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What changed in Airsculpt Technologies, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Airsculpt Technologies, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+310 added−289 removedSource: 10-K (2025-03-14) vs 10-K (2024-02-27)

Top changes in Airsculpt Technologies, Inc.'s 2024 10-K

310 paragraphs added · 289 removed · 232 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

60 edited+17 added−20 removed94 unchanged
Biggest changeAirSculpt ® Smooth delivers effective and long-lasting cellulite reduction with one single treatment. AirSculpt ® Smooth uses an advanced cellulite removal tool, which is FDA-cleared to target cellulite on the buttocks and thighs. Results appear almost instantly, and because AirSculpt ® Smooth is heat-free, it can be used on any skin type.
Biggest changeThis advanced, minimally invasive treatment combines helium gas and radiofrequency energy to create a plasma specially equipped to correct sagging skin and restore a youthful, natural appearance. AirSculpt ® Smooth delivers effective and long-lasting cellulite reduction with one single treatment. AirSculpt ® Smooth uses an advanced cellulite removal tool, which is FDA-cleared to target cellulite on the buttocks and thighs.
Our AirSculpt ® procedures are differentiated by our patented technology, broad and innovative procedures, elite patient experience, and highly skilled surgeons. • AirSculpt ® Technology: Our patented and precision-engineered method, AirSculpt ® , permanently removes fat and tightens skin while sculpting targeted areas of the body through minimally invasive body contouring procedures.
Our AirSculpt ® procedures are differentiated by our patented technology, broad and innovative procedures, elite patient experience, and highly skilled surgeons. • AirSculpt ® Method: Our patented and precision-engineered method, AirSculpt ® , permanently removes fat and tightens skin while sculpting targeted areas of the body through minimally invasive body contouring procedures.
Center Format and Selection Our centers are approximately 3,000 square feet each and are typically open six days per week, with select centers open seven days per week, from 9 am to 5 pm. Certain centers may operate outside of typical hours to accommodate client schedules. Most existing locations have two procedure rooms.
Center Format and Selection Our centers are approximately 3,000 to 5,000 square feet each and are typically open six days per week, with select centers open seven days per week, from 9 am to 5 pm. Certain centers may operate outside of typical hours to accommodate client schedules. Most existing locations have two procedure rooms.
Our centers are typically staffed by three surgeons, who are independent contractors, nurses, office managers, sales consultants, sales assistants and front desk concierges/administrative assistants. Our target markets include affluent metropolitan and suburban areas. We conduct in-person site visits to proposed center locations.
Our centers are typically staffed by three surgeons, who are independent contractors, nurses, office managers, sales consultants, sales assistants and front desk concierges/administrative assistants. Our target markets include affluent metropolitan and suburban areas and we conduct in-person site visits to proposed center locations.
The tools we use to perform our fat removal and fat transfer procedures are purchased from third parties and we do not own the proprietary rights to such tools.
The tools we use to perform our fat removal and fat transfer procedures are purchased from third parties and we do not own the proprietary rights to such tools.
Additionally, university and hospital systems, medical spas and centers and beauty and rejuvenation centers include the body contouring services in their offerings. While we primarily operate in the body contouring market, we also compete with companies that offer non-surgical methods of fat reduction, including weight-loss drugs, and other non-invasive weight loss and obesity solutions.
Additionally, university and hospital systems, medical spas and centers and beauty and rejuvenation centers include body contouring services in their offerings. While we primarily operate in the body contouring market, we also compete with companies that offer non-surgical methods of fat reduction, including weight-loss drugs, and other non-invasive weight loss and obesity solutions.
Some states also require the applicable Professional Association to hold its own clinic license or permit. Through the affiliated Professional Associations, we voluntarily seek accreditation from The Joint Commission for all of our centers. The Joint Commission is a not-for-profit with over 70 years of experience in health care accreditation.
Some states also require the applicable Professional Association to hold its own clinic license or permit. Through the affiliated Professional Associations, we voluntarily seek accreditation from The Joint Commission for all of our centers in the United States. The Joint Commission is a not-for-profit with over 70 years of experience in health care accreditation.
We have also registered AirSculpt ® and certain other trademarks outside of the United States. We seek to protect our intellectual property by filing patent applications in the United States related to our procedures that are important to our business.
We have also registered AirSculpt ® and certain other trademarks outside of the United States. We seek to protect our intellectual property by filing patent applications in the United States and internationally related to our procedures that are important to our business.
By using web-based lead generation, we generate over 450,000 monthly website visits, primarily through optimized spend on Google’s marketing engine. • Celebrity endorsements: We collaborate with celebrity influencers and TV personalities to drive continuous media coverage that raises brand awareness and social acceptance of our procedures. • Patient testimonials: Our patients are some of the best advocates for our brand, with many recommending our procedures to family and friends.
By using web-based lead generation, we generate over 400,000 monthly website visits, primarily through optimized spend on Google’s marketing engine. • Celebrity endorsements: We collaborate with celebrity influencers and TV personalities to drive continuous media coverage that raises brand awareness and social acceptance of our procedures. • Patient testimonials: Our patients are some of the best advocates for our brand, with many recommending our procedures to family and friends.
Competition We believe that our brand recognition and minimally invasive procedures with results meeting or exceeding our customer expectations distinguish us in the rapidly growing market for body contouring.
Competition We believe that our brand recognition and minimally invasive procedures with results meeting or exceeding our customer expectations distinguish us in the growing market for body contouring.
Instead of protecting specific, individual liposuction components (such as a particular handpiece design), our issued patents and our pending application relate to certain proprietary implementations of the process described in the section “Our Technique, Training and Equipment,” and the combination of multiple components to form proprietary systems that are specially configured for carrying out those proprietary processes.
Instead of protecting specific, individual liposuction components (such as a particular handpiece design), our issued patents and our pending applications relate to certain proprietary implementations of the process described in the section “Our Technique, Training and Equipment,” and the combination of multiple components to form proprietary systems that are specially configured for carrying out those proprietary processes.
Instead of protecting specific, individual liposuction components (such as a particular handpiece design), our issued patents and our pending application relate to certain proprietary implementations of the process described in the section “Our Technique, Training and Equipment,” and the combination of multiple components to form proprietary systems that are specially configured for carrying out those proprietary processes.
Instead of protecting specific, individual liposuction components (such as a particular handpiece design), our issued patents and our pending applications relate to certain proprietary implementations of the process described in the section “Our Technique, Training and Equipment,” and the combination of multiple components to form proprietary systems that are specially configured for carrying out those proprietary processes.
We also had contracts with approximately 90 surgeons. While each center varies depending on its size, case volume and case types, we employ an average of approximately 10 full-time equivalent employees at our centers. While we provide “full-time equivalent” information, a number of our employees work on flexible schedules rather than full-time, which increases our staffing efficiency.
We also had contracts with approximately 97 surgeons. While each center varies depending on its size, case volume and case types, we employ an average of approximately 10 full-time equivalent employees at our centers. While we provide “full-time equivalent” information, a number of our employees work on flexible schedules rather than full-time, which increases our staffing efficiency.
Our consultants provide patients pricing information the day of their consult and, if requested by the patient, assist patients with securing third-party financing from entities such as CareCredit, Cherry and Alphaeon, among others, enabling consumers to more quickly schedule their procedures.
Our consultants provide patients pricing information the day of their consult and, if requested by the patient, assist patients with securing third-party financing from entities such as CareCredit, PatientFi and Alphaeon, among others, enabling consumers to more quickly schedule their procedures.
We employ the following strategies to drive brand awareness: • Developing digital content, including a “ before and after ” photo gallery and AirSculpt ® TV: We have collected a catalog of over 215,000 “before and after” photos, showcasing our treatment outcomes.
We employ the following strategies to drive brand awareness: • Developing digital content, including a “ before and after ” photo gallery and AirSculpt ® TV: We have collected a catalog of over 250,000 “before and after” photos, showcasing our treatment outcomes.
The areas in which we compete include: • Patients: We compete for patients to utilize our procedures through our marketing efforts and exceptional brand reputation. • Procedure Offering: We compete with providers of liposuction, abdominoplasty (tummy tuck) and gastric bypass surgery, weight-loss drugs and non-surgical procedures that use cooling, injected medication or heat to reduce fat cells.
The areas in which we compete include: • Patients: We compete for patients to utilize our procedures through our marketing efforts and exceptional brand reputation. 9 Table of Contents • Procedure Offering: We compete with providers of liposuction, abdominoplasty (tummy tuck) and gastric bypass surgery, weight-loss drugs and non-surgical procedures that use cooling, injected medication or heat to reduce fat cells.
We employ the following strategies to expand our footprint: • Expand Footprint by Opening New Centers in the United States: We believe our track record of successfully opening new AirSculpt centers consistently generating strong unit-level economics validates our strategy across the United States and to domestically expand our footprint.
We employ the following strategies to expand our footprint: • Expand Footprint by Opening New Centers in the United States: We believe our track record of successfully opening new AirSculpt centers consistently generating strong unit-level economics validates our strategy across the United States.
As a result, these employees also do not participate in our benefits structure, which we believe reduces the relative cost of our benefits plans to us. None of our employees is represented by a collective bargaining agreement. Additional Information The Company was founded by Dr.
As a result, these employees also do not participate in our benefits structure, which we believe reduces the relative cost of our benefits plans to us. None of our employees is represented by a collective bargaining agreement. Additional Information 12 Table of Contents The Company was founded by Dr.
From the initial consultation to the day of procedure, our patients are guided by knowledgeable patient care consultants. Our centers are located near high end retail environments, such as Rodeo Drive in Beverly Hills and Fifth Avenue in New York.
From the initial consultation to the day of procedure, our patients are guided by knowledgeable patient care consultants. Our centers are located near high end retail environments, such as Rodeo Drive in Beverly Hills and Fifth Avenue in 3 Table of Contents New York.
We believe our treatment results and elite patient experience have positioned AirSculpt as a preferred body contouring brand. We performed 14,932 body contouring procedures in 2023. Our proprietary and patented AirSculpt ® method is minimally invasive because it requires no needle, no scalpel, no stitches and no general anesthesia to achieve transformational change that appears both natural and smooth.
We believe our treatment results and elite patient experience have positioned AirSculpt as a preferred body contouring brand. We performed 14,036 body contouring procedures in 2024. Our proprietary and patented AirSculpt ® method is minimally invasive because it requires no needle, no scalpel, no stitches and no general anesthesia to achieve transformational change that appears both natural and smooth.
Many procedures can also involve significant pain and may require excess post-surgical recovery time. 9 Table of Contents • Surgeons and other professionals: We compete for high quality surgeons and other professionals across the body contouring and cosmetic surgery industry to ensure we are able to continue to provide our patients with a smooth process, premium service, and high quality results.
Many procedures can also involve significant pain and may require excess post-surgical recovery time. • Surgeons and other professionals: We compete for high quality surgeons and other professionals across the body contouring and cosmetic surgery industry to ensure we are able to continue to provide our patients with a smooth process, premium service, and high quality results.
AirSculpt ® , AirSculpt+®, AirSculpting™, AirSculpt Plus ™ , Elite Body Sculpture®, RevisionSculpt®, AirSculpt Lift ™ , No Needle, No Scalpel, No Stitches ® , If You Can Pinch It, We Can Take It ® , Power BBL ® , Tiny Tuck ® , 48 Hour Six Pack ® , AirSculpt is for Everybody ® , Cure for the Hip Dip ® , Hip Flip ® , CankCure ® , Stubborn Fat, It’s All We Do®, The 48 Hour Difference™, What a Difference A Day Makes™, and our logo are U.S. registered trademarks or trademarks for which registration is pending in the United States.
AirSculpt ® , AirSculpt+®, AirSculpting ® , AirSculpt Plus ® , Elite Body Sculpture®, RevisionSculpt®, AirSculpt Lift ™ , No Needle, No Scalpel, No Stitches ® , If You Can Pinch It, We Can Take It ® , Power BBL ® , Tiny Tuck ® , 48 Hour Six Pack ® , Cure for the Hip Dip ® , Hip Flip ® , CankCure ® , Stubborn Fat, It’s All We Do®, The 48 Hour Difference™, and our logo are U.S. registered trademarks or trademarks for which registration is pending in the United States.
AirSculpt ® is minimally invasive, providing transformative results, all delivered in one session while the patient is awake. As of December 31, 2023, our patent portfolio is comprised of two issued U.S. utility patents and one pending U.S. utility patent application, each of which we own directly.
AirSculpt ® is minimally invasive, providing transformative results, all delivered in one session while the patient is awake. As of December 31, 2024, our patent portfolio is comprised of two issued U.S. utility patents, one pending U.S. utility patent application, and one International (PCT) patent application, each of which we own directly.
On average, our centers contain two procedure rooms with the capacity to perform up to 36 surgeries a week, in addition to additional consultation offices for prospective patients. Our accreditation as an office-based practice under the Joint Commission demonstrates our commitment to safety and quality. In 2023, we generated revenue per case of $13,121 on average.
On average, our centers contain two procedure rooms with the capacity to perform up to 36 surgeries a week, in addition to additional consultation offices for prospective patients. Our accreditation as an office-based practice under the Joint Commission demonstrates our commitment to safety and quality. In 2024, we generated revenue per case of $12,849 on average.
We believe we are in compliance with federal and state antitrust laws, but courts or regulatory authorities may reach a determination in the future that could have a material adverse effect on our business, prospects, results of operations and financial condition. Employees As of December 31, 2023, we employed approximately 346 full-time employees and approximately 35 part-time employees.
We believe we are in compliance with federal and state antitrust laws, but courts or regulatory authorities may reach a determination in the future that could have a material adverse effect on our business, prospects, results of operations and financial condition. Employees As of December 31, 2024, we employed approximately 389 full-time employees and approximately 33 part-time employees.
Our Competitive Strengths We attribute our success to the following strengths that differentiate us from our competitors: Trusted Brand Redefining Body Contouring The AirSculpt ® method was created to offer patients a gentler alternative to traditional fat removal procedures with transformative results delivered in a luxurious, spa-like environment.
We believe our procedures offer dramatic results to our patients. 2 Table of Contents Our Competitive Strengths We attribute our success to the following strengths that differentiate us from our competitors: Trusted Brand Redefining Body Contouring The AirSculpt ® method was created to offer patients a gentler alternative to traditional fat removal procedures with transformative results delivered in a luxurious, spa-like environment.
These initiatives include hiring additional sales support staff to respond to patient inquiries and utilizing virtual consultations that enable our patients to speak with surgeons and qualified patient care representatives in the convenience of their own home or office, making it easier and quicker to schedule a procedure and reduce overall waiting time. ◦ Continue to introduce new, innovative procedures: Since our founding in 2012, we have demonstrated our ability to innovate with the novel introduction of the AirSculpt ® method to the cosmetic surgery field.
These initiatives include responding more efficiently to patient inquiries and utilizing virtual consultations that enable our patients to speak with surgeons and qualified patient care representatives in the convenience of their own home or office, making it easier and quicker to schedule a procedure and reduce overall waiting time. ◦ Continue to introduce new, innovative procedures: Since our founding in 2012, we have demonstrated our ability to innovate with the novel introduction of the AirSculpt ® method to the cosmetic surgery field.
Our AirSculpt ® TV program, featured on our AirSculpt Instagram page and website, provides a never-before seen transparency in our space, encouraging further growth.
Our AirSculpt ® TV program, featured on our AirSculpt Instagram page and website, provides a never-before seen transparency in our space.
Our Growth Drivers The market for surgical aesthetic procedures is growing, fueled by favorable trends including: • Self-Image Awareness: increased consumer awareness and focus on beauty consciousness driven by social media and prioritization of healthy lifestyles; • Social Acceptance: consumers have embraced cosmetic treatment and reduced the social stigma, especially through the proliferation of shared patient photos on social media; • Improved Safety and Recovery Profile: advances in technology have led to reduced recovery times and introduction of more minimally-invasive procedures; • Rise in Disposable Income: the global rise in disposable income provides individuals with greater discretionary funds for personal appearance enhancements including cosmetic surgery; and • Increased Weight Gain in the Overall Population: worldwide prevalence of overweight and obesity in individuals continues to rise.
Our Growth Drivers The market for surgical aesthetic procedures is growing, fueled by trends including: • Self-Image Awareness: increased consumer awareness and focus on beauty consciousness driven by social media and prioritization of healthy lifestyles; • Social Acceptance: consumers have embraced cosmetic treatment and reduced the social stigma, especially through the proliferation of shared patient photos on social media; • Improved Safety and Recovery Profile: advances in technology have led to reduced recovery times and introduction of more minimally-invasive procedures; • Rise in Disposable Income: the global rise in disposable income provides individuals with greater discretionary funds for personal appearance enhancements including cosmetic surgery; and • Increased Weight Gain in the Overall Population: worldwide prevalence of overweight and obesity in individuals continues to rise. • Increased use of GLP-1 Weight Loss Drugs: increasing use of weight loss drugs may lead to increased demand for body contouring and skin tightening procedures.
In 2020, we began to offer our patients the choice of virtual consults prior to their procedures. 3 Table of Contents • Elite Surgeons: Our surgeons are chosen not only for their medical skills, generally as plastic or cosmetic surgeons, but also for their artistic vision.
We offer our patients the choice of virtual consults prior to their procedures. • Elite Surgeons: Our surgeons are chosen not only for their medical skills, generally as plastic or cosmetic surgeons, but also for their artistic vision.
Governmental Regulation Our business and the healthcare industry generally are highly regulated. While we believe that we have structured our agreements and operations in material compliance with applicable healthcare laws and regulations, there can be no assurance that we will be able to successfully address changes in the current regulatory environment or changes in interpretation of existing laws and regulations.
While we believe that we have structured our agreements and operations in material compliance with applicable healthcare laws and regulations, there can be no assurance that we will be able to successfully address changes in the current regulatory environment or changes in interpretation of existing laws and regulations.
National and International Footprint Fueled by Attractive Unit Economics We have a growing national footprint consisting of 27 centers across 18 U.S. states, Canada, and the United Kingdom as of February 27, 2024. Our centers are located primarily in metropolitan cities near retail shops that our patients frequent and popular areas.
National and International Footprint Fueled by Attractive Unit Economics We have a growing national footprint consisting of 32 centers across 20 U.S. states, Canada, and the United Kingdom as of March 14, 2025. Our centers are located primarily in metropolitan cities near retail shops that our patients frequent and popular areas.
We deliver our body contouring procedures through a growing, nationwide footprint of 27 centers across 18 U.S. states, Canada, and the United Kingdom as of February 27, 2024. Our centers, located in metropolitan and suburban areas, offer a premium patient experience and luxurious, spa-like atmosphere.
We deliver our body contouring procedures through a growing, nationwide footprint of 32 centers across 20 U.S. states, Canada, and the United Kingdom as of March 14, 2025. Our centers, located in metropolitan and suburban areas, offer a premium patient experience and luxurious, spa-like atmosphere.
In addition to monitoring and managing our social media presence, our team is focused on search engine optimization on our digital platform. For the year ended December 31, 2023, our total advertising costs were $25.9 million, split approximately 85% digital advertising and 15% other advertising platforms.
In addition to monitoring and managing our social media presence, our team is focused on search engine optimization on our digital platform. For the year ended December 31, 2024, our total advertising costs were $33.4 million, split approximately 90% digital advertising and 10% other advertising platforms.
State Corporate Practice of Medicine and Fee-Splitting Laws The laws in many of the states in which we operate or may in the future operate, prohibit entities owned by non-physicians from practicing medicine, exercising control over surgeons, employing surgeons or otherwise interfering with the 11 Table of Contents independent professional judgment of surgeons.
The imposition of these regulatory requirements may have the effect of increasing operating costs and reducing the profitability of our operations. 11 Table of Contents State Corporate Practice of Medicine and Fee-Splitting Laws The laws in many of the states in which we operate or may in the future operate, prohibit entities owned by non-physicians from practicing medicine, exercising control over surgeons, employing surgeons or otherwise interfering with the independent professional judgment of surgeons.
Our market includes both surgical procedures, such as liposuction and abdominoplasty procedures, as well as non-surgical procedures, such as cryolipolysis, ultrasound, laser lipolysis and other non-surgical body fat reduction procedures.
Our Market Opportunity We operate within the large and growing market for body fat reduction procedures. Our market includes both surgical procedures, such as liposuction and abdominoplasty procedures, as well as non-surgical procedures, such as cryolipolysis, ultrasound, laser lipolysis and other non-surgical body fat reduction procedures.
Our Growth Strategies We intend to deliver sustainable growth in revenue and profitability by executing on the following strategies: • Continue to Grow Our Brand Awareness and Attract New Patients: We believe that consumer trends towards greater acceptance of body contouring and cosmetic treatments will continue to expand the market for our services. 4 Table of Contents We believe we are a leading provider of body contouring procedures and that there is a significant opportunity to drive awareness and adoption of our AirSculpt ® method and procedure offerings. • Continue to Drive Sales Growth of Our Centers: We employ the following strategies to increase our procedures performed and drive higher revenue per procedure with the aim of continuing to accelerate our growth in existing centers: ◦ Continue to add new procedure rooms: Our centers typically have two procedure rooms.
Our Growth Strategies We intend to deliver long-term growth in revenue and profitability by executing on the following strategies: • Continue to Grow Our Brand Awareness and Attract New Patients: We believe that consumer trends towards greater acceptance of body contouring and cosmetic treatments will continue to expand the market for our services. 4 Table of Contents We believe we are a leading provider of body contouring procedures and that there is a significant opportunity to drive awareness and adoption of our AirSculpt ® method and procedure offerings. • Continue to Drive Sales Growth of Our Centers: We employ the following strategies to increase our procedures performed and drive higher revenue per procedure in existing centers: ◦ Increase speed and efficiency of patient onboarding to increase utilization and reduce patient waiting times: We have and will continue to execute initiatives that increase the speed through which patients convert from initial consultation to procedure.
Aaron Rollins, our Lead Independent Director, Adam Feinstein, and the other management team members, we have built a results-driven culture. For the year ended December 31, 2023, we generated $195.9 million of revenue compared to $168.8 million for the year ended December 31, 2022, which represents approximately 16.1% growth.
Aaron Rollins, our Lead Independent Director, Adam Feinstein, and the other management team members, we have built a culture focused on achieving the best results for our patients. For the year ended December 31, 2024, we generated $180.4 million of revenue compared to $195.9 million for the year ended December 31, 2023, which represents a decline of approximately 7.9%.
We also continue to develop new procedures, such as the Hip Flip ® and CankCure ® , to meet our patients’ demand and drive traffic to our centers. ◦ Increase prices on procedures: We have an ability to increase prices on our procedures driven by the strong value proposition that our services offer to our patients.
We also continue to develop new procedures, such as the Hip Flip ® and CankCure ® , to meet our patients’ demand and drive traffic to our centers. ◦ Increase prices on procedures: We have an ability to increase prices on our procedures driven by the strong value proposition that our services offer to our patients. ◦ Optimizing Marketing Investment : As part of our long-term growth strategy, we are focused on optimizing our marketing investment to enhance efficiency, improve return on investment, and drive sustainable revenue growth.
Experienced Founder-Led Management Team to Support Growth We are led by an experienced team united by our vision to redefine body contouring and a belief in our future growth potential. Our founder and Executive Chairman of our board of directors, Dr.
We have a capital efficient business that requires minimal maintenance capital expenditures and working capital to support our operations. Experienced Founder-Led Management Team to Support Growth We are led by an experienced team united by our vision to redefine body contouring and a belief in our long-term growth potential. Our founder and Executive Chairman of our board of directors, Dr.
Our treatment results—highlighted by a vast gallery of “before and after” photos across gender, body shape and treatment areas—are a powerful tool to build our brand through digital marketing on our website and social media accounts.
Results appear almost instantly, and because AirSculpt ® Smooth is heat-free, it can be used on any skin type. Our treatment results—highlighted by a vast gallery of “before and after” photos across gender, body shape and treatment areas—are a powerful tool to build our brand through digital marketing on our website and social media accounts.
Starting in 2020, we began to offer our patients the choice of a pre-procedure virtual consult. Rather than making an in-office appointment, our patients are able to speak with our surgeons and qualified patient care consultants in the convenience of their own home or office typically within 24-72 hours.
Rather than making an in-office appointment, our patients are able to speak with our surgeons and qualified patient care consultants in the convenience of their own home or office typically within 24-72 hours. We encourage a strong relationship between our patients and surgeons, from initial consultation, through procedure, to after treatment.
Existing procedures for fat reduction or body contouring, other than AirSculpt ® , currently include surgical procedures such as liposuction and abdominoplasty (tummy tuck) and non-surgical procedures that use cooling, injected medication or heat to reduce fat cells. We believe these procedures often have limited, inconsistent and less predictable results than AirSculpt ® .
Limitations to Existing Procedures Fat reduction and body contouring procedures have become increasingly popular, but many offerings have significant limitations. Existing procedures for fat reduction or body contouring, other than AirSculpt ® , currently include surgical procedures such as liposuction and abdominoplasty (tummy tuck) and non-surgical procedures that use cooling, injected medication or heat to reduce fat cells.
Many procedures can also involve significant pain and may require excess recovery time post-surgery. The AirSculpt ® Difference AirSculpt ® is a minimally invasive procedure delivered in one session while the patient is awake. Each procedure is done by a trained surgeon for customized and precise results.
We believe these procedures often have limited, inconsistent and less predictable results than AirSculpt ® . Many procedures can also involve significant pain and may require excess recovery time post-surgery. The AirSculpt ® Difference AirSculpt ® is a minimally invasive procedure delivered in one session while the patient is awake.
We require 100% private pay upfront and face no reimbursement risk. Our centers generate highly attractive unit-level economics and require only a modest investment to open.
We require 100% private pay upfront and face no reimbursement risk. Our centers generate highly attractive unit-level economics and require only a modest investment to open. Our centers typically achieve profitability within approximately three months, providing AirSculpt with a highly attractive and near-immediate return on invested capital.
We do not face any risk in default of payment under that financing arrangement, which is solely between the patient and third party financing vendor. In 2023, approximately 47% of our cases involved the patient securing third-party financing.
We do not face any risk in default of payment under that financing arrangement, which is solely between the patient and third-party financing vendor. In 2024, approximately 52% of our cases involved the patient securing third-party financing. We are focused on expanding consumer financing options to enhance affordability, increase customer accessibility, and drive sales growth.
We encourage a strong relationship between our patients and surgeons, from initial consultation, through procedure, to after treatment. Nearly all of our patient-facing consultants are 8 Table of Contents former patients and can speak to their personal AirSculpt experiences. Based on these efforts, together with discussions with our surgeons, our patients elect to move forward and schedule a procedure date.
Nearly all of our patient-facing consultants are former patients and can speak to their personal AirSculpt experiences. Based on these efforts, together with discussions with our surgeons, our patients elect to move forward and schedule a procedure date. Many patients, satisfied with results and experience, return to AirSculpt to receive further AirSculpt ® treatments on additional body parts.
Our Intellectual Property As of December 31, 2023, our patent portfolio is comprised of two issued U.S. utility patents and one pending U.S. utility patent application, each of which we own directly.
By offering flexible payment solutions, we aim to attract a broader customer base, improve conversion rates, and strengthen customer loyalty. Our Intellectual Property As of December 31, 2024, our patent portfolio is comprised of two issued U.S. utility patents, one pending U.S. utility patent application, and one International (PCT) patent application, each of which we own directly.
Further, the Company introduced AirSculpt ® + and AirSculpt ® Smooth in fiscal year 2022. AirSculpt ® + is a new procedure that permanently removes fat and tightens the skin with unparalleled precision and finesse.
Further, the Company introduced AirSculpt ® + and AirSculpt ® Smooth in fiscal year 2022. AirSculpt ® + permanently removes fat and tightens the skin with unparalleled precision and finesse. Patients first target any area containing excess fat with AirSculpt ® , then have that same area treated with a technology that instantly tightens skin and improves laxity.
AirSculpt Technologies, Inc. was incorporated in Delaware on June 30, 2021 and completed an IPO on October 28, 2021. 12 Table of Contents Our website address is www.airsculpt.com and our investor relations website is located at https://investors.elitebodysculpture.com . The information posted on our website is not incorporated into this Annual Report.
Rollins in 2012 and reorganized in 2018 as part of the acquisition by our Sponsor of a majority stake in the company prior to the IPO. AirSculpt Technologies, Inc. was incorporated in Delaware on June 30, 2021 and completed an IPO on October 28, 2021. Our website address is www.airsculpt.com and our investor relations website is located at https://investors.airsculpt.com .
It is difficult to predict the long-term outlook of the market for weight-loss drugs, including their long-term efficacy and potential drawbacks.
The increased market acceptance, availability and customer awareness of weight-loss drugs has changed the market for body fat reduction procedures. The increasing use of weight loss drugs may lead to increased demand for body contouring and skin tightening procedures. It is difficult to predict the long-term outlook of the market for weight-loss drugs, including their long-term efficacy and potential drawbacks.
We opened our first international facility in Toronto, Canada in December 2022, and our second in London, United Kingdom in June 2023. 6 Table of Contents Our Technique, Training and Equipment AirSculpt ® is a proprietary, patented method of tumescent liposuction that removes unwanted fat from several targeted areas of the body in a minimally invasive procedure, producing dramatic results.
We believe there is a significant North American growth opportunity of over 200 potential locations in the U.S. and Canada and will continue to opportunistically evaluate new center openings. 6 Table of Contents Our Technique, Training and Equipment AirSculpt ® is a proprietary, patented method of tumescent liposuction that removes unwanted fat from several targeted areas of the body in a minimally invasive procedure, producing dramatic results.
Rollins is primarily focused on leading the Company’s overall vision and providing strategic guidance. In addition, Todd Magazine became Chief Executive Officer at the end of January 2023. Mr. Magazine brings to AirSculpt more than 30 years of experience in retail operations and brand-building.
Rollins is primarily focused on leading the Company’s overall vision and providing strategic guidance. In addition, Yogi Jashnani became Chief Executive Officer in January 2025. Mr.
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Our total selling expenses for 2023 were approximately $36.8 million, or approximately 18.8% of revenue. Our customer acquisition costs were approximately $2,465 per customer in 2023. Our sales assistants respond to inquiries from prospective patients and schedule virtual or in-person consultations.
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Our total selling expenses for 2024 were approximately $43.9 million, or approximately 24.4% of revenue. Our customer acquisition costs were approximately $3,130 per customer in 2024.
The proprietary AirSculpt ® method empowers our surgeons to use their high level of skill and artistry to deliver dramatic results personalized to our patients. 2 Table of Contents Beneficial Treatment Results and Premium Patient Experience, Underpinned by Proprietary AirSculpt ® Technology We believe that our AirSculpt ® procedures offer beneficial results and a premium patient experience.
Beneficial Treatment Results and Premium Patient Experience, Underpinned by Proprietary AirSculpt ® Method We believe that our AirSculpt ® procedures offer beneficial results and a premium patient experience.
As a result, we cannot be certain that the market for body fat reduction procedures which we operate in will continue to grow and that it will not be reduced or eliminated due to the growth of the market for weight-loss drugs.
As a result, we cannot be certain of the impact these wight-loss drugs will have on the market for body fat reduction procedures.
As for discomfort, patients typically report limited soreness the next day following the procedure. We believe our procedures offer dramatic results to our patients.
Each procedure is done by a trained surgeon for customized and precise results. As for discomfort, patients typically report limited soreness the next day following the procedure.
Scaled Platform and Consistent Demand Drives Attractive Growth and Free Cash Flow Our operating model is highly scalable and enables capital efficient growth. We have generated double digit growth in each of the years since 2015.
Scaled Platform and Consistent Demand Drives Capital Efficient Growth and Free Cash Flow Our operating model is highly scalable and enables capital efficient growth. For the year ended December 31, 2024, we generated approximately $180 million of revenue compared to approximately $196 million for the year ended December 31, 2023, which represents an approximately 7.9% decline.
Previously, he was North American President of Pfizer's OTC business, held president's roles for Gatorade and Quaker Oats at PepsiCo, and led various marketing teams at Procter & Gamble. We have built a strong and diverse team across our marketing and operations functions that is highly scalable and capable of supporting future growth. We have a results-driven team culture.
We have built a strong and experienced team across our marketing and operations functions that is highly scalable and capable of supporting future growth.
We specialize in body contouring through the minimally invasive removal of unwanted fat.
We specialize in body contouring through the minimally invasive removal of unwanted fat. The proprietary AirSculpt ® method empowers our surgeons to use their high level of skill and artistry to deliver dramatic results personalized to our patients.
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Patients first target any area containing excess fat with AirSculpt ® , then have that same area treated with a new technology that instantly tightens skin and improves laxity. This advanced, minimally invasive treatment combines helium gas and radiofrequency energy to create a plasma specially equipped to correct sagging skin and restore a youthful, natural appearance.
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Given the recent decline in revenue, our focus will be stabilizing revenue growth through optimizing our marketing investment, improving our go-to-market and sales strategies, expanding consumer financing offerings and focusing on new 1 Table of Contents product innovation.
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Additionally, we have invested in our social media and marketing capabilities to drive our brand awareness and increase consumer acceptance for our procedures.
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In January 2025, the Company hired a new Chief Executive Officer, Yogi Jashnani, with over 20 years of experience in the aesthetics, retail and finance industries and significant experience in driving revenue growth through strategic initiatives. We believe that Mr.
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We believe we have significant opportunity to further grow our brand awareness, open new centers in the United States and internationally, and increase sales in our existing centers. 1 Table of Contents Our Growing Market Opportunity Our Market Opportunity We operate within the large and growing market for body fat reduction procedures.
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Jashnani's industry knowledge, as well as his leadership experience, will provide value in driving initiatives forward to return to revenue growth.
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The United States market for body fat reduction procedures was estimated to be $5.2 billion in 2021 by LifeSci Consulting, growing at approximately a 8.8% compound annual growth rate (“CAGR”) since 2017 and expected to grow at a 10% CAGR through 2026, according to Global Market Insights.
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We are focusing our marketing spend on techniques that have proven successful for us in the past using a returns-based approach and are also testing new areas such as online video, and other social marketing channels under the direction of our new Chief Digital Officer.
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The global market for body fat reduction procedures was estimated to be in excess of $10 billion in 2021.
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The Company has also hired a new Chief Sales Officer dedicated to strengthening our consultative sales model with enhanced training, improving our sales processes, and providing a greater focus on lead conversion.
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The recent regulatory approval, increased market acceptance, availability and customer awareness of weight-loss drugs has negatively impacted demand in the market for body fat reduction procedures by causing some patients to reject surgical options in favor of non-invasive and less expensive solutions.
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We believe that there is an opportunity to introduce new services, particularly in the area of skin tightening, that would allow us to expand our customer reach and generate incremental revenues. Finally, we have implemented a cost reduction program that is estimated to eliminate approximately $3 million in annual overhead costs and contracted expenses.
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The combination of these growth drivers continue to propel the market. Limitations to Existing Procedures Fat reduction and body contouring procedures have become increasingly popular, but many offerings have significant limitations.
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Based on a study completed by an independent third-party consultant contracted by the Company in July 2023, the addressable market that the Company operates in, including liposuction, body sculpting, fat transfer fillers and skin tightening procedures, was estimated to be $11 billion in 2022 and expected to grow at a 9% compound annual growth rate through 2027.
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Given the consistently high level of demand for our services and the average price of our procedures, our centers typically achieve profitability within approximately three months, providing AirSculpt with a highly attractive and near-immediate return on invested capital.
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We believe our focus on returning to same-store revenue growth though optimizing marketing investments, enhancing sales strategies, expanding consumer financing options and adding new product lines will enhance the unit level economics over the levels we saw in 2024.
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For the year ended December 31, 2023, we generated approximately $196 million of revenue compared to approximately $169 million for the year ended December 31, 2022, which represents approximately 16.1% growth.
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Jashnani served as the Chief Revenue Officer of Sky Zone, Inc. from November 2023 to January 2025 (and as a consultant in the same role from April 2023 to November 2023), and as Chief Commercial Officer of Ideal Image Development Corp., from December 2019 to March 2023.
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We have a capital efficient business that requires minimal maintenance capital expenditures and working capital to support our operations, enabling us to generate strong cash flows to fund future growth. We have achieved consistent, self-funded growth since our founding in 2012 and have accelerated our performance in recent years.
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By leveraging data-driven insights, we aim to allocate marketing resources more effectively across channels, ensuring that each dollar spent contributes to measurable business outcomes. ◦ Expanding Financing Offerings : We are focused on expanding consumer financing options to enhance affordability, increase customer accessibility, and drive sales growth.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks and uncertainties include, but are not limited to, the following: Risks Related to Our Business • Macroeconomic trends including inflation and rising interest rates may adversely affect our financial condition and results of operations. • We have a limited operating history and our past results may not be indicative of our future performance. • Our success depends on our ability to maintain the value and reputation of the AirSculpt® brand. • We have grown rapidly in recent years and have limited operating experience at our current scale of operations. • Our financial results will be harmed if there is not sufficient patient demand for AirSculpt® procedures. • Our success depends largely upon patient satisfaction with the effectiveness of the AirSculpt® procedure. • We may fail to open and operate new centers in a timely and cost-effective manner. • We may not be able to successfully continue to expand in markets outside of North America. • If our competitors are able to develop and market solutions that are safer, more effective, easier to use or more readily adopted by patients and healthcare providers, our commercial opportunities may be reduced or eliminated. • Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks. • Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy resulting from the ongoing military conflict between Russia and Ukraine. • Use of social media may materially and adversely affect our reputation or subject us to fines or other penalties. • Our business relies heavily on email and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could materially adversely affect our net revenue and business. • Changes in laws and regulations related to the internet, perceptions toward the use of social media and changes in internet infrastructure itself may diminish our ability to drive new customer acquisition. • Regulations related to healthcare may hamper our availability to provide virtual consultations. • We face competition for surgeons and other workers that provide our medspa and cosmetic services. • We outsource the manufacturing of key elements of the tools we use for AirSculpt® procedures to a single third-party manufacturer, Euromi, who is dependent upon third-party suppliers. • In some jurisdictions, we are precluded or limited in our ability to enter into non-compete agreements with our surgeons. • Our centers and our affiliated Professional Associations may become subject to medical liability claims. • Our revenue could decline due to changes in credit markets and decisions made by credit providers. • We may be adversely affected if we lose any member of our senior management. • The interests of our Sponsor may conflict with the interests of the Company and its other stockholders. • Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and expose us to interest rate risk. • Restrictive covenants in our debt instruments may adversely affect us. • Any failure to meet our debt service obligations could have a material adverse effect on our business, prospects, results of operations and financial condition. • We are a holding company with no operations of our own. 14 Table of Contents • Our variable rate debt exposes us to risks associated with rising interest rates, including as a result of the phase out of LIBOR, which could adversely affect our cash flows. • If there is a change in accounting standards by the Financial Accounting Standards Board or the interpretation thereof affecting consolidation of entities, it could have a material adverse effect on our consolidation of total revenue derived from the Professional Associations. • Our management team has limited experience managing a public company. • Our centers may be adversely impacted by weather and other factors beyond our control, and disruptions in our disaster recovery systems or management continuity planning could limit our ability to operate our business effectively. • Use and storage of paper medical records increases risk of loss, destruction and could increase human error with respect to documentation and patient care. • Our internal computer systems, or those of any of our manufacturers, other contractors, consultants, or collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data. • Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or our patients, or prevent us from accessing critical information or systems and expose us to liability, and could adversely affect our business and our reputation.
Biggest changeThese risks and uncertainties include, but are not limited to, the following: Risks Related to Our Business • Our operating results could be adversely affected if we are unable to successfully implement certain cost savings initiatives and revenue growth strategies. • Macroeconomic trends including inflation and rising interest rates may adversely affect our financial condition and results of operations. • We have a limited operating history and our past results may not be indicative of our future performance. • Our success depends on our ability to maintain the value and reputation of the AirSculpt® brand. • We have grown rapidly in recent years and have limited operating experience at our current scale of operations. • Our financial results will be harmed if there is not sufficient patient demand for AirSculpt® procedures. • Our success depends largely upon patient satisfaction with the effectiveness of the AirSculpt® procedure. • We may fail to open and operate new centers in a timely and cost-effective manner. • We may not be able to successfully continue to expand in markets outside of North America. • If our competitors are able to develop and market solutions that are safer, more effective, easier to use or more readily adopted by patients and healthcare providers, our commercial opportunities may be reduced or eliminated. • Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy resulting from the ongoing military conflict between Russia and Ukraine. • Use of social media may materially and adversely affect our reputation or subject us to fines or other penalties. • Our business relies heavily on email and other messaging services, and any restrictions on the sending of emails or messages or an inability to timely deliver such communications could materially adversely affect our net revenue and business. • Changes in laws and regulations related to the internet, perceptions toward the use of social media and changes in internet infrastructure itself may diminish our ability to drive new customer acquisition. • Regulations related to healthcare may hamper our availability to provide virtual consultations. • We face competition for surgeons and other workers that provide our medspa and cosmetic services. • We outsource the manufacturing of key elements of the tools we use for AirSculpt® procedures to a single third-party manufacturer, Euromi, who is dependent upon third-party suppliers. • In some jurisdictions, we are precluded or limited in our ability to enter into non-compete agreements with our surgeons. • Our centers and our affiliated Professional Associations may become subject to medical liability claims. • Our revenue could decline due to changes in credit markets and decisions made by credit providers. • We may be adversely affected if we lose any member of our senior management. • The interests of our Sponsor may conflict with the interests of the Company and its other stockholders. • Our leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry and expose us to interest rate risk. • Restrictive covenants in our debt instruments may adversely affect us. • Any failure to meet our debt service obligations could have a material adverse effect on our business, prospects, results of operations and financial condition. • We are a holding company with no operations of our own. • Our variable rate debt exposes us to risks associated with rising interest rates, which could adversely affect our cash flows. • If there is a change in accounting standards by the Financial Accounting Standards Board or the interpretation thereof affecting consolidation of entities, it could have a material adverse effect on our consolidation of total revenue derived from the Professional Associations. • Our management team has limited experience managing a public company. 14 Table of Contents • Our centers may be adversely impacted by weather and other factors beyond our control, and disruptions in our disaster recovery systems or management continuity planning could limit our ability to operate our business effectively. • Use and storage of paper medical records increases risk of loss, destruction and could increase human error with respect to documentation and patient care. • Our internal computer systems, or those of any of our manufacturers, other contractors, consultants, or collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data, or personal data. • Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or our patients, or prevent us from accessing critical information or systems and expose us to liability, and could adversely affect our business and our reputation.
Our reliance on a single supplier of handpieces subjects us to a number of risks that could harm our business, including: • interruption of supply resulting from modifications to or discontinuation of Euromi’s operations; • delays in product shipments resulting from uncorrected defects, reliability issues, or Euromi’s variation in a component; 22 Table of Contents • a lack of long-term supply agreements; • inability to obtain adequate supply in a timely manner or to obtain adequate supply on commercially reasonable terms; • difficulty and cost associated with locating and qualifying alternative suppliers for our handpieces in a timely manner; • production delays related to the evaluation and testing of handpieces from alternative suppliers and corresponding regulatory qualifications; and • damage to our brand reputation caused by defective handpieces.
Our reliance on a single supplier of handpieces subjects us to a number of risks that could harm our business, including: • interruption of supply resulting from modifications to or discontinuation of Euromi’s operations; • delays in product shipments resulting from uncorrected defects, reliability issues, or Euromi’s variation in a component; • a lack of long-term supply agreements; • inability to obtain adequate supply in a timely manner or to obtain adequate supply on commercially reasonable terms; • difficulty and cost associated with locating and qualifying alternative suppliers for our handpieces in a timely manner; • production delays related to the evaluation and testing of handpieces from alternative suppliers and corresponding regulatory qualifications; and 22 Table of Contents • damage to our brand reputation caused by defective handpieces.
The health of the economy may affect consumer purchases of discretionary services, such as cosmetic services, which could have a material adverse effect on our business, financial condition and results of operations. Our results of operations may be materially affected by conditions in the capital and credit markets and the economy generally.
The health of the economy may affect consumer purchases of discretionary services, such as cosmetic services, which could have a material adverse effect on our business, financial condition and results of operations. The results of our operations may be materially affected by conditions in the capital and credit markets and the economy generally.
Upon the occurrence of an event of default under our Term Loan and Revolving Facility, the lenders could elect to declare all amounts outstanding under our Term Loan and Revolving Facility to be immediately due and payable and terminate all commitments to extend further credit.
Upon the occurrence of an event of default under our Term Loan and Revolving Credit Facility, the lenders could elect to declare all amounts outstanding under our Term Loan and Revolving Credit Facility to be immediately due and payable and terminate all commitments to extend further credit.
These provisions in our charter documents include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors, unless the board of directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the required approval of at least 66 2∕3 % of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; 42 Table of Contents • the required approval of at least 66 2∕3 % of the shares entitled to vote to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us; and • certain restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock other than affiliates of our Sponsor.
These provisions in our charter documents include the following: • a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the exclusive right of our board of directors, unless the board of directors grants such right to the stockholders, to elect a director to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; • the required approval of at least 66 2∕3 % of the shares entitled to vote to remove a director for cause, and the prohibition on removal of directors without cause; • the ability of our board of directors to alter our amended and restated bylaws without obtaining stockholder approval; 43 Table of Contents • the required approval of at least 66 2∕3 % of the shares entitled to vote to adopt, amend or repeal our amended and restated bylaws or repeal the provisions of our amended and restated certificate of incorporation regarding the election and removal of directors; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; • an exclusive forum provision providing that the Court of Chancery of the State of Delaware will be the exclusive forum for certain actions and proceedings; • the requirement that a special meeting of stockholders may be called only by the board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; • advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquiror from conducting a solicitation of proxies to elect the acquiror’s own slate of directors or otherwise attempting to obtain control of us; and • certain restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock other than affiliates of our Sponsor.
The manufacturing operations of Euromi are themselves dependent upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business. The handpieces that our surgeons use for AirSculpt ® procedures are currently manufactured by Euromi. We have not qualified alternate suppliers and rely upon purchase orders, rather than long-term supply agreements.
The manufacturing operations of Euromi are themselves dependent upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business. The handpieces that our surgeons use for AirSculpt ® procedures are currently manufactured by Euromi. We do not have qualified alternate suppliers and rely upon purchase orders, rather than long-term supply agreements.
Continued international expansion is subject to a number of risks, including: • difficulties in staffing and managing our international operations; • increased competition as a result of more procedures receiving regulatory approval or otherwise freedom to market in international markets; • reduced or varied protection for intellectual property rights in some countries; • foreign tax laws; • fluctuations in currency exchange rates; • foreign certification and regulatory clearance or approval requirements; • difficulties in developing effective marketing campaigns in unfamiliar foreign countries; • geopolitical events (such as Russian invasion of Ukraine), social and economic instability abroad, terrorist attacks, and security concerns in general; • potentially adverse tax consequences, including the complexities of foreign value-added tax systems, tax inefficiencies related to our corporate structure, and restrictions on the repatriation of earnings; • the burdens of complying with a wide variety of foreign laws and different legal standards; and • increased financial accounting and reporting burdens and complexities.
Continued international operation is subject to a number of risks, including: • difficulties in staffing and managing our international operations; • increased competition as a result of more procedures receiving regulatory approval or otherwise freedom to market in international markets; • reduced or varied protection for intellectual property rights in some countries; • foreign tax laws; • fluctuations in currency exchange rates; • foreign certification and regulatory clearance or approval requirements; • difficulties in developing effective marketing campaigns in unfamiliar foreign countries; • geopolitical events (such as Russian invasion of Ukraine), social and economic instability abroad, terrorist attacks, and security concerns in general; • potentially adverse tax consequences, including the complexities of foreign value-added tax systems, tax inefficiencies related to our corporate structure, and restrictions on the repatriation of earnings; • the burdens of complying with a wide variety of foreign laws and different legal standards; and • increased financial accounting and reporting burdens and complexities.
Also, increases in interest rates on variable rate debt would increase our interest expense and the cost of refinancing existing debt and incurring new debt, unless we make arrangements that hedge the risk of rising interest rates, which would adversely affect net income and cash available for payment of our debt obligations and distributions to equity holders.
Increases in interest rates on variable rate debt would increase our interest expense and the cost of refinancing existing debt and incurring new debt, unless we make arrangements that hedge the risk of rising interest rates, which would adversely affect net income and cash available for payment of our debt obligations and distributions to equity holders.
While we have applied for patent protection in the United States relating to certain of our procedures, a company may attempt to commercialize competing procedures utilizing our proprietary methods in foreign countries where we do not have any patents or patent applications and where legal recourse may be limited or unavailable.
While we have applied for patent protection in the United States and internationally relating to certain of our procedures, a company may attempt to commercialize competing procedures utilizing our proprietary methods in foreign countries where we do not have any patents or patent applications and where legal recourse may be limited or unavailable.
We rely on Vesey Street Capital Partners, L.L.C., our private equity sponsor (“Sponsor”) and the interests of our Sponsor may conflict with the interests of the Company and its other stockholders. We have in recent years depended on our relationship with our Sponsor to help guide our business plan. Our Sponsor has significant expertise in financial matters.
We rely on Vesey Street Capital Partners, L.L.C., our private equity sponsor and the interests of our Sponsor may conflict with the interests of the Company and its other stockholders. We have in recent years depended on our relationship with our Sponsor to help guide our business plan. Our Sponsor has significant expertise in financial matters.
Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • the continued market acceptance of, and the growth of the body contouring market; • our ability to maintain and attract new customers; • our development and improvement of the quality of the AirSculpt ® experience, including, improving our proprietary AirSculpt ® technology and innovating new procedures; • any change in the competitive landscape of our market; • pricing pressure as a result of competition or otherwise; • delays or disruptions in our supply of handpieces; • errors in our forecasting of the demand for our services, which could lead to lower revenue or increased costs, or both; • increases in marketing, sales, and other operating expenses that we may incur to grow and expand our footprint and to remain competitive; 45 Table of Contents • the ability to maintain and open new centers; • successful expansion into international markets; • constraints on the availability of consumer financing or increased down payment requirements to finance our procedures; • system failures or breaches of security or privacy; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to healthcare regulation, privacy, consumer product safety, and advertising, or enforcement by government regulators, including fines, orders, or consent decrees; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; • changes in accounting standards, policies, guidance, interpretations, or principles; and • changes in business or macroeconomic conditions, including lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages.
Our financial condition and operating results in any given quarter can be influenced by numerous factors, many of which we are unable to predict or are outside of our control, including: • the continued market acceptance of, and the growth of the body contouring market; • our ability to maintain and attract new customers; • our development and improvement of the quality of the AirSculpt ® experience, including, improving our proprietary AirSculpt ® method and innovating new procedures; • any change in the competitive landscape of our market; • pricing pressure as a result of competition or otherwise; • delays or disruptions in our supply of handpieces; • errors in our forecasting of the demand for our services, which could lead to lower revenue or increased costs, or both; • increases in marketing, sales, and other operating expenses that we may incur to grow and expand our footprint and to remain competitive; 46 Table of Contents • the ability to maintain and open new centers; • successful expansion into international markets; • constraints on the availability of consumer financing or increased down payment requirements to finance our procedures; • system failures or breaches of security or privacy; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to healthcare regulation, privacy, consumer product safety, and advertising, or enforcement by government regulators, including fines, orders, or consent decrees; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; • changes in accounting standards, policies, guidance, interpretations, or principles; and • changes in business or macroeconomic conditions, including lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages.
Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will continue to meet those tests. A breach of any of these covenants could result in a default under our Term Loan and Revolving Facility.
Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we cannot assure you that we will continue to meet those tests. A breach of any of these covenants could result in a default under our Term Loan and Revolving Credit Facility.
If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets, excluding assets of our non-guarantor subsidiaries, as security under our Term Loan and Revolving Facility.
If we were unable to repay those amounts, the lenders could proceed against the collateral granted to them to secure that indebtedness. We have pledged substantially all of our assets, excluding assets of our non-guarantor subsidiaries, as security under our Term Loan and Revolving Credit Facility.
As a result, we face even greater competition in these markets than in the United States. Further, our patent protection is limited to the United States, and therefore we may face increased competition from competitors using procedures similar to the AirSculpt® procedure in other countries.
As a result, we face even greater competition in these markets than in the United States. Further, our patent protection of AirSculpt® is limited to the United States, and therefore we may face increased competition from competitors using procedures similar to the AirSculpt® procedure in other countries.
We depend on our senior management, and we may be adversely affected if we lose any member of our senior management. Because our senior management has been key to our growth and success, we are highly dependent on Dr. Aaron Rollins, our founder and Executive Chairman of our board of directors.
We depend on our senior management, and we may be adversely affected if we lose any member of our senior management. Because our senior management has been key to our success, we are highly dependent on Dr. Aaron Rollins, our founder and Executive Chairman of our board of directors.
Despite the implementation of security measures, our internal computer systems and those of our current and any other contractors, consultants, collaborators and third-party service providers, such measures may not be effective in every instance. 29 Table of Contents Cybercrime and hacking techniques are constantly evolving, and we and/or our third-party service providers may be unable to anticipate or avoid attempted or actual security breaches, react in a timely manner, or implement adequate preventative measures, particularly given the increasing use of hacking techniques designed to circumvent controls, avoid detection, and remove or obfuscate forensic artifacts.
Despite the implementation of security measures, our internal computer systems and those of our current and any other contractors, consultants, collaborators and third-party service providers, such measures may not be effective in every instance. 30 Table of Contents Cybercrime and hacking techniques are constantly evolving, and we and/or our third-party service providers may be unable to anticipate or avoid attempted or actual security breaches, react in a timely manner, or implement adequate preventative measures, particularly given the increasing use of hacking techniques designed to circumvent controls, avoid detection, and remove or obfuscate forensic artifacts.
Despite our current indebtedness levels, we and our subsidiaries may still be able to incur substantially more debt, which could further exacerbate the risks associated with our substantial leverage. We and our subsidiaries may be able to incur substantial additional indebtedness in the future, including secured indebtedness.
Despite our current indebtedness levels, we and our subsidiaries may still be able to incur more debt, which could further exacerbate the risks associated with our substantial leverage. We and our subsidiaries may be able to incur additional indebtedness in the future, including secured indebtedness.
The decision to undergo an AirSculpt ® procedure is thus driven by patient demand, which may be influenced by a number of factors, such as: 17 Table of Contents • the success of our sales and marketing programs; • our success in attracting consumers who have not previously undergone an aesthetic procedure; • the extent to which the AirSculpt ® procedure satisfies patient expectations; • our ability to properly train our surgeons in performing AirSculpt ® procedures such that our patients do not experience excessive discomfort during treatment or adverse side effects; • the cost, safety, and effectiveness of AirSculpt ® procedures versus other aesthetic treatments; • consumer sentiment about the benefits and risks of aesthetic procedures generally and the AirSculpt ® procedure in particular; • general consumer confidence, which may be impacted by economic and political conditions; • our use of social media to drive new customer acquisition; and • our ability to offer virtual consultations to our patients.
The decision to undergo an AirSculpt ® procedure is thus driven by patient demand, which may be influenced by a number of factors, such as: • the success of our sales and marketing programs; • our success in attracting consumers who have not previously undergone an aesthetic procedure; • the extent to which the AirSculpt ® procedure satisfies patient expectations; • our ability to properly train our surgeons in performing AirSculpt ® procedures such that our patients do not experience excessive discomfort during treatment or adverse side effects; • the cost, safety, and effectiveness of AirSculpt ® procedures versus other aesthetic treatments; • consumer sentiment about the benefits and risks of aesthetic procedures generally and the AirSculpt ® procedure in particular; • general consumer confidence, which may be impacted by economic and political conditions; • our use of social media to drive new customer acquisition; and • our ability to offer virtual consultations to our patients.
As a result, we cannot be certain that our procedures will continue to be competitive with current or future medical advances in the weight loss and obesity solutions market.
As a result, we cannot be certain that our procedures will continue to be competitive with current or future technologies and medical advances in the weight loss and obesity solutions market.
These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 44 Table of Contents Operating as a public company makes it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
These activities may divert management’s attention from other business concerns, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 45 Table of Contents Operating as a public company makes it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage.
We cannot predict the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits. 38 Table of Contents Certain risks are inherent in providing prescription and over the counter (“OTC”) treatments, and our insurance may not be adequate to cover any claims against us.
We cannot predict the impact on our business of new or amended laws or regulations or any changes in the way existing and future laws and regulations are interpreted or enforced, nor can we ensure we will be able to obtain or maintain any required licenses or permits. 39 Table of Contents Certain risks are inherent in providing prescription and over the counter (“OTC”) treatments, and our insurance may not be adequate to cover any claims against us.
In addition, our Term Loan and Revolving Facility contain other and more restrictive covenants, including covenants requiring us to maintain specified financial ratios triggered in certain situations and to satisfy other financial condition tests.
In addition, our Term Loan and Revolving Credit Facility contain other and more restrictive covenants, including covenants requiring us to maintain specified financial ratios triggered in certain situations and to satisfy other financial condition tests.
If the lenders under our Term Loan and Revolving Facility accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our Term Loan and Revolving Facility and our other indebtedness.
If the lenders under our Term Loan and Revolving Credit Facility accelerate the repayment of borrowings, we cannot assure you that we will have sufficient assets to repay our Term Loan and Revolving Credit Facility and our other indebtedness.
We seek to protect our position by filing patent applications in the United States related to our proprietary procedures and any products that we may develop that are important to our business.
We seek to protect our position by filing patent applications in the United States and internationally related to our proprietary procedures and any products that we may develop that are important to our business.
Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there is a risk we may develop one or more procedures or other technologies without knowledge of a pending patent application, which if such patent application 32 Table of Contents issued into a patent would result in our procedures or technologies infringing such patent.
Because patent applications can take years to issue and are often afforded confidentiality for some period of time, there is a risk we may develop one or more procedures or other technologies without knowledge of a pending patent application, which if such patent application 33 Table of Contents issued into a patent would result in our procedures or technologies infringing such patent.
In any such lawsuit or other proceedings, a court or other administrative body may decide that a patent of 33 Table of Contents ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
In any such lawsuit or other proceedings, a court or other administrative body may decide that a patent of 34 Table of Contents ours is invalid or unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question.
Any enforcement action against us, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. 36 Table of Contents In pursuing our growth strategy, we may seek to expand our presence into states in which we do not currently operate.
Any enforcement action against us, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business. 37 Table of Contents In pursuing our growth strategy, we may seek to expand our presence into states in which we do not currently operate.
However, these choice of forum provisions may limit a stockholder’s ability to bring a Proceeding in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or stockholders. 43 Table of Contents Further, these choice of forum provisions may increase the costs for a stockholder to bring such a Proceeding and may discourage them from doing so.
However, these choice of forum provisions may limit a stockholder’s ability to bring a Proceeding in a judicial forum that it finds favorable for disputes with us or our directors, officers, other employees or stockholders. 44 Table of Contents Further, these choice of forum provisions may increase the costs for a stockholder to bring such a Proceeding and may discourage them from doing so.
Outcomes from these examinations and audits could have an adverse effect on our financial condition and results of operations. 27 Table of Contents If there is a change in accounting standards by the Financial Accounting Standards Board or the interpretation thereof affecting consolidation of entities, it could have a material adverse effect on our consolidation of total revenue derived from the Professional Associations.
Outcomes from these examinations and audits could have an adverse effect on our financial condition and results of operations. 28 Table of Contents If there is a change in accounting standards by the Financial Accounting Standards Board or the interpretation thereof affecting consolidation of entities, it could have a material adverse effect on our consolidation of total revenue derived from the Professional Associations.
We provide comprehensive, administrative and non-clinical Management Services to our affiliated Professional Associations in exchange for a management fee. Regulatory authorities, state boards of medicine, state attorneys general and other parties 37 Table of Contents may assess or determine that our relationships with our affiliated Professional Associations and surgeons violate state CPOM and/or fee-splitting prohibitions.
We provide comprehensive, administrative and non-clinical Management Services to our affiliated Professional Associations in exchange for a management fee. Regulatory authorities, state boards of medicine, state attorneys general and other parties 38 Table of Contents may assess or determine that our relationships with our affiliated Professional Associations and surgeons violate state CPOM and/or fee-splitting prohibitions.
Therefore, there can be no assurance that our non-compete agreements related to employed or otherwise contracted surgeons will be enforceable if challenged in certain states. In such event, we would be unable to prevent former employed or otherwise contracted surgeons from competing with us, potentially resulting in the loss of some of our business.
Therefore, there can be no assurance that our non-compete agreements related to employed or otherwise contracted surgeons will be enforceable if challenged in certain states. In such event, we would be unable to prevent formerly employed or otherwise contracted surgeons from competing with us, potentially resulting in the loss of some of our business.
If our trademarks and trade names are not adequately protected, that could adversely impact our ability to build name recognition in certain markets. 35 Table of Contents We rely on trademarks, service marks and trade names to distinguish our procedures and services from those of our competitors and have registered or applied to register these trademarks.
If our trademarks and trade names are not adequately protected, that could adversely impact our ability to build name recognition in certain markets. 36 Table of Contents We rely on trademarks, service marks and trade names to distinguish our procedures and services from those of our competitors and have registered or applied to register these trademarks.
Failure to manage our future growth effectively and profitably could have an adverse effect on our business, financial condition, and operating results. We are dependent upon the success of the AirSculpt ® body sculpting procedure. If market acceptance for the AirSculpt ® procedure fails to grow significantly, our business and future prospects could be harmed.
Failure to manage our long-term future growth effectively and profitably could have an adverse effect on our business, financial condition, and operating results. We are dependent upon the success of the AirSculpt ® body sculpting procedure. If market acceptance for the AirSculpt ® procedure fails to grow significantly, our business and future prospects could be harmed.
The theft or unauthorized use or publication of our trade secrets and other confidential proprietary information could reduce the differentiation of our 34 Table of Contents procedures and harm our business, the value of our investment in development could be reduced and third parties may make claims against us related to losses of their confidential or proprietary information.
The theft or unauthorized use or publication of our trade secrets and other confidential proprietary information could reduce the differentiation of our 35 Table of Contents procedures and harm our business, the value of our investment in development could be reduced and third parties may make claims against us related to losses of their confidential or proprietary information.
Use and storage of paper medical records increases risk of loss, destruction and could increase human error with respect to documentation and patient care. 28 Table of Contents The affiliated Professional Associations continue to rely on the use paper medical records, which are initially stored on-site at our centers.
Use and storage of paper medical records increases risk of loss, destruction and could increase human error with respect to documentation and patient care. 29 Table of Contents The affiliated Professional Associations continue to rely on the use of paper medical records, which are initially stored on-site at our centers.
For example, the California Confidentiality of Medical Information Act (CMIA) regulates the disclosure of medical information, and applies to the IIHI we Process in the ordinary course of our Business. Violations of the CMIA can result in personal liability to the patient, the imposition of 39 Table of Contents administrative fines and civil penalties, and even criminal liability.
For example, the California Confidentiality of Medical 40 Table of Contents Information Act (CMIA) regulates the disclosure of medical information, and applies to the IIHI we Process in the ordinary course of our Business. Violations of the CMIA can result in personal liability to the patient, the imposition of administrative fines and civil penalties, and even criminal liability.
Despite our 30 Table of Contents implementation of security measures, cyber-attacks are becoming more sophisticated and frequent, and we or our third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures against them or to prevent additional attacks.
Despite our 31 Table of Contents implementation of security measures, cyber-attacks are becoming more sophisticated and frequent, and we or our third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures against them or to prevent additional attacks.
We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some 40 Table of Contents investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
We 41 Table of Contents cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Insurance coverage may not continue to be available at a cost allowing us to maintain adequate levels of insurance. If one or more successful claims against us, our affiliated Professional Associations or surgeons were not covered by or exceeded the coverage of our insurance, our financial condition and results of operations could be adversely affected.
Insurance coverage may not continue to be available at a cost allowing us to maintain adequate levels of insurance. If one or more successful claims against us, our affiliated 23 Table of Contents Professional Associations or surgeons were not covered by or exceeded the coverage of our insurance, our financial condition and results of operations could be adversely affected.
Our ability to restructure or refinance our debt, if at all, will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could 26 Table of Contents further restrict our business operations.
Our ability to restructure or refinance our debt, if at all, will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
Because we have a limited history operating our business at its current scale, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model future growth.
Because we have a limited history operating our business at its current scale, it is difficult to evaluate our current business and future prospects, including our ability to plan for and model long-term future growth.
Therefore, we cannot be certain that we were the first to 31 Table of Contents make the inventions claimed in our patents or pending patent applications or that we were the first to file for patent protection of such inventions.
Therefore, we cannot be certain that we were the first to 32 Table of Contents make the inventions claimed in our patents or pending patent applications or that we were the first to file for patent protection of such inventions.
As of December 31, 2023, we remained an emerging growth company, and as such, our independent registered public accounting firm is not required to certify the effectiveness of our internal controls.
As of December 31, 2024, we remained an emerging growth company, and as such, our independent registered public accounting firm is not required to certify the effectiveness of our internal controls.
Opening new centers may result in inadvertent oversaturation, temporarily or permanently divert customers from our existing centers to new centers and reduce comparable centers revenue, thus adversely affecting our overall financial performance.
Opening new centers could result in inadvertent oversaturation, temporarily or permanently divert customers from our existing centers to new centers and reduce comparable centers revenue, thus adversely affecting our overall financial performance.
Changes in how web and mail services block, organize and prioritize email may reduce the number of subscribers who receive or open our emails. For example, Google’s Gmail service has a feature that organizes incoming emails into categories (for example, primary, social and promotions).
Changes in how web and mail services block, organize and prioritize email may reduce the number of subscribers who receive or open our 20 Table of Contents emails. For example, Google’s Gmail service has a feature that organizes incoming emails into categories (for example, primary, social and promotions).
If there is not sufficient patient demand for AirSculpt ® procedures, our financial results and future prospects will be harmed. The AirSculpt ® procedure is an elective procedure, the cost of which must be borne by the patient, and is not reimbursable through government or private health insurance.
If there is not sufficient patient demand for AirSculpt ® procedures, our financial results and future prospects will be harmed. 17 Table of Contents The AirSculpt ® procedure is an elective procedure, the cost of which must be borne by the patient, and is not reimbursable through government or private health insurance.
Risks Related to Ownership of Our Common Stock • We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors. • Our stock price could be extremely volatile, and, as a result, you may not be able to resell your shares at or above the price you paid for them. • There may be sales of a substantial amount of our common stock by our current stockholders, and these sales could cause the price of our common stock to fall. 15 Table of Contents • Certain of our directors and executive officers hold a substantial portion of our common stock, which may lead to conflicts of interest with other stockholders over corporate transactions and other corporate matters. • Provisions in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value. • We have no plans to pay cash dividends on our common stock for the foreseeable future. • Our internal controls may not be effective. • The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business. • Our stock price and trading volume could decline if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business. • We may be subject to securities litigation, which is expensive and could divert management attention.
Risks Related to Ownership of Our Common Stock • We are an “emerging growth company,” and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors. • Our stock price could be extremely volatile, and, as a result, you may not be able to resell your shares at or above the price you paid for them. • There may be sales of a substantial amount of our common stock by our current stockholders, and these sales could cause the price of our common stock to fall. • Certain of our directors and executive officers hold a substantial portion of our common stock, which may lead to conflicts of interest with other stockholders over corporate transactions and other corporate matters. • Provisions in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value. • We have no plans to pay cash dividends on our common stock for the foreseeable future. • Our internal controls may not be effective. • The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business. • Our stock price and trading volume could decline if securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business. • We may be subject to securities litigation, which is expensive and could divert management attention. 15 Table of Contents Risks Related to Our Business Our operating results could be adversely affected if we are unable to successfully implement certain cost savings initiatives and revenue growth strategies.
We have grown rapidly in recent years and have limited operating experience at our current scale of operations. If we are unable to manage our growth effectively, our brand, company culture, and financial performance may suffer. We have expanded rapidly and have limited operating experience at our current size.
We have grown rapidly in recent years and have limited operating experience at our current scale of operations. If we are unable to manage and capitalize on our scale effectively, our brand, company culture, and financial performance may suffer. We have expanded rapidly and have limited operating experience at our current size.
Because of the market opportunity and the high growth potential of the market for weight loss and obesity solutions, existing and potential competitors have historically dedicated, and will continue to dedicate, significant resources to aggressively develop and commercialize their products.
Because of the market opportunity and the high growth potential of the market for weight loss and obesity solutions, existing and potential competitors have historically dedicated, and will 19 Table of Contents continue to dedicate, significant resources to aggressively develop and commercialize their products.
For example, in 2023, certain drugs initially approved for use in diabetes patients gained market acceptance for use in weight loss following FDA approvals for weight loss indications. 19 Table of Contents As of the date of this report, it is difficult to predict the long-term market impact of weight-loss drugs, including their long-term efficacy and potential drawbacks.
For example, in 2023, certain drugs initially approved for use in diabetes patients gained market acceptance for use in weight loss treatment following FDA approvals for weight loss indications. As of the date of this report, it is difficult to predict the long-term market impact of weight-loss drugs, including their long-term efficacy as weight loss drugs and potential drawbacks.
To successfully continue to expand in markets outside of North America, we must address many issues with which we have limited experience.
To successfully continue to grow in markets outside of North America, we must address many issues with which we have limited experience.
If the Company's total leverage ratio is equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin of 1.5% or 2.5% for base rate or SOFR, respectively. If the Company's total leverage ratio is below 1.0x, the applicable per annum margin is 1.0% or 2.0% for base rate or SOFR, respectively.
If the Company's total leverage ratio was equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin was 1.5% or 2.5% for base rate or SOFR, respectively. If the Company's total leverage ratio was below 1.0x, the applicable per annum margin was 1.0% or 2.0% for base rate or SOFR, respectively.
In addition, oversaturation or the risk of oversaturation may reduce or adversely affect the number or location of centers we plan to open, and could thereby materially and adversely affect our growth plans overall or in particular markets.
In addition, oversaturation or the risk of oversaturation could reduce or adversely affect the number or location of centers we plan to open, and could thereby materially and adversely affect our long-term growth plans overall or in particular markets.
The number of surgeons available to work through our affiliated Professional Associations at our centers is finite, and we face intense competition from other cosmetic treatment centers in recruiting surgeons to work in our centers. In addition, there may be other companies that may decide to enter our business.
We face competition for surgeons. 21 Table of Contents The number of surgeons available to work through our affiliated Professional Associations at our centers is finite, and we face intense competition from other cosmetic treatment centers in recruiting surgeons to work in our centers. In addition, there may be other companies that may decide to enter our business.
Our ability to successfully open and operate new centers depends on many factors, including, among others, our ability to: • recruit qualified surgeons through our affiliated Professional Associations for our new centers; • address regulatory, competitive, and marketing, and other challenges encountered in connection with expansion into new markets; • hire, train and retain surgeons and other personnel through our affiliated Professional Associations; • maintain adequate information system and other operational system capabilities; • successfully integrate new centers into our existing management structure with affiliated Professional Associations and operations, including information system integration; • negotiate acceptable lease terms at suitable locations; • source sufficient levels of medical supplies at acceptable costs; • obtain and maintain necessary permits and licenses through our affiliated Professional Associations; • construct and open our centers on a timely basis; • generate sufficient levels of cash or obtain financing on acceptable terms to support our expansion; • achieve and maintain brand awareness in new and existing markets; and • identify and satisfy the needs and preferences of our patients.
Our ability to successfully operate new centers depends on many factors, including, among others, our ability to: • recruit qualified surgeons through our affiliated Professional Associations for our new centers; • address regulatory, competitive, and marketing, and other challenges encountered in connection with expansion into new markets; • hire, train and retain surgeons and other personnel through our affiliated Professional Associations; • maintain adequate information system and other operational system capabilities; • successfully integrate new centers into our existing management structure with affiliated Professional Associations and operations, including information system integration; • source sufficient levels of medical supplies at acceptable costs; • obtain and maintain necessary permits and licenses through our affiliated Professional Associations; • generate sufficient levels of cash or obtain financing on acceptable terms to support our expansion; • achieve and maintain brand awareness in new markets; and • identify and satisfy the needs and preferences of our patients.
The effect of this structure is that we depend on the earnings of our subsidiaries, and the distribution or payment to us of a portion of these earnings to meet our obligations, including those under our Term Loan and Revolving Facility and any of our other debt obligations.
The effect of this structure is that we depend on the earnings of our 27 Table of Contents subsidiaries, and the distribution or payment to us of a portion of these earnings to meet our obligations, including those under our Term Loan and Revolving Credit Facility and any of our other debt obligations.
If we are required to adapt our business model, we may be limited to only in-person services, which may have a material adverse effect on our business, financial condition and results of operations. We face competition for surgeons.
If we are required to adapt our business model, we may be limited to only in-person services, which may have a material adverse effect on our business, financial condition and results of operations.
Risks Related to Our Business Macroeconomic trends including inflation and rising interest rates may adversely affect our financial condition and results of operations. Macroeconomic trends, including increases in inflation and rising interest rates, may adversely impact our business, financial condition and results of operations.
Macroeconomic trends including inflation and rising interest rates may adversely affect our financial condition and results of operations. Macroeconomic trends, including increases in inflation and rising interest rates, may adversely impact our business, financial condition and results of operations.
The unpredictability of this regulatory landscape means that sudden 21 Table of Contents changes in policy regarding standards of care and what is permissible are possible.
The unpredictability of this regulatory landscape means that sudden changes in policy regarding standards of care and what is permissible are possible.
We rely on a skilled, licensed labor force to provide our medspa and cosmetic services, and the supply of this labor force is finite. If we cannot hire adequate staff for our clinics, we will not be able to operate. As of December 31, 2023, we employed approximately 346 full-time employees and approximately 35 part-time employees.
We rely on a skilled, licensed labor force to provide our medspa and cosmetic services, and the supply of this labor force is finite. If we cannot hire adequate staff for our clinics, we will not be able to operate. As of December 31, 2024, we employed approximately 389 full-time employees and approximately 33 part-time employees.
In particular, we have experienced periods of high revenue growth, including most recently, during the global pandemic, that we do not expect to continue as the business, and the body contouring market, matures. Estimates of future revenue growth and future growth rates are subject to many risks and uncertainties and our future revenue may differ materially from our projections.
In particular, we have experienced periods of high revenue growth, including during the global pandemic, that we do not expect to continue as the business, and the body contouring market, mature. Estimates of future revenue trends are subject to many risks and uncertainties and our future revenue may differ materially from our projections.
Our Term Loan and Revolving Facility contain various covenants that limit, among other things, our ability and the ability of our restricted subsidiaries to: • incur additional indebtedness; • make certain distributions, investments and other restricted payments; • dispose of our assets; • grant liens on our assets; • engage in transactions with affiliates; • merge, consolidate or transfer substantially all of our assets; and • make payments to us (in the case of our restricted subsidiaries).
Our Term Loan and Revolving Credit Facility, including the recent Third Amendment, contain various covenants that limit, among other things, our ability and the ability of our restricted subsidiaries to: • incur additional indebtedness; • make certain distributions, investments and other restricted payments; • dispose of our assets; 26 Table of Contents • grant liens on our assets; • engage in transactions with affiliates; • merge, consolidate or transfer substantially all of our assets; and • make payments to us (in the case of our restricted subsidiaries).
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this Annual Report on Form 10-K and others such as: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • announcements by us, our competitors or our vendors of significant contracts, acquisitions, joint marketing relationships, joint ventures or capital commitments; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments affecting us or our industry; • speculation in the press or investment community; • changes in accounting principles; • geopolitical conditions such as acts of terrorism, military or armed conflicts, such as the Russian invasion of Ukraine, or global pandemics; • natural disasters and other calamities; and 41 Table of Contents • changes in general market and economic conditions.
The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those described elsewhere in this Annual Report on Form 10-K and others such as: • variations in our operating performance and the performance of our competitors; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or our industry; • announcements by us, our competitors or our vendors of significant contracts, acquisitions, joint marketing relationships, joint ventures or capital commitments; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments affecting us or our industry; • speculation in the press or investment community; • changes in accounting principles; • geopolitical conditions such as acts of terrorism, military or armed conflicts, such as the Russian invasion of Ukraine, or global pandemics; • natural disasters, including earthquakes, floods and wildfires (such as the 2025 Los Angeles wildfires), and other calamities; and • changes in general market and economic conditions. 42 Table of Contents In the past, securities class action litigation has often been initiated against companies following periods of volatility in their stock price.
In addition, surgeons who provide 23 Table of Contents professional services in our centers are required to maintain separate malpractice coverage with similar minimum coverage limits.
In addition, surgeons who provide professional services in our centers are required to maintain separate malpractice coverage with similar minimum coverage limits.
Such shares are freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). As of February 26, 2024, approximately 79% of our outstanding common stock is held by investment funds affiliated with our Sponsor and members of our management and employees.
Such shares are freely transferable, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). As of March 13, 2025, approximately 77.0% of our outstanding common stock is held by investment funds affiliated with our Sponsor and members of our management and employees.
Further, many of our centers are leased pursuant to multi-year leases, and our ability to negotiate favorable terms on an expiring lease or for a lease renewal option may depend on factors that are not within our control. Expanding internationally will require significant additional investment.
Further, many of our centers are leased pursuant to multi-year leases, and our ability to negotiate favorable terms on an expiring lease or for a lease renewal option may depend on factors that are not within our control.
Daniel Sollof and Adam Feinstein remain on our board of directors and hold contractual rights to seats on our board of directors for as long as our Sponsor maintains certain levels of ownership of our common stock. Currently, affiliates of our Sponsor beneficially own 51.1% of our common stock.
Daniel Sollof and Adam Feinstein remain on our board of directors and hold contractual rights to seats on our board of directors for as long as our Sponsor maintains certain levels of ownership of our common stock.
If there were an adverse regulatory, economic or other development in any of the states and jurisdictions in which we have a higher concentration of centers there could be unanticipated adverse impacts on our business in those states and jurisdictions, which could have a material adverse effect on our business, prospects, results of operations and financial condition.
In the event of any other adverse regulatory, economic or other developments in any of the states and jurisdictions in which we have a higher concentration of centers there could be unanticipated adverse impacts on 24 Table of Contents our business in those states and jurisdictions, which could have a material adverse effect on our business, prospects, results of operations and financial condition.
The demand for medical professionals has increased significantly as a result of the COVID-19 pandemic. Further, even before the COVID-19 pandemic, the demand for medical professionals had been increasing as more consumers began gravitating to health and wellness treatments, such as medspa and cosmetic services.
The demand for medical professionals increased significantly during the COVID-19 pandemic and in the following years. Further, even before the COVID-19 pandemic, the demand for medical professionals had been increasing as more consumers began gravitating to health and wellness treatments, such as medspa and cosmetic services.
Our business depends on email and other messaging services for promoting our brand and services. If we are unable to successfully deliver emails or other messages to potential customers, or if potential customers decline to open or read our messages, our business, financial condition and results of operations may be materially adversely affected.
If we are unable to successfully deliver emails or other messages to potential customers, or if potential customers decline to open or read our messages, our business, financial condition and results of operations may be materially adversely affected.
To effectively manage and capitalize on our growth, we must continue to expand our marketing, focus on innovation and upgrade our management information systems and other processes.
To effectively manage and capitalize on our scale, we must focus on innovation and upgrade our management information systems and other processes.
Because our senior management has contributed greatly to our growth since inception, the loss of key management personnel, without adequate replacements, or our inability to attract, retain and motivate sufficient numbers of qualified management personnel could have a material adverse effect on our financial condition and results of operations.
Because our senior management is instrumental to our future success, the loss of key management personnel, without adequate replacements, or our inability to attract, retain and motivate sufficient numbers of qualified management personnel could have a material adverse effect on our financial condition and results of operations.
If our centers fail to achieve, or are unable to sustain, profitability levels, our business may be materially harmed and we may incur significant costs associated with closing those centers. Our plans to accelerate the growth of new centers may increase this risk.
If our centers fail to achieve, or are unable to sustain, profitability levels, our business may be materially harmed and we may incur significant costs associated with closing those centers.
We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated revenue growth and operating improvements will be realized or that future borrowings will be available to us under our Term Loan and Revolving Facility in amounts sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs.
We cannot assure you that our business will generate sufficient cash flow from operations, that revenue trends and operating improvements anticipated as of the date of this Annual Report on Form 10-K will be realized or that future borrowings will be available to us under our Term Loan and Revolving Credit Facility in amounts sufficient to enable us to pay our indebtedness, or to fund our other liquidity needs.
As of December 31, 2023, total outstanding indebtedness under our senior credit facility was approximately $72.9 million, consisting of $72.9 million in term loans (the “Term Loan”) and $5.0 million revolving credit facility (the “Revolver”), of which approximately $5.0 million was undrawn (the “Term Loan and Revolving Facility”).
As of December 31, 2024, total outstanding indebtedness under our senior credit facility was approximately $75.8 million, consisting of $70.8 million in term loans (the “Term Loan”) and $5.0 million drawn on the revolving credit facility (the “Revolver”) (the “Term Loan and Revolving Credit Facility”).
Our continued growth could strain our existing resources and we could experience ongoing operating difficulties in managing our business across numerous jurisdictions, including difficulties in hiring, training, and managing surgeons and other staff in our centers through the Professional Associations. Failure to scale and preserve our high-performance, results-driven culture during this period of growth could harm our future success.
Future growth could strain our existing resources and we could experience ongoing operating difficulties in managing our 16 Table of Contents business across numerous jurisdictions, including difficulties in hiring, training, and managing surgeons and other staff in our centers through the Professional Associations. Failure to scale and preserve our high-performance, client-focused culture could delay or prevent future success.
As of the date of this Annual Report on Form 10-K, we operate through our arrangements with our affiliated Professional Associations twenty-two centers in Arizona, California, Colorado, Florida, Georgia, Illinois, Massachusetts, Minnesota, Nevada, New York, North Carolina, Pennsylvania, Tennessee, Texas, Utah, Washington, and Virginia as well as Toronto, Canada. 24 Table of Contents In addition, our centers located in California represented 20% of our revenue in 2023 and 2022.
As of the date of this Annual Report on Form 10-K, we operate through our arrangements with our affiliated Professional Associations thirty-two centers in Arizona, California, Colorado, Florida, Georgia, Illinois, Kansas, Massachusetts, Michigan, Minnesota, Nevada, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Utah, Washington, and Virginia as well as Toronto, Canada and London, United Kingdom.
If we do not adapt to meet these evolving challenges or if our management team does not effectively scale with our growth, we may experience erosion to our brand and our company culture may be harmed. 16 Table of Contents Our growth strategy contemplates expanding our footprint by opening new centers around the world.
If we do not adapt to meet these evolving challenges or if our management team does not effectively scale, we may experience erosion to our brand and our company culture may be harmed. While we do not expect to open new centers in the next year, our long-term growth strategy contemplates expanding our footprint opportunistically by opening new centers.
There may be sales of a substantial amount of our common stock by our current stockholders, and these sales could cause the price of our common stock to fall. As of February 26, 2024, there are 57,422,246 shares of common stock outstanding.
There may be sales of a substantial amount of our common stock by our current stockholders, and these sales could cause the price of our common stock to fall. As of March 13, 2025, there are 58,574,516 shares of common stock outstanding.
Successful implementation of our growth strategy will require significant expenditures before any substantial associated revenue is generated and we cannot guarantee that these increased investments will result in corresponding and offsetting revenue growth. Our planned expansion will place increased demands on our existing operational, managerial, and administrative resources.
Opportunistically expanding our footprint will require significant expenditures before any substantial associated revenue is generated and we cannot guarantee that these investments will result in corresponding and offsetting revenue growth. Our opportunistic expansions, if and when they occur, could place increased demands on our existing operational, managerial, and administrative resources.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Audit Committee Chair holds a Certification in Cybersecurity Oversight from the National Association of Corporate Directors. Our CIO has 30+ years of experience in Information Technology, 10 years specifically in IT and IT Security combined. The CIO also has a Ph.D. in Cybersecurity Management, and has taken multiple companies through both NIST and HiTrust Cybersecurity Framework Audits.
Biggest changeOur Audit Committee Chair holds a Certification in Cybersecurity Oversight from the National Association of Corporate Directors. The effectiveness of the cybersecurity and information security program is tested through a combination of internal and external assessments.
Such a breach could expose us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share. 46 Table of Contents Our Board of Directors exercises its oversight role through the Audit subcommittee, which provides the Board with regular reports and findings from our Chief Information Officer ("CIO").
Such a breach could expose us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share. 47 Table of Contents Our board of directors exercises its oversight role through the Audit Committee, which provides the board of directors with regular reports and findings from our Chief Financial Officer.
Added
Updates are provided to senior management and the Audit Committee on a quarterly basis for informed decision-making and as part of the Company's broader risk management process.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeState/Country City Number of Procedure Rooms Arizona Scottsdale 2 California Beverly Hills 2 California Orange County 2 California Sacramento 3 California San Diego 2 California San Jose 2 Colorado Denver 2 Florida Orlando 2 Florida Miami 2 Georgia Atlanta 2 Illinois Chicago 2 Massachusetts Boston 3 Minnesota Minneapolis 2 Nevada Las Vegas 2 New York New York 2 North Carolina Charlotte 2 North Carolina Raleigh 2 Pennsylvania Philadelphia 2 Tennessee Nashville 2 Texas Austin 2 Texas Dallas 3 Texas Houston 2 Utah Salt Lake City 2 Washington Seattle 2 Virginia Vienna 2 Canada Toronto 2 United Kingdom London 2 __________ * Leases have been signed with facilities in Birmingham, MI, Deerfield, IL, White Plains, NY and Kansas City, MO but it is not yet known when these facilities will open for business.
Biggest changeState/Country City Number of Procedure Rooms Arizona Scottsdale 2 California Beverly Hills 2 California Orange County 2 California Sacramento 3 California San Diego 2 California San Jose 2 Colorado Denver 2 Florida Orlando 2 Florida Miami 2 Georgia Atlanta 2 Illinois Chicago 2 Illinois Deerfield 2 Kansas Kansas City 2 Massachusetts Boston 3 Michigan Birmingham 2 Minnesota Minneapolis 2 Nevada Las Vegas 2 New York New York 2 New York White Plains 2 North Carolina Charlotte 2 North Carolina Raleigh 2 Ohio Columbus 2 Pennsylvania Philadelphia 2 Tennessee Nashville 2 Texas Austin 2 Texas Dallas 3 Texas Houston 2 Utah Salt Lake City 2 Washington Seattle 2 Virginia Vienna 2 Canada Toronto 2 United Kingdom London 2 48 Table of Contents We intend to procure additional space as we hire additional employees and expand geographically.
We use these locations primarily for sales and marketing, information technology, social media content management, research and development, supply chain and logistics, finance, human resources, and editing related to AirSculpt ® TV. In addition to our corporate headquarters, as of the date of this Annual Report on Form 10-K, we operate twenty-seven centers* from which we offer AirSculpt ® procedures.
We use these locations primarily for sales and marketing, information technology, social media content management, research and development, supply chain and logistics, finance, human resources, and editing related to AirSculpt ® TV. In addition to our corporate headquarters, as of the date of this Annual Report on Form 10-K, we operate thirty-two centers from which we offer AirSculpt ® procedures.
We intend to procure additional space as we hire additional employees and expand geographically. We believe that our facilities are adequate to meet our needs for the immediate future and that suitable additional space will be available to accommodate any expansion of our operations as needed. 47 Table of Contents
We believe that our facilities are adequate to meet our needs for the immediate future and that suitable additional space will be available to accommodate any expansion of our operations as needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThese claims, to the extent they exceed our insurance deductibles, are covered by insurance, but there can be no assurance that our insurance coverage will be adequate to cover any such liability. Item 4. Mine Safety Disclosures Not applicable. 48 Table of Contents PART II
Biggest changeThese claims, to the extent they exceed our insurance deductibles, are covered by insurance, but there can be no assurance that our insurance coverage will be adequate to cover any such liability. Item 4. Mine Safety Disclosures Not applicable. 49 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information”, incorporated herein by reference.
Biggest changeSecurity Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Equity Compensation Plan Information”, incorporated herein by reference. Item 6. Reserved This item has been removed and reserved pursuant to SEC order.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Shares are traded on the Nasdaq Global Market under the symbol “AIRS.” Dividends During the twelve months ended December 31, 2023, we paid a $0.4 million dividend on our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our c ommon stock are traded on the Nasdaq Global Market under the symbol “AIRS.” Dividends During the twelve months ended December 31, 2024, we paid a $0.3 million dividend on our common stock.
Holders of Record As of February 26, 2024, there were 57,422,246 issued and outstanding shares of common stock held by 35 stockholders of record.
Holders of Record As of March 13, 2025, there were 58,574,516 issued and outstanding shares of common stock held by 32 stockholders of record.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

66 edited+32 added−26 removed41 unchanged
Biggest changeThe following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net (loss)/income, the most directly comparable GAAP financial measure: Twelve Months Ended December 31, ($ in thousands) 2023 2022 2021 Net (loss)/income $ (4,479) $ (14,679) $ 10,551 Plus Sponsor management fee — — 1,636 Equity-based compensation 18,224 29,457 7,185 Loss on debt modification — 932 682 IPO related costs — 731 11,837 Restructuring and related severance costs 5,488 4,111 850 Depreciation and amortization 10,253 8,061 6,597 (Gain)/loss on disposal of long-lived assets (212) 147 — Interest expense, net 6,485 6,751 4,888 Income tax expense 7,477 3,383 329 Adjusted EBITDA $ 43,236 $ 38,894 $ 44,555 Adjusted EBITDA Margin 22.1 % 23.0 % 33.4 % For the twelve months ended December 31, 2023, 2022, and 2021 pre-opening de novo and relocation costs were $3.3 million, $4.3 million, and $1.6 million, respectively. 53 Table of Contents The following table reconciles Adjusted Net Income and Adjusted Net Income per Share to net loss, the most directly comparable GAAP financial measure: Twelve Months Ended December 31, ($ in thousands) 2023 2022 2021 Net (loss)/income $ (4,479) $ (14,679) $ (393) Plus Equity-based compensation 18,224 29,457 4,725 Loss on debt modification — 932 — IPO related costs — 731 317 Restructuring and related severance costs 5,488 4,111 — (Gain)/loss on disposal of long-lived assets (212) 147 — Tax effect of adjustments (2,732) (2,195) (192) Adjusted net income $ 16,289 $ 18,504 $ 4,457 Adjusted net income per share of common stock (1)(2) Basic $ 0.29 $ 0.33 $ 0.08 Diluted $ 0.28 $ 0.32 $ 0.08 Weighted average shares outstanding Basic 56,778,793 55,684,701 55,640,154 Diluted 57,611,469 57,918,005 58,329,428 (1) Diluted Adjusted Net Income Per Share is computed by dividing adjusted net income by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.
Biggest changeFor the twelve months ended December 31, 2024, 2023, and 2022 pre-opening de novo and relocation costs were $1.0 million, $3.3 million, and $4.3 million, respectively. 54 Table of Contents The following table reconciles Adjusted Net Income and Adjusted Net Income per Share to net loss, the most directly comparable GAAP financial measure: Twelve Months Ended December 31, ($ in thousands) 2024 2023 2022 Net loss $ (8,251) $ (4,479) $ (14,679) Plus Equity-based compensation (1) 3,762 18,224 29,457 Loss on debt modification — — 932 IPO related costs — — 731 Restructuring and related severance costs 6,026 5,488 4,111 Loss/(gain) on disposal of long-lived assets 16 (212) 147 Litigation settlements 850 — — Tax effect of adjustments (1,271) (2,732) (2,195) Adjusted net (loss)/income $ 1,132 $ 16,289 $ 18,504 Adjusted net (loss)/income per share of common stock (2) Basic $ 0.02 $ 0.29 $ 0.33 Diluted $ 0.02 $ 0.28 $ 0.32 Weighted average shares outstanding Basic 57,688,906 56,778,793 55,684,701 Diluted 58,281,133 57,611,469 57,918,005 (1) During the first quarter of fiscal year 2024, the Company recorded a cumulative reversal of stock compensation expense of $10.4 million related to reassessing the probability of achieving the performance target on certain of the Company's performance-based stock units.
If the Company's total leverage ratio is equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin is 1.5% or 2.5% for base rate or SOFR, respectively. If the Company's total leverage ratio is below 1.0x, the applicable per annum margin is 1.0% or 2.0% for base rate or SOFR, respectively.
If the Company's total leverage ratio is equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin is 2.0% or 3.0% for base rate or SOFR, respectively. If the Company's total leverage ratio is below 1.0x, the applicable per annum margin is 1.5% or 2.5% for base rate or SOFR, respectively.
All of our revenue is earned from services provided by the Professional Associations we manage. See “Critical Accounting Policies and Estimates—Principles of Consolidation.” Components of Results of Operations Revenue Our revenue is generated from our patented AirSculpt ® procedures performed on our patients. We are 100% self-pay and do not accept payments from the U.S. federal government or payer organizations.
All of our revenue is earned from services provided by the Professional Associations we manage. See “Critical Accounting Policies and Estimates.” Components of Results of Operations Revenue Our revenue is generated from our patented AirSculpt ® procedures performed on our patients. We are 100% self-pay and do not accept payments from the U.S. federal government or payer organizations.
Each surgeon owner of a Professional Association (each a “Surgeon Owner,” and collectively, the “Surgeon Owners”) is also party to a continuity agreement (each, a “Continuity Agreement,” and collectively, the “Continuity Agreements”), which (i) prohibits the applicable surgeons from freely transferring or selling their interests in the Professional Associations, (ii) provides for the ability to add a second surgeon equity holder to help ensure continuity of the Professional Association, and (iii) provides for the automatic transfer of ownership upon the occurrence of certain 61 Table of Contents events, save that, due to limitations under New York law, there is no Continuity Agreement in place with respect to the New York Professional Association.
Each surgeon owner of a Professional Association (each a “Surgeon Owner,” and collectively, the “Surgeon Owners”) is also party to a continuity agreement (each, a “Continuity Agreement,” and collectively, the “Continuity Agreements”), which (i) prohibits the applicable surgeons from freely transferring or selling their interests in the Professional Associations, (ii) provides for the ability to add a second surgeon equity holder to help ensure continuity of the Professional Association, and (iii) provides for the automatic transfer of ownership upon the occurrence of certain events, save that, due to limitations under New York law, there is no Continuity Agreement in place with respect to the New York Professional Association.
We review goodwill for impairment annually in the month of October. We performed our annual review of goodwill impairment in October 2023 and 2022 using a qualitative analysis and determined that a quantitative analysis was not required. There were no triggering events during the twelve months ended December 31, 2023 and 2022.
We review goodwill for impairment annually in the month of October. We performed our annual review of goodwill impairment in October 2024 and 2023 using a qualitative analysis and determined that a quantitative analysis was not required. There were no triggering events during the twelve months ended December 31, 2024 and 2023.
As of December 31, 2023, we had $10.3 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We do not have any letters of credit outstanding as of December 31, 2023.
We do not have any letters of credit outstanding as of December 31, 2024. As of December 31, 2023, we had $10.3 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of December 31, 2023.
Our policy is to require payment for services in advance of performing any procedure. Payments received for which services have yet to been performed were $1.5 million as of December 31, 2023 and $2.4 million as of December 31, 2022, respectively and are included in deferred revenue and patient deposits on our balance sheets.
Our policy is to require payment for services in advance of performing any procedure. Payments received for which services have yet to been performed were $1.2 million as of December 31, 2024 and $1.5 million as of December 31, 2023, respectively and are included in deferred revenue and patient deposits on our balance sheets.
Treasury yield of treasury bonds with a maturity that approximates the expected term of the market-based PSU awards. 62 Table of Contents • Expected dividend yield—The dividend yield is based on the current expectations of dividend payouts. The Company does not anticipate paying any cash dividends in the foreseeable future.
Treasury yield of treasury bonds with a maturity that approximates the expected term of the market-based PSU awards. • Expected dividend yield—The dividend yield is based on the current expectations of dividend payouts. The Company does not anticipate paying any cash dividends in the foreseeable future.
Therefore, we mainly operate by maintaining MSAs with our affiliated Professional Associations, which are owned, directly or indirectly, and operated by a licensed surgeon, and which contract with individual surgeons to provide medical services. Under the MSAs, we provide and perform non-medical Management Services for which we are paid a management fee by each Professional Association.
Therefore, we mainly operate by maintaining MSAs with our affiliated Professional 62 Table of Contents Associations, which are owned, directly or indirectly, and operated by a licensed surgeon, and which contract with individual surgeons to provide medical services. Under the MSAs, we provide and perform non-medical Management Services for which we are paid a management fee by each Professional Association.
We generally expect our selling expenses to increase as we continue to grow our brand and expand our national footprint. We evaluate our selling expense as compared to growth in our sales volume and will invest accordingly to the extent we believe we can increase our growth without materially negatively impacting our Adjusted EBITDA Margins.
We generally expect our selling expenses to increase as we continue to grow our brand and expand our national footprint. We evaluate our selling expense as compared to growth in our sales volume and will invest accordingly to the extent we believe we can position ourselves for future growth without materially negatively impacting our Adjusted EBITDA Margins.
Key Factors Affecting Our Performance Our results of operations and financial condition have been, and will continue to be, affected by a number of factors, including the following: Our Ability to Attract New Patients The decision to undergo an AirSculpt ® procedure is driven by patient demand, which may be influenced by a number of factors, such as: • general consumer confidence, which may be impacted by economic and political conditions; • individual levels of disposable income to pay for our procedures and the continued availability of financing for our patients; • the cost, safety and efficacy of AirSculpt ® relative to other aesthetic products and alternative treatments; • the increased market acceptance, availability and customer awareness of safer, more effective, easier to use and less expensive weight loss solutions, including weight loss drugs and other non-surgical weight loss and obesity solutions; • the success of our sales and marketing programs; • the perceived advantages or disadvantages of AirSculpt ® compared to other aesthetic products and treatments; • the extent to which our AirSculpt ® procedure satisfies patient expectations; • our ability to properly train our surgeons in performing AirSculpt ® procedures such that our patients do not experience excessive discomfort during treatment or adverse side effects; and • consumer sentiment about the benefits and risks of aesthetic procedures generally and AirSculpt ® in particular.
Our Ability to Attract New Patients The decision to undergo an AirSculpt ® procedure is driven by patient demand, which may be influenced by a number of factors, such as: • general consumer confidence, which may be impacted by economic and political conditions; • individual levels of disposable income to pay for our procedures and the continued availability of financing for our patients; • the cost, safety and efficacy of AirSculpt ® relative to other aesthetic products and alternative treatments; • the increased market acceptance, availability and customer awareness of safer, more effective, easier to use and less expensive weight loss solutions, including weight loss drugs and other non-surgical weight loss and obesity solutions; • the success of our sales and marketing programs; • the perceived advantages or disadvantages of AirSculpt ® compared to other aesthetic products and treatments; • the extent to which our AirSculpt ® procedure satisfies patient expectations; • our ability to properly train our surgeons in performing AirSculpt ® procedures such that our patients do not experience excessive discomfort during treatment or adverse side effects; and • consumer sentiment about the benefits and risks of aesthetic procedures generally and AirSculpt ® in particular.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expense were approximately $71.3 million and $44.7 million for the twelve months ended December 31, 2022 and 2021, respectively.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expense were approximately $65.6 million and $71.3 million for the twelve months ended December 31, 2023 and 2022, respectively.
This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. Our actual results could differ materially from those anticipated in the forward-looking statements.
This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See the section entitled “Cautionary Note Regarding Forward-Looking Statements” in this Annual Report on Form 10-K. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including those risks.
Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.
We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. 61 Table of Contents Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), and (iv) disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee compensation.
At December 31, 2023, we had working capital of $(4.4) million compared to $(5.6) million at December 31, 2022. For the twelve months ended December 31, 2022, our operating cash flow decreased by $2.2 million compared to the same period in 2021.
At December 31, 2024, we had working capital of $(11.5) million compared to $(4.4) million at December 31, 2023. For the twelve months ended December 31, 2023, our operating cash flow decreased by $0.5 million compared to the same period in 2022.
Adjusted EBITDA has limitations as an analytical tool including: (i) Adjusted EBITDA does not include results from equity-based compensation and (ii) Adjusted EBITDA does not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments. Adjusted Net Income has limitations as an analytical tool because it does not include results from equity-based compensation.
Adjusted EBITDA has limitations as an analytical tool including: (i) Adjusted EBITDA does not include results from equity-based compensation and (ii) Adjusted EBITDA does not reflect 53 Table of Contents interest expense on our debt or the cash requirements necessary to service interest or principal payments.
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $36.8 million and $30.1 million for the twelve months ended December 31, 2023 and 2022, respectively. Our customer acquisition costs were approximately $2,465 and $2,300 per customer in the twelve months ended December 31, 2023 and 2022, respectively.
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $43.9 million and $36.8 million for the twelve months ended December 31, 2024 and 2023, respectively. Our customer acquisition costs were approximately $3,130 and $2,465 per customer in the twelve months ended December 31, 2024 and 2023, respectively.
Our ability to successfully open and operate new centers depends on many factors, including, among others, our ability to: • recruit qualified surgeons for our new centers; • address regulatory, competitive, marketing, and other challenges encountered in connection with expansion into new markets; • hire, train and retain surgeons and other personnel; • maintain adequate information system and other operational system capabilities; • successfully integrate new centers into our existing management structure and operations, including information system integration; • negotiate acceptable lease terms at suitable locations; • source sufficient levels of medical supplies at acceptable costs; • obtain and maintain necessary permits and licenses; 50 Table of Contents • construct and open our centers on a timely basis; • generate sufficient levels of cash or obtain financing on acceptable terms to support our expansion; • achieve and maintain brand awareness in new and existing markets; and • identify and satisfy the needs and preferences of our patients.
Our ability to successfully operate new centers depends on many factors, including, among others, our ability to: • recruit qualified surgeons for our new centers; • address regulatory, competitive, marketing, and other challenges encountered in connection with expansion into new markets; • hire, train and retain surgeons and other personnel; • maintain adequate information system and other operational system capabilities; • successfully integrate new centers into our existing management structure and operations, including information system integration; • source sufficient levels of medical supplies at acceptable costs; • obtain and maintain necessary permits and licenses; • generate sufficient levels of cash or obtain financing on acceptable terms to support our expansion; • achieve and maintain brand awareness in new and existing markets; and • identify and satisfy the needs and preferences of our patients. 51 Table of Contents Our failure to effectively address challenges such as these could adversely affect our ability to operate new centers in a cost-effective manner.
We assist patients, as needed, by providing third-party financing options to pay for procedures. We have arrangements with various financing companies to facilitate this option. There is a financing transaction fee based on a set percentage of the amount financed.
We assist patients, as needed, by providing third-party financing options to pay for procedures. We have arrangements with various financing companies to 55 Table of Contents facilitate this option. There is a financing transaction fee based on a set percentage of the amount financed. We recognize revenue based on the expected transaction price which is reduced for financing fees.
Total selling expenses were approximately $30.1 million and $21.0 million for the twelve months ended December 31, 2022 and 2021, respectively. Our customer acquisition costs were approximately $2,300 and $1,902 per customer in the twelve months ended December 31, 2022 and 2021, respectively.
Total selling expenses were approximately $36.8 million and $30.1 million for the twelve months ended December 31, 2023 and 2022, respectively. Our customer acquisition costs were approximately $2,465 and $2,300 per customer in the twelve months ended December 31, 2023 and 2022, respectively.
We include Adjusted EBITDA and Adjusted Net Income because they are important measures on which our management assesses and believes investors should assess our operating performance. We consider Adjusted EBITDA and Adjusted Net Income each to be an important measure because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
We consider Adjusted EBITDA and Adjusted Net Income each to be an important measure because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
We expect our marketing and corporate support costs to continue to increase as we open de novo centers and expand the support we provide to our centers. Selling, general and administrative expenses as a percent of revenue were 52.3% and 60.1% for the twelve months ended December 31, 2023 and 2022, respectively.
We expect our marketing and corporate support costs to continue to increase on an absolute dollar basis as we open de novo centers. Selling, general and administrative expenses as a percent of revenue were 54.8% and 52.3% for the twelve months ended December 31, 2024 and 2023, respectively.
The table also shows the percentage relationship to revenue for the periods indicated: Twelve Months Ended December 31, 2023 2022 2021 ($ in thousands) Amount % of Revenue Amount % of Revenue Amount % of Revenue Revenue $ 195,917 100.0 % $ 168,794 100.0 % $ 133,315 100.0 % Operating expenses: Cost of service 74,012 37.8 % 62,781 37.2 % 44,536 33.4 % Selling, general and administrative 102,381 52.3 % 101,418 60.1 % 65,732 49.3 % Loss on debt modification — — % 932 0.6 % 682 0.5 % Depreciation and amortization 10,253 5.2 % 8,061 4.8 % 6,597 4.9 % (Gain)/loss on disposal of long-lived assets (212) (0.1) % 147 0.1 % — — % Total operating expenses 186,434 95.2 % 173,339 102.7 % 117,547 88.2 % Income/(loss) from operations 9,483 4.8 % (4,545) (2.7) % 15,768 11.8 % Interest expense, net 6,485 3.3 % 6,751 4.0 % 4,888 3.7 % Pre-tax net income/(loss) 2,998 1.5 % (11,296) (6.7) % 10,880 8.2 % Income tax expense 7,477 3.8 % 3,383 2.0 % 329 0.2 % Net (loss)/income $ (4,479) (2.3) % $ (14,679) (8.7) % $ 10,551 7.9 % Twelve Months Ended December 31, 2023 Compared to Twelve Months Ended December 31, 2022 Overview— Our financial results for the twelve months ended December 31, 2023 compared to the twelve months ended December 31, 2022 reflect the addition of five de novo centers which increased procedure rooms by 10.
The table also shows the percentage relationship to revenue for the periods indicated: Twelve Months Ended December 31, 2024 2023 2022 ($ in 000s) Amount % of Revenue Amount % of Revenue Amount % of Revenue Revenue $ 180,350 100.0 % $ 195,917 100.0 % $ 168,794 100.0 % Operating expenses: Cost of service 71,382 39.6 % 74,012 37.8 % 62,781 37.2 % Selling, general and administrative 98,880 54.8 % 102,381 52.3 % 101,418 60.1 % Depreciation and amortization 11,888 6.6 % 10,253 5.2 % 8,061 4.8 % Loss/(gain) on disposal of long-lived assets 16 — % (212) (0.1) % 147 0.1 % Total operating expenses 182,166 101.0 % 186,434 95.2 % 173,339 102.7 % Loss/(income) from operations (1,816) (1.0) % 9,483 4.8 % (4,545) (2.7) % Interest expense, net 6,247 3.5 % 6,485 3.3 % 6,751 4.0 % Pre-tax net (loss)/income (8,063) (4.5) % 2,998 1.5 % (11,296) (6.7) % Income tax (benefit)/expense 188 0.1 % 7,477 3.8 % 3,383 2.0 % Net loss $ (8,251) (4.6) % $ (4,479) (2.3) % $ (14,679) (8.7) % Twelve Months Ended December 31, 2024 Compared to Twelve Months Ended December 31, 2023 Overview— Our financial results for the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023 reflect the addition of five de novo centers which increased procedure rooms by ten.
We recognize revenue based on the expected transaction price which is reduced for financing fees. 54 Table of Contents Our policy is to require full payment for services in advance of performing a procedure. Payments received for which services have yet to been performed for all reported periods are included in deferred revenue and patient deposits on our balance sheets.
Our policy is to require full payment for services in advance of performing a procedure. Payments received for which services have yet to been performed for all reported periods are included in deferred revenue and patient deposits on our balance sheets.
Our Ability to Successfully Expand our Footprint Our growth strategy depends, in large part, on growing and expanding our operations, both in existing and new geographic regions, particularly in densely populated and affluent metropolitan and suburban regions, and operating our new centers successfully.
Our Ability to Successfully Operate in New Markets Our growth strategy depends, in large part, on successfully operating our new facilities, both in existing and new geographic regions, particularly in densely populated and affluent metropolitan and suburban regions.
Long-Term Debt The carrying value of our total indebtedness was $71.6 million and $83.5 million, which includes unamortized deferred financing costs and issuance discount of $1.2 million and $1.5 million, as of December 31, 2023 and December 31, 2022, respectively.
Long-Term Debt The carrying value of our total indebtedness was $74.7 million and $71.6 million, which includes unamortized deferred financing costs and issuance discount of $1.0 million and $1.2 million, and funds drawn on the revolving credit facility of $5.0 million and $—, as of December 31, 2024 and December 31, 2023, respectively.
(Gain)/loss on disposal of long-lived assets— For the twelve months ended December 31, 2023, we recognized a $212,000 gain related to the disposal of previous property, plant, and equipment as a result of relocation to expand certain centers.
(Gain)/loss on disposal of long-lived assets —For the twelve months ended December 31, 2023, we recognized a $212,000 gain related to the disposal of previous property, plant, and equipment as a result of relocation to expand certain centers. 58 Table of Contents Interest Expense, net —Interest expense decreased to $6.5 million from $6.8 million for the twelve months ended December 31, 2023 and 2022, respectively.
Key Operational and Business Metrics In addition to the measures presented in our consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions: Twelve months ended December 31, 2023, 2022 and 2021 • Cases performed were 14,932, 13,063 and 11,050 in 2023, 2022 and 2021, respectively; • Revenue per case was $13,121, $12,922 and $12,065 in 2023, 2022 and 2021, respectively; • Same-center information; ◦ Same-center revenue per case increased 1.5% and 6.4% in 2023 and 2022, respectively; ◦ Same-center volume changed (1.4)% and 2.7% in 2023 and 2022, respectively; • Net income (loss) was $(4.5) million, $(14.7) million and $10.6 million in 2023, 2022 and 2021, respectively; • Adjusted EBITDA* was $43.2 million, $38.9 million and $44.6 million in 2023, 2022 and 2021, respectively; • Adjusted EBITDA Margin* was 22.1%, 23.0% and 33.4% in 2023, 2022 and 2021, respectively; • Loss per share (1) was $(0.08), $(0.26) and $(0.01) for 2023, 2022 and 2021, respectively; and • Adjusted Net Income per share (diluted)* was $0.28, $0.32 and $0.08 in 2023, 2022 and 2021, respectively. * For a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income per share, which are all non-GAAP measures, to the most directly comparable GAAP financial measures, information about why we consider them useful and a discussion of the material risks and limitations of these measures, please see “—Non-GAAP Financial Measures—Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income per Share.” (1) Prior to the IPO, the EBS Intermediate Parent, LLC structure included only LLC common units issued and outstanding to pre-IPO LLC members.
Key Operational and Business Metrics In addition to the measures presented in our consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions: Twelve months ended December 31, 2024, 2023 and 2022 • Cases performed were 14,036, 14,932 and 13,063 in 2024, 2023 and 2022, respectively; • Revenue per case was $12,849, $13,121 and $12,922 in 2024, 2023 and 2022, respectively; • Same-center information: ◦ Same-center revenue per case increased (2.4)%, 1.5%, and 7.4% in 2024, 2023, and 2022, respectively; ◦ Same-center volume changed (13.7)%, (1.4)%, and 0.7% in 2024, 2023, and 2022, respectively; • Net loss was $(8.3) million, $(4.5) million and $(14.7) million in 2024, 2023 and 2022, respectively; • Adjusted EBITDA* was $20.7 million, $43.2 million and $38.9 million in 2024, 2023 and 2022, respectively; • Adjusted EBITDA Margin* was 11.5%, 22.1% and 23.0% in 2024, 2023 and 2022, respectively; • Loss per share was $(0.14), $(0.08) and $(0.26) for 2024, 2023 and 2022, respectively; and • Adjusted Net Income per share (diluted)* was $0.02, $0.28 and $0.32 in 2024, 2023 and 2022, respectively. * For a reconciliation of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income and Adjusted Net Income per share, which are all non-GAAP measures, to the most directly comparable GAAP financial measures, information about why we consider them useful and a discussion of the material risks and limitations of these measures, please see “—Non-GAAP Financial Measures—Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income per Share.” Cases Performed and Revenue per Case Our case volumes in the table below, which are used for calculating revenue per case, represent one patient visit; notwithstanding that, a patient may have multiple areas treated during one visit.
We did not have any letters of credit outstanding as of December 31, 2022. 58 Table of Contents The following table summarizes the net cash provided by (used for) operating activities, investing activities and financing activities for the periods indicated: Twelve Months Ended December 31, ($ in thousands) 2023 2022 2021 Cash Flows Provided By (Used For): Operating activities $ 23,956 $ 24,447 $ 26,633 Investing activities (9,919) (12,921) (7,116) Financing activities (13,391) (27,257) (4,549) Net increase/(decrease) in cash and cash equivalents 646 (15,731) 14,968 Operating Activities The primary source of our operating cash flow is the collection of patient payments received prior to performing surgical procedures.
The following table summarizes the net cash provided by (used for) operating activities, investing activities and financing activities for the periods indicated: Twelve Months Ended December 31, ($ in 000s) 2024 2023 2022 Cash Flows Provided By (Used For): Operating activities $ 11,350 $ 23,956 $ 24,447 Investing activities (14,007) (9,919) (12,921) Financing activities 630 (13,391) (27,257) Net (decrease)/increase in cash and cash equivalents (2,027) 646 (15,731) Operating Activities The primary source of our operating cash flow is the collection of patient payments received prior to performing surgical procedures.
Equity-Based Compensation We recognize equity-based compensation expense for employees and non-employees based on the grant-date fair value of awards over the applicable service period. See “Note 6 - Stockholders' Equity and Equity-based Compensation” for further discussion of the awards outstanding. The grant date fair value of awards that contain market-based conditions are estimated using a Monte Carlo simulation model.
Equity-Based Compensation We recognize equity-based compensation expense for employees and non-employees based on the grant-date fair value of awards over the applicable service period. See “Note 6 - Stockholders' Equity and Equity-based Compensation” for further 63 Table of Contents discussion of the awards outstanding.
We believe this provides the best approach for assessing our revenue performance and trends. 51 Table of Contents Total Case and Revenue Metrics Twelve Months Ended December 31, 2023 2022 2021 Cases 14,932 13,063 11,050 Case growth 14.3 % 18.2 % N/A Revenue per case $ 13,121 $ 12,922 $ 12,065 Revenue per case growth 1.5 % 7.1 % N/A Number of facilities 27 22 18 Number of total procedure rooms 57 47 32 Same-Center Case and Revenue Metrics Same-Center Information For the twelve months ended December 31, 2023 and 2022, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that have been owned and operated for at least twelve months as of December 31, 2023.
Total Case and Revenue Metrics Twelve Months Ended December 31, 2024 2023 2022 Cases 14,036 14,932 13,063 Case growth (6.0) % 14.3 % N/A Revenue per case $ 12,849 $ 13,121 $ 12,922 Revenue per case growth (2.1) % 1.5 % N/A Number of facilities 32 27 22 Number of total procedure rooms 67 57 47 Same-Center Case and Revenue Metrics Same-Center Information 52 Table of Contents For the twelve months ended December 31, 2024 and 2023, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that were owned and operated during the twelve months ended December 31, 2024 and 2023, respectively.
Investing Activities Net cash used in investing activities for the twelve months ended December 31, 2023 and 2022 was $9.9 million and $12.9 million, respectively. Investing activities during both periods were attributable to the expansion of multiple existing facilities and opening of de novo locations.
Investing activities during all three periods were attributable to the preparation for the opening of de novo locations and the relocation of multiple existing facilities. Financing Activities Net cash used in financing activities during the twelve months ended December 31, 2024 was $0.6 million.
Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
JOBS Act Accounting Election We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.
Interest Expense, net— Interest expense decreased to $6.5 million from $6.8 million for the twelve months ended December 31, 2023 and 2022, respectively. The decrease is due to the lower principal balance resulting from the Company's voluntary $10 million prepayment made in 2023.
The decrease is due to the lower principal balance resulting from the Company's voluntary $10 million prepayment made in 2023. Income Tax Expense — Our effective tax rate is 249.4% and (29.9)% for the twelve months ended December 31, 2023 and 2022, respectively.
Depreciation and Amortization— Depreciation and amortization increased to approximately $10.3 million for the twelve months ended December 31, 2023 compared to $8.1 million for the same period in 2022. This increase is the result of having five additional de novo centers during the twelve months ended December 31, 2023 as compared to the 2022 period.
This increase is the result of having five additional de novo centers during the twelve months ended December 31, 2023 as compared to the 2022 period.
We define Adjusted Net Income as net income/(loss) excluding restructuring and related severance costs, IPO related costs, (gain)/loss on disposal of long-lived assets, loss on debt modification, equity-based compensation and the tax effect of these adjustments.
We define Adjusted EBITDA as net loss excluding depreciation and amortization, net interest expense, income tax expense, restructuring and related severance costs, loss on debt modification , loss/(gain) on disposal of long-lived assets, settlement costs for non-recurring litigation, and equity-based compensation.
Normalizing the prior year for the increase in equity-based compensation and public company costs, selling, general and administrative expenses as a percent of revenue were 60.1% and 71.1% for the twelve months ended December 31, 2022 and 2021, respectively. 57 Table of Contents Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel.
Selling, general and administrative expenses as a percent of revenue were 52.3% and 60.1% for the twelve months ended December 31, 2023 and 2022, respectively. Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel.
Net cash used in financing activities for the twelve months ended December 31, 2022 was $27.3 million. For the twelve months ended December 31, 2022, we made distributions to our former member of $1.2 million, paid cash dividends to shareholders of $23.2 million, and made payments of taxes withheld through vested equity-based compensation of $2.0 million.
For the twelve months ended December 31, 2022, we made distributions to our former member of $1.2 million, paid cash dividends to stockholders of $23.2 million, and made payments of taxes withheld through vested equity-based compensation of $2.0 million. Finally, we made principal payments on our debt of $84.3 million offset by borrowings of new debt of $83.5 million.
Twelve Months Ended December 31, 2023 2022 Cases 12,859 13,041 Case growth (1.4) % N/A Revenue per case $ 13,114 $ 12,923 Revenue per case growth 1.5 % N/A Number of facilities 21 21 Number of total procedure rooms 45 45 For the years ended December 31, 2022 and 2021, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that have been owned and operated for at least twelve months as of December 31, 2022.
For the years ended December 31, 2023 and 2022, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that have been owned and operated for at least twelve months as of December 31, 2023.
The Professional Associations, which are all owned by licensed surgeons, are responsible for all clinical aspects of the medical operations that take place in each of our centers. Our consolidated financial statements present the results of operations and financial position of the Company, its wholly-owned subsidiaries and each of the Professional Associations that we manage under the MSAs.
Our consolidated financial statements present the results of operations and financial position of the Company, its wholly-owned subsidiaries and each of the Professional Associations that we manage under the MSAs.
Liquidity and Capital Resources We principally rely on cash flows from operations as our primary source of liquidity and, if needed, up to $5.0 million in revolving loans under our revolving credit facility.
The main driver of the difference between the effective and statutory rate is non-deductible executive compensation under Section 162(m) of the Internal Revenue Code. Liquidity and Capital Resources We principally rely on cash flows from operations as our primary source of liquidity and, if needed, up to $5.0 million in revolving loans under our revolving credit facility.
We expect our general and administrative expenses to increase over time due to the additional legal, accounting, insurance, investor relations and other costs that we will continue to incur as a public company. We also expect increases from other costs associated with continuing to grow our business.
We expect our general and administrative expenses to increase over time due to the additional legal, accounting, insurance, investor relations and other costs that we will continue to incur as a public company. Interest Expense Interest expense, net consists primarily of interest costs on our outstanding borrowings under our debt.
On November 7, 2022, the Company entered into a credit agreement with a syndicate of lenders (the "Credit Agreement") maturing November 7, 2027. Pursuant to the Credit Agreement, there is (i) an $85.0 million aggregate principal amount of term loans and (ii) a revolving loan facility in an aggregate principal amount of up to $5.0 million.
On November 7, 2022, the Company entered into the Term Loan and Revolving Credit Facility pursuant to the Credit Agreement with a syndicate of lenders, originally maturing November 7, 2027.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. We define Adjusted Net Income per Share as Adjusted Net Income divided by weighted average basic and diluted shares.
Adjusted Net Income has limitations as an analytical tool because it does not include results from equity-based compensation. We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. We define Adjusted Net Income per Share as Adjusted Net Income divided by weighted average basic and diluted shares.
We believe that the cash expected to be generated from operations and the availability of borrowings under the revolving credit facility will be sufficient for our working capital requirements, liquidity obligations, anticipated capital expenditures relating to the opening of de novo centers, and the addition of new procedure rooms to our existing locations, and payments due under our existing credit facilities for at least the next 12 months.
We believe that the cash expected to be generated from operations will be sufficient for our working capital requirements, liquidity obligations, and payments due under our existing credit facilities for at least the next 12 months. As of December 31, 2024, we had $8.2 million in cash and cash equivalents with no availability under our revolving credit facility.
Interest Expense Interest expense, net consists primarily of interest costs on our outstanding borrowings under our debt. 55 Table of Contents Results of Operations The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods.
Results of Operations 56 Table of Contents The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods.
Income Tax Expense— Our effective tax rate is 249.4% and (29.9)% for the twelve months ended December 31, 2023 and 2022, respectively. The main driver of the difference between the effective and statutory rate is non-deductible executive compensation under Section 162(m) of the Internal Revenue Code.
The main driver of the difference between the effective and statutory rate is non-deductible executive compensation under Section 162(m) of the Internal Revenue Code.
Finally, we made principal payments on our debt of $84.3 million offset by borrowings of new debt of $83.5 million. Net cash used in financing activities for the twelve months ended December 31, 2021 was $4.5 million.
For the twelve months ended December 31, 2023, we paid cash dividends to stockholders of $0.4 million and made principal payments on our debt of $12.1 million. Net cash used in financing activities for the twelve months ended December 31, 2022 was $27.3 million.
During the twelve months ended December 31, 2023, we made principal payments on our debt of $12.1 million, which included a voluntary prepayment of $10.0 million, paid cash dividends to shareholders of $0.4 million, and made payments of taxes withheld through vested equity-based compensation of $0.2 million.
During the twelve months ended December 31, 2024, we made principal payments on our debt of $2.1 million, borrowed $5.0 million on our revolving credit facility, and made payments of taxes withheld through vested equity-based compensation of $0.9 million. Net cash used in financing activities for the twelve months ended December 31, 2023 was $13.4 million.
For the twelve months ended December 31, 2023, our operating cash flow decreased by $0.5 million compared to the same period in 2022. The decrease is related to having more restructuring and related severance costs and the timing of working capital payments primarily related to lease deposits on upcoming de novo projects.
The decrease is related to having more restructuring and related severance costs and the timing of working capital payments primarily related to lease deposits on upcoming de novo projects.
Depreciation and Amortization— Depreciation and amortization increased to approximately $8.1 million for the twelve months ended December 31, 2022 compared to $6.6 million for the same period in 2021. This increase is the result of having four additional de novo centers during the twelve months ended December 31, 2022 as compared to the 2021 period.
This increase is the result of having five additional de novo centers during the twelve months ended December 31, 2024 as compared to the 2023 period. Interest Expense, net— Interest expense decreased to $6.2 million from $6.5 million for the twelve months ended December 31, 2024 and 2023, respectively.
Twelve Months Ended December 31, 2022 2021 Cases 11,352 11,050 Case growth 2.7 % N/A Revenue per case $12,836 $12,065 Revenue per case growth 6.4 % N/A Number of total facilities 18 18 Number of total procedure rooms 38 32 Non-GAAP Financial Measures—Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Net Income per Share We report our financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"), however, management believes the evaluation of our ongoing operating results may be enhanced by a presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income per Share, which are non-GAAP financial measures. 52 Table of Contents We define Adjusted EBITDA as net income/(loss) excluding depreciation and amortization, sponsor management fees, loss on debt modification, net interest expense, income tax expense/(benefit), restructuring and related severance costs, IPO related costs, (gain)/loss on disposal of long-lived assets, and equity-based compensation.
Twelve Months Ended December 31, 2023 2022 Cases 12,859 13,041 Case growth (1.4) % N/A Revenue per case $13,114 $12,923 Revenue per case growth 1.5 % N/A Number of total facilities 21 21 Number of total procedure rooms 45 45 Non-GAAP Financial Measures—Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Net Income per Share We report our financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"), however, management believes the evaluation of our ongoing operating results may be enhanced by a presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income per Share, which are non-GAAP financial measures.
Twelve Months Ended December 31, 2022 Compared to Twelve Months Ended December 31, 2021 Overview— Our financial results for the twelve months ended December 31, 2022 compared to the twelve months ended December 31, 2021 reflect the addition of four de novo centers. Revenue— Our revenue increased $35.5 million, or 26.6%, compared to the same period in 2021.
Twelve Months Ended December 31, 2023 Compared to Twelve Months Ended December 31, 2022 Overview — Our financial results for the twelve months ended December 31, 2023 compared to the twelve months ended December 31, 2022 reflect the addition of five de novo centers which increased procedure rooms by 10.
These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier. 60 Table of Contents Critical Accounting Policies and Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with GAAP.
These exemptions will apply for a period of five years following the completion of our IPO or until we are no longer an “emerging growth company,” whichever is earlier.
Interest payments in the table above were calculated using an interest rate of 7.85% for the debt which was the interest rate applicable to the borrowing as of December 31, 2023.
This amount does not reflect any prepayments. (2) Amounts in the table reflect the contractually required interest payable pursuant to borrowings under our debt related to our Credit Agreement. Interest payments in the table above were calculated using an interest rate of 7.86% for the debt which was the interest rate applicable to the borrowing as of December 31, 2024.
Net cash used in investing activities for the twelve months ended December 31, 2022 and 2021 was $12.9 million and $7.1 million, respectively.
At December 31, 2023, we had working capital of $(4.4) million compared to $(5.6) million at December 31, 2022. 59 Table of Contents Investing Activities Net cash used in investing activities for the twelve months ended December 31, 2024, 2023, and 2022 was $14.0 million, $9.9 million, and $12.9 million, respectively.
The proceeds were used, in part, to pay off the Company’s $83.6 million outstanding principal balance under its previous credit facility. On September 29, 2023, the Company voluntarily pre-paid $10.0 million of the principal of the term loans under the Credit Agreement using cash on hand.
Pursuant to the Credit Agreement, there is (i) an $85.0 million original aggregate principal amount of term loans and (ii) a revolving loan facility in an aggregate principal amount of up to $5.0 million. On September 29, 2023, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand.
The Management Services provide for the administration of the non-clinical aspects of the medical operations and include, but are not limited to, financial, administrative, technical, marketing and personnel services. We do not practice medicine.
Our Operating Structure The Company owns and operates non-clinical assets and provides Management Services, through its wholly-owned subsidiaries, to our affiliated Professional Associations located across the United States under the MSAs. The Management Services provide for the administration of the non-clinical aspects of the medical operations and include, but are not limited to, financial, administrative, technical, marketing and personnel services.
Additionally, selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue. 56 Table of Contents General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expense were approximately $54.9 million and 57 Table of Contents $65.6 million for the twelve months ended December 31, 2024 and 2023, respectively.
This increase is primarily related to the addition of public company costs of approximately $6.7 million and an increase in equity-based compensation of $22.3 million. This increase is also related to additional expenses we incurred for marketing and corporate support as we grow our center count through de novo expansion and providing support for our centers.
This decrease is related to a decrease in our equity-based compensation expense (see Note 6 to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion) partially offset by additional expenses we incurred for marketing and corporate support as we grow our center count through de novo expansion and providing support for our centers.
Determining the fair value of market-based awards requires judgment.
The grant date fair value of awards that contain market-based conditions are estimated using a Monte Carlo simulation model. Determining the fair value of market-based awards requires judgment.
General and administrative expense were approximately $65.6 million and $71.3 million for the twelve months ended December 31, 2023 and 2022, respectively. This reduction is due to a decrease in equity-based compensation. We expect to continue growing our corporate team to support the opening of new centers and growth at existing facilities.
This reduction is due to a decrease in equity-based compensation. Depreciation and Amortization —Depreciation and amortization increased to approximately $10.3 million for the twelve months ended December 31, 2023 compared to $8.1 million for the same period in 2022.
Cost of service was 37.2% and 33.4% as a percentage of revenue for the twelve months ended December 31, 2022 and 2021, respectively. This increase is primarily due to adding four de novo centers over the prior period.
Cost of service was 39.6% and 37.8% as a percentage of revenue for the twelve months ended December 31, 2024 and 2023, respectively. The percentage increase is primarily due to the decline in revenue and not being able to leverage certain fixed costs within cost of service such as rent and certain nursing costs.
We define same-center facilities and procedure rooms as facilities and procedure rooms that have been owned or operated for at least twelve months as of December 31, 2022.
At facilities that were not owned or operated for the entirety of the prior year period, the current year period has been pro-rated to reflect only growth experienced during the portion of the twelve months ended December 31, 2024 in which such facilities were owned and operated during the twelve months ended December 31, 2023.We define same-center facilities and procedure rooms based on if a facility was owned or operated as of December 31, 2023.
These investments will further enhance quality and safety for our patients and better prepare us for future growth in both existing centers and the new centers we are developing. Selling, General and Administrative Expenses— Selling, general and administrative expenses increased $35.7 million, or 54.3%, for the twelve months ended December 31, 2022 compared to the same period in 2021.
Selling, General and Administrative Expenses— Selling, general and administrative expenses decreased $3.5 million, or 3.4%, for the twelve months ended December 31, 2024 compared to the same period in 2023.
Cost of Service— Our cost of service increased $18.2 million, or 41.0%, compared to the twelve months ended December 31, 2021. This increase is primarily attributable to opening four de novo centers since the 2021 period and an increase in our same center volumes and revenue.
Revenue— Our revenue decreased $15.6 million, or 7.9%, compared to the same period in 2023. The decrease is primarily attributed to weaker than expected performance across the broader aesthetics and high-end retail industries. Cost of Service— Our cost of service decreased $2.6 million, or 3.6%, compared to the twelve months ended December 31, 2023.
Removed
Our failure to effectively address challenges such as these could adversely affect our ability to successfully open and operate new centers in a timely and cost-effective manner.
Added
You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Annual Report.
Removed
The Company analyzed the calculation of earnings per unit for periods prior to the IPO and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the IPO on October 28, 2021.
Added
You should read this Annual Report completely, including Part I, Item 1A (Risk Factors) of this Annual Report and the “Forward-Looking Statements” sections of this Annual Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by our forward-looking statements contained in the following discussion and analysis.
Removed
Thus, the basic and diluted earnings (loss) per share represent only the period from October 28, 2021 to December 31, 2021. Cases Performed and Revenue per Case Our case volumes in the table below, which are used for calculating revenue per case, represent one patient visit; notwithstanding that, a patient may have multiple areas treated during one visit.
Added
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Removed
(2) In 2021, basic and diluted weighted average shares outstanding and loss per share represent only the period from October 28, 2021 to December 31, 2021 (see Note 7). Our Operating Structure The Company owns and operates non-clinical assets and provides Management Services, through its wholly-owned subsidiaries, to our affiliated Professional Associations located across the United States under the MSAs.
Added
Key Factors Affecting Our Performance Our results of operations and financial condition have been, and will continue to be, affected by a number of factors, including the following: 50 Table of Contents Growth Initiatives and Strategic Priorities Given the recent decline in revenue, the Company is focusing on stabilizing revenue growth through a number of strategic and growth initiatives, including: • optimizing our marketing investment by spending on techniques that have proven successful for us in the past using a returns-based approach and testing new areas such as online video, and other social marketing channels under the direction of our new Chief Digital Officer; • improving our go-to-market and sales strategies under our new Chief Sales Officer who is dedicated to strengthening our consultative sales model with enhanced training, improving our sales processes, and providing a greater focus on lead conversion; • expanding consumer financing offerings; and • focusing on new product innovation where we believe that there is an opportunity to introduce new services, particularly in the area of skin tightening, that would allow us to expand our customer reach and generate incremental revenues.
Removed
As we continue to expand the number of centers and procedures rooms, we anticipate general and administrative expenses to decrease as a percentage of revenue over time.
Added
We believe this provides the best approach for assessing our revenue performance and trends.
Removed
The increase is the result of adding four de novo centers which increased our footprint from 18 centers to 22 centers as of December 31, 2022. We have also experienced strong revenue per case growth over the prior year of 7.1%.
Added
Twelve Months Ended December 31, 2024 2023 Cases 12,892 14,932 Case growth (13.7) % N/A Revenue per case $ 12,801 $ 13,121 Revenue per case growth (2.4) % N/A Number of facilities 27 27 Number of total procedure rooms 57 57 Our same-store revenue decline is primarily attributed to weaker than expected performance across the broader aesthetics and high-end retail industries.
Removed
This increase is primarily due to patients having more areas treated at one visit as compared to prior periods and we attribute this to our brand awareness focus and more specifically to AirSculpt TV, which allows prospective patients to see live procedures being performed.
Added
We define Adjusted Net Income as net loss excluding restructuring and related severance costs, loss/(gain) on disposal of long-lived assets, settlement costs for non-recurring litigation, equity-based compensation and the tax effect of these adjustments. We include Adjusted EBITDA and Adjusted Net Income because they are important measures on which our management assesses and believes investors should assess our operating performance.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+4 added−0 removed3 unchanged
Biggest changeIf the Company's total leverage ratio is below 1x, the applicable per annum margin is 1.0% or 2.0% for base rate or SOFR, respectively. As of December 31, 2023, we had term loan borrowings of $72.9 million in principal amount under the Loan Agreement.
Biggest changeIf the Company's total leverage ratio is equal to or greater than 1.0x and less than 2.0x, the applicable per annum margin is 2.0% or 3.0% for base rate or SOFR, respectively. If the Company's total leverage ratio is below 1.0x, the applicable per annum margin is 1.5% or 2.5% for base rate or SOFR, respectively.
Interest rate risk is highly sensitive due to many factors, including United States monetary and tax policies, United States and international economic factors and other factors beyond our control. Under the new Credit Agreement, all outstanding loans bear interest based on either a base rate or SOFR plus an applicable per annum margin.
Interest rate risk is highly sensitive due to many factors, including United States monetary and tax policies, United States and international economic factors and other factors beyond our control. Under the Credit Agreement, all outstanding loans bear interest based on either a base rate or SOFR plus an applicable per annum margin.
Based on the amount outstanding, a 100 basis point increase or decrease in market interest rates over a twelve-month period would result in a change to interest expense of approximately $0.7 million. Inflation Risk Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results.
Based on the amount outstanding, a 100 basis point increase or decrease in market interest rates over a twelve-month period would result in a change to interest expense of approximately $0.8 million. Inflation Risk Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results.
Added
If the Company's total leverage ratio is below 1x, the applicable per annum margin is 1.0% or 2.0% for base rate or SOFR, respectively. On September 13, 2024, the Company amended the Credit Agreement to modify certain financial condition covenants and the applicable margins.
Added
As such, for the period of September 13, 2024 through June 30, 2025, the applicable per annum margin is 2.5% or 3.5% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.0x.
Added
As of March 12, 2025, the Company entered into the Third Amendment to the Credit Agreement which changed the applicable per annum margin, beginning on or about July 1, 2025, to 3.75% or 4.75% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 3.00x, 3.50% or 4.50% for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.00x and less than 3.00x, and 3.25% or 4.25% for base rate or SOFR, respectively.
Added
As of December 31, 2024, we had term loan borrowings of $70.8 million in principal amount under the Loan Agreement and $5.0 million drawn on the revolving credit facility.

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