What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-06 compared with 2025-03-06 · 45 added, 40 removed, 144 unchanged (37% of the section changed)

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As a result of many factors, such as those set forth under the section entitled “Risk Factors” and elsewhere in this Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements.

See “CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS” for a discussion of the uncertainties, risks and assumptions associated with these statements.

See “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS” for a discussion of the uncertainties, risks and assumptions associated with these statements.

Due to rounding, certain amounts in the tables herein may not sum precisely.

We develop, manufacture, market and distribute MRI compatible medical devices and accessories, disposables and services relating to them.

We are a leader in the development of innovative MRI compatible medical devices.

We are the only known provider of a non-magnetic IV infusion pump system that is specifically designed to be safe for use during MRI procedures.

We are the only known provider of non-magnetic IV infusion pump systems specifically designed to be safe for use during MRI procedures.

We were the first to develop an infusion delivery system that largely eliminates many of the dangers and problems present during MRI procedures.

Standard infusion pumps contain magnetic and electronic components which can create radio frequency interference and are dangerous to operate in the presence of the powerful magnet that drives an MRI system.

Our patented MRidium® MRI compatible IV infusion pump system has been designed with a non-magnetic ultrasonic motor, uniquely designed non-ferrous parts and other special features to safely and predictably deliver anesthesia and other IV fluids during various MRI procedures.

Our pump solution provides a seamless approach that enables accurate, safe and dependable fluid delivery before, during and after an MRI scan, which is important to critically ill patients who cannot be removed from their vital medications, and children and infants who must generally be sedated to remain immobile during an MRI scan.

Our patented MRidium MRI compatible IV infusion pump systems have been designed with a non-magnetic ultrasonic motor, uniquely designed non-ferrous parts and other special features to safely and predictably deliver anesthesia and other IV fluids during various MRI procedures.

Our pump solutions provide a seamless approach that enables accurate, safe and dependable fluid delivery before, during and after an MRI scan, which is important to critically ill patients who cannot be removed from their vital medications, and children and infants who must generally be sedated to remain immobile during an MRI scan.

Each IV infusion pump system generally consists of an MRidium MRI compatible IV infusion pump, non-magnetic mobile stand, proprietary disposable IV tubing sets and many of these systems contain additional optional upgrade accessories.

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The IRadimed 3880 MRI compatible patient vital signs monitoring system has an easy-to-use design and allows for the effective communication of patient vital signs information to clinicians.

We generate revenue from the sale of MRI compatible medical devices and accessories, extended warranty agreements, services related to maintaining our products and the sale of disposable products used with our devices.

We generate revenue from the sale of MRI compatible medical devices and accessories, extended maintenance agreements, services related to maintaining our products and the sale of disposable products used with our devices.

The principal customers for our MRI compatible products include hospitals and acute care facilities, both in the United States and internationally.

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We also enter into agreements with IDNs and healthcare supply contracting companies, which are commonly referred to as GPOs in the U.S., which enable us to sell and distribute our products to their member hospitals.

GPOs negotiate volume purchase prices for hospitals, group practices, and other clinics that are members of a GPO.

GPO agreements, we are required to pay the GPOs a fee of three percent of the sales of our products to members of the GPO.

negotiate volume purchase prices for hospitals, group practices, and other clinics that are members of a GPO.

Under our GPO agreements, we are required to pay the GPOs a fee of three percent of the sales of our products to members of the GPO.

Sales to participating IDNs do not have an associated fee.

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Our estimated cumulative unit sales of medical devices are as follows:

IV Infusion Pump Systems

IV Infusion Pump System Channels

Patient Vital Signs Monitoring Systems

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Revenue Recognition

The principal customers for our MRI compatible products include hospitals and acute care facilities, both in the U.S.

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the transaction price, or the amount we expect to receive, is determinable and we have transferred control of the promised products or services to the customer.

We consider transfer of control evidenced upon the passage of title and risks and rewards of ownership to the customer, which is typically at a point in time, except for our extended warranty agreements.

We allocate the transaction price using the relative standalone selling price method.

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We recognize a receivable at the point in time we have an unconditional right to payment.

terms are typically within 45 days after transferring control to U.S.

Payment terms are typically within 45 days after transferring control to U.S.

Most international distributors are required to pay a portion of the transaction price in advance and the remaining amount within 30 days of receiving the related products.

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Percent of Revenue

Year Ended December 31,

Cost of revenue

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Revenue by Geographic Region

(in thousands)

United States

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Revenue by Type

(in thousands)

MRI Compatible IV Infusion Pump Systems

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Total devices revenue

Disposables, services and other

Amortization of extended warranty agreements

Amortization of extended maintenance agreements

Services and other

Total revenue

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increased $10.0 million, or 16.4 percent, to $70.6 million from $60.6 million for the same period in 2024.

Revenue from sales internationally decreased $0.4 million, or 3.1 percent, to $12.6 million from $13.0 million for the same period in 2023.

Revenue from sales internationally increased $0.6 million, or 4.8 percent, to $13.2 million from $12.6 million for the same period in 2024.

Domestic sales accounted for 84 percent of total revenue for the year ended December 31, 2025, compared to 83 percent for the same period in 2024.

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This increase was the result of higher overall unit sales, particularly our IV infusion pump systems.

For the year ended December 31, 2024, revenue from sales of our disposables, service and other increased $1.5 million, or 8.5 percent, to $19.1 million from $17.6 million for the same period in 2023.

Revenue from the amortization of our extended warranty agreements increased $0.2 million, or 11.7 percent, to $2.2 million from $2.0 million for the same period in 2023.

For the year ended December 31, 2025, revenue from the amortization of our extended maintenance agreements increased $0.2 million, or 6.7 percent, to $2.4 million from $2.2 million for the same period in 2024.

Revenue from sales of our disposables increased $2.5 million, or 17.0 percent, to $17.5 million from $15.0 million for the same period in 2024.

Revenue from services and other decreased $0.2 million, or 4.1 percent, to $3.9 million from $4.1 million for the same period in 2024.

The increase in ancillary product sales and revenue from amortization aligns with the increased gross sales of our devices.

Cost of Revenue and Gross Profit

(in thousands)

Cost of revenue

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Gross profit increased approximately $8.0 million, or 14.2 percent, to $64.3 million for the year ended December 31, 2025 from $56.3 million for the same period in 2024.

The increase in cost of revenue and gross profit is primarily due to higher revenue during the year ended December 31, 2024, compared to the same period in 2023.

Gross profit margin was 76.9 percent and 76.5 percent for the years ended December 31, 2024 and 2023, respectively.

The increase in gross profit margin is the result of favorable overhead variance adjustments and higher average selling prices in 2024 compared to 2023, a reduction in raw material costs, and increased management oversight of inventory.

The increase in year over year sales also positively impacts the Company’s ability to favorably absorb overhead costs and increase gross profit margin.

The increase in cost of revenue and gross profit is primarily due to higher revenue and associated material costs during the year ended December 31, 2025, compared to the same period in 2024.

Gross profit margin remained consistent at 77 percent for the years ended December 31, 2025 and 2024.

This is the result of higher average selling prices in 2025 compared to 2024, a reduction in certain raw material costs, and

improved inventory management;

and offset by increased overhead costs related to, employment costs, shipping logistics, and depreciation.

Operating Expenses

(in thousands)

General and administrative

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General and administrative expense increased approximately $1.9 million, or 12 percent, to $17.8 million for the year ended December 31, 2025, from $15.9 million for the same period in 2024.

This increase is primarily due to higher expenses for legal and professional costs, regulatory approval and consulting costs, and payroll and employee benefits costs.

These increases are a direct result of the continued growth of the Company and need for additional support resources.

This increase is primarily due to higher expenses related to regulatory approval and consulting costs, payroll and employee benefits costs, and non-capital expenses related to the New Facility.

These increases are a result of the support needs for the continued growth of the Company.

Sales and Marketing

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Higher commissions are related to the sales cycle, and in line with revenue growth.

The increases are a direct result of the continued growth of the Company.

The increases are a result of the continued growth of the Company.

Research and Development

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We reported other income of approximately $2.2 million and $2.3 million for the years ended December 31, 2025 and 2024, respectively.

This increase is primarily the result of higher interest income during the year ended December 31, 2024 compared to the same period in 2023.

This decrease is primarily the result of lower available interest rates during the year ended December 31, 2025 compared to the same period in 2024.

We recorded a provision for income tax expense of approximately $5.9 million for the year ended December 31, 2025, compared to a tax expense of approximately $5.0 million for the same period in 2024.

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Liquidity and Capital Resources

Our principal sources of liquidity have historically been our cash and cash equivalents balances, our investments, cash flow from operations and access to the financial markets.

Our principal sources of liquidity have historically been our cash and cash equivalents balances, and our cash flow from operations.

Our principal uses of cash are operating expenses, working capital requirements, capital expenditures and dividend payments.

As of December 31, 2025, we had cash and investments of $51.2 million, stockholders’ equity of $94.6 million, and working capital of $71.0 million, compared to cash and cash equivalents and investments of $52.2 million, stockholders’ equity of $86.8 million, and working capital of $66.7 million as of December 31, 2024.

(in thousands)

Net cash provided by operating activities

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Operating Activities

For the year ended December 31, 2024, cash provided by operations increased $12.1 million to $25.6 million, from $13.5 million in 2023.

During 2024, cash provided by operations was positively impacted by higher net income, lower inventory, lower accounts receivable, and increased stock compensation.

Cash provided by operations was negatively impacted by higher accounts payable and other accruals, higher deferred revenue, and higher deferred income taxes.

For the year ended December 31, 2025, cash provided by operations decreased $0.7 million to $24.9 million, from $25.6 million in 2024.

During 2025, cash provided by operations was positively impacted by higher net income, income tax effects, and deferred revenue collections, while negatively impacted by higher accounts receivable, inventory and expense accruals.

Investing Activities

For the year ended December 31, 2024, cash used in investing activities increased $0.8 million to $8.8 million, from $8.0 million used in 2023.

During 2024, cash related to investing activities was impacted by purchases of property and equipment, specifically ongoing construction costs for our new corporate office and manufacturing facility in Orange County, Florida.

For the year ended December 31, 2025, cash used in investing activities decreased $0.4 million to $8.4 million, from $8.8 million used in 2024.

During 2025 and 2024, cash outflows were primarily the cost of our new corporate office and manufacturing facility in Orlando, Florida, which is now completed and occupied.

Financing Activities

For the year ended December 31, 2025, cash used in financing activities increased $3.3 million to $17.6 million, from $14.3 million used in 2024.

During 2024, cash used in financing activities was related to cash payments for dividends and taxes paid for the net share settlement of restricted stock units.

During 2025 and 2024, cash used in financing activities was related to higher cash payments for dividends and higher taxes paid for the net share settlement of restricted stock units.

Sales to end users in the United States are generally made on open credit terms.

Management maintains an allowance for potential credit losses.

Our manufacturing operations and headquarters facility is approximately 23,100 square feet located in Winter Springs, Florida.

This facility has been leased from Susi, LLC, an entity controlled by our President, Chief Executive Officer, and Chairman, Roger Susi.

Pursuant to the terms of the Amended Lease Amendment, the monthly base rent is $34,133, adjusted annually for changes in the consumer price index.

We believe our sources of liquidity, including cash flow from operations, existing cash, and available financing sources will be sufficient to meet our projected cash requirements for at least the next 12 months from the date the financial statements are issued and into the foreseeable future.

Any equity financing may be dilutive to stockholders, and debt financing, if available, may involve restrictive covenants that increase our costs.

We monitor our capital requirements to ensure our needs are in line with available capital resources.

From time to time, we may explore additional financing sources to meet our working capital requirements, make continued investment in research and development, expand our business and acquire products or businesses that complement our current business.

These actions would likely affect our future capital requirements and the adequacy of our available funds.

Our manufacturing operations and headquarters facility is approximately 62,300 square feet located in Orlando, Orange County, Florida.

The Company funded the approximately $15.2 million construction project entirely with available cash.

The land and facility thereon is wholly owned without related debt.

We believe our sources of liquidity, including cash flow from operations, existing cash, and available financing sources, if needed, will be sufficient to meet our projected cash requirements for at least the next 12 months from the date the financial statements are issued and into the foreseeable future.

We monitor our capital requirements to ensure our needs are in line with these available sources.

From time to time, if necessary and beneficial, we may explore additional financing sources to meet our working capital requirements, make continued investment in research and development, expand our business and acquire products or businesses that complement our current business.

actions would likely affect our future capital requirements and the adequacy of our available funds.

Our future liquidity and capital requirements will depend on numerous factors, including the:

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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 7. Management’s Discussion and Analysis