Airsculpt Technologies Inc.
11/06/2026 | Press release | Distributed by Public on 11/06/2026 06:03
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes and other financial information appearing in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission ("SEC") on March 31, 2026 pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") as amended by the Form 10-K/A filed with the SEC on April 6, 2026. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See the section entitled "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report on Form 10-Q. Our actual results could differ materially from those anticipated in the forward-looking statements for many reasons, including those risks. You should not place undue reliance on these forward-looking statements, which apply only as of the date of this Quarterly Report. You should read this Quarterly Report completely, including Part II, Item 1A (Risk Factors) of this Quarterly Report and the section titled "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by our forward-looking statements contained in the following discussion and analysis. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Unless otherwise indicated or the context otherwise requires, references in this Quarterly Report to the "Company," "AirSculpt," "we," "us" and "our" refer to AirSculpt Technologies, Inc. and its consolidated subsidiaries and its related Professional Associations.
Overview
AirSculpt is an experienced national provider of body contouring procedures delivering a premium consumer experience. We provide custom body contouring using our proprietary AirSculpt® method that removes unwanted fat and tightens skin in a minimally invasive procedure, producing dramatic results. We deliver our AirSculpt® procedures through a nationwide footprint of 31 centers across 20 states and Canada as of November 6, 2026.
For the three and nine months ended September 30, 2026, we performed 2,483 and 8,941 cases, respectively, compared to 2,780 and 9,248 for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2026, we generated approximately $31.9 million and $114.2 million of revenue, respectively, compared to $35.0 million and $118.4 million for the three and nine months ended September 30, 2025, respectively. This represents an approximately 8.7% decline in revenue for the three months ended September 30, 2026 over the same period in the prior year and an approximately 3.5% decline in revenue for the nine months ended September 30, 2026 over the same period in the prior year.
Key Operational and Business Metrics
In addition to the measures presented in our condensed consolidated financial statements, we use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts and make strategic decisions:
Cases Performed and Revenue per Case
Our case volumes in the table below, which are used for calculating revenue per case, represent one patient visit although, a patient may have multiple areas treated during one visit. We believe this provides the best approach for assessing our revenue performance and trends.
Total Case and Revenue Metrics
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cases | 2,483 | 2,780 | 8,941 | 9,248 | |||||||||||||||||||
| Case growth | (10.7) | % | N/A | (3.3) | % | N/A | |||||||||||||||||
| Revenue per case | $ | 12,865 | $ | 12,587 | $ | 12,776 | $ | 12,800 | |||||||||||||||
| Revenue per case growth | 2.2 | % | N/A | (0.2) | % | N/A | |||||||||||||||||
| Number of facilities | 31 | 32 | 31 | 32 | |||||||||||||||||||
| Number of total procedure rooms | 65 | 67 | 65 | 67 | |||||||||||||||||||
Same-Center Case and Revenue Metrics
Same-Center Information
For the three months ended September 30, 2026 and 2025, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that were owned and operated during the three months ended September 30, 2026 and 2025, respectively. At facilities that were not owned or operated for the entirety of the prior year period, the current year period has been pro-rated to reflect only growth experienced during the portion of the three months ended September 30, 2026 in which such facilities were owned and operated during the three months ended September 30, 2025. We define same-center facilities and procedure rooms based on whether a facility was owned or operated as of September 30, 2025.
For the nine months ended September 30, 2026 and 2025, we define same-center case and revenue growth as the growth in each of our cases and revenue at facilities that were owned and operated during the nine months ended September 30, 2026 and 2025, respectively. At facilities that were not owned or operated for the entirety of the prior year period, the current year period has been pro-rated to reflect only growth experienced during the portion of the nine months ended September 30, 2026 in which such facilities were owned and operated during the nine months ended September 30, 2025. We define same-center facilities and procedure rooms based on whether a facility was owned or operated as of September 30, 2025.
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Cases | 2,483 | 2,748 | 8,941 | 9,137 | |||||||||||||||||||
| Case growth | (9.6) | % | N/A | (2.1) | % | N/A | |||||||||||||||||
| Revenue per case | $ | 12,865 | $ | 12,574 | $ | 12,776 | $ | 12,777 | |||||||||||||||
| Revenue per case growth | 2.3 | % | N/A | - | % | N/A | |||||||||||||||||
| Number of facilities | 31 | 31 | 31 | 31 | |||||||||||||||||||
| Number of total procedure rooms | 65 | 65 | 65 | 65 | |||||||||||||||||||
Non-GAAP Financial Measures-Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Net Income per Share
We report our financial results in accordance with generally accepted accounting principles in the United States of America ("GAAP"), however, management believes the evaluation of our ongoing operating results may be enhanced by a presentation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Net Income per Share, which are non-GAAP financial measures.
We define Adjusted EBITDA as net loss excluding depreciation and amortization, net interest expense, income tax expense/(benefit), restructuring and related severance costs, certain other non-recurring costs, unrealized (gain)/loss, and equity-based compensation.
We define Adjusted Net Income as net loss excluding restructuring and related severance costs, equity-based compensation, loss on impairment of long-lived assets, certain other non-recurring costs, and the tax effect of these adjustments.
We include Adjusted EBITDA and Adjusted Net Income because they are important measures which our management uses and believes investors should use to assess our operating performance. We consider Adjusted EBITDA and Adjusted Net Income to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis. However, Adjusted EBITDA has limitations as an analytical tool including that it: (i) does not include results from equity-based compensation and (ii) does not reflect interest expense on our debt or the cash requirements necessary to service interest or principal payments. Similarly, Adjusted Net Income has limitations as an analytical tool because it does not include results from equity-based compensation.
We define Adjusted EBITDA Margin as Adjusted EBITDA as a percentage of revenue. We define Adjusted Net Income per Share as Adjusted Net Income divided by weighted average basic and diluted shares. We included Adjusted EBITDA Margin and Adjusted Net Income per Share because they are important measures that our management uses, and believes investors should use to assess our operating performance. We consider Adjusted EBITDA Margin and Adjusted Net Income per Share to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis.
The following table reconciles Adjusted EBITDA and Adjusted EBITDA Margin to net loss, the most directly comparable GAAP financial measure:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net loss | $ | (7,173) | $ | (9,512) | $ | (10,682) | $ | (12,950) | ||||||||||||||||||
| Plus | ||||||||||||||||||||||||||
| Equity-based compensation | 1,095 | 1,125 | 2,566 | 3,716 | ||||||||||||||||||||||
| Restructuring and related severance costs | 33 | 1,310 | 1,307 | 2,516 | ||||||||||||||||||||||
| One-time SOX compliance and other related costs | 497 | - | 1,543 | - | ||||||||||||||||||||||
| Depreciation and amortization | 2,902 | 3,217 | 8,864 | 9,705 | ||||||||||||||||||||||
| Loss on impairment of long-lived assets | 5 | 7,137 | 5 | 7,245 | ||||||||||||||||||||||
| Litigation settlements | - | - | 325 | - | ||||||||||||||||||||||
| Interest expense, net | 1,244 | 1,407 | 3,485 | 4,594 | ||||||||||||||||||||||
| Income tax expense/(benefit) | 1,789 | (1,645) | 1,223 | (2,197) | ||||||||||||||||||||||
| Unrealized loss | 1 | - | 4 | - | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 393 | $ | 3,039 | $ | 8,640 | $ | 12,629 | ||||||||||||||||||
| Adjusted EBITDA Margin | 1.2 | % | 8.7 | % | 7.6 | % | 10.7 | % | ||||||||||||||||||
The following table reconciles Adjusted Net Loss and Adjusted Net Loss per Share to net loss, the most directly comparable GAAP financial measure:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Net loss | $ | (7,173) | $ | (9,512) | $ | (10,682) | $ | (12,950) | ||||||||||||||||||
| Plus | ||||||||||||||||||||||||||
| Equity-based compensation | 1,095 | 1,125 | 2,566 | 3,716 | ||||||||||||||||||||||
| Loss on impairment of long-lived assets | 5 | 7,137 | 5 | 7,245 | ||||||||||||||||||||||
| Litigation settlements | - | - | 325 | - | ||||||||||||||||||||||
| Restructuring and related severance costs | 33 | 1,310 | 1,307 | 2,516 | ||||||||||||||||||||||
| One-time SOX compliance and other related costs | 497 | - | 1,543 | - | ||||||||||||||||||||||
|
Tax effect of adjustments (2)
|
(565) | (2,462) | (1,385) | (2,850) | ||||||||||||||||||||||
| Adjusted net loss | $ | (6,108) | $ | (2,402) | $ | (6,321) | $ | (2,323) | ||||||||||||||||||
|
Adjusted net loss per share of common stock (1)
|
||||||||||||||||||||||||||
| Basic | $ | (0.08) | $ | (0.04) | $ | (0.09) | $ | (0.04) | ||||||||||||||||||
| Diluted | $ | (0.08) | $ | (0.04) | $ | (0.09) | $ | (0.04) | ||||||||||||||||||
| Weighted average shares outstanding | ||||||||||||||||||||||||||
| Basic | 72,538,877 | 62,436,670 | 70,943,909 | 60,202,169 | ||||||||||||||||||||||
| Diluted | 72,538,877 | 62,436,670 | 70,943,909 | 60,202,169 | ||||||||||||||||||||||
(1) Diluted Adjusted Net Loss Per Share is computed by dividing adjusted net loss by the weighted-average number of shares of common stock outstanding adjusted for the dilutive effect of all potential shares of common stock.
(2) Tax effect of adjustments represents the estimated income tax impact of the non-GAAP adjustments presented above and is presented as a separate adjustment. The tax effect is calculated by applying the U.S. federal statutory income tax rate to each adjustment that is deductible for income tax purposes. The tax effect does not reflect changes in the Company's valuation allowance. Accordingly, the discrete valuation allowance charge of $2.7 million recorded during the three months ended September 30, 2026 is not adjusted and remains included in Adjusted net loss.
Components of Results of Operations
Revenue
Our revenue is generated from AirSculpt® procedures, which incorporate certain patented technologies and techniques, performed on our patients. We are 100% self-pay and do not accept payments from the U.S. federal government or payer organizations. We assist patients, as needed, by providing third-party financing options to pay for procedures. We have arrangements with various financing companies to facilitate this option. There is a financing transaction fee based on a set percentage of the amount financed. We recognize revenue based on the expected transaction price which is reduced for financing fees.
Our policy is to require full payment for services in advance of performing a procedure. Payments received for which services have yet to been performed for all reported periods are included in deferred revenue and patient deposits on our balance sheets.
Cost of Service (excluding depreciation and amortization)
Cost of service is comprised of all service and product costs related to the delivery of procedures, including but not limited to compensation to our physicians and clinical staff, medical supply costs, and facility-related rent expense.
Operating Expense
Selling, General and Administrative
Selling, general and administrative consists of marketing and advertising expenses we incur to market our patented AirSculpt® procedures to potential patients and general and administrative costs, including rent for our corporate offices.
Selling Expenses
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Our advertising costs include both national and site-based advertising used to generate greater awareness and engagement among our current and potential patients. Our advertising costs include social media, digital marketing and traditional advertising. Selling expenses include salaries and commissions for employees engaged in marketing and sales. We define our customer acquisition costs as the total selling expenses per case.
We evaluate our selling expense as compared to growth in our sales volume and will invest accordingly to the extent we believe we can position ourselves for future growth without materially negatively impacting our Adjusted EBITDA Margins.
General and Administrative
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service and the salaries and commissions of sales and marketing employees), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources.
Interest Expense
Interest expense, net consists primarily of interest costs on our outstanding borrowings under our debt.
Results of Operations
Three Months Ended September 30, 2026 Compared to Three Months Ended September 30, 2025
The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods. The table also shows the percentage relationship to revenue for the periods indicated:
|
Three Months Ended September 30, |
|||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| ($ in 000s) | Amount |
% of Revenue |
Amount |
% of Revenue |
|||||||||||||||||||
| Revenue | $ | 31,944 | 100.0 | % | $ | 34,993 | 100.0 | % | |||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Cost of service | 12,914 | 40.4 | % | 14,864 | 42.5 | % | |||||||||||||||||
| Selling, general and administrative | 20,262 | 63.4 | % | 19,525 | 55.8 | % | |||||||||||||||||
| Depreciation and amortization | 2,902 | 9.1 | % | 3,217 | 9.2 | % | |||||||||||||||||
| Loss on impairment of long-lived assets | 5 | - | % | 7,137 | 20.4 | % | |||||||||||||||||
| Total operating expenses | 36,083 | 113.0 | % | 44,743 | 127.9 | % | |||||||||||||||||
| Loss from operations | (4,139) | (13.0) | % | (9,750) | (27.9) | % | |||||||||||||||||
| Interest expense, net | 1,244 | 3.9 | % | 1,407 | 4.0 | % | |||||||||||||||||
| Unrealized loss | 1 | N/A | - | N/A | |||||||||||||||||||
| Pre-tax net loss | (5,384) | (16.9) | % | (11,157) | (31.9) | % | |||||||||||||||||
| Income tax expense/( benefit) | 1,789 | 5.6 | % | (1,645) | (4.7) | % | |||||||||||||||||
|
Net loss
|
$ | (7,173) | (22.5) | % | $ | (9,512) | (27.2) | % | |||||||||||||||
Revenue- Our revenue decreased $3.0 million, or 8.7%, compared to the same period in 2025. This decline was driven primarily by a 9.6% decrease in cases on a same-center basis, partially offset by a 2.3% increase in average selling price on
a same-center basis. Revenue in the prior-year period also benefited from the operations of the London clinic, which was closed as of December 31, 2025.
Cost of Service- Our cost of services decreased $2.0 million, or 13.1%, compared to the same period in 2025. The decrease was driven by a $0.8 million decrease in physician fees, a $0.4 million decrease in facility rent, a $0.4 million decrease in medical supplies, and a $0.4 million decrease in nursing payroll, reflecting efficiencies in personnel costs and the elimination of one center. Cost of service was 40.4% and 42.5% as a percentage of revenue for the three months ended September 30, 2026 and 2025, respectively.
Selling, General and Administrative Expenses- Selling, general and administrative expenses increased $0.7 million, or 3.8%, for the three months ended September 30, 2026 compared to the same period in 2025. This increase is driven primarily by a $1.4 million increase in professional and legal fees, a $0.3 million increase in advertising expense and a $0.3 million increase in IT expenses. These increases were partially offset by a $1.1 million decrease in rent expense, reflecting the non-recurrence of rent acceleration recorded in the prior-year period in connection with the closure of our London facility, and a $0.2 million decrease in payroll expense, which included reversals of previously accrued severance and bonuses. Selling, general and administrative expenses as a percent of revenue was 63.4% and 55.8% for the three months ended September 30, 2026 and 2025, respectively.
Selling expenses consist of advertising costs for social, digital and traditional marketing and sales and marketing personnel. Total selling expenses were approximately $9.4 million and $8.8 million for the three months ended September 30, 2026 and 2025, respectively. Our customer acquisition costs were approximately $3,767 and $3,145 per customer in the three months ended September 30, 2026 and 2025, respectively. Selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical cost included in cost of service), equity-based compensation, technology, operations, finance, legal, corporate office rent and human resources. General and administrative expenses were approximately $10.9 million and $10.8 million for the three months ended September 30, 2026 and 2025, respectively.
Depreciation and Amortization- Depreciation and amortization decreased to approximately $2.9 million for the three months ended September 30, 2026 compared to $3.2 million for the same period in 2025. This decrease is driven primarily by the net reduction of one clinic location and one office location during the three months ended September 30, 2026 as compared to the 2025 period.
Interest Expense, net- Interest expense was $1.2 million and $1.4 million for the three months ended September 30, 2026 and 2025, respectively. The $0.2 million decrease was related to a $0.4 million decrease in interest on our outstanding debt resulting from principal prepayments, partially offset by a $0.3 million increase in loan and finance costs.
Income Tax Expense- Our effective tax rate was (33.2)% and 14.7% for the three months ended September 30, 2026 and 2025, respectively. The main drivers of the difference between the effective and statutory rate for the three and nine months ended September 30, 2026 are the increase in the valuation allowance, non-deductible executive compensation under Section 162(m) of the Internal Revenue Code, and state taxes.
Nine Months Ended September 30, 2026 Compared to Nine Months Ended September 30, 2025
The following table and notes summarize certain results from the statements of operations for each of the periods indicated and the changes between periods. The table also shows the percentage relationship to revenue for the periods indicated:
|
Nine Months Ended September 30, |
||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| ($ in 000s) | Amount |
% of Revenue |
Amount |
% of Revenue |
||||||||||||||||||||||
| Revenue | $ | 114,233 | 100.0 | % | $ | 118,376 | 100.0 | % | ||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| Cost of service | 45,069 | 39.5 | % | 48,015 | 40.6 | % | ||||||||||||||||||||
| Selling, general and administrative | 66,265 | 58.0 | % | 63,964 | 54.0 | % | ||||||||||||||||||||
| Depreciation and amortization | 8,864 | 7.8 | % | 9,705 | 8.2 | % | ||||||||||||||||||||
| Loss on impairment of long-lived assets | 5 | - | % | 7,245 | 6.1 | % | ||||||||||||||||||||
| Total operating expenses | 120,203 | 105.3 | % | 128,929 | 108.9 | % | ||||||||||||||||||||
| Loss from operations | (5,970) | (5.2) | % | (10,553) | (8.9) | % | ||||||||||||||||||||
| Interest expense, net | 3,485 | 3.1 | % | 4,594 | 3.9 | % | ||||||||||||||||||||
| Unrealized loss | 4 | N/A | - | N/A | ||||||||||||||||||||||
| Pre-tax net loss | (9,459) | (8.3) | % | (15,147) | (12.8) | % | ||||||||||||||||||||
| Income tax expense/(benefit) | 1,223 | 1.1 | % | (2,197) | (1.9) | % | ||||||||||||||||||||
| Net loss | $ | (10,682) | (9.4) | % | $ | (12,950) | (10.9) | % | ||||||||||||||||||
Revenue-Our revenue decreased $4.1 million, or 3.5%, for the nine months ended September 30, 2026 compared to the same period in 2025. This decline was driven primarily by 2.1% decrease in same center volume and a .2% decrease in average selling price on a same-center basis. Revenue in the prior-year period also benefited from the operations of the London clinic, which was closed as of December 31, 2025.
Cost of Service-Our cost of service decreased $2.9 million, or 6.1%, for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The decrease was driven by a $1.1 million decrease in physician fees, a $0.8 million decrease in nursing payroll, a $0.6 million decrease in facility rent, and a $0.4 million decrease in medical supplies, reflecting the elimination of one center in the current period and efficiencies gained in personnel, medical and supply costs. Cost of service was 39.5% and 40.6% as a percentage of revenue for the nine months ended September 30, 2026 and 2025, respectively.
Selling, General and Administrative Expenses-Selling, general and administrative expenses increased $2.3 million, or 3.6%, for the nine months ended September 30, 2026 compared to the same period in 2025. This increase relates to a $2.4 million increase in advertising expense, a $1.7 million increase in professional and legal fees, a $0.6 million increase in payroll expenses, a $0.4 million increase in insurance expense, a $0.5 million increase in bank and processing fees, and a $0.2 million increase in legal settlement expense. These increases were partially offset by a $1.3 million decrease in rent expense, a $1.2 million decrease in stock compensation expense, a $0.5 million decrease in licenses and business taxes, a $0.4 million decrease in other selling expenses, and a $0.2 million decrease in miscellaneous income. Selling, general and administrative expenses as a percent of revenue were 58.0% and 54.0% for the nine months ended September 30, 2026 and 2025, respectively.
Selling expenses consist of advertising costs for social, digital and traditional marketing and for sales and marketing personnel. Total selling expenses were approximately $31.5 million and $28.2 million for the nine months ended September 30, 2026 and 2025, respectively. Our customer acquisition costs were approximately $3,526 and $3,050 per customer in the nine months ended September 30, 2026 and 2025, respectively. Additionally, selling expenses as a percentage of revenue may fluctuate from quarter to quarter based on the timing and scope of our initiatives and the related impact to our revenue.
General and administrative expenses include employee-related expenses, including salaries and related costs (excluding physician and clinical costs included in cost of service), equity-based compensation, technology, operations, finance, legal,
corporate office rent and human resources. General and administrative expense were approximately $34.7 million and $35.7 million for the nine months ended September 30, 2026 and 2025, respectively.
Depreciation and Amortization-Depreciation and amortization decreased to approximately $8.9 million for the nine months ended September 30, 2026 compared to $9.7 million for the same period in 2025.
Interest Expense, net-Interest expense was $3.5 million and $4.6 million for the nine months ended September 30, 2026 and 2025, respectively. The $1.1 million decrease was related to a $1.3 million decrease in interest on our outstanding debt resulting from principal prepayments and a $0.1 million increase in interest income, partially offset by a $0.3 million increase in loan and finance costs.
Income Tax Expense- Our effective tax rate was (12.9)% and 14.5% for the nine months ended September 30, 2026 and 2025, respectively. The main drivers of the difference between the effective and statutory rate for the three and nine months ended September 30, 2026 are the increase in the valuation allowance, non-deductible executive compensation under Section 162(m) of the Internal Revenue Code, and state taxes.
Liquidity and Capital Resources
Our principal sources of liquidity are cash on hand, proceeds from sales of our common stock under our at-the-market offering program, and, if needed, up to $5.0 million in revolving loans under our revolving credit facility, subject to minimum liquidity draw requirements. In March 2025, we filed a Registration Statement on Form S-3 (File No. 333-285825) which covers the offer, issuance and sale, for an aggregate initial offering price not to exceed $100.0 million, of shares of common stock and preferred stock; debt securities; warrants to purchase common stock, preferred stock and/or debt securities; and units. We also commenced an at-the-market offering program, with Leerink Partners LLC ("Leerink") acting as sales agent. This at-the-market offering program provides us with additional access to capital, as needed, subject to market conditions. During the quarter ended September 30, 2026, the Company sold approximately 2.4 million shares of common stock through its at-the-market offering program for total net proceeds of approximately $7.19 million.
The amount of securities we may sell under our shelf registration statement on Form S-3 may be limited. Under current SEC regulations, if the aggregate market value of our common stock held by non-affiliates (our "public float") is less than $75.0 million, and for so long as our public float remains less than $75.0 million, the amount we can raise through primary public offerings of securities in any 12-month period using shelf registration statements on Form S-3 is limited to one-third of our public float, which is referred to as the "baby shelf rules." We may be subject to the baby shelf rules, which would limit the amount of securities we could sell under our shelf registration statement, other than shares remaining available for sale under our existing at-the-market offering program, and could limit our ability to raise equity capital, including to repay or refinance our indebtedness under the Credit Agreement.
Our primary uses of cash are for payroll, marketing and advertisements, rent, debt service, information technology and infrastructure, including our corporate office. Our cash flows are closely tied to the receipt of patient payments, and we have experienced revenue declines in the two most recent years due to a decline in overall cases performed. Our ability to improve operating results depends upon a significant number of factors, some of which are beyond our control. If we are unable to realize the anticipated savings or benefits of our growth strategies, or otherwise fail to implement those strategies successfully, the operating results and liquidity may be adversely affected.
We believe that the cash expected to be generated from operations will be sufficient for our working capital requirements, liquidity obligations, and payments due under our existing credit facilities for at least the next 12 months. The term loans under our Credit Agreement, which had an outstanding principal balance of $37.2 million as of September 30, 2026, mature on November 15, 2027.
On November 5, 2026, the Company entered into a financing agreement (the "Blue Torch Financing Agreement") with a syndicate of lenders and Blue Torch Finance LLC ("Blue Torch"), as administrative agent and collateral agent, maturing on November 5, 2031. Under the Blue Torch Financing Agreement, there is a senior secured (i) term loan facility with an aggregate principal amount of $39.0 million, which was funded in full at closing, and (ii) revolving loan facility with an aggregate commitment of up to $5.0 million, none of which was drawn at closing. Pursuant to the Blue Torch Financing Agreement, borrowings bear interest at a rate of Term SOFR (as defined in the Blue Torch Financing Agreement) plus an applicable margin of 7.75%, which may be decreased to 6.75% based on leverage level. The lenders party to the Blue Torch Financing Agreement have been granted a first-priority security interest in substantially all assets of the borrower and guarantor parties thereto, subject to customary exclusions. The Blue Torch Financing Agreement contains customary affirmative and negative covenants for transactions of this type, including limitations on indebtedness, liens, investments,
restricted payments, asset sales, and affiliate transactions. The Blue Torch Financing Agreement also includes customary events of default and financial maintenance covenants, including (a) a maximum Leverage Ratio (as defined in the Blue Torch Financing Agreement) of 4.50:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, stepping down over time to 2.00:1.00 for each fiscal quarter ending December 31, 2030 and thereafter, (b) a minimum Fixed Charge Coverage Ratio (as defined in the Blue Torch Financing Agreement) of 1.00:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, increasing to 1.10:1.00 for each fiscal quarter ending December 31, 2027 through September 30, 2028 and 1.20:1.00 for each fiscal quarter ending December 31, 2028 and thereafter, and (c) minimum average weekly Liquidity (as defined in the Blue Torch Financing Agreement) of $7.5 million prior to September 30, 2027 and $5.0 million thereafter. The Blue Torch Financing Agreement requires mandatory prepayments of the loans from excess cash flow, for each fiscal year beginning with fiscal year 2027, payable following delivery of the audited annual financial statements for that fiscal year, in percentages ranging from 0% to 75% depending on the Company's gross leverage ratio, and from the net proceeds of certain asset dispositions, incurrences of indebtedness, and extraordinary receipts and cure equity, and from the proceeds of equity issued to cure certain financial covenant defaults. Proceeds from the Blue Torch Financing Agreement were used to repay in full all indebtedness under, and terminate, the Credit Agreement and to pay fees and expenses related to the Blue Torch Financing Agreement. Proceeds of any revolving loans will be used for working capital and general corporate purposes. The foregoing description is qualified in its entirety by reference to the Blue Torch Financing Agreement, a copy of which was filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on November 6, 2026.
As of September 30, 2026, we had $15.2 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of September 30, 2026.
As of September 30, 2025, we had $5.4 million in cash and cash equivalents and an available amount of $5.0 million under our revolving credit facility. We did not have any letters of credit outstanding as of September 30, 2025.
The following table summarizes the net cash provided by (used for) operating activities, investing activities and financing activities for the periods indicated:
|
Nine Months Ended September 30, |
||||||||||||||
| ($ in 000s) | 2026 | 2025 | ||||||||||||
| Cash Flows Provided By (Used For): | ||||||||||||||
| Operating activities | $ | 558 | $ | 5,627 | ||||||||||
| Investing activities | (505) | (2,346) | ||||||||||||
| Financing activities | 6,680 | (6,111) | ||||||||||||
| Net increase/(decrease) in cash and cash equivalents | 6,733 | (2,830) | ||||||||||||
Operating Activities
The primary source of our operating cash flow is the collection of patient payments received prior to performing surgical procedures. For the nine months ended September 30, 2026, our operating cash flow decreased by $5.1 million compared to the same period in 2025. The decrease is primarily attributed to weaker than expected revenue performance during the nine months ended September 30, 2026 as compared to the prior year period.
Investing Activities
Net cash used in investing activities for the nine months ended September 30, 2026 and 2025 was $0.5 million and $2.3 million, respectively. Investing activities in the nine months ended September 30, 2026 relate primarily to capitalized software. Investing activities during the nine months ended September 30, 2025 relate primarily to final payments on our White Plains, NY location that opened in December 2024.
Financing Activities
Net cash provided by financing activities during the nine months ended September 30, 2026 was $6.7 million. During the nine months ended September 30, 2026, we received net proceeds of $26.7 million from the at-the-market offering, made principal payments on our debt of $19.8 million and made payments of taxes withheld through vested equity-based compensation of $0.2 million.
Net cash used in financing activities for the nine months ended September 30, 2025 was $6.1 million. For the nine months ended September 30, 2025, we received net proceeds of $13.8 million from an underwritten public offering and made principal payments on our debt of $12.9 million, payments for debt modification of $0.3 million and payments of taxes withheld through vested equity-based compensation of $0.1 million.
At-the-Market Common Offering Program
On March 14, 2025, the Company entered into a sales agreement (the "ATM Agreement") with Leerink, as sales agent, in connection with an at-the-market offering program under which the Company may offer and sell, from time to time in our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million at prices and on terms to be determined by market conditions at the time of offering. The $50.0 million of common stock that may be offered, issued and sold under the ATM Agreement is included in the $100.0 million of securities that may be offered, issued and sold by us under our Registration Statement on Form S-3 (File No. 333-285825). The Company and Leerink each have the right to suspend or terminate the ATM Agreement in each party's sole discretion at any time. As of September 30, 2026, the Company had sold an aggregate of 11,504,516 shares of common stock under the ATM Agreement for aggregate gross proceeds of approximately $33.4 million, and approximately $16.6 million remained available for sale under the ATM Agreement.
In addition, under the Fourth Amendment, which was executed on August 7, 2026, 50% of the net cash proceeds of any issuance of our equity securities after that date (other than issuances under our equity incentive plans) must be applied to prepay the term loans. As a result, only approximately half of the net cash proceeds we raised under our at-the-market offering program after August 7, 2026 per the Fourth Amendment will be available to fund our operations and other general corporate purposes. The Credit Agreement was repaid in full and terminated in connection with the closing of the Blue Torch Financing Agreement, and the Blue Torch Financing Agreement does not require us to apply the net proceeds of equity issuances generally to prepay the loans, other than the proceeds of equity issued to cure certain financial covenant defaults. The Fourth Amendment also required us to make $5.0 million of mandatory term-loan payments in 2026 ($2.5 million paid upon signing and an additional $2.5 million paid on or before September 30, 2026).
In the three and nine months ended September 30, 2026, the Company sold the following quantities of our common stock pursuant to the ATM Agreement for total net proceeds of approximately $7.2 million and $26.7 million:
| Date | Shares (in thousands) | |||||||
| Q1 Total | 5,894 | |||||||
| Q2 Total | 973 | |||||||
| Q3 Total | 2,407 | |||||||
| YTD Total | 9,274 | |||||||
Long-Term Debt
The carrying value of our total indebtedness was $36.7 million and $56.0 million, which includes unamortized deferred financing costs and issuance discount of $0.5 million and $0.9 million as of September 30, 2026 and December 31, 2025, respectively.
On November 7, 2022, the Company entered into a credit agreement with a syndicate of lenders (the "Credit Agreement") originally maturing November 7, 2027. Pursuant to the Credit Agreement, there is (i) an $85.0 million original aggregate principal amount of term loans and (ii) a revolving loan facility with an aggregate principal amount of up to $5.0 million. On September 29, 2023, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand. During the quarter-ended March 31, 2026, the Company voluntarily pre-paid $10.0 million of the principal balance of the term loans under the Credit Agreement using cash on hand.
On March 12, 2025, the Company entered into an amendment to the Credit Agreement (the "Third Amendment"). Under the terms of the Third Amendment, the parties thereto agreed to modify certain financial condition covenants made by the Company in the Credit Agreement, such that (i) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025 and June 30, 2025 must be no less than 0.50x and 1.10x, respectively, and no less than 1.25x on the last day of the fiscal quarters ending September 30, 2025 and thereafter, instead of 1.10x as of March 31, 2025 and 1.25x as of June 30, 2025 and thereafter, as previously set forth in the Credit Agreement; (ii) the Consolidated Leverage Ratio (as defined in the Credit
Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025, June 30, 2025, September 30, 2025, December 31, 2025 and March 31, 2026, must not exceed 4.25x, 3.50x, 3.25x, 3.25x, and 2.75x, respectively, and the Consolidated Leverage Ratio as of the last day of each fiscal quarter thereafter must not exceed 2.25x, instead of 3.25x as of March 31, 2025, 2.75x as of June 30, 2025, and 2.25x thereafter, as previously set forth in the Credit Agreement; (iii) the Company and its subsidiaries will be required to maintain minimum Liquidity (as defined in the Credit Agreement) of not less than (A) $3.0 million as of the last day of the month ending March 31, 2025, (B) $5.0 million as of the last day of the month ending April 30, 2025, and (C) $7.5 million as of the last day of the months ending May 31, 2025 and thereafter (or the last day of each fiscal quarter thereafter upon the satisfaction of certain financial tests described therein); and (iv) new liquidity and financial reporting requirements have been added.
In addition to revising the covenants listed above, the Third Amendment revised or added new terms such that (i) for outstanding loans, beginning on or about July 1, 2025, the applicable per annum margin would be increased to 3.75% or 4.75% for base rate or SOFR (as defined in the Credit Agreement), respectively, if the Company's total leverage ratio was equal to or greater than 3.00x, 3.50% or 4.50% for base rate or SOFR, respectively, if the Company's total leverage ratio was equal to or greater than 2.00x and less than 3.00x, and 3.25% or 4.25% for base rate or SOFR, respectively, if the Company's total leverage ratio was below 2.00x, (ii) the term loan and revolving credit facility will mature on May 11, 2027 (instead of November 7, 2027); (iii) Liquidity in excess of $3.0 million will be used to repay the outstanding funds drawn on the revolving credit facility on a monthly basis beginning April 30, 2025; (iv) revolver draws will be subject to compliance with the minimum Liquidity covenant; (v) the Company will be required to reimburse Silicon Valley Bank ("SVB") for certain fees and expenses relating to the engagement of a financial advisor, and (vi) 100% of the first $10.0 million of any equity proceeds will be used to repay the term loan and revolving credit facility, subject to the following carve-outs (A) the first $3.0 million of equity proceeds; and (B) any equity proceeds received from Vesey Street Capital Partners, L.L.C., our private equity sponsor ("Sponsor"). In consideration for the Third Amendment, the Company paid a fee equal to 0.15% of the outstanding loans to consenting Lenders (as defined in the Credit Agreement) and a $0.125 million arrangement fee to SVB. On March 12, 2025, in connection with the Third Amendment, the Company, SVB and our Sponsor (through certain affiliated entities) entered into that certain limited guarantee by and among Vesey Street Capital Partners Healthcare Fund, L.P., Vesey Street Capital Partners Healthcare Fund-A, L.P., SVB, and the Company (the "Limited Guarantee"), pursuant to which our Sponsor agreed to provide a $10.0 million limited guaranty of the Company's obligations under the Credit Agreement. The Limited Guarantee was callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company had not prepaid the term loans (excluding regularly scheduled amortization) by $10.0 million as of such date. On June 13, 2025, the Company made a $10.0 million principal payment on the term loans in accordance with the Third Amendment using proceeds from its underwritten public offering completed on June 11, 2025. The Limited Guarantee automatically terminated on March 12, 2026 following the prepayment of the term loans in an aggregate amount of $20.0 million since the date of the Limited Guarantee.
On August 7, 2026, the Company entered into a further amendment to the Credit Agreement (the "Fourth Amendment") to, among other things: (i) extend the maturity date of the term loan and revolving credit facility to November 15, 2027 (approximately a six-month extension from the previous May 11, 2027 maturity date); (ii) require the Company to make a $2.5 million payment to the Lenders upon signing of the Fourth Amendment; (iii) require the Company to make an additional $2.5 million payment on or before September 30, 2026; (iv) require that 50% of the net proceeds of any future equity issuances (other than issuances under our equity incentive plans) be applied to prepay the term loans, in addition to amounts otherwise required to be applied under the Credit Agreement; (v) require the Company to provide biweekly updates on a conference call with the Lenders with respect to the status of its efforts to cause the Discharge of Obligations (as defined in the Credit Agreement); and (vi) require the Company, if the Discharge of Obligations has not occurred by October 31, 2026, to retain one or more investment banks reasonably satisfactory to the Administrative Agent (as defined in the Credit Agreement) to cause the Discharge of Obligations to occur, whether by obtaining replacement debt financing or otherwise. The Company determined the amendment is a modification.
Since the execution of the Fourth Amendment on August 7, 2026, the Company has made all required payments under the Credit Agreement, including the $2.5 million payment due upon signing and the additional $2.5 million payment due on or before September 30, 2026. The Company has also applied 50% of the net proceeds from equity issuances under its at-the-market (ATM) offering to prepay the term loans, as required by the Fourth Amendment.
As of September 30, 2026, the Company had prepaid $0.7 million of the term loans from net proceeds of ATM equity issuances. Subsequent to quarter-end, on October 20, 2026, the Company made an additional prepayment of $1.7 million from ATM net proceeds.
On November 5, 2026, the Company entered into a financing agreement (the "Blue Torch Financing Agreement") with a syndicate of lenders and Blue Torch Finance LLC ("Blue Torch"), as administrative agent and collateral agent, maturing on
November 5, 2031. Under the Blue Torch Financing Agreement, there is a senior secured (i) term loan facility with an aggregate principal amount of $39.0 million, which was funded in full at closing, and (ii) revolving loan facility with an aggregate commitment of up to $5.0 million, none of which was drawn at closing. Pursuant to the Blue Torch Financing Agreement, borrowings bear interest at a rate of Term SOFR (as defined in the Blue Torch Financing Agreement) plus an applicable margin of 7.75%, which may be decreased to 6.75% based on leverage level. The lenders party to the Blue Torch Financing Agreement have been granted a first-priority security interest in substantially all assets of the Company. The Blue Torch Financing Agreement contains customary affirmative and negative covenants for transactions of this type, including limitations on indebtedness, liens, investments, restricted payments, asset sales, and affiliate transactions. The Blue Torch Financing Agreement also includes customary events of default and financial maintenance covenants, including (a) a maximum Leverage Ratio (as defined in the Blue Torch Financing Agreement) of 4.50:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, stepping down over time to 2.00:1.00 for each fiscal quarter ending December 31, 2030 and thereafter, (b) a minimum Fixed Charge Coverage Ratio (as defined in the Blue Torch Financing Agreement) of 1.00:1.00 for each fiscal quarter ending December 31, 2026 through September 30, 2027, increasing to 1.10:1.00 for each fiscal quarter ending December 31, 2027 through September 30, 2028 and 1.20:1.00 for each fiscal quarter ending December 31, 2028 and thereafter, and (c) minimum average weekly Liquidity (as defined in the Blue Torch Financing Agreement) of $7.5 million prior to September 30, 2027 and $5.0 million thereafter. The Blue Torch Financing Agreement requires mandatory prepayments of the loans from excess cash flow for each fiscal year beginning with fiscal year 2027, payable following delivery of the audited annual financial statements for that fiscal year, in percentages ranging from 0% to 75% depending on the Company's gross leverage ratio, and from the net proceeds of certain asset dispositions, incurrences of indebtedness and extraordinary receipts, and from the proceeds of equity issued to cure certain financial covenant defaults. Proceeds from the Blue Torch Financing Agreement were used to repay in full all indebtedness under, and terminate, the Credit Agreement and to pay fees and expenses related to the Blue Torch Financing Agreement. Proceeds of any revolving loans will be used for working capital and general corporate purposes.
As of September 30, 2026, the interest rate under the Credit Agreement was 8.15%.
Critical Accounting Policies and Estimates
A summary of significant accounting policies is disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 under the caption "Critical Accounting Policies and Estimates" in the Management's Discussion and Analysis of Financial Condition and Results of Operations section. There have been no material changes in the nature of our critical accounting policies and estimates or the application of those policies since the date of that report.
Airsculpt Technologies Inc. published this content on November 06, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 06, 2026 at 12:05 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]