Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q1 2021 Earnings Conference Call May 3, 2021 5:00 PM ET Company Participants Daniel Reuvers - President and Chief Executive Officer Brent Moen - Chief Financial Officer Conference Call Participants Andrew Stafford - Piper Sandler & Co. Malgorzata Andrew - William Blair & Company LLC Ryan Zimmerman - BTIG, LLC Christopher Pasquale - Guggenheim Securities, LLC Suraj Kalia - Oppenheimer & Co. Inc. Operator Good evening, ladies and gentlemen, and welcome to the Fir ...

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: March 31, 2021 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) (State or other jurisdict ...

Financial Data and Key Metrics Changes - Total revenue for Q4 2020 increased by 4% year-over-year to $59.2 million, exceeding the high-end of annual revenue guidance [7][28] - Gross profit for Q4 2020 increased by $753,000 to $41.9 million, with a gross margin of 71% compared to 72% in the previous year [29][30] - Net income for Q4 2020 increased to $12.1 million, or $0.61 per diluted share, compared to $4.3 million, or $0.22 per diluted share, in Q4 2019 [35] Business Line Data and Key Metrics Changes - Sales and rentals of Entre systems increased by 44% year-over-year, while sales and rentals of Flexitouch Plus systems were essentially flat [8] - Flexitouch systems accounted for 87% of total revenue in Q4 2020, down from 90% in the prior year [28] - VA revenue declined by 17% year-over-year to $6.3 million, representing 11% of total Q4 revenue compared to 13% in the prior year [17] Market Data and Key Metrics Changes - Revenue by payer for Q4 2020 was approximately 71% commercial, 18% Medicare, and 11% VA, compared to 75%, 12%, and 13% respectively in Q4 2019 [29][38] - The company served approximately 60,000 patients in 2020, indicating significant underpenetration in the market with 1.4 million patients diagnosed with lymphedema [54] Company Strategy and Development Direction - The company aims to expand its prescriber base and enhance productivity through the addition of field support specialists, which is expected to improve sales rep efficiency [50][51] - Focus remains on the U.S. market development due to the significant underserved community, with plans to invest in clinical evidence generation and education [56][86] - The company anticipates a revenue growth of 15% to 20% year-over-year for 2021, with specific growth targets for Flexitouch and Entre systems [41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing COVID-related headwinds impacting Q1 2021, expecting a mid-single-digit revenue decline in the first quarter [43][44] - The company remains optimistic about returning to a normalized growth environment in the latter half of 2021, driven by improved market conditions and vaccine distribution [62] - Management emphasized the resilience and resourcefulness of the organization and its customers in navigating the challenges posed by the pandemic [51][56] Other Important Information - The company received 510(k) clearance for its solutions for lipedema and phlebolymphedema, expanding its market dialogue [25] - Two new board members were appointed, bringing over 20 years of healthcare experience to the leadership team [27] Q&A Session Summary Question: Guidance and Q1 Expectations - Analysts inquired about the guidance for Q1 and the impact of COVID on revenue expectations, with management indicating that the VA business softness and holiday-related COVID impacts contributed to the guidance [60][61] Question: VA Business Trends - Questions were raised regarding the future of the VA business, with management stating that they do not expect a return to pre-COVID operations in the near term [64][65] Question: Sales Rep Changes and Productivity - Analysts asked about changes in the sales rep structure and expected productivity, with management explaining the rationale behind adding field support specialists to enhance sales rep efficiency [69][70] Question: International Initiatives - Questions were posed about international market initiatives, with management indicating a focus on the U.S. market due to its growth potential and delaying international expansion plans [84][86] Question: Contribution from New Prescribers - Analysts inquired about the contribution from new prescribers, with management noting that new prescribers typically start slow but are expected to ramp up over the year [88][90]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 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 (State or o ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2020 was reported at $49.1 million, a decrease of 1% year-over-year, but a 40% sequential improvement from Q2 2020 [6][17] - Gross profit decreased by $400,000 to $35 million, with a gross margin of 71%, consistent with the same period last year [18] - Operating income decreased by 44% to $1.8 million compared to Q3 2019 [19] - Net income remained flat at $2.4 million or $0.12 per diluted share, with a slight increase in weighted average shares [20] - Adjusted EBITDA was approximately $6 million, down from $6.4 million in Q3 2019 [20] Business Line Data and Key Metrics Changes - Sales and rentals of Flexitouch systems accounted for 90% of total revenue, down from 92% in the prior year [17] - Entre Systems saw a 26% year-over-year increase in sales and rentals, contributing positively to overall revenue [6] Market Data and Key Metrics Changes - Revenue by payer in Q3 2020 was 70% commercial, 16% Medicare, and 14% VA, compared to 72%, 12%, and 16% respectively in Q3 2019 [17] - The company observed a strong recovery in privately-owned outpatient practices, particularly vascular clinics, which had fewer COVID-related restrictions [9] Company Strategy and Development Direction - The company aims to invest strategically in its business to capture the $5 billion market opportunity for lymphedema in the U.S. [25] - Continued focus on expanding the prescriber base through virtual education events and supporting existing clinicians [12][25] - The company plans to maintain a low 70% gross margin and an adjusted EBITDA margin of 7% to 8% for 2020 [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the business entering Q4, despite ongoing COVID-related challenges [24] - Positive trends in patient demand and clinician engagement were noted, with expectations for gradual recovery as COVID impacts lessen [15][24] Other Important Information - The company has no outstanding borrowings and a cash position of $42.2 million, positioning it well for future investments [21][24] - The company is facing a qui tam lawsuit, with a trial expected in late Q1 or early Q2 2021 [77] Q&A Session Summary Question: What is the likelihood of improvement in Q4 given recent COVID spikes? - Management indicated that while there are uncertainties, they are optimistic based on current trends and customer feedback [31][34] Question: How has the virtual education impacted new prescriber engagement? - The company reported significant participation in virtual events, which have been effective in expanding the prescriber base [36][39] Question: Can you provide insights on the increase in prescribers? - Management noted a meaningful increase in prescribers, although they did not disclose specific numbers, emphasizing the importance of this growth for future revenue [42][43] Question: What is the status of the VA channel and sales rep access? - There has been limited change in access to VA hospitals, but the company has seen a recovery in sales through community-based outpatient centers [52][53] Question: What is the update on the qui tam lawsuit? - The company filed a motion for partial summary judgment, with a trial expected in early 2021 [77]

PART I—FINANCIAL INFORMATION [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The company reported a nine-month net loss of $12.7 million on total assets of $157.8 million as of September 30, 2020 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $157.8 million, driven by increased cash, while total stockholders' equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $42,204 | $22,770 | | Accounts receivable | $36,033 | $33,444 | | Total current assets | $114,110 | $108,335 | | Total assets | $157,750 | $151,752 | | **Liabilities & Equity** | | | | Total current liabilities | $25,641 | $21,428 | | Total liabilities | $48,631 | $39,157 | | Total stockholders' equity | $109,119 | $112,595 | | Total liabilities and stockholders' equity | $157,750 | $151,752 | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company posted a nine-month net loss of $12.7 million, a sharp decline from a $6.7 million profit in the prior year Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $49,092 | $49,612 | $127,887 | $132,429 | | Gross Profit | $34,972 | $35,373 | $90,957 | $93,136 | | Income (loss) from operations | $1,794 | $3,197 | $(10,620) | $4,431 | | Net income (loss) | $2,424 | $2,431 | $(12,733) | $6,688 | | Diluted EPS | $0.12 | $0.12 | $(0.66) | $0.34 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $2.2 million for the nine-month period, a reversal from cash provided in the prior year Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(2,245) | $2,421 | | Net cash provided by (used in) investing activities | $20,684 | $(3,289) | | Net cash provided by financing activities | $995 | $583 | | **Net increase (decrease) in cash** | **$19,434** | **$(285)** | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures include COVID-19 impacts, a $4.0 million impairment charge, and revenue details by product and payer - The company is the sole manufacturer of the Flexitouch® and Entre™ systems, with seasonal business demand[29](index=29&type=chunk)[32](index=32&type=chunk) - In response to COVID-19, the company implemented a 'no contact' virtual patient training model and remote work policies[36](index=36&type=chunk)[37](index=37&type=chunk) - The company discontinued its Airwear wrap product line in Q2 2020, resulting in a **$4.0 million non-cash impairment charge**[42](index=42&type=chunk) Revenue by Product (Nine Months Ended Sep 30, in thousands) | Product | 2020 Revenue | 2019 Revenue | % Change | | :--- | :--- | :--- | :--- | | Flexitouch system | $112,621 | $119,767 | -6% | | Other products | $15,266 | $12,662 | +21% | | **Total** | **$127,887** | **$132,429** | **-3%** | Revenue by Payer (Nine Months Ended Sep 30, in thousands) | Payer | 2020 Revenue | 2019 Revenue | % Change | | :--- | :--- | :--- | :--- | | Private insurers and other | $90,459 | $93,932 | -4% | | Veterans Administration | $18,168 | $23,690 | -23% | | Medicare | $19,260 | $14,807 | +30% | | **Total** | **$127,887** | **$132,429** | **-3%** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes revenue declines to COVID-19 but confirms liquidity is sufficient for the next twelve months [Overview and COVID-19 Impact](index=32&type=section&id=Overview%20and%20COVID-19%20Impact) The pandemic negatively impacted business access, prompting a shift to virtual models and a product line discontinuation - The company's mission is to help people with chronic diseases care for themselves at home[102](index=102&type=chunk) - The Flexitouch system is the main revenue source, accounting for **88% of revenue** in the first nine months of 2020[103](index=103&type=chunk) - The company discontinued the Airwear wrap product line in Q2 2020, recording a **$4.0 million non-cash impairment charge**[105](index=105&type=chunk) - Due to COVID-19, the company moved to a 'no contact' virtual patient training model and suspended clinical study recruitment[107](index=107&type=chunk)[112](index=112&type=chunk) [Results of Operations](index=37&type=section&id=Results%20of%20Operations) Revenue decreased 3% over nine months due to COVID-19, while operating expenses rose, leading to an operating loss Revenue Change by Product (Q3 2020 vs Q3 2019) | Product | Q3 2020 Revenue (in thousands) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | | Flexitouch system | $42,908 | $(1,791) | -4% | | Other products | $6,184 | $1,271 | +26% | | **Total** | **$49,092** | **$(520)** | **-1%** | - **Gross margin remained stable at 71%** for both the three and nine-month periods ended September 30, 2020[126](index=126&type=chunk) - Sales and marketing expenses decreased 6% in Q3 2020 but increased 6% over nine months due to sales team investments[127](index=127&type=chunk)[128](index=128&type=chunk) - RG&A expenses increased 34% for the nine months, driven by a **$3.6 million impairment charge** and higher professional fees[133](index=133&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $42.2 million in cash and an undrawn $10.0 million credit facility - Principal sources of liquidity are **$42.2 million in cash and cash equivalents** and borrowing capacity under a Credit Agreement[136](index=136&type=chunk) - The company has a **$10.0 million revolving credit facility** expiring in August 2021, with no outstanding borrowings[144](index=144&type=chunk)[145](index=145&type=chunk) - Under the CARES Act, the company received **$1.2 million in relief funds** and collected **$2.9 million from NOL carrybacks**[151](index=151&type=chunk)[152](index=152&type=chunk) - Management believes current capital resources are sufficient to meet needs for at least the next twelve months[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposures have not materially changed from the disclosures in the 2019 Annual Report on Form 10-K - There have been **no material changes** to market risk disclosures since the 2019 Annual Report on Form 10-K[159](index=159&type=chunk) [Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2020[160](index=160&type=chunk) - **No material changes** to the internal control over financial reporting occurred during the quarter ended September 30, 2020[161](index=161&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending a *qui tam* action from a competitor and a securities class action lawsuit - The company is defending a *qui tam* lawsuit alleging violations of the Federal Anti-Kickback Statute and False Claims Act[163](index=163&type=chunk) - A securities class action lawsuit was filed on September 29, 2020, alleging materially false and misleading statements[164](index=164&type=chunk) [Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) A new significant risk factor has been added detailing the ongoing adverse impacts of the COVID-19 pandemic - A new risk factor has been added specifically addressing the **adverse effects of the COVID-19 pandemic** on the business[166](index=166&type=chunk) - Potential negative impacts from COVID-19 include reduced demand, supply chain disruptions, and workforce limitations[168](index=168&type=chunk)[169](index=169&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company confirms no unregistered sales of equity securities occurred during the reporting period - There were **no unregistered sales** of common or preferred stock during the reporting period[172](index=172&type=chunk) [Defaults Upon Senior Securities](index=51&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section is not applicable as there were no defaults upon senior securities - Not applicable[173](index=173&type=chunk) [Mine Safety Disclosures](index=51&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's operations - Not applicable[174](index=174&type=chunk) [Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No other material information was required to be reported during the period - None[175](index=175&type=chunk) [Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including officer certifications and XBRL data - The exhibits filed include officer certifications (31.1, 31.2, 32.1, 32.2) and financial data in Inline XBRL format (101.1)[178](index=178&type=chunk)

Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q2 2020 Earnings Conference Call August 3, 2020 5:00 PM ET Company Participants Dan Reuvers – President and Chief Executive Officer Brent Moen – Chief Financial Officer Conference Call Participants Ryan Zimmerman – BTIG Matthew O'Brien – Piper Sandler Margaret Kaczor – William Blair Chris Pasquale – Guggenheim Cecilia Furlong – Canaccord Genuity Suraj Kalia – Oppenheimer Operator Good evening, ladies and gentlemen, and welcome to the Second Quarter 2010 Earning ...

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, 2020 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 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | ...

Tactile Systems Technology, Inc. (NASDAQ:TCMD) Q1 2020 Earnings Conference Call May 4, 2020 8:00 AM ET Company Participants Gerald Mattys - Chief Executive Officer Brent Moen - Chief Financial Officer Conference Call Participants Matthew O’Brien - Piper Sandler Companies Cecilia Furlong - Canaccord Genuity, Inc. Margaret Kaczor - William Blair & Company Christopher Pasquale - Guggenheim Partners Ryan Zimmerman - BTIG LLC Operator Please stand by. Good morning, ladies and gentlemen, and welcome to the First ...

[PART I—FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section contains the unaudited condensed consolidated financial statements for the quarter ended March 31, 2020, Management's Discussion and Analysis (MD&A) of the company's financial condition and results of operations, and disclosures on market risk and internal controls [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) For the three months ended March 31, 2020, Tactile Systems Technology reported total assets of **$155.5 million** and total liabilities of **$42.5 million**, with revenue of **$43.7 million** and a net loss of **$1.3 million** [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands of dollars) | Account | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $32,297 | $22,770 | | Total current assets | $112,321 | $108,335 | | Total assets | $155,519 | $151,752 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $24,721 | $21,428 | | Total liabilities | $42,479 | $39,157 | | Total stockholders' equity | $113,040 | $112,595 | | Total liabilities and stockholders' equity | $155,519 | $151,752 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2020 vs Q1 2019 Statement of Operations (in thousands of dollars, except per share data) | Metric | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Total revenue | $43,675 | $37,617 | | Gross profit | $31,073 | $26,258 | | Total operating expenses | $35,524 | $28,060 | | Loss from operations | ($4,451) | ($1,802) | | Net (loss) income | ($1,307) | $1,472 | | Diluted EPS | ($0.07) | $0.08 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2020 vs Q1 2019 Cash Flow Summary (in thousands of dollars) | Cash Flow Activity | Q1 2020 | Q1 2019 | | :--- | :--- | :--- | | Net cash provided by operating activities | $909 | $1,273 | | Net cash provided by investing activities | $9,606 | $3,725 | | Net cash used in financing activities | ($988) | ($1,549) | | **Net increase in cash and cash equivalents** | **$9,527** | **$3,449** | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) - The company's business is seasonal, with substantially reduced demand in the first quarter due to patients' insurance deductibles resetting. This trend may be significantly different in 2020 due to the COVID-19 pandemic[29](index=29&type=chunk) - In response to COVID-19, the company has implemented measures such as remote work, virtual patient training, and modified manufacturing shifts to protect employees while continuing operations as an essential business[33](index=33&type=chunk)[36](index=36&type=chunk) Revenue by Product (in thousands of dollars) | Product | Q1 2020 Revenue | Q1 2019 Revenue | % of Total (2020) | | :--- | :--- | :--- | :--- | | Flexitouch system | $38,586 | $34,109 | 88% | | Other products | $5,089 | $3,508 | 12% | | **Total** | **$43,675** | **$37,617** | **100%** | Revenue by Payer (in thousands of dollars) | Payer | Q1 2020 Revenue | Q1 2019 Revenue | | :--- | :--- | :--- | | Private insurers and other payers | $30,237 | $25,882 | | Veterans Administration | $7,058 | $7,670 | | Medicare | $6,380 | $4,065 | | **Total** | **$43,675** | **$37,617** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a **16%** year-over-year revenue increase to **$43.7 million** for Q1 2020, driven by Flexitouch system sales, despite COVID-19 impact, leading to an operating loss of **$4.5 million** [Overview](index=24&type=section&id=Overview) - The company's direct sales force expanded to **over 250 employees** as of March 31, 2020, from **over 210 employees** a year prior, supporting its direct-to-patient and -provider model[107](index=107&type=chunk) - The COVID-19 pandemic has restricted access to clinicians and patients, prompting a shift to virtual interactions, and patient recruitment for clinical studies has been suspended[108](index=108&type=chunk)[110](index=110&type=chunk) - To date, the company's supply chain has not been materially impacted by COVID-19, and it believes it has sufficient safety stock for short and mid-term demand[112](index=112&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) - Revenue increased **16%** to **$43.7 million** in Q1 2020, with strong growth in January and February negatively impacted by the COVID-19 pandemic beginning in March[116](index=116&type=chunk) - The increase in revenue was driven by a **$4.5 million (13%)** rise in Flexitouch system sales and a **$1.6 million (45%)** increase in sales of other products, primarily the Entre system[117](index=117&type=chunk) - Sales and marketing expenses rose by **$5.6 million (32%)** year-over-year, mainly due to continued investment in the field sales team, including increased personnel-related compensation[123](index=123&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2020, principal sources of liquidity included **$32.3 million** in cash and cash equivalents, **$12.5 million** in marketable securities, and an undrawn **$10.0 million** revolving credit facility[128](index=128&type=chunk)[136](index=136&type=chunk) - The company believes its existing cash, marketable securities, and operating cash flows, along with its credit facility, will be sufficient to meet capital requirements for at least the next twelve months[139](index=139&type=chunk) - Under the CARES Act, the company was able to carry back net operating losses (NOLs), resulting in the recording of a **$2.6 million** income tax receivable[143](index=143&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material changes to its market risks since its Annual Report on Form 10-K for the year ended December 31, 2019 - There have been no material changes in the company's market risks from those disclosed in the 2019 Annual Report on Form 10-K[148](index=148&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2020, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective at a reasonable assurance level[150](index=150&type=chunk) - No changes occurred during the quarter ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[151](index=151&type=chunk) [PART II—OTHER INFORMATION](index=33&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) This section covers other required disclosures, including legal proceedings, risk factors, and information on equity securities, highlighting an ongoing qui tam lawsuit and COVID-19 as a new risk [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company is defending a qui tam lawsuit filed by a competitor alleging violations of the Federal Anti-Kickback Statute and False Claims Act, with the U.S. government declining to intervene - The company is defending a qui tam action filed by a competitor alleging violations related to Medicare and Medicaid programs, with the United States declining to intervene in the case[153](index=153&type=chunk) - A motion to dismiss the case was denied in February 2020, and the company filed its answer and asserted counterclaims in March 2020, believing the plaintiff's allegations are without merit[153](index=153&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The COVID-19 pandemic is identified as a new, significant risk factor expected to adversely affect the business through reduced demand, supply chain disruptions, and workforce limitations - The COVID-19 pandemic is introduced as a new risk factor that has adversely affected the business and is expected to continue doing so[155](index=155&type=chunk) - Key potential negative impacts from the pandemic include reduced demand for products, disruptions to the supply chain, continued restricted access to clinicians, and limitations on the ability of the workforce to perform their duties effectively[158](index=158&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during Q1 2020 and no material change in the planned use of IPO proceeds - There were no unregistered sales of common or preferred stock during the quarter[158](index=158&type=chunk) - There has been no material change in the company's planned use of the net proceeds from its initial public offering in 2016[161](index=161&type=chunk) [Item 3. Defaults Upon Senior Securities](index=35&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable as the company has no defaults upon senior securities to report - Not applicable[162](index=162&type=chunk) [Item 4. Mine Safety Disclosures](index=35&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[163](index=163&type=chunk) [Item 5. Other Information](index=35&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the quarter - None[164](index=164&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including certifications from the Principal Executive Officer and Principal Financial Officer - The report includes various exhibits, such as forms of stock option and restricted stock unit agreements, and certifications by the CEO and CFO as required by the Sarbanes-Oxley Act[167](index=167&type=chunk)