio covenant, a minimum consolidated EBITDA covenant and a minimum fixed charge coverage ratio covenant. In addition, the Fourth Amendment provided for an additional term loan in the amount of $8.25 million, which we used for a paydown of the revolving credit facility. The Fourth Amendment also extended the maturity date of the term loans and revolving credit facility under the Credit Agreement from September 8, 2024, to August 1, 2026.

On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which further amended the Credit Agreement. The Fifth Amendment permits the Company to make payments to repurchase shares of its common stock, as long as the Company is not in default before and after giving effect to such repurchases, and as long as such repurchases do not exceed $30.0 million.

​

As of June 30, 2025, we had outstanding borrowings of $24.8 million under the Credit Agreement, comprised entirely of the term loan. The principal of the term loan is required to be repaid in quarterly installments of $750,000. Maturities of the term loan for the next two years as of June 30, 2025, are as follows:

​

​	​	​	​
(In thousands)		Amount
2025 (July 1 - December 31)	​	$	1,500
2026	​	​	23,250
Total	​	​	24,750
Less: Deferred financing fees	​	​	(51)
Net note payable	​	​	24,699
Less: current portion of note payable	​	​	(2,956)
Non-current portion of note payable	​	$	21,743

​

Our obligations under the Credit Agreement are secured by a security interest in substantially all of our and our subsidiary’s assets and are also guaranteed by our subsidiary. As of June 30, 2025, the Credit Agreement contained a number of restrictions and covenants, including that we maintain compliance with a maximum consolidated total leverage ratio, a minimum fixed charge coverage ratio and a minimum consolidated EBITDA covenant. As of June 30, 2025, we were in compliance with all covenants under the Credit Agreement.

On July 31, 2025, we entered into an Amended and Restated Credit Agreement (the “2025 Restated Credit Agreement”), which amended and restated the Credit Agreement in its entirety. The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable under the revolving credit facility under the 2025 Restated Credit Agreement from 1.75% to 2.75% and the unused line fee at a rate per annum from 0.125% to 0.250%, in each case depending on our consolidated leverage ratio. The 2025 Restated Credit Agreement also eliminated the minimum consolidated EBITDA financial covenant, such that the financial covenants now consist of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant.  In addition, the 2025 Restated Credit Amendment expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.

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

Note 9. Commitments and Contingencies

Lease Obligations

We lease property and equipment under operating leases, typically with terms greater than 12 months, and determine if an arrangement contains a lease at inception. In general, an arrangement contains a lease if

13

Table of Contents

there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability at the present value of lease payments over the lease term on the commencement date. The related right of use (“ROU”) operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease renewal and/or termination options are at our discretion and are included in the determination of the lease term and lease payment obligations when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement.

We classify our leases as buildings, vehicles or computer and office equipment and do not separate lease and non-lease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Condensed Consolidated Balance Sheets.

None of our lease agreements contain material restrictive covenants or residual value guarantees.

Buildings

We lease certain office and warehouse space at various locations in the United States where we provide services. These leases are typically greater than one year with fixed, escalating rents over the noncancelable terms and, therefore, ROU operating lease assets and operating lease liabilities are recorded on the Condensed Consolidated Balance Sheets, with rent expense recognized on a straight-line basis over the term of the lease. The remaining lease terms vary from approximately one to six years as of June 30, 2025.

We entered into a lease (“initial lease”) in October 2018, for approximately 80,000 square feet of office space for our new corporate headquarters in Minneapolis, Minnesota. In December 2018, we amended the initial lease to add approximately 29,000 square feet of additional office space, which is accounted for as a separate lease (“second lease”) in accordance with ASU No. 2016-02, “Leases” (Topic 842) (“ASC 842”). In December 2019, we further amended the lease which extended the expiration date of the initial lease, extended the expiration date of and added approximately 4,000 square feet to the second lease, as well as added approximately 37,000 square feet of additional office space, accounted for as a separate lease (“third lease”) in accordance with ASC 842. The portion of the space covered under the initial lease was placed in service in September 2019. The portion of the space covered under the second lease commenced in September 2020. Finally, the portion of the space covered under the third lease commenced in September 2021. The three portions were recognized as an operating lease and included in the ROU operating lease assets and operating lease liabilities on the Condensed Consolidated Balance Sheets.

Computer and Office Equipment

We also have operating lease agreements for certain computer and office equipment. The remaining lease terms as of June 30, 2025, ranged from less than one year to approximately three years with fixed monthly payments that are included in the ROU operating lease assets and operating lease liabilities. The leases provide an option to purchase the related equipment at fair market value at the end of the lease. The leases will automatically renew as a month-to-month rental at the end of the lease if the equipment is not purchased or returned.

​

14

Table of Contents

Lease Position, Undiscounted Cash Flow and Supplemental Information

The table below presents information related to our ROU operating lease assets and operating lease liabilities that we have recorded:

​

​	​	​	​	​	​	​
(In thousands)		At June 30, 2025			At December 31, 2024
Right of use operating lease assets	​	$	15,462	​	$	16,633
​	​	​	​	​	​	​
Operating lease liabilities:	​	​	​	​	​	​
Current	​	$	3,095	​	$	2,980
Non-current	​		14,380	​		15,955
Total	​	$	17,475	​	$	18,935
​	​	​	​	​	​	​
Operating leases:	​	​	​	​	​	​
Weighted average remaining lease term	​		5.3 years	​	​	5.8 years
Weighted average discount rate	​	​	4.3%	​	​	4.4%
​	​	​	​	​	​	​
​	​	Six Months Ended June 30,
​	​	2025		​	2024
Supplemental cash flow information for our operating leases:	​	​	​	​	​	​
Cash paid for operating lease liabilities	​	$	1,851	​	$	1,743
Non-cash right of use assets obtained in exchange for new operating lease obligations	​	$	—	​	$	3

​

The table below reconciles the undiscounted cash flows for the periods presented to the operating lease liabilities recorded on the Condensed Consolidated Balance Sheet for the periods presented:

​

​	​	​	​
(In thousands)	​	​	​
2025 (July 1 - December 31)	​	$	1,884
2026	​	​	3,808
2027	​		3,311
2028	​		3,275
2029	​		3,309
Thereafter	​		3,692
Total minimum lease payments	​	​	19,279
Less: Amount of lease payments representing interest	​	​	(1,804)
Present value of future minimum lease payments	​	​	17,475
Less: Current obligations under operating lease liabilities	​	​	(3,095)
Non-current obligations under operating lease liabilities	​	$	14,380

​

Operating lease costs were $0.9 million for each of the three months ended June 30, 2025 and 2024. Operating lease costs were $1.8 million for each of the six months ended June 30, 2025 and 2024.  

Major Vendors

We had purchases from one vendor that accounted for 12% and 17% of our total purchases for the three months ended June 30, 2025 and 2024, respectively. We had purchases from one vendor that accounted for 12% and 20% of our total purchases for the six months ended June 30, 2025 and 2024, respectively.

15

Table of Contents

​

​

Purchase Commitments

We issued purchase orders prior to June 30, 2025, totaling $30.4 million for goods that we expect to receive within the next year.

Retirement Plan

We maintain a 401(k) retirement plan for our employees in which eligible employees can contribute a percentage of their pre-tax compensation. We recorded an expense related to our discretionary contributions to the 401(k) plan of $0.7 and $0.4 million for the three months ended June 30, 2025 and 2024, respectively, and $1.4 million and $1.1 million for the six months ended June 30, 2025 and 2024, respectively.

Legal Proceedings

From time to time, we are subject to various claims and legal proceedings arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

On October 25, 2024, the United States District Court, District of Massachusetts (Boston) unsealed two qui tam complaints against us, and we were served with these complaints on January 14, 2025 and January 21, 2025. The United States has indicated that it is not intervening in either matter at this time. The first complaint is captioned United States ex. rel. Benjaman Scarborough vs. Tactile Systems Technology, Inc., Case No. 1:21-cv-10813-IT, and was filed under seal on May 17, 2021, on behalf of the United States by a former employee (the “Scarborough Complaint”). The Scarborough Complaint alleges that we submitted false claims and made false statements in connection with the Medicare programs, in violation of the Federal False Claims Act. The second complaint is captioned United States ex. rel. Jackie Gorham, an individual, and Dustin Gast, an individual, vs. Tactile Systems Technology, Inc. Case No. 1:21-cv-11809-IT, and was filed under seal on September 1, 2021, on behalf of the United States by two former employees (the “Gorham Complaint”). The Gorham Complaint alleges that we submitted false claims and made false statements in connection with the Medicare, Medicare Advantage plans, Medicaid and other government payers, in violation of the Federal False Claims Act and submitted false claims resulting from kickbacks in violation of the Federal False Claims Act and the Federal Anti-Kickback Statute. Both complaints seek damages, statutory penalties, attorneys’ fees, and costs. On February 24, 2025, the parties (the relators under both complaints and the Company) filed a joint motion requesting that both actions be stayed until November 25, 2025, to provide time for the government to review and assess sample claims for the purpose of assessing the allegations. On February 25, 2025, the Court granted the motion and issued orders that stay both actions until November 25, 2025.  We will defend the actions as they proceed.

16

Table of Contents

Note 10. Stockholders' Equity

Share Repurchase Program

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

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

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

​

Six Months Ended

​

​

​

June 30,

​

​

June 30,

(In thousands, except share and per share data)

​

​

2025

​

​

2024

​

​

2025

​

​

2024

Number of shares repurchased

​

​

1,507,496

​

​

—

​

​

2,143,099

​

​

—

Total share repurchased cost

​

$

16,704

​

$

—

​

$

26,772

​

$

—

Average total cost per repurchased share

​

$

11.08

​

$

—

​

$

12.49

​

$

—

​

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

Stock-Based Compensation

On May 7, 2025, our stockholders approved the Tactile Systems Technology, Inc. 2025 Equity Incentive Plan (the “2025 Plan”), which authorizes us to grant stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards to employees, non-employee directors and certain consultants and advisors. The 2025 Plan provides for the issuance of up to 1,850,000 shares of our common stock, plus the number of shares subject to any award under the 2016 Equity Incentive Plan (the “2016 Plan”) that was outstanding on May 7, 2025 and that later expires, is cancelled or forfeited, is settled for cash or otherwise does not result in the issuance of all of the shares subject to such award. As of June 30, 2025, 1,595,027 shares were available for future grant pursuant to the 2025 Plan.

Following our stockholders’ approval of the 2025 Plan on May 7, 2025, no additional grants will be made under 2016 Plan.  However, outstanding awards under the 2016 Plan will continue to be governed by their respective original terms.

17

Table of Contents

We recorded stock-based compensation expense of $1.9 million for each of the three months ended June 30, 2025 and 2024, and $4.0 million and $3.9 million for the six months ended June 30, 2025 and 2024, respectively. This expense was allocated as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(In thousands)

2025

2024

2025

2024

Cost of revenue

​

$

101

​

$

103

​

$

200

​

$

186

Sales and marketing expenses

​

​

465

​

​

606

​

​

968

​

​

1,344

Research and development expenses

​

​

52

​

​

48

​

​

85

​

​

81

Reimbursement, general and administrative expenses

​

​

1,321

​

​

1,103

​

​

2,752

​

​

2,288

Total stock-based compensation expense

​

$

1,939

​

$

1,860

​

$

4,005

​

$

3,899

​

Stock Options

Stock options issued to participants other than non-employees typically vest over three or four years and typically have a contractual term of seven or ten years. Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for stock options was $0.0 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively, and $0.0 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, there was approximately $12,050 of total unrecognized pre-tax stock option expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted-average period of 0.4 years.

Our stock option activity for the six months ended June 30, 2025, was as follows:

​

​	​	​	​	​	​	​	​	​	​	​
​		​	​	Weighted-		​	Weighted-	​	​	​
​	​	​	​	Average		​	Average	​	Aggregate
​	​	Options	​	Exercise Price		​	Remaining	​	Intrinsic
(In thousands except options and per share data)	​	Outstanding	​	Per Share		​	Contractual Life	​	Value (1)
Balance at December 31, 2024	​	394,871	​	$	40.70	​	2.8 years	​	$	309
Exercised	​	(2,364)	​	$	4.23	​	​	​	$	22
Cancelled/Expired	​	(114,429)	​	$	42.14	​	​	​	​	​
Balance at June 30, 2025	​	278,078	​	$	40.42	​	2.5 years	​	$	49
​	​	​	​	​	​	​	​	​	​	​
Options exercisable at June 30, 2025	​	272,690	​	$	41.45	​	2.45 years	​	$	33

​

(1) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period.

Options exercisable of 392,239 as of June 30, 2024, had a weighted-average exercise price of $42.19 per share.

Time-Based Restricted Stock Units

We have granted time-based restricted stock units to certain participants under the 2016 Plan that are stock-settled with common shares. Time-based restricted stock units granted under the 2016 Plan vest over one to three years. Stock-based compensation expense included in the Condensed Consolidated Statements of Operations for time-based restricted stock units was $1.4 million and $1.5 million for the three months ended June 30, 2025 and 2024, respectively, and $2.9 million for each of the six months ended June 30, 2025 and 2024. As of June 30, 2025, there was approximately $9.1 million of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 2.0 years.

18

Table of Contents

Our time-based restricted stock unit activity for the six months ended June 30, 2025, was as follows:

​

​	​	​	​	​	​	​	​	​
​	​	​	​	Weighted-		​	​	​
​		​		Average Grant			Aggregate
​	​	Units	​	Date Fair Value		​	Intrinsic
(In thousands except unit and per unit data)	​	Outstanding	​	Per Unit		​	Value (1)
Balance at December 31, 2024	​	728,426	​	$	14.33	​	$	12,478
Granted	​	467,253	​	$	13.85	​	​	​
Vested	​	(345,920)	​	$	15.05	​	​	​
Cancelled	​	(39,489)	​	$	14.66	​	​	​
Balance at June 30, 2025	​	810,270	​	$	13.73	​	$	8,216

​

(1) The aggregate intrinsic value of restricted stock units outstanding was based on our closing stock price on the last trading day of the period.

Performance-Based Restricted Stock Units

We have granted performance-based restricted stock units (“PSUs”) to certain participants under the 2016 Plan. These PSUs have both performance-based and time-based vesting features. The PSUs granted in 2024 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA margin are achieved in each of 2024 and 2025 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2026 (ranging from 25% to 175% of target). The PSUs granted in 2025 have three separate performance periods, and one-third of each grant will be earned if and to the extent performance goals based on revenue and adjusted EBITDA margin are achieved in 2025 (ranging from 25% to 175% of target), one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2026 (ranging from 25% to 175% of target), and one-third will be earned if and to the extent performance goals based on revenue change and adjusted EBITDA change are achieved in 2027 (ranging from 25% to 175% of target). All earned and vested PSUs will be settled in shares of common stock.

Stock-based compensation expense recognized for PSUs was $0.3 and $0.2 million for the three months ended June 30, 2025 and 2024, respectively, and $0.7 and $0.6 million for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, there was approximately $2.5 million of total unrecognized pre-tax compensation expense related to outstanding PSUs that is expected to be recognized over a weighted average period of 2.4 years.

Our PSU activity for the six months ended June 30, 2025, was as follows:

​

​	​	​	​	​	​	​	​	​
​	​	​	​	Weighted-		​	​	​
​		​		Average Grant			Aggregate
​	​	PSUs	​	Date Fair Value		​	Intrinsic
(In thousands except unit and per unit data)	​	Outstanding	​	Per Unit		​	Value (1)
Balance at December 31, 2024	​	272,919	​	$	15.19	​	$	4,675
Granted	​	168,722	​	$	15.38	​	​	​
Vested	​	(120,436)	​	$	16.67	​	​	​
Cancelled	​	(9,033)	​	$	13.77	​	​	​
Balance at June 30, 2025	​	312,172	​	$	14.75	​	$	3,165

​

(1) The aggregate intrinsic value of PSUs outstanding was based on our closing stock price on the last trading day of the period.

Employee Stock Purchase Plan

Our employee stock purchase plan (“ESPP”), which was approved by our Board of Directors on April 27, 2016, and by our stockholders on June 20, 2016, allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The ESPP is available to all of our employees and employees of participating subsidiaries. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85% of the lower of the closing market price per share of our common stock

19

Table of Contents

on the first or last trading day of each stock purchase period. The ESPP provides for six-month purchase periods, beginning on May 16 and November 16 of each calendar year.

A total of 1,600,000 shares of common stock was initially reserved for issuance under the ESPP. This share reserve will automatically be supplemented each January 1, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the least of (a) 1% of the shares of our common stock outstanding on the immediately preceding December 31, (b) 500,000 shares or (c) such lesser amount as our Board of Directors may determine. Pursuant to the automatic increase feature of the ESPP, 240,780 shares were added as available for issuance thereunder on January 1, 2025 and 236,003 shares were added as available for issuance thereunder on January 1, 2024. As of June 30, 2025, 1,582,926 shares were available for future issuance under the ESPP. We recognized stock-based compensation expense associated with the ESPP of $0.2 million and $0.1 million for the three months ended June 30, 2025 and 2024, respectively. We recognized stock-based compensation expense associated with the ESPP of $0.4 million and $0.2 million for the six months ended June 30, 2025 and 2024, respectively.

​

Note 11. Revenue

We derive our revenue from the sale and rental of our products to our customers in the United States. The following table presents our revenue, inclusive of sales and rental revenue, disaggregated by product line:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(In thousands)

2025

​

2024

​

2025

​

2024

Revenue

​

​

​

​

​

​

​

​

​

​

​

​

Lymphedema products

​

$

65,969

​

$

64,683

​

$

116,524

​

$

116,996

Airway clearance products

​

​

12,936

​

​

8,535

​

​

23,649

​

​

17,310

Total

​

$

78,905

​

$

73,218

​

$

140,173

​

$

134,306

​

​

​

​

​

​

​

​

​

​

​

​

​

Percentage of total revenue

​

​

​

​

​

​

​

​

​

​

​

​

Lymphedema products

​

84%

​

88%

​

83%

​

87%

Airway clearance products

​

​

16%

​

​

12%

​

​

17%

​

​

13%

Total

​

100%

​

100%

​

100%

​

100%

​

Our revenue by channel, inclusive of sales and rental revenue, for the three and six months ended June 30, 2025 and 2024, are summarized in the following table:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(In thousands)

2025

​

2024

​

2025

​

2024

Private insurers and other payers

​

$

39,041

​

$

44,066

​

$

67,986

​

$

75,343

Veterans Administration

​

​

7,506

​

​

8,071

​

​

14,043

​

​

14,897

Medicare

​

​

19,422

​

​

12,546

​

​

34,495

​

​

26,756

Durable medical equipment distributors

​

​

12,936

​

​

8,535

​

​

23,649

​

​

17,310

Total

​

$

78,905

​

$

73,218

​

$

140,173

​

$

134,306

​

Our rental revenue is derived from rent-to-purchase arrangements that typically range from three to ten months. As title transfers to the patient, with whom we have the contract, upon the termination of the lease term and because collectability is probable, under ASC 842, these are recognized as sales-type leases. Each rental agreement contains two components, the controller and related garments, both of which are interdependent and recognized as one lease component.

The revenue and associated cost of revenue of sales-type leases are recognized on the lease commencement date and a net investment in leases is recorded on the Condensed Consolidated Balance Sheets. We bill the patients’ insurance payers monthly over the duration of the rental term. We record the net investment in leases and recognize revenue upon commencement of the lease in the amount of the expected

20

Table of Contents

consideration to be received through the monthly payments. Similar to our sales revenue, the transaction price is impacted by multiple factors, including the terms and conditions contracted by third-party payers. As the rental contract resides with the patients, we have elected the portfolio approach, at the payer level, to determine the expected consideration, which considers the impact of early terminations. While the contract is with the patient, in certain circumstances, the third-party payer elects an initial rental period with an option to extend. We assess the likelihood of extending the lease at the onset of the lease to determine if the option is reasonably certain to be exercised. As the lease is short-term in nature, we anticipate collection of substantially all of the net investment within the first year of the lease agreement. Completion of these payments represents the fair market value of the equipment, and as such, interest income is not applicable.

Rental revenue for each of the three and six months ended June 30, 2025 and 2024, was primarily from private insurers. Sales-type lease revenue and the associated cost of revenue for the three and six months ended June 30, 2025 and 2024, was:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended June 30,

​

Six Months Ended June 30,

(In thousands)

​

2025

​

2024

​

2025

​

2024

Sales-type lease revenue

​

$

8,374

​

$

8,951

​

$

17,173

​

$

16,732

Cost of sales-type lease revenue

​

2,629

​

2,852

​

4,660

​

5,567

Gross profit

​

$

5,745

​

$

6,099

​

$

12,513

​

$

11,165

​

​

Note 12. Income Taxes

We record our interim provision for income taxes by applying our estimated annual effective tax rate to our year-to-date pre-tax income (loss) and adjusting for discrete tax items recorded in the period. Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. These differences relate primarily to different methods used for income tax reporting purposes, including for depreciation and amortization, warranty and vacation accruals, and deductions related to allowances for doubtful accounts receivable and inventory reserves. Our provision for income taxes includes current federal and state income tax expense, as well as deferred federal and state income tax expense.

The effective tax rate for the three months ended June 30, 2025 was an expense of 28.9%, compared to an expense of 29.2% for the three months ended June 30, 2024. The primary driver of the change in the Company’s effective tax rate was attributable to the relative impact of stock-based compensation discrete tax items. We recorded an income tax expense of $1.3 million and an income tax expense of $1.8 million for the three months ended June 30, 2025 and 2024, respectively.

The effective tax rate for the six months ended June 30, 2025 was an expense of 46.4%, compared to an expense of 36.0% for the six months ended June 30, 2024. The primary driver of the change in the Company’s effective tax rate was attributable to the relative impact of stock-based compensation discrete tax items. Although discrete tax expense was lower in absolute terms in the current year period, it represented a larger proportion of pre-tax income due to lower overall earnings. As a result, the discrete items had a more significant effect on the effective tax rate, increasing it compared to the same prior year period.  We recorded an income tax expense of $0.2 million and an income tax expense of $1.2 million for the six months ended June 30, 2025 and 2024, respectively.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority is more-likely-than-not to sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

The Company currently is not under examination in any jurisdictions.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development

21

Table of Contents

expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. We are evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025. We currently expect the OBBBA to have a minimal impact on our effective tax rate and to favorably impact the timing of cash taxes. Based on our estimates and assumptions, we currently expect that, after taking into account the anticipated impacts of the OBBBA, our full-year 2025 cash tax benefit will be approximately $4.6 million.

Note 13. Net Income Per Share

The following table sets forth the computation of our basic and diluted net income per share:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

Six Months Ended

​

​

June 30,

​

June 30,

(In thousands, except share and per share data)

2025

2024

2025

2024

Net income

​

$

3,217

​

$

4,298

​

$

243

​

$

2,089

Weighted-average shares outstanding

​

​

23,092,469

​

​

23,873,379

​

​

23,399,848

​

​

23,769,604

Weighted-average shares used to compute diluted net income per share

​

​

23,237,671

​

​

24,099,047

​

​

23,679,220

​

​

24,073,986

Net income per share - Basic

​

$

0.14

​

$

0.18

​

$

0.01

​

$

0.09

Net income per share - Diluted

​

$

0.14

​

$

0.18

​

$

0.01

​

$

0.09

​

The following common stock equivalents were excluded from the computation of diluted net income per share for the periods presented because including them would have been anti-dilutive:

​

​	​	​	​	​	​	​	​	​
​	​	Three Months Ended			​	Six Months Ended
​	​	June 30,			​	June 30,
​		2025		2024		2025		2024
Restricted stock units	​	616,951	​	449,056	​	810,270	​	493,370
Common stock options	​	245,817	​	381,187	​	278,078	​	387,298
Performance stock units	​	143,695	​	—	​	248,399	​	166,457
Total	​	1,006,463	​	830,243	​	1,336,747	​	1,047,125

​

​

Note 14. Fair Value Measurements

We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1). The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2). The lowest priority is given to unobservable inputs (Level 3).

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

The carrying amounts of financial instruments such as accounts receivable, other assets, accounts payable, accrued expenses and other liabilities approximate their related fair values due to the short-term maturities of these items. Non-financial assets, such as equipment and leasehold improvements, and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and the accompanying notes thereto included elsewhere in this report.

22

Table of Contents

Overview

We are a medical technology company that develops and commercializes medical devices in the United States. Our mission is to reveal and treat people with underserved chronic conditions and help them care for themselves at home. We focus our efforts on advancing the standard of care in home-based solutions for patients with lymphedema and chronic respiratory conditions by improving clinical, patient and economic outcomes. In our lymphedema product line, our sales and marketing channel focus includes (1) oncology-related clinicians who treat cancer survivors diagnosed with secondary lymphedema related to their cancer treatments, (2) vascular disease clinicians who support patients with lymphedema, chronic venous insufficiency, and lipedema and (3) wound, vein and lymphatic massage clinics. In our airway clearance product line, we support patients suffering from chronic, severe respiratory conditions, particularly bronchiectasis, and we sell our products indirectly through home medical equipment and DME providers. We generally employ a direct-to-patient and -clinician business model within our lymphedema portfolio, through which we obtain patient referrals and prescriptions from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions directly to patients and train them on the proper use of our solutions. Across our two product lines, our home-based solutions deliver cost-effective, clinically proven and long-term treatment for indicated patients.

Our current lymphedema products are the Flexitouch Plus, Entre Plus and Nimbl pneumatic compression pump systems and our airway clearance product is a High-Frequency Chest Wall Oscillation (“HFCWO”) device called AffloVest. The Flexitouch system product line is considered an advanced pneumatic compression device. The first generation Flexitouch system received 510(k) clearance from the U.S. Food and Drug Administration (the “FDA”) in July 2002, introducing a medical device technology to address the many limitations of self-administered home-based manual lymphatic drainage therapy. A second generation Flexitouch system received 510(k) clearance from the FDA in October 2006. In September 2016, we received 510(k) clearance from the FDA for the Flexitouch system in treating lymphedema of the head and neck. A third generation, Flexitouch Plus, received 510(k) clearance from the FDA in June 2017. In December 2020, we received 510(k) clearance from the FDA for two new indications for our Flexitouch Plus system: phlebolymphedema and lipedema. The Entre system product line and Nimbl product line are considered basic, or simple, pneumatic compression devices. These systems are sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device e.g., a Flexitouch Plus system. We introduced the Entre system in the United States in February 2013, this device was manufactured by Thermotek, Inc. and received FDA clearance in 2010. In 2015, we received FDA clearance for our own first generation Entre system and the second generation, Entre Plus, was released in March 2023. Nimbl, our next-generation pneumatic compression platform, received 510(k) clearance in June 2024 and was commercially launched for upper extremity lymphedema in October 2024 and was commercially launched for lower extremity lymphedema in February 2025. Sales and rentals of our lymphedema products represented 83% and 87% of our revenue in the six months ended June 30, 2025 and 2024, respectively.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line. AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders. For the six months ended June 30, 2025 and 2024, sales of AffloVest represented 17% and 13% of our revenue, respectively.

To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of a lymphedema and respiratory sales force, marketing team including clinical education programs, patient education team, reimbursement capabilities and clinical expertise. We market our lymphedema products using a direct-to-patient and -clinician model. The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product. We employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest. As of June 30, 2025, we employed 161 account managers and 132 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products. This compares to 161 account managers and 103 specialists for our lymphedema products and a team of 19 specialists supporting our airway clearance products as of June 30, 2024.

23

Table of Contents

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

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

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

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

For the three months ended June 30, 2025, we generated revenue of $78.9 million and had net income of $3.2 million, compared to revenue of $73.2 million and net income of $4.3 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, we generated revenue of $140.2 million and had net income of $0.2 million, compared to revenue of $134.3 million and net income of $2.1 million for the six months ended June 30, 2024. Our primary sources of capital since our initial public offering in 2016 have been from operating income, bank financing and our public offering in February 2023.

We operate in one segment for financial reporting purposes.

​

​

24

Table of Contents

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2025 and 2024

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Three Months Ended

​

​

​

​

​

​

​

​

June 30,

​

Change

(In thousands)

​

2025

​

2024

​

$

​

%

Condensed Consolidated Statement

​

​

​

​

% of

​

​

​

​

% of

​

​

​

​

​

​

of Operations Data:

​

​

​

​

revenue

​

​

​

​

revenue

​

​

​

​

​

​

Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales revenue

​

$

70,531

​

89

%

​

$

64,267

​

88

%

​

$

6,264

​

10

%

Rental revenue

​

​

8,374

​

11

%

​

​

8,951

​

12

%

​

​

(577)

​

(6)

%

Total revenue

​

​

78,905

​

100

%

​

​

73,218

​

100

%

​

​

5,687

​

8

%

Cost of revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost of sales revenue

​

​

17,483

​

22

%

​

​

16,263

​

22

%

​

​

1,220

​

8

%

Cost of rental revenue

​

​

2,629

​

3

%

​

​

2,852

​

4

%

​

​

(223)

​

(8)

%

Total cost of revenue

​

​

20,112

​

25

%

​

​

19,115

​

26

%

​

​

997

​

5

%

Gross profit

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross profit - sales revenue

​

​

53,048

​

67

%

​

​

48,004

​

66

%

​

​

5,044

​

11

%

Gross profit - rental revenue

​

​

5,745

​

8

%

​

​

6,099

​

8

%

​

​

(354)

​

(6)

%

Gross profit

​

​

58,793

​

75

%

​

​

54,103

​

74

%

​

​

4,690

​

9

%

Operating expenses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales and marketing

​

​

30,039

​

38

%

​

​

28,608

​

39

%

​

​

1,431

​

5

%

Research and development

​

​

2,018

​

3

%

​

​

2,234

​

3

%

​

​

(216)

​

(10)

%

Reimbursement, general and administrative

​

​

22,034

​

28

%

​

​

16,779

​

23

%

​

​

5,255

​

31

%

Intangible asset amortization

​

​

619

​

1

%

​

​

633

​

1

%

​

​

(14)

​

(2)

%

Total operating expenses

​

​

54,710

​

70

%

​

​

48,254

​

66

%

​

​

6,456

​

13

%

Income from operations

​

​

4,083

​

5

%

​

​

5,849

​

8

%

​

​

(1,766)

​

(30)

%

Interest income

​

​

850

​

1

%

​

​

754

​

1

%

​

​

96

​

13

%

Interest expense

​

​

(410)

​

—

%

​

​

(529)

​

(1)

%

​

​

119

​

(22)

%

Other income

​

​

1

​

—

%

​

​

—

​

—

%

​

​

1

​

—

%

Income before income taxes

​

​

4,524

​

6

%

​

​

6,074

​

8

%

​

​

(1,550)

​

(26)

%

Income tax expense

​

​

1,307

​

2

%

​

​

1,776

​

2

%

​

​

(469)

​

(26)

%

Net income

​

$

3,217

​

4

%

​

$

4,298

​

6

%

​

$

(1,081)

​

(25)

%

​

​

25

Table of Contents

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Six Months Ended

​

​

​

​

​

​

​

​

June 30,

​

Change

(In thousands)

​

2025

​

2024

​

$

​

%

Condensed Consolidated Statement

​

​

​

​

% of

​

​

​

​

% of

​

​

​

​

​

​

of Operations Data:

​

​

​

​

revenue

​

​

​

​

revenue

​

​

​

​

​

​

Revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales revenue

​

$

123,000

​

88

%

​

$

117,574

​

88

%

​

$

5,426

​

5

%

Rental revenue

​

​

17,173

​

12

%

​

​

16,732

​

12

%

​

​

441

​

3

%

Total revenue

​

​

140,173

​

100

%

​

​

134,306

​

100

%

​

​

5,867

​

4

%

Cost of revenue

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Cost of sales revenue

​

​

31,374

​

22

%

​

​

31,207

​

23

%

​

​

167

​

1

%

Cost of rental revenue

​

​

4,660

​

3

%

​

​

5,567

​

4

%

​

​

(907)

​

(16)

%

Total cost of revenue

​

​

36,034

​

25

%

​

​

36,774

​

27

%

​

​

(740)

​

(2)

%

Gross profit

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Gross profit - sales revenue

​

​

91,626

​

66

%

​

​

86,367

​

65

%

​

​

5,259

​

6

%

Gross profit - rental revenue

​

​

12,513

​

9

%

​

​

11,165

​

8

%

​

​

1,348

​

12

%

Gross profit

​

​

104,139

​

75

%

​

​

97,532

​

73

%

​

​

6,607

​

7

%

Operating expenses

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Sales and marketing

​

​

57,555

​

41

%

​

​

55,965

​

42

%

​

​

1,590

​

3

%

Research and development

​

​

3,759

​

3

%

​

​

4,377

​

3

%

​

​

(618)

​

(14)

%

Reimbursement, general and administrative

​

​

42,032

​

30

%

​

​

33,040

​

25

%

​

​

8,992

​

27

%

Intangible asset amortization

​

​

1,252

​

1

%

​

​

1,265

​

1

%

​

​

(13)

​

(1)

%

Total operating expenses

​

​

104,598

​

75

%

​

​

94,647

​

71

%

​

​

9,951

​

11

%

Income (loss) from operations

​

​

(459)

​

—

%

​

​

2,885

​

2

%

​

​

(3,344)

​

(116)

%

Interest income

​

​

1,745

​

1

%

​

​

1,467

​

1

%

​

​

278

​

19

%

Interest expense

​

​

(834)

​

(1)

%

​

​

(1,096)

​

(1)

%

​

​

262

​

(24)

%

Other income

​

​

1

​

—

%

​

​

9

​

—

%

​

​

(8)

​

(89)

%

Income before income taxes

​

​

453

​

—

%

​

​

3,265

​

2

%

​

​

(2,812)

​

(86)

%

Income tax expense

​

​

210

​

—

%

​

​

1,176

​

1

%

​

​

(966)

​

(82)

%

Net income

​

$

243

​

—

%

​

$

2,089

​

3

%

​

$

(1,846)

​

(88)

%

​

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

​

​

​

Revenue

Revenue increased $5.7 million, or 8%, to $78.9 million in the three months ended June 30, 2025, compared to $73.2 million in the three months ended June 30, 2024. The increase in total revenue was attributable to an increase of $4.4 million, or 52%, in sales of the airway clearance product line and an increase of $1.3 million, or 2%, in sales and rentals of the lymphedema product line in the three months ended June 30, 2025, compared to the three months ended June 30, 2024.

Revenue increased $5.9 million, or 4%, to $140.2 million in the six months ended June 30, 2025, compared to $134.3 million in the six months ended June 30, 2024. The increase in total revenue was attributable to an increase of $6.3 million, or 37%, in sales of the airway clearance product line in the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The increase was partially offset by a decrease of $0.5 million, or 0.4%, in sales and rentals of the lymphedema product line in the six months ended June 30, 2025, compared to the six months ended June 30, 2024.

The increase in the airway clearance product line revenue in the three and six months ended June 30, 2025, was primarily attributable to increased placements of AffloVest among our DME partners. The increase in the lymphedema product line revenue in the three months ended June 30, 2025 was primarily attributable to an increase in headcount and productivity of our field sales team. The decrease in the lymphedema product line revenue in the six months ended June 30, 2025 was primarily attributable to disruption in the early phases of our implementation of a new customer relationship management system and delayed hiring due to a salesforce rebalance and optimization plan.

26

Table of Contents

The following table summarizes our revenue by product line for the three and six months ended June 30, 2025 and 2024, both in dollars and percentage of total revenue:

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​	​	​
​	​	June 30,					​	Change
(In thousands)		2025		​	2024		​	$		​	%
Revenue	​	​	​	​	​	​	​	​	​	​	​
Lymphedema products	​	$	65,969	​	$	64,683	​	$	1,286	​	2%
Airway clearance products	​	​	12,936	​	​	8,535	​	​	4,401	​	52%
Total	​	$	78,905	​	$	73,218	​	$	5,687	​	8%
​	​	​	​	​	​	​	​	​	​	​	​
Percentage of total revenue	​	​	​	​	​	​	​	​	​	​	​
Lymphedema products	​		84%	​		88%	​		​	​	​
Airway clearance products	​	​	16%	​	​	12%	​	​	​	​	​
Total	​		100%	​		100%	​		​	​	​

​

​	​	​	​	​	​	​	​	​	​	​	​
​	​	Six Months Ended					​	​	​	​	​
​	​	June 30,					​	Change
(In thousands)		2025		​	2024		​	$		​	%
Revenue	​	​	​	​	​	​	​	​	​	​	​
Lymphedema products	​	$	116,524	​	$	116,996	​	$	(472)	​	0%
Airway clearance products	​	​	23,649	​	​	17,310	​	​	6,339	​	37%
Total	​	$	140,173	​	$	134,306	​	$	5,867	​	4%
​	​	​	​	​	​	​	​	​	​	​	​
Percentage of total revenues	​	​	​	​	​	​	​	​	​	​	​
Lymphedema products	​		83%	​		87%	​		​	​	​
Airway clearance products	​	​	17%	​	​	13%	​	​	​	​	​
Total	​		100%	​		100%	​		​	​	​

​

​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

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

Cost of Revenue and Gross Margin

Cost of revenue increased $1.0 million, or 5%, to $20.1 million in the three months ended June 30, 2025, compared to $19.1 million in the three months ended June 30, 2024. The increase in cost of revenue was primarily attributable to the increase in revenue. Cost of revenue decreased $0.7 million, or 2%, to $36.0 million in the six months ended June 30, 2025, compared to $36.7 million in the six months ended June 30, 2024. The decrease in cost of revenue was primarily attributable to lower manufacturing and warranty costs.

Gross margin was 75% and 74% in the three months ended June 30, 2025 and 2024, respectively, and 75% and 73% in the six months ended June 30, 2025 and 2024, respectively.

Sales and Marketing Expenses

Sales and marketing expenses increased $1.4 million, or 5%, to $30.0 million in the three months ended June 30, 2025, compared to $28.6 million in the three months ended June 30, 2024. The increase was primarily attributable to a $1.4 million increase in personnel-related compensation expenses and a $0.4 million increase in expenses related to meetings and seminars, partially offset by a $0.1 million decrease in expenses for

27

Table of Contents

professional services, a $0.1 million decrease in travel and entertainment expenses, a $0.1 million decrease in general office and printing expenses and a $0.1 million decrease in expenses related to educational grants.

Sales and marketing expenses increased $1.6 million, or 3%, to $57.6 million in the six months ended June 30, 2025, compared to $56.0 million in the six months ended June 30, 2024. The increase was primarily attributable to a $1.0 million increase in personnel-related compensation expenses, a $0.6 million increase in travel and entertainment expenses and a $0.3 increase in expenses related to meetings and seminars, partially offset by a $0.2 million decrease in expenses for a new product launch and a $0.1 million decrease in expenses related to general office and printing.

Research and Development Expenses

Research and development (“R&D”) expenses decreased $0.2 million, or 10%, to $2.0 million in the three months ended June 30, 2025, compared to $2.2 million in the three months ended June 30, 2024. The decrease was primarily attributable to a $0.3 million decrease in clinical study related expenses and a $0.1 million decrease in personnel-related compensation expenses, partially offset by a $0.2 million increase in IT-related expenses.

R&D expenses decreased $0.6 million, or 14%, to $3.8 million in the six months ended June 30, 2025, compared to $4.4 million in the six months ended June 30, 2024. The decrease was primarily attributable to a $0.6 million decrease in clinical study related expenses and a $0.3 million decrease in personnel-related compensation expenses, partially offset by a $0.3 million increase in IT-related expenses.

Reimbursement, General and Administrative Expenses

Reimbursement, general and administrative expenses increased $5.3 million, or 31%, to $22.0 million in the three months ended June 30, 2025, compared to $16.8 million in the three months ended June 30, 2024. This increase was primarily attributable to a $2.9 million increase in personnel-related compensation expenses, a $1.1 million increase in IT-related expenses, and a $1.3 million increase in occupancy costs, depreciation expense and professional fees.

Reimbursement, general and administrative expenses increased $9.0 million, or 27%, to $42.0 million in the six months ended June 30, 2025, compared to $33.0 million in the six months ended June 30, 2024. This increase was primarily attributable to a $5.3 million increase in personnel-related compensation expenses, a $2.1 million increase in IT-related expenses, and a $1.6 million increase in occupancy costs, depreciation expense and professional fees.

Intangible Asset Amortization

Intangible asset amortization remained consistent at $0.6 million for each of the three months ended June 30, 2025 and 2024.

Intangible asset amortization remained consistent at $1.3 million for each of the six months ended June 30, 2025 and 2024.

Interest Income and Interest Expense

Interest income increased $0.1 million, or 13%, to $0.9 million in the three months ended June 30, 2025, compared to $0.8 million in the three months ended June 30, 2024, primarily due to a higher cash balance in an Institutional Insured Liquid Deposit demand account. Interest expense decreased $0.1 million, or 22%, to $0.4 million in the three months ended June 30, 2025, compared to $0.5 million in the three months ended June 30, 2024, primarily due to the decrease in the outstanding balance of our term loan.

Interest income increased $0.3 million, or 19%, to $1.7 million in the six months ended June 30, 2025, compared to $1.5 million in the six months ended June 30, 2024, primarily due to a higher cash balance in an Institutional Insured Liquid Deposit demand account. Interest expense decreased $0.3 million, or 24%, to $0.8

28

Table of Contents

million in the six months ended June 30, 2025, compared to $1.1 million in the six months ended June 30, 2024, primarily due to the decrease in the outstanding balance of our term loan.

Income Taxes

We recorded an income tax expense of $1.3 million and $1.8 million for the three months ended June 30, 2025 and 2024, respectively. The primary driver of the change in our effective tax rate was attributable to the Company recording less expense related to stock-based compensation discrete items when compared to the prior year period.

We recorded an income tax expense of $0.2 million and $1.2 million for the six months ended June 30, 2025 and 2024, respectively. The primary driver of the change in our effective tax rate was attributable to the Company recording less expense related to stock-based compensation discrete items when compared to the prior year period.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted. Key income tax-related provisions of the OBBBA include the repeal of mandatory capitalization of research and development expenditures under Internal Revenue Code (IRC) Section 174 (reinstating full expensing beginning in 2025), extension of bonus depreciation, and revisions to international tax regimes. We are evaluating the financial implications of the OBBBA and will begin reflecting its effects in the third quarter of 2025. We currently expect the OBBBA to have a minimal impact on our effective tax rate and to favorably impact the timing of cash taxes. Based on our estimates and assumptions, we currently expect that, after taking into account the anticipated impacts of the OBBBA, our full-year 2025 cash tax benefit will be approximately $4.6 million.

Liquidity and Capital Resources

Cash Flows

On June 30, 2025, our principal sources of liquidity were cash of $81.5 million and net accounts receivable of $33.1 million. This compares to cash of $73.6 million and net accounts receivable of $46.4 million at June 30, 2024.  

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

​	​	​	​	​	​	​
​	​	Six Months Ended
​	​	June 30,
(In thousands)		2025			2024
Net cash provided by (used in):	​	​	​	​	​	​
Operating activities		$	15,174	​	$	14,066
Investing activities	​	​	(804)	​	​	(1,027)
Financing activities	​	​	(27,209)	​	​	(454)
Net (decrease) increase in cash		$	(12,839)	​	$	12,585

​

​

Operating Activities

Net cash provided by operating activities during the six months ended June 30, 2025 was $15.2 million, resulting from a net increase in operating assets and liabilities of $7.5 million, non-cash net income adjustments of $7.4 million, and net income of $0.2 million. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in net accounts receivable of $11.9 million, a $2.6 million increase in accrued expenses and other liabilities, a $2.3 million increase in accounts payable, a decrease in inventories of $1.5 million, and a decrease in net investment in leases of $0.1 million, partially offset by a decrease in accrued payroll and related taxes of $5.2 million, an increase in prepaid expenses and other assets of $4.7 million, a decrease in income taxes payable of $0.6 million and an increase in right of use operating lease assets of $0.3 million. The positive non-cash net income adjustments consisted primarily of $4.0 million of stock-based compensation expense, $3.4 million of depreciation and amortization, and $0.1 million of loss on disposals.

29

Table of Contents

Net cash provided by operating activities during the six months ended June 30, 2024 was $14.1 million, resulting from non-cash net income adjustments of $7.3 million, a net increase in operating assets and liabilities of $4.7 million and net income of $2.1 million. The positive non-cash net income adjustments consisted primarily of $3.9 million of stock-based compensation expense and $3.3 million of depreciation and amortization expense. Cash provided relating to the change in operating assets and liabilities primarily consisted of a decrease in accounts receivable of $7.7 million, a decrease in inventories of $3.7 million and a $0.6 million decrease in net investments in leases, partially offset by a decrease in accrued payroll and related taxes of $4.7 million, a decrease in accounts payable of $1.6 million and a decrease in income taxes payable of $0.9 million.

Investing Activities

Net cash used in investing activities during the six months ended June 30, 2025, was $0.8 million, consisting of purchases of property and equipment and patent costs.

Net cash used in investing activities during the six months ended June 30, 2024, was $1.0 million, consisting of purchases of property and equipment primarily related to tenant improvements, and patent costs.

Financing Activities

Net cash used in financing activities during the six months ended June 30, 2025, was $27.2 million, primarily consisting of payments of $26.6 million for the repurchase of our common stock and a payment of $1.5 million made on our term loan, partially offset by $0.8 million in proceeds from the issuance of common stock under the ESPP.

Net cash used in financing activities during the six months ended June 30, 2024, was $0.5 million, primarily consisting of a $1.5 million payment made on our term loan, partially offset by $1.0 million in proceeds from the issuance of common stock under the ESPP.

Credit Agreement

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

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

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

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

30

Table of Contents

ending June 30, 2023. Pursuant to the Second Amendment, we made a mandatory principal prepayment of the term loan of $3.0 million on February 22, 2022.

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

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

On November 1, 2024, we entered into a Fifth Amendment Agreement (the “Fifth Amendment”), which further amended the Credit Agreement. The Fifth Amendment permits the Company to make payments to repurchase shares of its common stock, as long as the Company is not in default before and after giving effect to such repurchases, and as long as such repurchases do not exceed $30.0 million.

As of June 30, 2025, we had outstanding borrowings of $24.8 million under the Credit Agreement, comprised entirely of the term loan. The principal of the term loan is required to be repaid in quarterly installments of $750,000.

On July 31, 2025, we entered into an Amended and Restated Credit Agreement (the “2025 Restated Credit Agreement”), which amended and restated the Credit Agreement in its entirety. The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable under the revolving credit facility under the 2025 Restated Credit Agreement from 1.75% to 2.75% and the unused line fee at a rate per annum from 0.125% to 0.250%, in each case depending on our consolidated leverage ratio. The 2025 Restated Credit Agreement also eliminated the minimum consolidated EBITDA financial covenant, such that the financial covenants now consist of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant.  In addition, the 2025 Restated Credit Amendment expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.

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

For additional information regarding the Credit Agreement, including interest rates, fees and maturities, see Note 8 – “Credit Agreement” of the condensed consolidated financial statements contained in this report.

​

31

Table of Contents

Share Repurchase Program

​

On October 30, 2024, our Board of Directors authorized a program to repurchase up to $30.0 million of our common stock. Under the program, purchases could be made from time to time in the open market, in privately negotiated purchases, or both. The timing and number of shares to be purchased was based on the price of our common stock, general business and market conditions and other investment considerations and factors. The share repurchase program was scheduled to expire on October 31, 2026. The program did not obligate us to repurchase any specific number of shares and could have been suspended or discontinued at any time without prior notice.

During the six months ended June 30, 2025, we repurchased 2,143,099 shares for approximately $26.6 million. We used cash on hand to fund these repurchases. As of June 24, 2025, the Company had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program. In aggregate under the program, the Company repurchased a total of 2,338,617 shares of common stock at a total cost of $30.0 million.

Future Cash Requirements

For a discussion of our material estimated future cash requirements under our contractual obligations and commercial commitments, in total and disaggregated into current and long-term, see “Future Cash Requirements” included in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes since December 31, 2024.

Adequacy of Resources

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

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

● sales and marketing resources needed to further penetrate our market;

● expansion of our operations;

● IT investments to scale our business;

● response of competitors to our solutions and applications;

● costs associated with clinical research activities;

● increases in interest rates;

● labor shortages and wage inflation;

● component price inflation;

● costs to develop and implement new products and revisions to existing products; and

● use of capital for acquisitions or licenses, if any.

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

32

Table of Contents

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

Inflation, changing prices, and tariffs did not have a material effect on our business during the quarter ended June 30, 2025. However, recent changes and announcements in U.S. and global tariff frameworks have negatively impacted, and could continue to negatively impact, our supply chain and increase our cost of goods sold. The ultimate impact of tariffs, including any related responses, are uncertain and will depend on various factors, including which tariffs are ultimately implemented, the timing of implementation, any exemptions available, whether exemptions are granted and maintained, and the amount, scope and nature of the tariffs. We continue to analyze the potential impact of recently announced tariffs, trade actions and related effects on our business and, at this time, we estimate that the impacts on our cost of goods sold could be up to $1.5 million for the year ended December 31, 2025, of which approximately $0.7 million was incurred through June 30, 2025. While we continue to actively work to mitigate tariff impacts, there is no assurance that such actions will be effective.

Recent Accounting Pronouncements

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

Critical Accounting Estimates

Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations. For additional information, please see the discussion of our most critical accounting estimates under “Critical Accounting Estimates” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion on our market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” included in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes since December 31, 2024.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2025. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2025, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

33

Table of Contents

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that occurred during the quarter ended June 30, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Information pertaining to certain legal proceedings in which we are involved can be found in Note 9 – “Commitments and Contingencies” to our condensed consolidated financial statements included in Part I, Item 1 of this report and is incorporated herein by reference.

Item 1A. Risk Factors.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, which could materially affect our business, financial condition or future results. There have been no material changes in our risk factors from those disclosed in that report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Issuer Purchases of Equity Securities

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Total Number

​

Approximate

​

​

​

​

​

​

​

​

​

of Shares

​

Dollar Value of

​

​

​

​

​

​

​

​

​

Purchased as

​

Shares that

​

​

​

​

​

​

​

​

​

Part of Publicly

​

May Yet Be

​

​

Total Number

​

Average

​

Announced

​

Purchased

​

​

of Shares

​

Price Paid

​

Plans or

​

Under the Plans or

Period

​

Purchased

​

Per Share(1)

​

Programs

​

Programs(2)

April 1, 2025 - April 30, 2025

​

320,118

​

​

$

13.66

​

​

320,118

​

$

12,135,735

May 1, 2025 - May 31, 2025

​

399,082

​

​

​

10.42

​

​

399,082

​

​

7,988,256

June 1, 2025 - June 30, 2025

​

788,296

​

​

​

10.16

​

​

788,296

​

​

139

Total

​

1,507,496

​

​

​

​

​

​

1,507,496

​

​

​

​

(1) Amount includes commissions paid.

(2) On November 4, 2024, we announced that our board of directors authorized a program to repurchase shares of our common stock in an aggregate amount not to exceed $30.0 million. The share repurchase program became effective on October 30, 2024 and was scheduled to expire on October 31, 2026. As of June 24, 2025, the Company had utilized substantially all of the repurchase authorization under the program and therefore completed the share repurchase program.

Item 3. Defaults Upon Senior Securities.

Not applicable.

34

Table of Contents

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Amended and Restated Credit Agreement

Because we are filing this Quarterly Report on Form 10-Q within four business days after the triggering event, we are making the following disclosure under this Item 5 instead of filing a Current Report on Form 8-K under Item 1.01, Entry into a Material Definitive Agreement and Item 2.03, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant:

On July 31, 2025, we entered into an Amended and Restated Credit Agreement with the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent (the “2025 Restated Credit Agreement”) which amended and restated our prior credit agreement in its entirety. The 2025 Restated Credit Agreement, among other things, revised the applicable margin payable under the revolving credit facility under the 2025 Restated Credit Agreement from 1.75% to 2.75% and the unused line fee at a rate per annum from 0.125% to 0.250%, in each case depending on our consolidated leverage ratio. The 2025 Restated Credit Agreement also eliminated the minimum consolidated EBITDA financial covenant, such that the financial covenants now consist of a maximum consolidated total leverage ratio covenant and a minimum fixed charge coverage ratio covenant.  In addition, the 2025 Restated Credit Amendment expanded the revolving credit facility from $25.0 million to $40.0 million and extended the maturity date of the revolving credit facility from August 1, 2026, to July 31, 2028.

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

The foregoing description of the 2025 Restated Credit Agreement is a summary, does not purport to be complete, and is qualified in its entirety by reference to the 2025 Restated Credit Agreement, a copy of which is attached to this Quarterly Report on Form 10-Q as Exhibit 10.5 and is incorporated herein by reference.

Executive Compensation Matter

Because we are filing this Quarterly Report on Form 10-Q within four business days after the triggering event, we are making the following disclosure under this Item 5 instead of filing a Current Report on Form 8-K under Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers:

On July 31, 2025, the Compensation and Organization Committee of the Board of Directors approved a monthly housing stipend for Ms. Dodd, our Chief Executive Officer, for her use for housing near our headquarters, beginning in August 2025. The monthly amount is $3,400 and no tax gross-ups will be paid by the Company on the stipend.

Trading Arrangements

During the quarter ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

35

Table of Contents

​

Item 6. Exhibits.

The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index below.

EXHIBIT INDEX

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Incorporated by Reference					​	​
Exhibit	​	​	​	​	​	​		Exhibit		Filed
Number	​	Description of Exhibit	​	Form		Date of Filing	​	Number	​	Herewith
​	​	​	​	​	​	​	​	​	​	​
3.1	​	Amended and Restated Certificate of Incorporation, conformed version reflecting all amendments through May 8, 2024	​	10-Q	​	08/05/2024	​	3.3	​	​
​	​	​	​	​	​	​	​	​	​	​
3.2	​	Amended and Restated By-laws, effective December 19, 2022	​	10-K	​	02/21/2023	​	3.2	​	​
​	​	​	​	​	​	​	​	​	​	​
10.1	​	Tactile Systems Technology, Inc. 2025 Equity Incentive Plan	​	8-K	​	05/09/2025	​	10.1	​	​
​	​	​	​	​	​	​	​	​	​	​
10.2	​	Form of Restricted Stock Unit Award Agreement (Executives) under the 2025 Equity Incentive Plan	​	8-K	​	05/09/2025	​	10.2	​	​
​	​	​	​	​	​	​	​	​	​	​
10.3	​	Form of Restricted Stock Unit Award Agreement (Non-Employee Directors) under the 2025 Equity Incentive Plan	​	8-K	​	05/09/2025	​	10.3	​	​
​	​	​	​	​	​	​	​	​	​	​
10.4	​	Form of Performance Stock Unit Agreement under the 2025 Equity Incentive Plan	​	8-K	​	05/09/2025	​	10.4	​	​
​	​	​	​	​	​	​	​	​	​	​
10.5	​	Amended and Restated Credit Agreement, dated as of July 31, 2025, by and among Tactile Systems Technology, Inc., the lenders from time to time party thereto and Wells Fargo Bank, National Association	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
31.1	​	Certification of Principal Executive Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as amended	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
31.2	​	Certification of Principal Financial Officer pursuant to Rule 13a-14(a) / 15d-14(a) of the Securities Exchange Act of 1934, as amended	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
32.1	​	Certification of Principal Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
32.2	​	Certification of Principal Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
101.1	​	Inline XBRL for the following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025: (i) Balance Sheets, (ii) Statements of Operations, (iii) Statements of Stockholders’ Equity, (iv) Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements; and for the information set forth in Part II, Item 5.	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​
104.1	​	Cover page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.1)	​	​	​	​	​	​	​	X
​	​	​	​	​	​	​	​	​	​	​

​

​

36

Table of Contents

​

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	​		​
	​	Tactile Systems Technology, Inc.
​	​	​
Date: August 4, 2025	​	By:	/s/ Elaine M. Birkemeyer
	​		Elaine M. Birkemeyer
	​		Chief Financial Officer
	​		(Principal financial and accounting officer)

​

​

37