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Item 8. Financial Statements and Supplementary Data

2025-03-14 compared with 2024-02-27 · 154 added, 115 removed, 488 unchanged (36% of the section changed)

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Consolidated Statements of Operations

Consolidated Statements of Other Compre h ensiv e ( Loss)/Income

Consolidated Statements of Changes in Member’s/Stockholders’ Equity

Consolidated Statements of Other Comprehensive Loss

Consolidated Statements of Changes in Stockholders’ Equity

Consolidated Statements of Cash Flows

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We have audited the accompanying consolidated balance sheets of AirSculpt Technologies, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, other comprehensive (loss)/income, changes in member’s / stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, other comprehensive loss, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

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We have served as the Company’s auditor since 2018.

Miami, Florida

February 27, 2024

Tampa, Florida

March 14, 2025

AirSculpt Technologies, Inc.

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Long-term operating lease liabilities 24,248 22,665

Revolving credit funds payable 5,000 —

Other long-term liabilities 817 716

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Selling, general and administrative (1)

98,880 102,381 101,418

Loss on debt modification — — 932

Depreciation and amortization 11,888 10,253 8,061

(Gain)/loss on disposal of long-lived assets ( 212 ) 147 —

Loss/(gain) on disposal of long-lived assets 16 ( 212 ) 147

Total operating expenses 182,166 186,434 173,339

Income/(loss) from operations 9,483 ( 4,545 ) 15,768

(Loss)/income from operations ( 1,816 ) 9,483 ( 4,545 )

Interest expense, net 6,247 6,485 6,751

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Income tax expense 188 7,477 3,383

Net (loss)/income $ ( 4,479 ) $ ( 14,679 ) $ 10,551

Net loss $ ( 8,251 ) $ ( 4,479 ) $ ( 14,679 )

Loss per share of common stock

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Diluted 57,688,906 56,778,793 55,684,701

(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.

See Note 6 to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion.

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

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and Subsidiaries

Consolidated Statements of Other Comprehensive (Loss)/Income

Consolidated Statements of Other Comprehensive Loss

For the years ended December 31, 2024, 2023 and 2022

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($000s) 2024 2023 2022

Net (loss)/income $ ( 4,479 ) $ ( 14,679 ) $ 10,551

Other comprehensive (loss)/income:

Net loss $ ( 8,251 ) $ ( 4,479 ) $ ( 14,679 )

Other comprehensive loss:

Change in foreign currency translation adjustment ( 275 ) ( 336 ) ( 76 )

Total other comprehensive (loss)/income ( 336 ) ( 76 ) —

Comprehensive loss/(income) $ ( 4,815 ) $ ( 14,755 ) $ 10,551

Total other comprehensive loss:

( 275 ) ( 336 ) ( 76 )

Comprehensive loss $ ( 8,526 ) $ ( 4,815 ) $ ( 14,755 )

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

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and Subsidiaries

Consolidated Statements of Changes in Member's/Stockholders' Equity

Consolidated Statements of Changes in Stockholders' Equity

For the years ended December 31, 2024, 2023 and 2022

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Paid-in Capital Accumulated Other Comprehensive Loss

($000s, except for share data) Member’s Equity Shares Amount Accumulated Deficit Total

($000s, except for shares) Shares Amount Accumulated Deficit Total

Balance at December 31, 2021 55,640,154 56 83,865 — ( 393 ) 83,528

Activity prior to Reorganization and IPO

Issuance of common stock through unit vesting 541,535 — — — — —

Distributions — — ( 732 ) — — ( 732 )

Equity-based compensation 2,460 — — — — — 2,460

Net income 10,944 — — — — — 10,944

Effect of Reorganization and IPO

Reorganization transaction ( 69,797 ) 53,466,241 54 69,743 — — —

Recognition of deferred tax liability in connection with Reorganization — — — ( 4,143 ) — — ( 4,143 )

Issuance of common stock in connection with the IPO, net of issuance costs of $ 10,372

— 2,173,913 2 13,540 — — 13,542

Activity subsequent to IPO

Dividends — — ( 24,701 ) — — ( 24,701 )

Equity-based compensation — — 29,457 — — 29,457

Payment of taxes withheld through vested equity-based compensation — — ( 2,031 ) — — ( 2,031 )

Net loss — — — — ( 14,679 ) ( 14,679 )

Other comprehensive loss — — — ( 76 ) — ( 76 )

Balance at December 31, 2022 56,181,689 56 85,858 ( 76 ) ( 15,072 ) 70,766

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Issuance of common stock through unit vesting 1,013,462 1 — — — 1

Distributions — — — ( 79 ) — — ( 79 )

Dividends — — 964 — — 964

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Cash flows from operating activities

Net (loss)/income $ ( 4,479 ) $ ( 14,679 ) $ 10,551

Adjustments to reconcile net (loss)/income to net cash provided by operating activities:

Net loss $ ( 8,251 ) $ ( 4,479 ) $ ( 14,679 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 11,888 10,253 8,061

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Deferred income taxes ( 252 ) 1,342 1,134

(Gain)/loss on disposal of long-lived assets ( 212 ) 147 —

Loss/(gain) on disposal of long-lived assets 16 ( 212 ) 147

Changes in assets and liabilities

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Borrowings on term loan, net — — 83,503

Proceeds from IPO — — 13,542

Payments for debt modification ( 136 ) — —

Proceeds from revolving credit facility 5,000 — —

Distribution to member — ( 79 ) ( 1,159 )

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Other financing activity ( 954 ) ( 569 ) ( 147 )

Net cash used in financing activities ( 13,391 ) ( 27,257 ) ( 4,549 )

Net cash provided by/(used in) financing activities 630 ( 13,391 ) ( 27,257 )

Net decrease in cash and cash equivalents ( 2,027 ) 646 ( 15,731 )

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Cash paid for interest $ 5,997 $ 6,277 $ 5,830

Cash paid for taxes $ 4,663 $ 4,932 $ —

Cash paid for income taxes $ 1,808 $ 4,663 $ 4,932

Supplemental disclosure of non-cash investing information:

Property and equipment included in accounts payable and accrued expenses $ 1,595 $ 283 $ 1,113

Distributions to member included in accrued expenses $ — $ — $ 427

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

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(“AirSculpt” or the "Company"), was formed as a Delaware corporation on June 30, 2021.

On October 28, 2021, AirSculpt completed an initial public offering (“IPO”) of 8,050,000 shares of common stock at an initial public offering price of $ 11.00 per share.

Immediately following the IPO, AirSculpt’s total outstanding shares were 55,640,154 .

Pursuant to a reorganization (the “Reorganization”) among entities under common control immediately prior to the IPO, AirSculpt became a holding company with its principal asset being 100 % of the ownership interests in EBS Intermediate Parent LLC.

The Company's revenues are concentrated in the specialty, minimally invasive liposuction market.

The operations of the Company prior to the IPO represent the predecessor to AirSculpt.

The Company and its consolidated subsidiaries are referred to collectively in these consolidated financial statements as “we,” “our,” and “us.” Solely for convenience, some of the copyrights, trade names and trademarks referred to in these consolidated financial statements are listed without their © , ® and ™ symbols, but we will assert, to the fullest extent under applicable law, our rights to our copyrights, trade names and trademarks.

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All intercompany accounts and transactions have been eliminated in consolidation.

Basis of Presentation

In the opinion of management, the accompanying consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

Variable Interest Entities

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The Company’s policy is to require payment for services in advance.

Payments received for services that have yet to be performed as of December 31, 2023 and December 31, 2022 are included in deferred revenue and patient deposits.

All of the deferred revenue and patient deposits as of December 31, 2022 were recognized in revenue during the twelve months ended December 31, 2023.

For the years ended December 31, 2023, 2022 and 2021, revenue from international locations was $ 5.2 million, $ 0.3 million and $ — million , respectively.

Payments received for services that have yet to be performed are included in deferred revenue and patient deposits.

All of the deferred revenue and patient deposits as of December 31, 2023 and 2022 were recognized in revenue during the twelve months ended December 31, 2024 and 2023.

For the twelve months ended December 31, 2024, 2023, and 2022, revenue from international locations was $ 6.1 million, $ 5.2 million, and $ 0.3 million, respectively, and net loss from international operations was $ 1.5 million, $ 1.9 million, and $ 1.4 million, respectively.

Cost of Service

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Property and equipment are stated at cost less accumulated depreciation.

Depreciation is computed using the straight-line method of accounting over the assets’ estimated useful lives.

Depreciation is computed using the straight-line method of accounting over the assets’ estimated useful lives, generally five years for medical equipment, five years for office and computer equipment, and seven years for furniture and fixtures.

Depreciation of leasehold improvements is based on the shorter of the estimated useful life of the improvement or the remaining lease term.

As of December 31, 2023, the Company has $ 1.7 m recorded in other long-term assets related to a software as a service hosting arrangement that has not yet been implemented.

As of December 31, 2024 and 2023, the Company has $ 2.4 million and $ 1.7 million recorded, respectively, in other long-term assets related to a software as a service hosting arrangement that has not yet been implemented.

The software will be used to enhance the sales and marketing process.

The Company determines if an arrangement is a lease at inception.

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For leases where the implicit rate is not readily determinable, the Company’s incremental borrowing rate is used.

The Company calculates its incremental borrowing rate on a periodic basis using a third-party financial model that estimates the rate of interest the Company would have to pay to borrow an amount equal to the total lease payments on a collateralized basis over a term similar to the lease.

lease payments on a collateralized basis over a term similar to the lease.

The Company applies its incremental borrowing rate using a portfolio approach.

The right-of-use assets also include any lease payments made prior to commencement and

is recorded net of any lease incentives received.

The right-of-use assets also include any lease payments made prior to commencement and is recorded net of any lease incentives received.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

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Earnings Per Share

Basic earnings per share of common stock is computed by dividing net income/(loss) attributable to AirSculpt Technologies, Inc.

Basic earnings per share of common stock is computed by dividing net loss attributable to AirSculpt Technologies, Inc.

for the twelve months ended December 31, 2024, 2023 and 2022 by the weighted-average number of shares of common stock outstanding during the same period.

Diluted earnings per share of common stock is computed by dividing net income/(loss) attributable to AirSculpt Technologies, Inc.

Diluted earnings per share of common stock is computed by dividing net loss attributable to AirSculpt Technologies, Inc.

for the twelve months ended December 31, 2024, 2023 and 2022 by the weighted-average number of shares of common stock adjusted to give effect to potentially dilutive securities.

Where the inclusion of potentially dilutive shares would be antidilutive, diluted loss per share equals basic loss per share.

Prior to the IPO, the EBS Intermediate Parent, LLC structure included only LLC common units.

As a result, the Company does not believe earnings per share to be a meaningful presentation in the accompanying consolidated financial statements for the periods of 2021 prior to the IPO.

Therefore, earnings per share information has not been presented for periods prior to the IPO on October 28, 2021.

Thus, the basic and diluted earnings (loss) per share represent only the period from October 28, 2021 to December 31, 2021.

Advertising Costs

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Advertising expenses were approximately $ 33.4 million, $ 25.9 million and $ 20.6 million for the twelve months ended December 31, 2024, 2023 and 2022, respectively.

Prior to the Reorganization, the Company was organized as a limited liability company and had elected to be treated as a partnership for federal and state income tax purposes.

Accordingly, the tax consequences of the Company’s profits and losses were passed through to the members of the Company and were reported in their respective income tax returns.

Therefore, historically no provision for income taxes has been provided in the accompanying consolidated financial statements for the periods prior to the Reorganization.

As a result of the Reorganization, the Company became subject to taxation as a C corporation for periods after October 28, 2021.

The Company became subject to taxation as a C corporation for periods after October 28, 2021.

The Company applies the provisions of ASC 740-10, Accounting for Uncertain Tax Positions (“ASC 740-10”).

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ASC 740-10 also modifies disclosure requirements related to uncertain tax positions for nonpublic entities and provides that all entities are subject to ASC 740-10 even if the only tax position in question is the entity’s status as a pass-through.

As required by the uncertain tax position guidance, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an

For tax positions meeting the more-likely-than-not threshold, the amount recognized in the condensed consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

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federal and state income taxes.

Prior to the Reorganization, the Company was not subject to federal taxation.

Going Concern

Management evaluates at each annual and interim period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the consolidated financial statements are issued.

Management’s evaluation is based on relevant conditions and events that are known and reasonably knowable at the date that the consolidated financial statements are issued.

Management has concluded that there are no conditions or events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the issuance of these financial statements.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures , which requires enhanced disclosures of significant segment expenses.

The ASU is effective for annual periods beginning after December 15, 2023 and interim periods beginning after December 15, 2024.

The amendments in this ASU must be applied retrospectively to all periods presented and early adoption is permitted.

The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures , which establishes new requirements for the categorization and disaggregation of information in the rate reconciliation as well as for disaggregation of income taxes paid.

The ASU is effective for annual periods beginning after December 15, 2024 and interim periods beginning after December 15, 2025.

The amendments in this ASU may be applied prospectively or retrospectively to all periods presented and early adoption is permitted.

The Company is evaluating the impact of this ASU on its consolidated financial statements.

NOTE 2 – GOODWILL AND INTANGIBLES, NET

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NOTE 3 – PROPERTY AND EQUIPMENT, NET

As of December 31, 2023 and December 31, 2022 property and equipment consists of the following:

As of December 31, 2024 and December 31, 2023 property and equipment consists of the following (in 000’s):

2024 December 31,

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NOTE 4 – 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.

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 using cash on hand.

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 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.

Under the Credit Agreement, all outstanding loans bear interest based on either a base rate or SOFR plus an applicable per annum margin.

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If the Company's total leverage ratio is below 1.0 x, 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.

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 2.0 x.

If the Company's total leverage ratio is equal to or greater than 1.0 x and less than 2.0 x, 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 1.0 x, the applicable per annum margin is 1.5 % or 2.5 % for base rate or SOFR, respectively.

As of December 31, 2024, the interest rate was 7.86 %.

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Long-term debt, net $ 65,456 $ 69,503

As of December 31, 2023 and December 31, 2022, the Company had $ 5.0 million available on the revolving credit facility.

As of December 31, 2024 and December 31, 2023, the Company had $ 0.0 million and $ 5.0 million available on the revolving credit facility.

The Company had $ 5.0 million drawn on the revolving credit facility as of December 31, 2024.

The scheduled future maturities of long-term debt as of December 31, 2024 is as follows (in 000’s):

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NOTE 6 – STOCKHOLDERS' EQUITY AND EQUITY-BASED COMPENSATION

Subsequent to the IPO and Reorganization, AirSculpt established the 2021 Equity Incentive Plan.

The Company may issue a maximum of 5,564,015 shares under the 2021 Equity Incentive Plan.

This amount will automatically increase on January 1 of each year for a period of ten years starting on January 1, 2023, in an amount equal to the lesser of (i) four percent of the total Common Stock outstanding on December 31 of the preceding year and (ii) such smaller number of shares as determined by the Company’s Board.

Under the 2021 Equity Incentive Plan, 3,950,450 stock units were awarded to AirSculpt’s executive officers and directors and 728,880 stock units were awarded to employees on November 4, 2021 and November 10, 2021, respectively.

These stock units were granted in the form of RSUs and PSUs.

During the twelve months ended December 31, 2024 and 2023, the Company granted 590,279 and 767,261 RSUs, respectively, to certain officers, employees and non-employee directors in accordance with the 2021 Plan.

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These RSUs are not considered outstanding until vested.

During the twelve months ended December 31, 2023 and 2022, the Company granted 50,000 and 38,775 PSUs, respectively, subject to the achievement of a combination of performance conditions.

During the twelve months ended December 31, 2024 and 2023, the Company granted 482,165 and 624,846 PSUs, respectively, subject to the achievement of market-based conditions ("market-based PSUs").

The vesting is based on achievement of a total shareholder return relative to a specified peer group (“rTSR”).

Based on the rTSR, the awards can settle in shares in a range from 0 % to 200 %.

In addition to the achievement of the performance conditions, these PSUs are generally subject to the continuing service of the employee over the ratable vesting period from the earned date continuing through the settlement of the shares.

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These PSUs are not considered outstanding until settled.

During the twelve months ended December 31, 2021, the Company granted 973,703 PSUs subject to the achievement of certain market-based conditions.

The vesting is based on achievement of a specified 60 -day volume weighted average share price (“VWAP”) in relation to a specified base price in the award agreement.

These awards are structured with one-third vesting at 120 % VWAP, one-third vesting at 145 % VWAP and the final one-third vesting at 175 % VWAP.

During the twelve months ended December 31, 2023 and 2022, the Company granted 624,846 and 103,936 PSUs, respectively, subject to the achievement of market-based conditions ("market-based PSUs").

The vesting is based on achievement of a total shareholder return relative to a specified peer group (“rTSR”).

Based on the rTSR, the awards can settle in shares in a range from 0 % to 200 %.

Determining the fair value of the market-based PSU awards requires judgment.

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A summary of the Company’s RSU and PSU activity for the twelve months ended December 31, 2024, 2023 and 2022 follows.

For purposes of this summary, the Company assumes the market-based PSUs will be issued at 100 % of the units within the range of 0 % to 200 %.

Weighted Average

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Granted 359,132 15.10

Forfeitures ( 5,564 ) 14.71

Forfeitures/Cancellations ( 503,693 ) 14.13

Vestings ( 1,002,571 ) 14.76

Outstanding at December 31, 2022 3,526,634 14.23

Granted 1,442,107 6.60

Forfeitures ( 503,693 ) 14.13

Forfeitures/Cancellations ( 30,605 ) 10.83

Vestings ( 1,025,234 ) 13.93

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Granted 1,072,444 7.66

Forfeitures ( 30,605 ) 10.83

Forfeitures/Cancellations ( 2,249,555 ) 12.65

Vestings ( 1,120,408 ) 10.62

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Other information pertaining to equity-based compensation

On December 30, 2022, Ronald Zelhof, the Chief Operating Officer, entered into a Separation and General Release Agreement (“Separation Agreement”) with the Company.

In connection with confirming that certain restrictive covenants remain in effect, Mr.

Zelhof was entitled to remain eligible to earn PSUs through March 31, 2024 and a partial accelerated vesting for 176,388 RSUs.

In connection with the Separation Agreement, the Company recognized an additional $ 2.1 million in stock compensation during the twelve months ended December 31, 2022.

In connection with the IPO, on November 4, 2021 the Company previously granted PSUs with performance-based vesting conditions to certain employees.

The performance-based conditions include PSUs that can vest upon achieving specified stock price performance targets (the "Price Targets"), and the remaining PSUs can vest upon achieving a revenue performance target in any trailing twelve-month period up to December 31, 2024 (the "Revenue Target").

During the three months ended March 31, 2024, the Company reassessed the probability of achieving the Revenue Target and determined such achievement is improbable based on current facts and circumstances.

As a result, the Company recorded a $ 10.4 million cumulative reversal of stock compensation expense related to the unvested PSUs attributable to the Revenue Target in the three months ended March 31, 2024.

On August 8, 2024, Todd Magazine stepped down from his role as Chief Executive Officer of the Company, effective as of August 8, 2024, and entered into a Transition Services Agreement with the Company.

In consideration of the provision by Mr.

Magazine of consulting services to the Company through December 31, 2024, Mr.

Magazine remained eligible to vest in 75,000 RSUs on January 1, 2025, which would have otherwise been forfeited, which resulted in an additional

$ 0.3 million in stock compensation during the twelve months ended December 31, 2024.

Further, pursuant to the severance provisions under Section 7.2 of his employment agreement with the Company, Mr.

Magazine remains eligible to earn a prorated portion of the PSUs granted to him in 2023 and 2024 through December 31, 2026, and December 31, 2027, respectively, and partial accelerated vesting for 209,490 RSUs, resulting in an additional $ 0.8 million in stock compensation during the twelve months ended December 31, 2024.

The Company recorded equity-based compensation expense of $ 3.8 million, $ 18.2 million, and $ 29.5 million for the twelve months ended December 31, 2024, 2023, and 2022, respectively, in selling, general and administrative expenses on the consolidated statements of operations.

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On August 10, 2022, the board of directors of the Company approved a $ 0.41 per share special cash dividend.

The dividend was paid on September 14, 2022, to shareholders of record at the close of business on August 26, 2022.

The dividend was paid on September 14, 2022, to stockholders of record at the close of business on August 26, 2022.

Cash dividends paid totaled $ 0.3 million for the twelve months ended December 31, 2024.

The Company's unvested stock units participate in dividends and as such, the Company had $ 1.0 million in dividends payable as of December 31, 2023, of which $ 0.3 million is current.

The Company's unvested stock units participate in dividends and as such, the Company had no dividends payable as of December 31, 2024.

The Company recognized distributions to EBS Parent, LLC (the "Parent") of approximately $ 0.1 million, $ 1.2 million, and $ 66.9 million for the twelve months ended December 31, 2024, 2023, and 2022, respectively.

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Basic earnings per share of common stock is computed by dividing net income/loss attributable to AirSculpt Technologies, Inc.

for the twelve months ended December 31, 2023 and 2022 by the weighted-average number of shares of common

stock outstanding during the same period.

for the twelve months ended December 31, 2024, 2023, and 2022 by the weighted-average number of shares of common stock outstanding during the same period.

Diluted earnings per share of common stock is computed by dividing net income/loss attributable to AirSculpt Technologies, Inc.

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Where the inclusion of potentially dilutive shares would be antidilutive, diluted loss per share equals basic loss per share.

Prior to the IPO, the EBS Intermediate Parent, LLC structure included only LLC common units issued and outstanding to pre-IPO LLC members.

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.

Thus, the basic and diluted earnings (loss) per share represent only the period from October 28, 2021 to December 31, 2021.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share of common stock is as follows (in 000’s except for shares and per share figures):

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2024 2023 2022

Net (loss)/income $ ( 4,479 ) $ ( 14,679 ) $ 10,551

Net income attributable to EBS Intermediate Parent, LLC prior to Reorganization — — 10,944

Net loss attributable to AirSculpt Technologies, Inc.

( 4,479 ) ( 14,679 ) ( 393 )

Net loss $ ( 8,251 ) $ ( 4,479 ) $ ( 14,679 )

Weighted average shares of common stock outstanding - basic 57,688,906 56,778,793 55,684,701

56,778,793 55,684,701 55,640,154

Effect of dilutive securities — — —

Weighted average shares of common stock outstanding - diluted 57,688,906 56,778,793 55,684,701

56,778,793 55,684,701 55,640,154

Loss per share of common stock outstanding - basic and diluted $ ( 0.14 ) $ ( 0.08 ) $ ( 0.26 )

(1) Basic and diluted weighted average shares outstanding and loss per share for 2021 represent only the period from October 28, 2021 to December 31, 2021

The following number of potentially dilutive shares were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive.

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NOTE 8 – INCOME TAXES

Prior to the Reorganization and IPO, EBS Intermediate was structured as a partnership and therefore, was subject to certain LLC entity-level taxes but generally not subject to U.S.

federal and state income taxes.

As part of the Reorganization Transactions described in Note 1, the Company created a C Corporation, and is now subject to U.S.

federal and state taxes.

Significant components of income tax expense were as follows (in 000’s):

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The most significant items impacting the effective tax rate during fiscal years 2023, 2022 and 2021 are due to the Reorganization, non-deductible officer compensation expense, and the items below.

Pass-through income

Prior to the Reorganization, EBS Intermediate Parent, LLC was the reporting entity, which is treated as a flow-through entity for federal income tax purposes.

The income or losses generated were not taxed at the LLC level.

As required by U.S.

tax law, income or loss generated by the LLC flows through to various partners of the LLC.

The tax impact of the pre-tax book income attributable to EBS Intermediate Parent, LLC prior to the execution of the reorganization and IPO was $( 2.4 ) million for the fiscal year ended December 31, 2021.

The Company’s deferred tax assets (liabilities) consisted of the following (in 000’s):

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After considering all of those factors, management recorded a $ 0.8 million and $ 0.5 million valuation allowance for the deferred tax assets related to the foreign net operating losses which are not more likely than not to be realized as of December 31, 2024 and 2023.

Our foreign pre-tax loss was $( 1.5 ) million, $( 1.9 ) million, and $( 1.4 ) million, for the fiscal years ended December 31, 2024, 2023 and 2022, respectively.

There were no valuation allowance releases in the current year.

The Company maintains a full valuation allowance related to its UK subsidiary and has no other valuation allowances.

Uncertain Tax Positions

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The Company believes, based upon a review of pending actions and proceedings, that the outcome of such legal actions and proceedings will not have a material adverse effect on its business, financial condition, results of operations, and cash flows.

The outcome of such actions and proceedings, however, cannot be predicted with

certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.

The outcome of such actions and proceedings, however, cannot be predicted with certainty and an unfavorable resolution of one or more of them could have a material adverse effect on the Company’s business, financial condition, results of operations, and cash flows.

Although the Company currently maintains liability insurance coverage intended to cover professional liability and certain other claims, the Company cannot assure that its insurance coverage will be adequate to cover liabilities arising out of claims asserted against it in the future where the outcomes of such claims are unfavorable.

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NOTE 10 – SEGMENT INFORMATION

The Company has one reportable segment:

The Company has one operating and one reportable segment:

direct medical procedure services.

This segment is made up of facilities and medical staff that provide the Company’s patented AirSculpt® procedures to patients.

Segment information is presented in the same manner that the Company’s chief operating decision maker (“CODM”) reviews the operating results in assessing performance and allocating resources.

The Company’s CODM is the Company’s chief executive officer.

The accounting policies of the direct medical procedure services segment are the same as those presented in Note 1 - Organization and Summary of Significant Accounting Policies.

The Company’s chief operating decision maker (“CODM”) is the Company’s chief executive officer.

The CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance and allocating resources.

The Company’s CODM reviews revenue, gross profit and Adjusted EBITDA.

Gross profit is defined as revenues less cost of service incurred and Adjusted EBITDA as net loss/income excluding depreciation and amortization, net interest expense, income tax expense, restructuring and related severance costs, IPO related costs, loss/(gain) on disposal of long-lived assets, and equity-based compensation.

The Company’s CODM reviews revenue, gross profit, Adjusted EBITDA and net income/(loss).

The CODM uses Adjusted EBITDA as the primary profit metric to evaluate income generated from operations in deciding where to spend additional marketing dollars or allocate additional resources.

Gross profit is defined as revenues less cost of service incurred and Adjusted EBITDA 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.

Segment information is presented below showing revenue, significant expenses and net income/(loss) (the closest GAAP measure to Adjusted EBITDA), in the same manner that the CODM reviews the operating results in assessing performance and allocating resources.

Twelve Months Ended

($ in thousands) 2024 2023 2022

Revenue $ 180,350 $ 195,917 $ 168,794

Operating expenses:

Cost of service (exclusive of depreciation and amortization) (1)

71,382 74,012 62,781

Advertising Cost 33,429 25,938 20,598

Facility selling, general, and administrative expense 22,933 24,694 20,427

Corporate selling, general, and administrative expense 42,518 51,749 60,393

Loss on debt modification — — 932

Depreciation and amortization 11,888 10,253 8,061

Loss/(gain) on disposal of long-lived assets 16 ( 212 ) 147

Total operating expenses 182,166 186,434 173,339

(Loss)/income from operations ( 1,816 ) 9,483 ( 4,545 )

Interest expense, net 6,247 6,485 6,751

Pre-tax net (loss)/income ( 8,063 ) 2,998 ( 11,296 )

Income tax expense 188 7,477 3,383

Net loss $ ( 8,251 ) $ ( 4,479 ) $ ( 14,679 )

Segment assets $ 209,996 $ 204,019 $ 200,759

(1) Cost of services includes the costs of physicians, nursing, supplies and rent directly related to the performance of procedures at the facility level.

NOTE 11 – SUBSEQUENT EVENTS

On March 12, 2025, the Company, EBS Intermediate Parent LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (“EBS Parent”), EBS Enterprises LLC, a Delaware limited liability company and wholly-owned subsidiary of EBS Parent (“Borrower”), Silicon Valley Bank, a division of First-Citizens Bank & Trust Company, as the administrative agent (“SVB”), and the lenders a party thereto entered into a Third Amendment to the Credit Agreement (the “Third Amendment”).

Under the terms of the Third Amendment, the parties thereto agreed to modify certain financial condition covenants made by the Company in the Credit Agreement, such that (i) the Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of the Company and its subsidiaries as of the last day of the

fiscal quarters ending March 31, 2025 and June 30, 2025 must be no less than 0.50 x and 1.10 x, respectively, and no less than 1.25 x on the last day of the fiscal quarters ending September 30, 2025 and thereafter, instead of 1.10 x as of March 31, 2025 and 1.25 x as of June 30, 2025 and thereafter, as previously set forth in the Credit Agreement;

(ii) the Consolidated Leverage Ratio (as defined in the Credit Agreement) of the Company and its subsidiaries as of the last day of the fiscal quarters ending March 31, 2025, June 30, 2025, September 30, 2025, December 31, 2025 and March 31, 2026, must not exceed 4.25 x, 3.50 x, 3.25 x, 3.25 x, and 2.75 x, respectively, and the Consolidated Leverage Ratio as of the last day of each fiscal quarter thereafter must not exceed 2.25 x, instead of 3.25 x as of March 31, 2025, 2.75 x as of June 30, 2025, and 2.25 x thereafter, as previously set forth in the Credit Agreement;

(iii) the Company and its subsidiaries will be required to maintain minimum Liquidity (as defined in the Credit Agreement) of not less than (A) $ 3,000,000.00 as of the last day of the month ending March 31, 2025, (B) $ 5,000,000 as of the last day of the month ending April 30, 2025, and (C) $ 7,500,000.00 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 will be increased 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 3.00 x, 3.50 % or 4.50 % for base rate or SOFR, respectively, if the Company's total leverage ratio is equal to or greater than 2.00 x and less than 3.00 x, and 3.25 % or 4.25 % for base rate or SOFR, respectively, if the Company's total leverage ratio is below 2.00 x, (ii) the maturity 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 SVB for certain fees and expenses relating to the engagement of a financial advisor, and (vi) 100 % of first $ 10.0 million of any equity proceeds will be used to repay the Term Loan and Revolving Credit Facility, subject to a carve-out of the first $ 3.0 million of equity proceeds;

and any equity proceeds received from Sponsor.

In consideration of the Third Amendment, the Company paid a fee equal to 0.15 % of the outstanding loans to consenting Lenders, and a $ 125,000 arrangement fee to SVB.

On March 12, 2025 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, a related party and who with their affiliates hold a 50.1 % ownership interest in the Company, 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 is callable on June 15, 2025 (or upon the earlier occurrence of certain defaults described therein) if the Company has not prepaid the Term Loan (excluding regularly scheduled amortization) by $ 10.0 million as of such date.

Under the terms of the Limited Guarantee, if Sponsor is required to make any payment under the Limited Guarantee (other than as a result of a bankruptcy event), then Sponsor will be deemed to have purchased shares of common stock of the Company having an aggregate value equal to the amount of such payment.

The Company has agreed to issue a subordinated note to Sponsor if a payment occurs under the Limited Guarantee, to the extent such payment does not result from the issuance of shares of common stock by the Company to Sponsor.

NOTE 12 – ACCRUED AND OTHER CURRENT LIABILITIES

As of December 31, 2024 and December 31, 2023 accrued and other current liabilities consists of the following (in 000’s):

2024 December 31,

Accrued advertising costs $ 3,209 $ —

Credit card payable 1,576 1,140

Accrued severance 1,400 —

Other 2,119 2,163

Accrued and other current liabilities $ 8,304 $ 3,303

Changes in and Disagreements With Accountants on Accounting and Financial Disclosures

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data