ELMD 10-K
Electromed, Inc. (ELMD)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
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| | Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended
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| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From ________ to ________. | ||
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
The aggregate market value of the common stock held by non-affiliates of the registrant as of December 31, 2025 was approximately $
There were
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Definitive Proxy Statement for the registrant’s annual meeting of shareholders, to be filed within 120 days of June 30, 2026, are incorporated by reference into Part III of this Annual Report on Form 10-K.
Electromed, Inc.
Index to Annual Report on Form 10-K
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Annual Report on Form 10-K that are not statements of historical fact should be considered forward-looking statements within the meaning of the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include, but are not limited to, statements regarding: our business strategy, including our intended level of investment in research and development and marketing activities; our expectations with respect to earnings, gross margins and sales growth, industry relationships, marketing strategies and international sales; estimated sizes of markets into which our products are or may be sold; our business strengths and competitive advantages; our ability to grow additional sales distribution channels; our intent to retain any earnings for use in operations rather than paying dividends; our expectation that our products will continue to qualify for reimbursement and payment under government and private insurance programs; our intellectual property plans and practices; the expected impact of applicable regulations on our business; our beliefs about our manufacturing processes; our expectations and beliefs with respect to our employees and our relationships with them; our belief that our current facilities are adequate to support our growth plans; our expectations with respect to ongoing compliance with the terms of our credit facility; our expectations regarding the ongoing availability of credit and our ability to renew our line of credit; enhancements to our products and services; expected excise tax exemption for the SmartVest System; and our anticipated revenues, expenses, capital requirements and liquidity. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “ongoing,” “plan,” “potential,” “project,” “target,” “should,” “will,” “would,” and similar expressions, including the negative of these terms, are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Although we believe these forward-looking statements are reasonable, they involve risks and uncertainties that may cause actual results to differ materially from those projected by such statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results or our industry’s actual results, levels of activity, performance, or achievements to be materially different from the information expressed or implied by the forward-looking statements.
Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, the following:
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ability to obtain and maintain reimbursement from Medicare, Medicaid, or private insurance payers for our products; |
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component or raw material shortages, changes to lead times or significant price increases, inflationary trends in electronic components, and uncertainty related to trade regulations (including, but not limited to, changes to tariffs); |
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adverse changes to state and federal health care regulations; |
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our ability to maintain regulatory compliance and to gain future regulatory approvals and clearances; |
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entry of new competitors including new drug or pharmaceutical discoveries; |
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adverse economic and business conditions or intense competition; |
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wage inflation; |
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rising energy costs and geopolitical conflict; |
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technical problems with our research and products; |
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the risks associated with cyberattacks, data breaches, computer viruses and other similar security threats; |
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changes affecting the medical device industry; |
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our ability to develop new sales channels for our products such as the hospital or homecare distributor channels; |
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adverse international health care regulation impacting current international business; |
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our ability to renew our line of credit or obtain additional credit as necessary; and |
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our ability to protect and expand our intellectual property portfolio. |
This list of factors is not exhaustive, however, and these or other factors, many of which are outside of our control, could have a material adverse effect on us and the results of our operations. Therefore, you should consider these risk factors with caution and form your own critical and independent conclusions about the likely effect of these risk factors on our future performance. Forward-looking statements speak only as of the date on which the statements are made, and we undertake no obligation, and expressly disclaim any such obligation, to update any forward-looking statement for any reason other than as required by law, even if new information becomes available or other events occur in the future. You should carefully review the disclosures and the risk factors described in this and other documents we file from time to time with the Securities and Exchange Commission (the “SEC”). All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth herein.
| Item 1. | Business. |
Overview
Electromed, Inc. (“we,” “our,” “us,” “Electromed” or the “Company”) develops, manufactures, markets and sells innovative products that provide airway clearance therapy, including the SmartVest® Airway Clearance System (“SmartVest System”) to patients with compromised pulmonary function with a commitment to excellence and compassionate service. Our goal is to make High Frequency Chest Wall Oscillation (“HFCWO”) treatments as effective, convenient, and comfortable as possible, so our patients can breathe easier and live better with improved respiratory function and fewer exacerbations.
We primarily employ a direct-to-patient and provider model, through which we obtain patient referrals from clinicians, manage insurance claims on behalf of our patients, and deliver the SmartVest System to patients, training them on proper use in their homes. This model allows us to directly approach patients and clinicians, whereby we disintermediate the traditional home medical equipment (“HME”) channel and capture both the manufacturer and distributor margins. We also sell our products in the acute care setting for patients in a post-surgical or intensive care unit, or who were admitted for a lung infection brought on by compromised airway clearance. Electromed was incorporated in Minnesota in 1992. Our common stock is listed on the NYSE American under the ticker symbol “ELMD.”
The SmartVest System generates HFCWO, an airway clearance therapy. The SmartVest System features a programmable air pulse generator, a therapy garment worn over the upper body and a connecting hose, which together provide safe, comfortable, and effective therapy to clear the lung and airway from retained secretions and mucus which can harbor bacteria and lead to infection. One important factor of respiratory health is the ability to clear secretions from airways. Impaired airway clearance, when mucus cannot be expectorated, may result in labored breathing, inflammatory response and/or immune systems boosting mucus production that invites bacteria trapped in stagnant secretions to cause infections. Studies show that HFCWO therapy is as effective an airway clearance method for patients who have compromised pulmonary function as traditional chest physical therapy (“CPT”) administered by a respiratory therapist.1 However, HFCWO can be self-administered, relieving a caregiver of participation in the therapy, and eliminating the attendant cost of an in-home care provider. We believe that HFCWO treatments are cost-effective primarily because they reduce a patient’s risk of respiratory infections and other secondary complications that are associated with impaired airway clearance and often result in costly hospital visits and repeated antibiotic use.
The SmartVest System is designed for patient comfort and ease of use which promotes adherence to prescribed treatment schedules, leading to improved airway clearance, patient outcomes and quality of life, and a reduction in healthcare utilization. We offer a broad range of garments, referred to as vests and wraps, in sizes for children and adults that allow for a tailored fit. User-friendly controls allow patients to administer their daily therapy with minimal or no assistance. Our direct product support services provide patient and clinician education, training, and follow-up to ensure that the product is integrated into each patient’s daily treatment regimen. Additionally, our reimbursement department works on behalf of the patient by processing their physician paperwork, providing clinical support and billing the applicable insurance provider. We believe that the advantages of the SmartVest System and Electromed's customer service to the patient include:
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improved quality of life; |
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reduction in healthcare utilization; |
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independence from a dedicated caregiver; |
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consistent treatments at home; |
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improved comfort during therapy; and |
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eligibility for reimbursement by private insurance, federal or state government programs or combinations of the foregoing. |
1Nicolini A, et al. Effectiveness of treatment with high-frequency chest wall oscillation in patients with bronchiectasis. BMC Pulmonary Medicine. 2013;13(21).
Our Products
Since 2000, we have marketed the SmartVest System and its predecessor products to patients suffering from bronchiectasis, cystic fibrosis, and neuromuscular conditions such as cerebral palsy and amyotrophic lateral sclerosis (“ALS”). Our products are sold into the home health care market and the acute care setting for patients in a post-surgical or intensive care unit, or who were admitted for a lung infection brought on by compromised airway clearance. Accordingly, our sales points of contact include adult pulmonology clinics, cystic fibrosis centers, neuromuscular clinics and hospitals.
We have received clearance from the U.S. Food and Drug Administration (“FDA”) to market the SmartVest System to promote airway clearance and improve bronchial drainage. In addition, Electromed is approved for HFCWO device sales in other, select international countries. The SmartVest System is available only with a physician’s prescription.
The SmartVest System is currently available in two models, SmartVest SQL® and SmartVest Clearway®, which are sold into homecare and hospital markets. In November 2022, we announced the introduction of SmartVest Clearway®, our next generation HFCWO system designed around an enhanced patient experience and modern design. We will continue to support and service earlier SmartVest models pursuant to the applicable product warranty. As part of our growth strategies, we evaluate opportunities involving products and services, especially those that may provide value to the respiratory homecare and hospital market.
The SmartVest Clearway System
The SmartVest Clearway System consists of an inflatable therapy garment, a programmable air pulse generator and a patented single-hose that delivers air pulses from the generator to the garment to create oscillatory pressure on the chest wall. The SmartVest Clearway is designed for maximum comfort and lifestyle convenience, so patients can readily fit therapy into their daily routines. The SmartVest Clearway was designed with patient experience in mind, continuing our history of offering a sleek and light weight generator featuring an intuitive touch screen to simplify use. The enhanced features make it easier to use and enable greater patient freedom in completing therapy.
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360° oscillation coverage and patented Soft Start(R) technology: All SmartVest garments provide 360° oscillation coverage, which delivers simultaneous treatment to all lobes of the lungs. The oscillatory squeeze-and-release technology delivers therapeutic pressure to the chest wall to loosen, sheer and propel mucus into the upper airways where it can be more easily expectorated. Our patented Soft Start technology gently inflates the garment to better acclimate the patient to therapy. |
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Open system design with Breathing RoomTM: The active inflate – active deflate mechanism of the SmartVest System enables patients to take deep breaths during therapy without feeling restricted, providing patients with a more comfortable treatment experience. |
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Programmable generator with user-friendly device operation: The SmartVest Clearway introduces an intuitive touchscreen with single touch start. The improved user interface enhances device programming and simplifies everyday use. The system features multiple operating modes, including ramp, favorite settings designations, and options for saving, locking and restoring protocols. An enhanced pause feature allows the physician to program dedicated times for the patient to clear secretions during therapy. |
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Patented single-hose design: A single-hose delivers oscillations to the SmartVest garment, which we believe provides therapy in a more comfortable and unobtrusive manner than a two-hose system. Oscillations are delivered evenly from the base of the SmartVest garment, extending the forces upward and inward in strong but smooth cycles surrounding the chest. |
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Soft-fabric garment is lightweight and comfortable: The SmartVest garment is lightweight and is designed to resemble an article of clothing. The garment’s design takes weight off of the patient’s shoulders and torso, enhancing the therapy experience. Quick fit Velcro®-like closures allow for a secure, comfortable fit without bulky straps and buckles. The simple design creates a broad size adjustment range to ensure a properly tailored fit to accommodate pediatric and adult patients. |
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Small and light: SmartVest Clearway is a sleek and lightweight generator, weighing less than 14 pounds. The lightweight design, ergonomic carrying handle and compact storage case make it easier for patients to move throughout their home as well as store and integrate HFCWO therapy into their daily lives. |
Other Products
We market the Single Patient Use (“SPU”) SmartVest and SmartVest Wrap® to health care providers in the acute care setting. Hospitals issue the SPU SmartVest or SmartVest Wrap to an individual patient for managing airway clearance while inpatient. Both products provide full coverage oscillation and facilitate continuity of care when the SmartVest System is prescribed for patients with a chronic condition upon discharge for use in the home.
Our Market
The SmartVest System is primarily prescribed for patients with bronchiectasis, cystic fibrosis, and neuromuscular conditions such as cerebral palsy and ALS. We believe that bronchiectasis represents the fastest growing diagnostic category and greatest potential for HFCWO growth in the United States growing at 12% annually in recent years2. Bronchiectasis is an irreversible, chronic lung condition characterized by enlarged and permanently damaged bronchi. The condition is associated with recurrent lower respiratory infections, inflammation, reduction in pulmonary function, impaired respiratory secretion clearance, increased hospitalizations, medication use, and increased morbidity and mortality. We believe that bronchiectasis is under-diagnosed but is experiencing a surge in clinical interest and awareness, including the relationship to COPD, commonly referred to as bronchiectasis COPD overlap syndrome3-9. The overlap of bronchiectasis and COPD increases exacerbations and hospitalizations, reduces pulmonary function, and increases mortality10.
We are driven to make life’s important moments possible, one breath at a time, by continually investing in clinical evidence that supports the therapeutic imperative of clearing excess mucus from the lungs. Electromed continues to promote and add to the body of evidence in support of HFCWO with multiple published clinical outcome studies demonstrating a significant improvement in quality of life and reduction in exacerbation rates, hospitalizations, emergency department visits, and antibiotic prescriptions in bronchiectasis patients using the SmartVest System11-14. This includes a 2022 publication in the American Journal of Respiratory and Critical Care Medicine reviewing outcomes among non-cystic fibrosis bronchiectasis patients with HFCWO Therapy15. In addition, we designed and ran a quality-of-life study for COPD patients using SmartVest, which was shared at the 2023 American Thoracic Society International Conference and published in American Journal of Respiratory and Critical Care Medicine. The study’s results demonstrated statistically significant favorable responses to HFCWO as add-on therapy for patients with a primary diagnosis of COPD. We have also shared data from our bronchiectasis quality of life trial at the 2023 World Bronchiectasis and NTM Conference, highlighting the effects of HFCWO with SmartVest on clinical symptoms of patients with bronchiectasis16-17. At the 2025 World Bronchiectasis Conference, Electromed supported the publication of an abstract that highlighted a significant gap in HFCWO treatment for qualifying clinically unstable patients, evidencing our belief that the therapy is under-prescribed19. Generating additional clinical evidence to further support the SmartVest System as a preferred treatment for bronchiectasis patients will remain a focus in the fiscal year ended June 30, 2027 (“fiscal 2027”).
We believe that HFCWO is under prescribed for bronchiectasis patients, resulting in a large, underpenetrated US market opportunity and growth potential for HFCWO therapy. These studies indicate a wide range of potential prevalence of bronchiectasis patients in the United States and an underpenetrated population of patients who may need or benefit from HFCWO. Internal company estimates derived from a 2025 analysis of claims data indicate a 16% penetration of HFCWO within the approximately one million Americans diagnosed with bronchiectasis18 (see Figure 1 below). We believe that bronchiectasis is underdiagnosed in the U.S. based on clinical study and epidemiology evidence with an even greater number of patients that could potentially benefit from diagnosis and treatment.
Estimated HFCWO Market Opportunity18 - Bronchiectasis Patients (U.S.) – Figure 1
Estimated HFCWO bronchiectasis penetration, treated population: ~166K HFCWO Adopted, Bronchiectasis HFCWO penetration ~16%
Estimated Net Bronchiectasis prevalence, DIAGNOSED: ~1MM US BE Diagnosed, Diagnosed BE population growing at ~12% annually
Estimated bronchiectasis prevalence, UNDIAGNOSED with COPD/BE overlap: 4.1 million US Undiagnosed
35% of BE patients managed by pulmonologists
The heightened awareness of bronchiectasis speaks to the growing body of clinical evidence supporting treatments to improve symptoms and manage disease progression.
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In 2019, an observational comparative retrospective cohort study published in BMC Pulmonary Medicine evaluated the efficacy of a treatment algorithm in 65 patients with radiographic and symptom confirmed bronchiectasis, centered on initiation of HFCWO therapy with the SmartVest System14. Patients were treated per the algorithm if they reported greater than two exacerbations in the previous year and symptoms, including chronic cough, sputum production, or dyspnea. Results show that at one-year: exacerbations requiring hospitalization and antibiotic use were significantly reduced and mean forced expiratory volume remained stable post enrollment, suggesting early initiation of HFCWO therapy with SmartVest may slow the otherwise normal progression of the disease. |
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In 2022, the American Journal of Respiratory and Critical Care Medicine published the results of a third-party retrospective cohort analysis of 101 qualifying non-cystic fibrosis bronchiectasis patients who received HFCWO. Key findings revealed that patients who used HFCWO therapy experienced improved health outcomes, a reduction in healthcare resource utilization and reduction in medication usage15. |
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In 2025, a retrospective analysis of the Bronchiectasis and Nontuberculous Mycobacteria Research Registry (BRR) evaluated baseline bronchial hygiene data among patients with bronchiectasis ("BE") to assess differences in demographics and clinical characteristics between individuals prescribed HFCWO devices and those without such prescriptions. The analysis found that over half of the BE patients not prescribed HFCWO at baseline met the Centers for Medicare & Medicaid Services eligibility criteria and exhibited comparable baseline profiles to those already receiving HFCWO therapy19. |
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Internal company estimates derived from third-party health claims database. |
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Weycker D, Hansen G, Seifer F. Prevalence and incidence of non-cystic fibrosis bronchiectasis among US adults in 2013. Chronic Respiratory Disease. 2017; 14(4):377-384. |
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Henkle E, et al. Characteristics and Health-care Utilization History of Patients with Bronchiectasis in US Medicare Enrollees With Prescription Drug Plans, 2006 to 2014. Chest. 2018;154(6), 1311–1320. |
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Seitz A, et al. Trends in Bronchiectasis Among Medicare Beneficiaries in the United States, 2000 to 2007. Chest. 2012;142(2), 432–439. |
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Aksamit T, et al. Bronchiectasis Research Registry C. Adult Patients With Bronchiectasis: A First Look at the US Bronchiectasis Research Registry. Chest. 2017;151:982-92. |
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Patel I.S., et al. Bronchiectasis, exacerbation indices, and inflammation in chronic obstructive pulmonary disease. Am J Respir Crit Care Med. 2004;170:400-7. |
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O’Brien C, et al. Physiological and radiological characterization of patients diagnosed with chronic obstructive pulmonary disease in primary care. Thorax. 2000;55:635-42. |
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Bafadhel M, et al. The role of CT scanning in multidimensional phenotyping of COPD. Chest. 2011;140:634-42. |
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Chalmers J. and Sethi S. Raising awareness of bronchiectasis in primary care: overview of diagnosis and management strategies in adults. NPJ Prim Care Respir Med. 2017;27:18. |
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Sievert C, et al. Using High Frequency Chest Wall Oscillation in a Bronchiectasis Patient Population: An Outcomes-Based Case Review. Respiratory Therapy Journal. 2016;11(4): 34–38. |
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Sievert C, et al. Cost-Effective Analysis of Using High Frequency Chest Wall Oscillation (HFCWO) in Patients with Non-Cystic Fibrosis Bronchiectasis. Respiratory Therapy Journal. 2017;12(1): 45–49. |
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Sievert C, et al. Incidence of Bronchiectasis-Related Exacerbation Rates After High Frequency Chest Wall Oscillation (HFCWO) Treatment — A Longitudinal Outcome-Based Study. Respiratory Therapy Journal. 2018;13(2): 38–41. |
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Powner J, et al. Employment of an algorithm of care including chest physiotherapy results in reduced hospitalizations and stability of lung function in bronchiectasis. BMC Pulmonary Medicine. 2019;19(82). |
| 15 |
DeKoven M, Mandia K, DeFabis N, Chen J, Ruscio A. Patient Characteristics, Healthcare Resource Utilization And Outcomes Among Non-Cystic Fibrosis Bronchiectasis Patients With High Frequency Chest Wall Oscillation (HFCWO) Therapy. American Journal of Respiratory and Critical Care Medicine. 2022. Vol 205:A3090 |
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M. Bruner, C. Bazan, B. Liu, C. Marion, K.S. Skarvan, L. Edwards, G. Solomon. Effects of High Frequency Chest Wall Oscillation (HFCWO) on Clinical Symptoms in COPD. American Journal of Respiratory and Critical Care Medicine. 2023. Vol 207:C96 |
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C. Cheng, M. Bruner, C. Bazan, B. Liu, C. Marion, L. Edwards, G. Solomon. Effects of High Frequency Chest Wall Oscillation (HFCWO) on Quality of Life in Bronchiectasis. 6th World Bronchiectasis & NTM Conference. 2023. Poster Abstract 310-B |
| 18 |
Internal company estimates derived from third party literature review and health claims databases. |
| 19 | C. Feir et al. High Frequency Chest Wall Oscillation (HFCWO) Data in the Bronchiectasis and Nontuberculous Mycobacteria (NTM) Research Registry (BRR). 8th World Bronchiectasis Conference Abstract Book. 2025; 226 |
Marketing, Sales and Distribution
Our sales and marketing efforts are focused on driving adoption of our products and services with physicians, clinicians, patients, and third-party payers and building market awareness to the benefits of HFCWO for treatment of bronchiectasis. Because the sale of the SmartVest System requires a physician’s prescription, we market to physicians and health care providers as well as directly to patients. Most of our revenue comes from domestic homecare sales through a physician referral model. We have established our own domestic sales force and support network, which we believe is able to provide superior education, support, and training to our customers.
Our direct U.S. sales force works with physicians and clinicians, primarily pulmonologists, in defined territories to help them understand our products and services and the value they provide to their respective patients. For the year ended June 30, 2026, we averaged 58 direct field sales employees. Our direct field sales employees are responsible for driving referral growth and sales through physician offices, local clinics and hospitals. We have developed a network of approximately 167 respiratory therapists across the U.S. to assist with in-home SmartVest System patient training on a non-exclusive, independent contractor basis. These independent contractors are credentialed by the National Board for Respiratory Care as either Certified Respiratory Therapists or Registered Respiratory Therapists and provide national coverage to an internal team of Registered Respiratory Therapists dedicated to supporting SmartVest patients. Additionally, Electromed employs a separate team of reimbursement specialists dedicated to managing insurance and payer relations and supporting prescribers and patients in navigating financial considerations. The availability of reimbursement is an important consideration for health care professionals and patients. Because our product has an assigned Healthcare Common Procedure Coding System (“HCPCS”) code, a claim can be billed for reimbursement using that code. We must demonstrate the effectiveness of our products to public and private insurance providers. The availability of reimbursement exists primarily due to an established HCPCS code for HFCWO. A HCPCS code is assigned to services and products by the Centers for Medicare and Medicaid Services (“CMS”).
Of the $73.4 million of our revenue derived from the U.S. in fiscal 2026, approximately 95.3% represented homecare, inclusive of homecare distributor sales, and 4.7% represented hospital sales. We expect to achieve future sales, earnings, and overall market share growth through sales force expansion, a continued focus on product innovation, improved patient experience and clinical outcomes in the homecare market. We believe that our position in the market, direct sales team and a dedication to advancing education on HFCWO awareness positions us to drive market awareness and growth to the benefits of HFCWO in treatment of bronchiectasis. We believe that dedicated service to our providers and patients is a key component of achieving future sales. Providers seek companies that are easy to work with, are responsive and care for their patients as an extension of their practices.
We generate sales interest through multiple channels that include visits to pulmonology clinics and medical centers, participation in medical conferences, maintenance of industry contacts to increase the visibility and acceptance of our products by physicians and health care professionals, support of industry through patient advocacy foundations, as well as through a focus on increasing patients by word of mouth and traffic to our website and social media channels. We continue to evaluate opportunities to offer the SmartVest System through selected HME distributors. We maintain agreements with a limited number of HME distributors to distribute and sell the SmartVest System in the United States homecare market. We expect to continue our direct sales channel as our primary homecare revenue source.
Approximately 0.6% and 0.4% of our net revenues were from sales outside of the U.S. in our fiscal 2026 and our fiscal year ended June 30, 2025 (“fiscal 2025”), respectively. We sell our products outside of the U.S. primarily through independent distributors specializing in respiratory products. Through June 30, 2026, most of our distributors operated in exclusive territories. Our principal distributors are located in the Middle East, Southeast Asia, and Central America. Units are sold at a fixed contract price with payments made directly from the distributor, rather than being tied to reimbursement rates of a patient’s insurance provider as is the case for domestic sales. Our sales strategy outside of the U.S. is to support our current distributors with less emphasis on contracting with new distributors.
Third-Party Reimbursement
In the U.S., individuals who use the SmartVest System generally rely on third-party payers, including private payers and governmental payers such as Medicare and Medicaid, to cover and reimburse all or part of the cost of using the SmartVest System. Our homecare revenue comes from reimbursement from commercial payers, Medicare, Medicaid, Veterans Affairs and direct patient payments. Reimbursement amounts for HFCWO therapy and the SmartVest System vary among public and private insurance providers.
A key strategy to grow sales is achieving world class customer service and support for our patients and clinicians and increasing the number of covered lives across a broad payer market. Our established and effective reimbursement department works on behalf of the patient to seek insurance authorization and process claims. Our reimbursement department's skill and knowledge is an important factor in building our revenue and serving patients’ financial interests. Our payment terms generally allow patients to pay for the SmartVest System over a period of one to 13 months, which is consistent with Medicare and other third parties' reimbursement procedures. The payment amount we receive for any single referral may vary based on several factors, including Medicare and third-party reimbursement processes and policies. The reimbursement department includes our payer relations function working directly with all payer types to increase the covered lives for the SmartVest System with national and regional private insurers and applicable state and federal government entities as well as to maintain the current licenses with state and federal government and payer contracts.
Our SmartVest System is reimbursed under HCPCS code E0483. Currently, the Medicare total allowable amount of reimbursement for this billing code is approximately $16,000. The allowed amount for state Medicaid programs ranges from approximately $8,000 to $15,000, which is similar to commercial payers. Actual reimbursement from third-party payers can vary and can be significantly less than the full allowable amount. Deductions from the allowable amount, such as co-payments, deductibles and/or maximums on durable medical equipment, decrease the reimbursement received from the third-party payer. Collecting a full allowable amount depends on our ability to obtain reimbursement from the patient’s secondary and/or supplemental insurance if the patient has additional coverage, or our ability to collect amounts from individual patients.
Most patients qualify for reimbursement and payment from Medicare, Medicaid, private insurance or combinations of the foregoing. Our sales continue to be dependent, in part, on the availability of coverage and reimbursement from third-party payers, even though our devices have been cleared for marketing by the FDA. The way reimbursement is sought and obtained varies based upon the type of payer involved and the setting in which the procedure is furnished. We estimate that as of June 30, 2026, we have over 275 million, or 87%, contracted lives in the U.S.
Research and Development
Our research and development (“R&D”) capabilities consist of full-time engineering staff and several consultants. We periodically engage consultants and contract engineering employees to supplement our development initiatives. Our team has demonstrated a record of developing new products that receive the appropriate product approvals and regulatory clearances around the world as demonstrated by the FDA 510(k) clearance for the SmartVest Clearway Airway Clearance System received November 2022.
During fiscal 2026 and 2025, we incurred R&D expenses of approximately $1,314,000 and $996,000, or 1.8% and 1.6% of our net revenues, respectively.
Intellectual Property
As of June 30, 2026, Electromed held multiple U.S. and foreign-issued patents covering aspects of the SmartVest System and its underlying technology. These patents and patent applications offer coverage in the field of air pressure pulse delivery to a human in support of airway clearance. Electromed also holds multiple U.S. trademark and foreign trademark registrations. We continue to focus on developing and maintaining intellectual property in markets of interest.
Manufacturing
Our headquarters in New Prague, Minnesota includes a dedicated manufacturing and engineering facility of more than 14,000 square feet, and we are certified on an annual basis to be compliant with International Organization for Standardization (“ISO”) 13485 quality system standards. The FDA and Notified Body audit our site periodically, in accordance with their practices, and we maintain our operations in a manner consistent with their requirements for a medical device manufacturer. While production of components is outsourced to meet our detailed specifications, each SmartVest System is assembled, tested, and approved for final shipment at our manufacturing site in New Prague, consistent with FDA, Underwriters Laboratory, and ISO standards. Many of our strategic suppliers are located within 100 miles of our headquarters, which enables us to closely monitor our component supply chain. We continually review our suppliers and component sources to ensure adequate availability of critical components and we maintain established inventory levels for critical components and finished goods to assure continuity of supply.
Product Warranties
We provide a warranty on the SmartVest System that covers the cost of replacement parts and labor, or a new SmartVest System in the event we determine a full replacement is necessary. For each homecare SmartVest System initially purchased and currently located in the U.S., we provide a lifetime warranty to the individual patient for whom the SmartVest System is prescribed. For sales to hospitals and HME distributors within the U.S., and for all international sales, we provide a one-to-five-year warranty.
Competition
The original HFCWO technology was licensed to American Biosystems, Inc. (formerly Hill-Rom Holdings, Inc., now part of Baxter International Inc.) (“Baxter”), which, until the introduction of our original MedPulse Respiratory Vest System® in 2000, was the only manufacturer of a product with HFCWO technology cleared for market by the FDA (Hill Rom’s The Vest® Airway Clearance System). Respiratory Technologies, Inc. (formerly RespirTech, now part of Koninklijke Phillips N.V.) (“Philips”) received FDA clearance to market their HFCWO product, the inCourage® Airway Clearance Therapy in 2005. Both Baxter and Philips employ a direct-to-patient model, with Philips additionally offering its HFCWO device through selected HME distributors. The AffloVest® from Tactile Systems Technology Inc. (“Tactile Medical”) also participates in the same market as our SmartVest System. Tactile Medical primarily sells its device through HME companies who distribute homecare medical devices and supplies.
Alternative products for administering pulmonary therapy include: Positive Expiratory Pressure, Intrapulmonary Percussive Ventilation, CPT and breathing techniques. Physicians may prescribe some or all of these devices and techniques, depending upon each patient’s health status, severity of disease, compliance, or personal preference.
Pharmaceutical companies are developing anti-inflammatory therapies for bronchiectasis to target underlying airway inflammation such as Insmed Inc. (“Insmed”), which received FDA approval in 2025 for Brinsupri, a DDP1 inhibitor targeting neutrophilic inflammation in patients with bronchiectasis. We believe these efforts will continue to raise awareness of the disease and further underscore the importance of airway clearance modalities like HFCWO as complementary treatment options.
Key drivers of HFCWO product sales continue to be improved quality of life through documented clinical outcomes and reduction in healthcare costs through resource utilization evidence. Technology innovations and enhancements to the patient experience such as size and weight of the generator, as well as optimized user interaction increase product reputation and patient satisfaction. We believe we distinguish ourselves in these areas with competitive advantages over alternative treatments ultimately improving the patient comfort, ease of use, and the effectiveness of HFCWO treatment. Because HFCWO is not “technique dependent,” as compared to most other alternative pulmonary therapy products, therapy remains consistent and controlled for the duration of treatment.
Governmental Regulation
Uncertainties in state and federal legislation, regulation and policy
We could be adversely affected by state and federal legislation, regulation and policy in ways and to an extent that cannot be predicted. We depend on the continued availability and on the levels of state and federal funding, and on the support of state and federal government officials. We operate in a heavily regulated environment and regulation is always changing.
The Trump administration’s economic, tax, international and health care policies could have significant impact on the health care industry in general. Since taking office in January 2025, President Trump has announced, revised, paused, and enacted various executive orders and tariffs which could have wide-reaching economic impact, including but not limited to limiting or pausing federal funding and increasing the costs of medical equipment and other supplies.
Recent shifts in leadership at executive agencies and the creation of temporary executive commissions such as the Department of Government Efficiency have added to uncertainty around federal funding, regulatory priorities, Medicare and Medicaid reimbursement, and other funding sources upon which we rely.
The 119th U.S. Congress passed the One Big Beautiful Bill Act ( “OBBBA”) on July 3, 2025, and President Trump signed it into law on July 4, 2025, extending the tax cuts to corporations and individuals provided by the Tax Cuts and Jobs Act of 2017, which were set to expire at the end of 2025. OBBBA also achieved many of President Trump’s priorities on health care, border security, energy and deficit reduction. To offset the cost of the tax cuts and other costs of OBBBA, the legislation contains budgetary cuts and increased regulatory requirements to Medicaid, Medicare, the ACA, and other federal programs. Changes include work requirements for Medicaid eligibility and limiting provider taxes in future years. Overall, the legislation is predicted to increase the number of uninsured by 11.8 million by 2034, relative to current law.
While it is too early to determine the impact that these initiatives and OBBBA will have on federal and state health care programs and their funding generally, and on us in particular, the impact could be material and adverse to our operations and to our financial condition. It is possible that federal spending in many areas of the federal budget will be reduced. Any reduction in federal spending for Medicare and Medicaid reimbursement could impact our operations and finances. It is not possible to summarize or describe the potential impact of such potential reductions on us or our industry. State legislation, regulation, policy and related guidance will also need to change as a result of OBBBA. No assurances can be given that changes at the state level will not present similar challenges to our finances and operations. We will continue to monitor OBBBA and analogous state law changes and make any necessary updates to policies and procedures.
Risks from evolving jurisprudence
In addition to uncertainties arising from OBBBA and other state and federal legislative, regulatory, and policy developments, recent actions by the United States Supreme Court and its willingness to revisit and alter longstanding judicial precedents, may introduce additional regulatory challenges. In June 2024, the U.S. Supreme Court issued its decision in Loper Bright Enterprises v. Raimondo (“Loper”), which modified the regulatory interpretation standard established 40 years ago by Chevron v. National Resources Defense Council, also known as the Chevron doctrine. The Chevron doctrine permitted federal agencies to interpret federal statutes when a statute was silent or ambiguous with respect to a specific issue and further provided that courts should defer to federal agencies’ interpretations in most cases. In Loper, the Court held that a court is not required to automatically defer to an agency’s reasonable interpretations of ambiguous statutes. We cannot predict the impact of the Loper decision on our operations or financial condition or on our industry in general; however, the decision is expected to result in a chill in future federal rulemaking and a significant increase in litigation challenging existing and future federal rules and regulations, including those promulgated by health regulatory agencies and CMS. The Loper decision introduces additional uncertainty in the federal regulatory frameworks within which we operate, including those governing the health care industry, among others. Uncertainty in legislation, regulation and policy at both the state and federal levels, and in the interpretation of the same, could impact our operations and finances in any number of ways and make it more difficult or costly to fully comply with applicable laws.
Medicare and Medicaid
OBBBA and other recent government and private sector initiatives in the U.S. and foreign countries aim at limiting the growth of health care costs including price regulation, competitive pricing, coverage and payment policies, comparative effectiveness of therapies, technology assessments, and managed-care arrangements. These initiatives are causing the marketplace to put increased emphasis on the delivery of more cost-effective medical devices that result in better clinical outcomes. Government programs, including Medicare and Medicaid, have attempted to control costs by limiting the amount of reimbursement the program will pay for procedures or treatments, restricting coverage for certain products or services, and implementing other mechanisms designed to constrain utilization and contain costs. Many private insurance programs look to Medicare as a guide in setting coverage policies and payment amounts. These initiatives have created an increasing level of price sensitivity among our customers.
Home Medical Equipment Licensing
Although we do not fall under competitive bidding for Medicare, we often must satisfy the same licensing requirements as other HME providers that qualify for competitive bidding. In response to out-of-state businesses winning the competitive bidding process, which had a significant impact on small local HME businesses, many states have enacted regulations that require a HME provider to have an in-state business presence, specifically through state HME licensing boards or through state Medicaid programs. In order to do business with any patients in the state or to be a provider for the state Medicaid program, a HME provider must have an in-state presence. In addition to Minnesota, the location of our corporate headquarters, we have a licensed in-state presence in five other states. We also maintain a distribution center in California, which also satisfies state Medicaid requirements. In-state presence requirements vary from state to state but generally require a physical location that is staffed and open during regular business hours.
Our financial condition may be adversely affected if the Affordable Care Act is repealed.
It is possible that efforts to repeal the ACA, in whole or in part, will continue under the Trump administration. We cannot predict the likelihood of any future ACA repeal bills or other health care reform bills becoming law, or the subsequent effects of any such laws or legal decisions, though such effects could materially impact our business or financial condition. In particular, any legal, legislative or executive action that: (1) reduces federal health care program spending; (2) increases the number of individuals without health insurance; (3) reduces the number of people seeking health care; or (4) otherwise significantly alters the health care delivery system or insurance markets, could each have a material adverse effect on our business or financial condition. According to the U.S. Census Bureau, 47.2 million people (15.5%) were uninsured in 2010. In 2020, 28 million people (8.6%) were uninsured.
Due to the complexity of federal healthcare policy, the pending nature of certain implementing regulations or interpretive guidance, and gradual implementation, as well as an inability to foresee how states, businesses and individuals will respond to the choices afforded them by ongoing reform, we are unable to predict the full impact of the Affordable Care Act on us at any given time.
We anticipate that the federal government’s ongoing health care reform initiatives will result in further legislation, regulation, and other actions that will continue the trend toward reduced reimbursement for hospital services and more pervasive regulation of operations. At present, no determination can be made concerning whether, or in what form, such legislation could be introduced and enacted into law. Similarly, the impact of future cost control programs and future regulations on our projected financial performance cannot be determined at this time. As noted above, any future changes to the Medicare and Medicaid programs could result in substantial reductions in reimbursement from Medicare and Medicaid, which could substantially reduce the revenues available to us, and any reduction in the levels of payment in these government payment programs could adversely affect our financial condition and our ability to fulfill our obligations.
Product Regulations
Our medical devices are subject to regulation by numerous government agencies, including the FDA and comparable foreign regulatory agencies. To varying degrees, each of these agencies requires us to comply with laws and regulations governing the development, testing, manufacturing, labeling, marketing, and distribution of our medical devices, and compliance with these laws and regulations entails significant costs for us. Our regulatory and quality assurance departments provide detailed oversight in their areas of responsibility to support required clearances and approvals to market our products.
In addition to the clearances and approvals discussed below, we obtained ISO 13485 certification in January 2005 and receive annual certification of our compliance to the current ISO quality standards.
FDA Requirements
We have received clearance from the FDA to market our products, including the SmartVest System. We may be required to obtain additional FDA clearance before marketing a new or modified product in the U.S., either through the 510(k)-clearance process or the more complex premarket approval process. The process may be time-consuming and expensive, particularly if human clinical trials are required. Failure to obtain such clearances or approvals could adversely affect our ability to grow our business.
Continuing Product Regulation
In addition to its approval processes for new products, the FDA may require testing and post-market surveillance programs to monitor the safety and effectiveness of previously cleared products that have been commercialized and may prevent or limit further marketing of products based on the results of post-mark surveillance reports. At any time after marketing clearance of a product, the FDA may conduct periodic inspections to determine compliance with both the FDA’s Quality Management System Regulation (“QMSR”) requirements and current medical device reporting regulations. Product approvals by the FDA can be withdrawn due to failure to comply with regulatory standards or the occurrence of unforeseen problems following initial market clearance. The failure to comply with regulatory standards or the discovery of previously unknown problems with a product or manufacturer could result in fines, delays or suspensions of regulatory clearances, seizures or recalls of products (with the attendant expenses), the banning of a particular device, an order to replace or refund the cost of any device previously manufactured or distributed, operating restrictions and criminal prosecution, as well as decreased sales as a result of negative publicity and product liability claims.
We must register annually with the FDA as a device manufacturer and, as a result, are subject to periodic FDA inspection for compliance with the FDA’s QMSR requirements that require us to adhere to certain extensive regulations. In addition, the federal Medical Device Reporting regulations require us to provide information to the FDA whenever there is evidence that reasonably suggests that a device may have caused or contributed to a death or serious injury or, if a malfunction were to occur, could cause or contribute to a death or serious injury. We also must maintain certain certifications to sell products internationally, and we undergo periodic inspections by notified bodies to obtain and maintain these certifications.
Advertising and marketing of medical devices, in addition to being regulated by the FDA, are also regulated by the Federal Trade Commission and by state regulatory and enforcement authorities. Recently, promotional activities for FDA-regulated products of other companies have been the subject of enforcement action brought under health care reimbursement laws and consumer protection statutes. Competitors and others also can initiate litigation relating to advertising and/or marketing claims. If the FDA were to determine our promotional or training materials constitute promotion of an unapproved or uncleared claim of use, it is possible we would need to modify our training or promotional materials or be subject to regulatory or enforcement actions that could result in civil fines or criminal penalties. Other federal, state or foreign enforcement authorities could also take similar action if they were to determine that our promotional or training materials constitute promotion of an unapproved use, which could result in significant fines or penalties.
Federal Physician Payments Sunshine Act
The Federal Physician Payments Sunshine Act (Section 6002 of the PPACA) (the “Sunshine Act”) was adopted on February 1, 2013, to create transparency for the financial relationship between medical device companies and physicians and/or teaching hospitals (covered recipients). In January 2021, the Sunshine Act was expanded to cover payments made to these additional covered recipients, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, and certified nurse midwives. The Sunshine Act requires all manufacturers of drugs and medical devices to annually report to CMS any payments or any other “transfers of value” made to any covered recipients, including but not limited to consulting fees, grants, clinical research support, royalties, honoraria, meals, and value of long-term use (over 90 days) of evaluation equipment. This information is then posted on a public website so that consumers can learn how much was paid to their physician by drug and medical device companies. The Sunshine Act requires ongoing data collection and annual management and reporting by us and imposes civil penalties for manufacturers that fail to report timely, accurately, or completely to CMS.
Fraud and Abuse Laws
Federal health care laws apply to the marketing of our products and when we or our customers submit claims for items or services that are reimbursed under Medicare, Medicaid or other federally funded health care programs. The principal applicable federal laws include:
| ● |
the False Claims Act, which prohibits the submission of false or otherwise improper claims for payment to a federally funded health care program; |
| ● |
the Anti-Kickback Statute, which prohibits offers to pay or receive remuneration of any kind for the purpose of inducing or rewarding referrals of items or services reimbursable by a federal health care program; and |
| ● |
the Stark Law, which prohibits physicians from profiting (actually or potentially) from their own referrals. |
There are often similar state false claims, anti-kickback, and anti-self-referral and insurance laws that apply to state-funded Medicaid and other health care programs and private third-party payers. In addition, the U.S. Foreign Corrupt Practices Act can be used to prosecute companies in the U.S. for arrangements with physicians, or other parties outside the U.S. if the physician or party is a government official of another country and the arrangement violates the law of that country. Enforcement of these regulations has become increasingly stringent, particularly due to more prevalent use of the whistleblower provisions under the False Claims Act, which allow private individuals to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government and to share in any monetary recovery. If a governmental authority were to conclude that we are not in compliance with applicable laws and regulations, we and our officers and employees could be subject to severe criminal and civil penalties and disbarment from participation as a supplier of product to beneficiaries covered by Medicare or Medicaid. Such penalties could adversely impact our financial performance.
Health care fraud and false statement statutes, such as the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (“HIPAA”) and the Health Information Technology for Economic and Clinical Health Act (“HITECH”), also prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program, including private payers, and knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation in connection with the delivery of or payment for health care benefits, items or services.
HIPAA, HITECH and Other Privacy Regulations
Federal and state laws protect the confidentiality of certain patient health information, including patient records, and restrict the use and disclosure of such information. HIPAA and HITECH set forth privacy and security standards that govern the use and disclosure of protected electronic health information by “covered entities,” which include healthcare providers, health plans and healthcare clearinghouses. Because we provide our products directly to patients and bill third-party payers such as Medicare, Medicaid, and insurance companies, we are a “covered entity” and must comply with these standards. Failure to comply with HIPAA and HITECH or any state or foreign laws regarding personal data protection may result in significant fines or penalties and/or negative publicity. In addition to federal regulations issued under HIPAA and HITECH, some states have enacted privacy and security statutes or regulations that, in some cases, are more stringent than those issued under HIPAA and HITECH. In those cases, it may be necessary to modify our planned operations and procedures to comply with the more stringent state laws. If we fail to comply with applicable state laws and regulations, we could be subject to additional sanctions.
Environmental Laws
We are subject to various environmental laws and regulations both within and outside the U.S. Like other medical device companies, our operations involve the use of substances regulated under environmental laws, primarily manufacturing and disposal processes. We do not expect that compliance with environmental protection laws will have a material impact on our results of operations, financial position, or cash flows.
Potential impact of another pandemic or public health emergency
In recent years, COVID-19 has had numerous and varied medical, economic, and social impacts, all of which have and may continue to adversely affect our business and financial results. The COVID-19 pandemic created staffing issues for many health care providers, including us, as a result of (a) absences due to quarantine or infection; (b) litigation over vaccine mandates, PPE and other COVID-19-related issues; (c) acceleration of retirements; and (d) burnout and other mental health issues. The ongoing effects of the COVID-19 pandemic, or any other public health emergency, could affect our ability to conduct normal operations and, as a result, our operating results and financial condition could be materially adversely affected.
In addition, the COVID-19 pandemic affected travel, commerce and financial markets in the United States and economic growth worldwide. The COVID-19 pandemic resulted in volatility in the U.S. and global financial markets, and significant realized and unrealized losses in investment portfolios. Financial results, generally, and liquidity may be materially diminished in the face of volatility. Access to capital markets may be hindered and increased costs of borrowing may occur as a result.
The occurrence of another public health emergency, including a pandemic like the COVID-19 pandemic, and governmental and public responses to such emergency, could directly or indirectly affect our operations and financial condition in many ways. Such an emergency could significantly increase or decrease demand for health care services, cause a decrease in demand for or impose restrictions on elective procedures, disrupt supply chains of necessary medical equipment and supplies, exacerbate clinical and non-clinical staffing shortages, or otherwise impair the operation of our Health Care Facilities. There can be no assurance that a future pandemic or other public health emergency will not have a material adverse impact on our operations or financial condition. The extent to which government stimulus or proceeds from business interruption insurance or other sources would be available, or whether such stimulus or proceeds would be sufficient to cover losses, is fact-dependent and impossible to predict.
Human Capital
We believe that our dedicated, talented employees are our most valuable resource and a key strength in accomplishing our collective mission and goals. As of June 30, 2026, we had 197 employees, 195 of which were full-time employees. Our employees are in 34 states throughout the United States. 17 of our employees were respiratory therapists licensed by appropriate state professional organizations. We also had approximately 167 respiratory therapists and health care professionals retained on a non-exclusive, independent contractor basis to provide training to our customers in the U.S. None of our employees are covered by a collective bargaining agreement.
We are committed to attracting, retaining, and developing diverse and high-performing talent that includes a strong focus on performance and development, total rewards, diversity, inclusion and equity, and employee safety. These serve as the pillars to our human capital management framework.
We understand that our success and growth depend on attracting, retaining, and developing talent across all levels of the organization. Our recruitment strategies are continuously reviewed with leadership and partners to ensure our practices align with our mission, purpose, and values.
We seek to have our employees understand our mission, purpose, and goals as well as their impact on our success. We use on-going reviews in addition to an annual performance review process to support development and performance discussions with employees. In addition, every employee is eligible to participate in our incentive plan, which allows us to reward the people who significantly contribute to our success.
To cultivate a learning culture that provides enhancement and growth for our people, we offer educational assistance, online training, seminars, specific skill training, participation in business and industry organizations, mentoring, and leadership development programs. We are also committed to contributing our talents and resources to serve the communities in which we live and work through various charitable campaigns, employee programs and volunteerism. We believe that this commitment assists in our efforts to attract and retain employees.
We believe that sharing rewards is essential to increasing employee engagement and improving morale and creating a positive culture. We also offer our employees a competitive salary and benefits package and are committed to continuous review of these programs. These benefits include but are not limited to retirement savings, a variety of health insurance options and other benefits programs, including dental and vision, disability insurance, contributions to health savings accounts, paid maternity/paternity leave, and wellness resources. In addition, we offer opportunities for remote work and flexible schedules and location, depending on business needs and the specific role.
Safety is a vital aspect of the success of our people and business. We are proud of our employees’ collective commitment to maintain safe work practices within our manufacturing operations. We also provide well-being services to support each employee’s physical and mental health and will continue to emphasize the importance of the safety and health of our employees in all we do.
Available Information
Our Internet address is www.smartvest.com. We have made available on our website, free of charge, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports, as soon as reasonably practicable after we electronically file these materials with, or furnish them to, the SEC. Reports of beneficial ownership filed by our directors and executive officers pursuant to Section 16(a) of the Exchange Act are also available on our website. We are not including the information contained on our website as part of, or incorporating it by reference into, this Annual Report on Form 10-K. The SEC also maintains an Internet site that contains our reports, proxy and information statements, and other information we file or furnish with the SEC, available at www.sec.gov.
| Risk Factors. |
As a smaller reporting company, we are not required to provide disclosure pursuant to this item.
| Unresolved Staff Comments. |
None.
| Item 1C. | Cybersecurity. |
Protecting the privacy of customer and personnel information is important to us, and we maintain security protocols and processes, including ongoing training and education for all personnel, designed to combat the risk of unauthorized access or inadvertent disclosure. Our business operations involve confidential information, including patient health information subject to regulation as discussed under “HIPAA, HITECH and Other Privacy Regulations” above. Our information technology infrastructure is designed to offer reliability, scalability, performance, security and privacy for our personnel, clients, and third-party contractors.
Cybersecurity Risk Management and Strategy
Our cybersecurity risk management program includes:
| ● | dedicated cybersecurity professionals who analyze cybersecurity threats, define cybersecurity policy and requirements, implement protections, and monitor and respond to cybersecurity incidents; |
| ● | cybersecurity regulatory-based risk assessments for Electromed's systems and applications (where required); |
| ● | a formal incident response plan, in which incidents are classified based upon the severity, impact, and the potential harm that can be caused by the incident; |
| ● | monthly information security training program for all employees, including phishing awareness training; and |
| ● | engagement of -party service providers to conduct assessments of our cybersecurity risk management program, penetration testing, and vulnerability testing. |
Cybersecurity Governance
| Properties. |
We own our principal headquarters and manufacturing facilities, consisting of approximately 37,000 square feet, which are located on an approximately 2.3-acre parcel in New Prague, Minnesota. Nearly all the Company’s revenues, profits, and assets are associated with this facility. We believe that our facilities are satisfactory for our long-term growth plans.
| Legal Proceedings. |
Occasionally, we may be party to legal actions, proceedings, or claims in the ordinary course of business, including claims based on the assertions of patent and trademark infringement. Corresponding costs are accrued when it is probable that loss will be incurred, and the amount can be precisely or reasonably estimated. We are not aware of any undisclosed actual or threatened litigation, other than ordinary routine litigation incidental to our business, that would have a material adverse effect on our financial condition or results of operations.
| Mine Safety Disclosures. |
None.
| Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Market Information
Our common stock is listed on the NYSE American under the symbol “ELMD”.
As of August 19, 2026, there were 37 registered holders of our common stock.
Dividends
We have never paid cash dividends on any of our shares of common stock. We currently intend to first retain any earnings for use in operations and do not anticipate paying cash dividends to our shareholders in the foreseeable future.
Recent Sales of Unregistered Equity Securities
None.
Purchases of Equity Securities by the Company and Affiliated Purchasers
On September 9, 2025, we announced the approval of our most recent stock repurchase authorization. Under this authorization, the Company may repurchase up to $10.0 million of outstanding shares of our common stock. The shares of our common stock may be repurchased under authorization on the open market or in privately negotiated transactions subject to applicable securities laws and regulations. The current repurchase authorization does not expire and, as of June 30, 2026, a total of 151,911 shares had been repurchased under the authorization with an average cost of $25.79 per share. The approximate dollar value of shares that may yet be purchased under the plan as of June 30, 2026, was approximately $6,082,000.
The following table sets forth information concerning all repurchases of shares of our common stock, including shares reacquired to satisfy tax withholding obligations upon vesting of restricted stock awards, for the three months ended June 30, 2026:
| Total Number of |
Approximate Dollar Value |
|||||||||||||||
| Average |
Shares Purchased as Part |
of Shares that May Yet |
||||||||||||||
| Total Number of |
Price Paid |
of Publicly Announced |
be Purchased Under the |
|||||||||||||
| Period |
Shares Purchased |
per Share |
Plans or Programs |
Plans or Programs |
||||||||||||
| April 1 – April 30, 2026 |
— | $ | — | — | $ | 6,082,000 | ||||||||||
| May 1 – May 31, 2026 |
— | — | — | $ | 6,082,000 | |||||||||||
| June 1 – June 30, 2026 (1) |
1,737 | 42.30 | — | $ | 6,082,000 | |||||||||||
| Total |
1,737 | $ | 42.30 | — | ||||||||||||
| (1) |
Consists of 1,737 shares forfeited to the Company in connection with the vesting of restricted stock awards that were outstanding under the 2017 Omnibus Incentive Plan. The average price paid per share reflects the closing price of our common stock on the date of forfeiture. |
| [Reserved]. |
| 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 in conjunction with our financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K. The forward-looking statements include statements that reflect management’s good faith beliefs, plans, objectives, goals, expectations, anticipations and intentions with respect to our future development plans, capital resources and requirements, results of operations, and future business performance. Our actual results could differ materially from those anticipated in the forward-looking statements included in this discussion as a result of certain factors, including, but not limited to, those discussed in the section entitled “Information Regarding Forward-Looking Statements” immediately preceding Part I of this Annual Report on Form 10-K.
Overview
Electromed develops and provides innovative airway clearance products applying HFCWO technologies in pulmonary care for patients of all ages.
We manufacture, market and sell products that provide HFCWO, including the SmartVest System that includes our newest generation SmartVest Clearway, previous generation SmartVest SQL and related products, to patients with compromised pulmonary function. The SmartVest Clearway is an updated and modern approach to HFCWO focused on an enhanced patient experience and proven patient outcomes. The product delivers effective 360o oscillatory pressure through our proprietary rapid inflate-deflate technology which improves the patient’s ability to breathe deeply during therapy. SmartVest Clearway delivers a sleek and lightweight generator and is designed with an intuitive touchscreen to simplify programing and everyday use. Our products are sold in both the homecare market and the hospital market. The SmartVest SQL has been sold in the domestic homecare market since 2014. In 2015, we launched the SmartVest SQL into hospital and certain international markets. In June 2017, we announced the launch of the SmartVest SQL with SmartVest Connect™ wireless technology, which allows data connection between physicians and patients to track therapy performance and collaborate in treatment decisions. In 2022, we launched the SmartVest Clearway to adult pulmonary, pediatric and cystic fibrosis patients for use in the home. We have marketed the SmartVest System and its predecessor products since 2000 to patients suffering from cystic fibrosis, bronchiectasis and repeated episodes of pneumonia. Additionally, we offer our products to a patient population that includes neuromuscular disorders such as cerebral palsy, muscular dystrophies, ALS, and patients with post-surgical complications or who are ventilator dependent or have other conditions involving excess secretion and impaired mucus transport.
The SmartVest System is often eligible for reimbursement from major private insurance providers, health maintenance organizations (“HMOs”), state Medicaid systems, and the federal Medicare system, which we believe is an important consideration for patients considering an HFCWO course of therapy. For domestic sales, the SmartVest System may be reimbursed under the Medicare-assigned billing code (E0483) for HFCWO devices if the patient has cystic fibrosis, bronchiectasis (including chronic bronchitis or COPD that has resulted in a diagnosis of bronchiectasis), or any one of certain enumerated neuromuscular diseases, and can demonstrate that another less expensive physical or mechanical treatment did not adequately mobilize retained secretions. Private payers consider a variety of sources, including Medicare, as guidelines in setting their coverage policies and payment amounts.
We have primarily employed a direct-to-patient and provider model, through which we obtain patient referrals from clinicians, manage insurance claims on behalf of our patients and their clinicians, deliver our solutions to patients and train them on proper use in their homes. This model allows us to directly approach patients and clinicians, whereby we disintermediate the traditional HME distributors and capture both the manufacturer and distributor margins. We have engaged a limited number of regional HME distributors focused on respiratory therapies as an alternate sales channel.
Our key growth strategies for fiscal 2027 are to accelerate our revenue growth by taking market share and expanding the addressable population for the largest and fastest growing segments of the market: adult pulmonology/bronchiectasis. Actions to support accelerating our revenue growth in this area include the following:
| ● |
Expand our sales force in geographies with high potential, adding additional territories with direct sales reps; |
| ● |
Increase SmartVest brand awareness through direct-to-consumer and physician marketing, and peer-to-peer education; |
| ● |
Provide best-in-class customer care and support; and |
| ● |
Develop and promulgate the body of bronchiectasis clinical evidence to increase physician adoption of the SmartVest System for patients. |
Impacts of Certain Macro-Economic Conditions and the Supply Chain on Our Business and Operations
We expect that component and raw material costs will continue to be a challenge in fiscal 2027, due to supply chain constraints, rising energy costs due to ongoing geopolitical conflict, uncertainty related to trade regulations such as tariffs, and inflationary trends in electronic components. In certain instances, we have purchased key materials in advance to ensure adequate future supply and mitigate the risk of potential supply chain disruptions. It is possible that these macro-economic conditions could have a greater adverse impact on our supply chain in the future, including impacts associated with preventative and precautionary measures taken by other businesses and applicable governments. A reduction or further interruption in any of our manufacturing processes, significant changes in trade regulations, or rising energy prices could have a material adverse effect on our business. Any significant increases to our raw material or shipping costs would reduce our gross margins.
Critical Accounting Estimates
During the preparation of our financial statements, we are required to make estimates, assumptions and judgment that affect reported amounts. Those estimates and assumptions affect our reported amounts of assets and liabilities, our disclosure of contingent assets and liabilities, and our reported revenues and expenses. We update these estimates, assumptions, and judgments as appropriate. Some of our accounting policies and estimates require us to exercise significant judgment in selecting the appropriate assumptions for calculating financial statements. Such judgments are subject to an inherent degree of uncertainty. Among other factors, these judgments are based upon our historical experience, known trends in our industry, terms of existing contracts and other information from outside sources, as appropriate. The following is a summary of our primary critical accounting policies and estimates. See also Note 1 to the Financial Statements, included in Part II, Item 8, of this Annual Report on Form 10-K.
Revenue Recognition
Revenue is measured based on consideration specified in the contract with a customer, adjusted for any applicable estimates of variable consideration and other factors affecting the transaction price, including consideration paid or payable to customers and significant financing components. Revenue from all customers is recognized when a performance obligation is satisfied by transferring control of a distinct good or service to a customer.
Individual promised goods and services in a contract are considered a performance obligation and accounted for separately if the individual good or service is distinct (i.e., the customer can benefit from the good or service on its own or with other resources that are readily available to the customer and the good or service is separately identifiable from other promises in the arrangement). If an arrangement includes multiple performance obligations, the consideration is allocated between the performance obligations in proportion to their estimated standalone selling price, unless discounts or variable consideration is attributable to one or more but not all the performance obligations. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs under Accounting Standards Codification (“ASC”) 340-40, “Other Assets and Deferred Costs,” or the requirements under other applicable accounting guidance are met.
We include shipping and handling fees in net revenues. Shipping and handling costs associated with the shipment of our SmartVest System after control has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues.
We request that customers return previously sold units that are no longer in use to us to limit the possibility that such units would be resold by unauthorized parties or used by individuals without a prescription. The customer is under no obligation to return the product; however, we do reclaim many previously sold units upon the discontinuance of patient usage. We are certified to recondition and resell returned SmartVest System units. Returned units are typically reconditioned and resold or used for demonstration equipment and warranty replacement parts.
Results of Operations
Fiscal Year Ended June 30, 2026 Compared to Fiscal Year Ended June 30, 2025
Revenues
Revenue for the fiscal years ended June 30, 2026, and 2025 are summarized in the table below.
| Fiscal Year Ended June 30, |
||||||||||||||||
| 2026 |
2025 |
Increase (Decrease) |
||||||||||||||
| Homecare Revenue |
$ | 66,612,000 | $ | 57,287,000 | $ | 9,325,000 | 16.3 | % | ||||||||
| Hospital Revenue |
3,442,000 | 3,140,000 | 302,000 | 9.6 | % | |||||||||||
| Homecare Distributor Revenue |
3,301,000 | 2,928,000 | 373,000 | 12.7 | % | |||||||||||
| Other Revenue |
421,000 | 645,000 | (224,000 | ) | (34.7 | )% | ||||||||||
| Total Revenue |
$ | 73,776,000 | $ | 64,000,000 | $ | 9,776,000 | 15.3 | % | ||||||||
Homecare Revenue. Homecare revenue increased by $9,325,000, or 16.3%, in fiscal 2026 compared to fiscal 2025. Approximately $7,959,000 of the increase in revenue was due to higher volume, which was driven by additional sales representatives and increased sales representative productivity, and approximately $1,366,000 was due to higher net revenues per approval. For the year ended June 30, 2026, we averaged 58 homecare field sales representatives compared to an average of 54 for the year ended June 30, 2025.
Hospital Revenue. Hospital revenue increased by $302,000, or 9.6%, in fiscal 2026 compared to fiscal 2025. Hospital revenue includes sales to hospitals, rental companies and other institutions. The increase was primarily due to an increase in sales representatives focused on the hospital market as well as higher capital and disposable demand.
Homecare Distributor Revenue. Homecare distributor revenue increased by $373,000, or 12.7%, in fiscal 2026 compared to fiscal 2025. The revenue increase in fiscal 2026 was due to increased demand from our distributor partners. We sell to a limited number of home medical equipment distributors, who in turn sell our SmartVest System in the U.S. homecare market.
Other Revenue. Other revenue decreased by $224,000, or 34.7%, in fiscal 2026 compared to fiscal 2025. The decrease in other revenue was primarily due to decreased demand from customers that do not fall within the other markets described above.
Gross Profit
Gross profit increased to $57,943,000 in fiscal 2026, or 78.5% of net revenues, from $49,971,000 or 78.1% of net revenues, in fiscal 2025. The increase in gross profit and gross margin was primarily due to increased revenue and higher net revenue per device.
Operating Expenses
Selling, General and Administrative Expenses
Selling, general and administrative (“SG&A”) expenses were $42,748,000 in fiscal 2026, representing an increase of $3,433,000, or 8.7%, from $39,315,000 in fiscal 2025.
Payroll and compensation-related expenses including health insurance benefits and other compensation increased by $2,269,000, or 8.5%, to $28,868,000 in fiscal 2026, compared to $26,599,000 in fiscal 2025. The increase in the current year was primarily due to the increase in salaries and incentive compensation related to the higher average number of sales representatives and higher overall compensation costs. We continue to provide regular merit-based increases for our employees and are regularly benchmarking our compensation ranges, including share-based compensation, for new and existing employees to ensure we can hire and retain the talent needed to drive growth in our business.
Travel, meals and entertainment expenses increased $488,000, or 12.5%, to $4,407,000 for fiscal 2026 compared to $3,919,000 in fiscal 2025. The increase in the current year was primarily due to a higher average number of direct sales representatives, sales training, and increased travel to support sales activity as well as market development.
Professional and legal fees, including recruiting and insurance expenses, increased by $69,000, or 1.4%, to $4,995,000 in fiscal 2026, compared to $4,926,000 in fiscal 2025. Professional fees include services related to legal costs, shareowner services and reporting requirements, board of directors compensation, information technology technical support and consulting fees. The increase was primarily related to increased legal and insurance costs.
Total discretionary marketing expenses increased by $259,000, or 18.2% to $1,680,000 in fiscal 2026, compared to $1,421,000 in fiscal 2025. The increase in the current year was primarily due to increased investments in our direct-to-consumer advertising and other market development initiatives.
Research and Development Expenses
R&D expenses increased by $318,000, or 31.9%, to $1,314,000 in fiscal 2026 compared to $996,000 in fiscal 2025. The increase in the current year was primarily due to increased average headcount and consulting expenses related to product enhancements and sustaining engineering.
Operating Income
Operating income increased by $4,221,000, or 43.7%, to $13,881,000 in fiscal 2026, compared to $9,660,000 in fiscal 2025. The increase in operating income was primarily due to increases in net revenues and gross profit.
Interest Income, net
Net interest income was approximately $479,000 in fiscal 2026 compared to net interest income of $624,000 in fiscal 2025. The decrease in the current year was primarily due to decreased interest rates.
Income Tax Expense
Income tax expense in fiscal 2026 was $3,059,000, which includes a current tax expense of $2,633,000, and a deferred expense of $426,000. Income tax expense in fiscal 2025 was $2,747,000, which includes a current tax expense of $3,057,000, and a deferred benefit of $310,000.
The effective tax rates were 21.3% and 26.7% for fiscal 2026 and 2025, respectively. The decrease in the effective tax rate for the current year was primarily driven by research and development tax credits in the current year and non-deductible officer compensation in the prior year that did not recur in the current year. The effective tax rates differ from the statutory federal rate because of state income taxes and other permanent items that are non-deductible for tax purposes relative to the amount of taxable income.
Net Income
Net income for fiscal 2026 was $11,301,000 compared to net income of $7,537,000 in fiscal 2025. The increase of $3,764,000, or 49.9%, in the current year net income was primarily due to increased net revenues and gross profit.
Liquidity and Capital Resources
Cash Flows and Sources of Liquidity
Cash Flows from Operating Activities
Net cash provided by operating activities in fiscal 2026 was $9,665,000. Cash flows from operating activities consisted of net income of $11,301,000, non-cash expenses of approximately $4,224,000, an increase in accrued compensation of $992,000, and an increase in accounts payable and accrued liabilities of $652,000. These cash flows from operating activities were partially offset by an increase in accounts receivable of $5,145,000, an increase in prepaid expenses and other assets of $1,024,000, an increase in inventories of $517,000, an increase in income tax receivable of $760,000, and an increase in contract assets of $58,000.
Cash Flows from Investing Activities
Net cash used for investing activities in fiscal 2026 was approximately $1,300,000. Cash used for investing activities consisted of approximately $1,252,000 in expenditures for property and equipment and $48,000 in payments for patent and trademark costs.
Cash Flows from Financing Activities
Net cash used for financing activities in fiscal 2026 was approximately $3,202,000, consisting of $3,918,000 used for the repurchase of our common stock and $249,000 used for tax payments on net share settlement of stock awards, partially offset by cash received from the issuance of common stock upon the exercise of options of $965,000.
Adequacy of Capital Resources
Our primary working capital requirements relate to adding employees to our sales force and support functions, continuing infrastructure investments, and supporting general corporate needs, including financing equipment purchases and other capital expenditures incurred in the ordinary course of business. Based on our current operational performance, we believe our working capital of approximately $45,146,000 and available borrowings under our existing credit facility will provide sufficient liquidity to meet our anticipated working capital and other liquidity needs for at least the next twelve months from the date of this report.
We maintain a credit facility that provides us with a revolving line of credit. Our December 2025 credit agreement provides a senior security credit facility with a $10,000,000 revolving line of credit. Any borrowings under the credit facility will bear interest at the applicable one-month Term SOFR (3.62% on June 30, 2026), plus 1.75%, payable monthly. The credit agreement provides that the credit facility will mature on December 16, 2026, if not renewed before such date. There was no outstanding principal balance on the line of credit as of June 30, 2026. The Company provided a first priority security interest in substantially all of its existing and future assets to secure the payment obligations under the credit agreement.
The documents governing the credit facility contain certain customary financial and non-financial covenants that include a maximum total funded debt ratio of not more than 2.50x and a minimum fixed charge coverage ratio of at least 1.20x (as each such term is defined in the credit agreement), as well as restrictions on the Company's ability to incur certain additional indebtedness. So long as there is no default or event of default, the governing documents do not restrict the Company's ability to pay dividends or repurchase common stock.
Any failure to comply with these covenants in the future may result in an event of default, which if not cured or waived, could result in the lender accelerating the maturity of our indebtedness, preventing access to additional funds under the line of credit, requiring prepayment of outstanding indebtedness, or refusing to renew the line of credit. If the maturity of the indebtedness is accelerated or the line of credit is not renewed, sufficient cash resources to satisfy the debt obligations may not be available and we may not be able to continue operations as planned. If we are unable to repay such indebtedness, the lender could foreclose on these assets.
During fiscal 2026 and 2025, we spent approximately $1,252,000 and $262,000, respectively, on property and equipment. The increase over the prior year was primarily related to manufacturing and building improvement projects which were completed in fiscal 2026. We currently expect to finance planned equipment purchases with cash flows from operations or borrowings under our credit facility. We may need to incur additional debt if we have an unforeseen need for additional capital equipment or if our operating performance does not generate adequate cash flows.
While the impact of macroeconomic conditions and other factors such as inflation and trade regulations are difficult to predict, we believe our cash, cash equivalents and cash flows from operations will be sufficient to meet our working capital, capital expenditure, operational cash requirements for at least the next twelve months from the date of this report.
Accounting Standards Recently Issued But Not Yet Adopted by the Company
See Note 1 of the Notes to our Financial Statements in this Annual Report on Form 10-K for information on new accounting standards adopted in fiscal 2026 or pending adoption.
| Quantitative and Qualitative Disclosures About Market Risk. |
As a smaller reporting company, we are not required to provide disclosure pursuant to this item.
| Financial Statements and Supplementary Data. |
Index to Financial Statements
Report of Independent Registered Public Accounting Firm
Shareholders and Board of Directors
Electromed, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Electromed, Inc. (the Company) as of June 30, 2026 and 2025, the related statements of operations, shareholders’ equity and cash flows for the years then ended, and the related notes to the financial statements. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for the years then ended 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. 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 U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.
Measurement of Customer Revenue Net of Adjustments
As discussed in Note 2 to the financial statements, revenues are recognized at a point in time when control passes to the customer upon product shipment or delivery. Net patient revenues (patient revenue less estimated adjustments) are recognized at the estimated net realizable amounts from third-party payers and customers in exchange for the product. The Company has agreements with third-party payers that provide for payments at amounts different from its established rates. Each quarter, the Company estimates its adjustments for each sale based on the terms of third-party payer contracts and historical collections experience, then applies an estimate for an adjustment reserve percentage to the gross accounts receivable balances.
We identified the measurement of the adjustment reserve related to customer revenue as a critical audit matter due to the audit effort, degree of auditor judgment, and subjectivity involved in evaluating the audit evidence related to management’s estimate.
Our audit procedures related to the Company’s measurement of the adjustment reserve included the following, among others.
| ● | Recalculated the contractual and collection reserve estimates and compared them to the general ledger. |
| ● | Selected samples of product sales, additional revenue collections and writeoffs, to inspect and compare to the underlying source documents and to test the reasonableness of the contractual adjustment and collection percentage assumptions used in management’s estimate. |
| ● | Evaluated the reasonableness of management’s estimate of contractual and collection reserves by: |
| – | Comparing the estimates of realization percentages to historical net collection percentages for portfolio groups. |
| – | Evaluating whether quarterly historical realization percentages were reasonable and qualitatively consistent with internal and external independent data. |
/s/
We have served as the Company’s auditor since 2010.
August 25, 2026
Balance Sheets
June 30, 2026, and 2025
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable (net of allowances for credit losses of $) | ||||||||
| Contract assets | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Income tax receivable | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Finite-life intangible assets, net | ||||||||
| Other assets | ||||||||
| Deferred income taxes | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Shareholders’ Equity | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued compensation | ||||||||
| Warranty reserve | ||||||||
| Other accrued liabilities | ||||||||
| Total current liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| Shareholders’ Equity | ||||||||
| Common stock, $ par value per share, shares authorized; and shares issued and outstanding, as of June 30, 2026, and June 30, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Total shareholders’ equity | ||||||||
| Total liabilities and shareholders’ equity | $ | $ | ||||||
See Notes to Financial Statements.
Statements of Operations
Years Ended June 30, 2026, and 2025
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net revenues | $ | $ | ||||||
| Cost of revenues | ||||||||
| Gross profit | ||||||||
| Operating expenses | ||||||||
| Selling, general and administrative | ||||||||
| Research and development | ||||||||
| Total operating expenses | ||||||||
| Operating income | ||||||||
| Interest income, net | ||||||||
| Net income before income taxes | ||||||||
| Income tax expense | ||||||||
| Net income | $ | $ | ||||||
| Income per share: | ||||||||
| Basic | $ | $ | ||||||
| Diluted | $ | $ | ||||||
| Weighted-average common shares outstanding: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
See Notes to Financial Statements.
Electromed, Inc.
Statements of Shareholders’ Equity
Years Ended June 30, 2026, and 2025
| Total | ||||||||||||||||||||
| Common Stock | Additional | Retained | Shareholders’ | |||||||||||||||||
| Shares | Amount | Paid-in Capital | Earnings | Equity | ||||||||||||||||
| Balance as of June 30, 2024 | $ | $ | $ | $ | ||||||||||||||||
| Net income | — | |||||||||||||||||||
| Exercise of common stock options, vesting of performance stock units and issuance of restricted stock, net of cancellations and tax withholdings | ( | ) | ( | ) | ||||||||||||||||
| Share-based compensation expense | — | |||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | ||||||||||||||||
| Net income | — | |||||||||||||||||||
| Exercise of common stock options, vesting of restricted stock units and issuance of restricted stock, net of cancellations and tax withholdings | ||||||||||||||||||||
| Share-based compensation expense | — | |||||||||||||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | ||||||||||||||||
See Notes to Financial Statements.
Electromed, Inc.
Statements of Cash Flows
Years Ended June 30, 2026, and 2025
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Impairment of intangible assets | ||||||||
| Amortization | ||||||||
| Share-based compensation expense | ||||||||
| Deferred income taxes | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ( | ) | ||||
| Contract assets | ( | ) | ( | ) | ||||
| Inventories | ( | ) | ||||||
| Prepaid expenses and other assets | ( | ) | ( | ) | ||||
| Income tax receivable, net | ( | ) | ( | ) | ||||
| Accounts payable and accrued liabilities | ||||||||
| Accrued compensation | ||||||||
| Net cash provided by operating activities | ||||||||
| Cash Flows from Investing Activities | ||||||||
| Expenditures for property and equipment | ( | ) | ( | ) | ||||
| Expenditures for finite-life intangible assets | ( | ) | ( | ) | ||||
| Net cash used for investing activities | ( | ) | ( | ) | ||||
| Cash Flows from Financing Activities | ||||||||
| Issuance of common stock upon exercise of options | ||||||||
| Taxes paid on net share settlement of stock awards | ( | ) | ( | ) | ||||
| Repurchase of common stock | ( | ) | ( | ) | ||||
| Net cash used for financing activities | ( | ) | ( | ) | ||||
| Net increase (decrease) in cash | ( | ) | ||||||
| Cash and cash equivalents | ||||||||
| Beginning of period | ||||||||
| End of period | $ | $ | ||||||
| Supplemental Disclosures of Noncash Investing and Financing Activities | ||||||||
| Property and equipment and intangible asset acquisitions in accounts payable | $ | $ | ||||||
| Taxes owed on net share settlement of stock awards in accrued liabilities | $ | $ | ||||||
| Demonstration equipment transferred between inventory and property and equipment | $ | $ | ||||||
| Issuance of common stock upon the vesting of performance-based stock units | $ | $ | ||||||
See Notes to Financial Statements.
Electromed, Inc.
Notes to Financial Statements
| Note 1. | Nature of Business and Summary of Significant Accounting Policies |
Nature of business: Electromed, Inc. (the “Company”) develops, manufactures and markets innovative airway clearance products that apply High Frequency Chest Wall Oscillation (“HFCWO”) therapy in pulmonary care for patients of all ages. The Company markets its products in the U.S. to the homecare and hospital markets. The Company also sells internationally through distributors. International sales were $
Since its inception, the Company has operated in a single industry segment: developing, manufacturing, and marketing medical equipment.
A summary of the Company’s significant accounting policies follows:
Long-lived assets: Long-lived assets, primarily property and equipment and finite-life intangible assets, are evaluated for impairment when significant events or changes in circumstances indicate the carrying value of an asset or asset group may not be recoverable. In evaluating recoverability, the following factors, among others, are considered: a significant change in the circumstances used to determine the amortization period, an adverse change in legal factors or in the business climate, a transition to a new product or service strategy, a significant change in customer base, and a realization of failed marketing efforts. The recoverability of an asset or asset group is measured by a comparison of the carrying value of the asset to future undiscounted cash flows.
The amount of the impairment loss to be recorded, if any, is calculated as the excess of the asset’s or assets group’s carrying amount over its estimated fair value.
In addition, we periodically reassess the estimated remaining useful lives of our long-lived and finite-life intangible assets. Changes to estimated useful lives would impact the amount of depreciation and amortization expense recorded in earnings. We have experienced no significant changes in the carrying amount or estimated remaining useful lives of our long-lived or amortizable intangible assets, except as described in Note 5.
Warranty liability: The Company provides a lifetime warranty on its products to the prescribed patient for homecare sales within the U.S. and a to -year warranty for all homecare distributor, hospital and other sales. The Company estimates the costs that may be incurred under its warranty and records a liability in the amount of such costs at the time the product is shipped or delivered. Factors that affect the Company’s warranty liability include the number of units shipped, historical and anticipated rates of warranty claims, the product’s useful life, and cost per claim. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amounts as necessary.
Changes in the Company’s warranty liability were as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Beginning warranty reserve | $ | $ | ||||||
| Accrual for products sold | ||||||||
| Expenditures and costs incurred for warranty claims | ( | ) | ( | ) | ||||
| Ending warranty reserve | $ | $ | ||||||
Income taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company reverses a valuation allowance if it determines, based on the weight of all available evidence, including when cumulative losses become positive income, that it is more likely than not that some or all of the deferred tax assets will be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The Company recognizes tax liabilities when the Company believes that certain positions may not be fully sustained upon review by tax authorities. Benefits from tax positions are measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon settlement. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences impact income tax expense in the period in which such determination is made. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense.
Recently Issued Accounting Standards
ASU 2023-09 - Income Taxes (Topic 740): Improvements to Income Tax Disclosures
The standard introduces increased transparency about income tax information through the requirement of increased disclosures around specific categories in the rate reconciliation and requires additional information on reconciling items. It is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company adopted this standard for its fiscal year ending June 30, 2026, and expanded its disclosure as required under the standard.
ASU 2024-03 - Reporting Comprehensive Income: Expense Disaggregation Disclosures
The standard introduces increased disclosure requirements for certain costs and expenses. It is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company currently expects to adopt this standard for its fiscal year ending June 30, 2028, and is evaluating the impact of adoption and additional disclosure requirements.
ASU 2025-05 - Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets
The standard provides a practical expedient that allows entities to assume the current conditions as of the balance sheet date do not change for the remaining life of the asset when estimating expected credit losses. It is effective for annual periods beginning after December 15, 2025, with early adoption permitted. The Company adopted this standard for its fiscal year ending June 30, 2026, and it did not have a material impact on the financial statements or related disclosures.
ASU 2025-06 - Intangibles - Goodwill and Other - Internal Use Software
The standard modernizes the accounting for software costs that are accounted for under Subtopic 350-40. It is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company expects to adopt this standard for its fiscal year ending June 30, 2029, and is evaluating the impact of adoption and additional disclosure requirements.
Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on the Company’s financial statements and related disclosures.
| Note 2. | Revenues |
Disaggregation of revenues. In the following table, revenue is disaggregated by market:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Homecare | $ | $ | ||||||
| Hospital | ||||||||
| Homecare distributor | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
In the following table, homecare revenue is disaggregated by payer type:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Commercial | $ | $ | ||||||
| Medicare | ||||||||
| Medicare Supplemental | ||||||||
| Medicaid | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Performance obligations and transaction price. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account under ASC 606, “Revenue From Contracts With Customers” (“ASC 606”). A contract’s transaction price is allocated to each distinct performance obligation in proportion to the standalone selling price for each and recognized as revenue when, or as, the performance obligation is satisfied. The Company’s performance obligations and the timing or method of revenue recognition in each of the Company’s markets are discussed below:
Homecare market. In the Company’s homecare market, its customers are patients who use the SmartVest System. The various models of the SmartVest System are comprised of three main components - a generator, a vest and a connecting hose - that are sold together as an integrated unit. Accordingly, in contracts within the homecare market, the Company regards the SmartVest System to be a single performance obligation.
The Company makes available to its homecare patients limited post-sale services that are not material in the context of the contracts, either individually or taken together, and therefore does not consider them to be performance obligations. The costs associated with the services are accrued and expensed when the related revenues are recognized. As such, transactions in the homecare market consist of a single performance obligation: the SmartVest System.
Homecare patients generally will rely on third-party payers, including commercial payers and governmental payers such as Medicare, Medicaid and the U.S. Department of Veterans Affairs to cover and reimburse all or part of the cost of the SmartVest System. The third-party payers’ reimbursement programs primarily fall into two types, distinguished by the differences in the timing of payments from the payer, consisting of either (i) an outright sale, in which payment is received from the payer based on standard terms, or (ii) a capped installment sale, under which the SmartVest System is sold for a series of payments that are capped not to exceed a prescribed or negotiated amount over a period of time.
Regardless of the type of transaction, provided criteria for an enforceable contract are met, it is the Company’s long-standing business practice to regard all homecare agreements as transferring control to the patient upon shipment or delivery, despite possible payment cancellation under government or commercial programs where the payer is controlling the payment over specified time periods. For homecare sales that feature installment payments, the ultimate amount of consideration received from Medicare, Medicaid or commercial payers can be significantly less than expected if the contract is terminated due to changes in the patient’s status, including insurance coverage, hospitalization, death or otherwise becoming unable to use the SmartVest System. However, once delivered to a patient who needs the SmartVest System, the patient is under no obligation to return the SmartVest System should payments be terminated because of the described contingencies. As a result, the Company’s product sales qualify for point-in-time revenue recognition. Control transfers to the patient, and revenue is recognized upon shipment or delivery of the SmartVest System. At this point, physical possession and the significant risks and rewards of ownership are transferred to the patient and either a current or future right to payment is triggered.
The Company’s contractually stated transaction prices in the homecare market are generally set by the terms of the contracts negotiated with insurance companies or by government programs. The transaction price for the Company’s products may be further impacted by variable consideration. ASC 606 requires the Company to adjust the transaction price at contract inception and throughout the contract duration for the estimated value of payments to be received from insurance payers based on historical experience and other available information, subject to the constraint on estimates of variable consideration. Capped installment payment arrangements represent the majority of Electromed’s net revenues adjusted for variable consideration. For the fiscal years ended June 30, 2026, and 2025, amounts subject to capped installment payment arrangements represented a significant portion of net revenues, accounting for approximately
Although estimates may be made on a contract-by-contract basis, whenever possible, the Company uses all available information including historical collection patterns to estimate variable consideration for portfolios of contracts. For each type of variable consideration discussed above, there are many contracts with similar characteristics with a wide range of possible transaction prices. For that reason, the Company uses the probability-weighted expected value method provided under ASC 606 to estimate variable consideration. The Company’s estimates of variable consideration consist of amounts it may receive from insurance providers in excess of its initial revenue estimate due to patients meeting deductibles or coinsurance during the payment duration, changes to a patient’s insurance status, changes in an insurance allowable, and amounts received directly from patients for their allowable or coinsurance. The Company believes it has representative historical information to estimate the amount of variable consideration in relevant portfolios considering the significant experience it has with each portfolio and the similarity of patient accounts within a portfolio. The analysis includes steps to ensure that revenue recognized on a portfolio basis does not result in a material difference when compared with an individual contract approach. The Company also leverages its historical experience and all available relevant information for each portfolio of contracts to minimize the risk its estimates used to arrive at the transaction price will result in a significant reversal in the amount of cumulative revenue recognized when the uncertainty associated with the variable consideration is subsequently resolved. Historical payment trends for recovery of claims subject to payer installments and payments from patients have remained relatively consistent over the past five years. No significant changes in patient demographics or other relevant factors have occurred that would limit the predictive value of such payment trends in estimating variable consideration for current contracts. As a result, the Company believes its estimates of variable consideration are generally not subject to the risk of significant revenue reversal. Revenue recognized from performance obligations satisfied in prior periods due to changes in estimates of variable consideration was immaterial for the years ended June 30, 2026, and 2025, respectively.
The Company often receives payment from third-party payers for the SmartVest System sales that may exceed one year. Despite these extended payment terms, no significant financing component is deemed to exist because the purpose of such terms is not to provide financing to the patient, the payer or the Company. Rather, the extended payment terms are mandated by the government or commercial insurance programs, the fundamental purpose of which is to avoid paying the full purchase price of equipment that may potentially be used by the patient for only a short period of time.
Homecare Distributor, Hospital and Other markets. Sales within the homecare distributor, hospital, and other markets are primarily at fixed contract prices that are not subject to further adjustments for variable consideration. Limited sales within the homecare distributor and hospital markets may include tiered pricing structures or volume-based rebates which offer more favorable pricing once certain volumes are achieved per the negotiated contract. The distributor or hospital’s purchases accumulate to give a right to a higher discount on purchases in excess of the specified level within the contract period. As a result, to the extent the Company expects the distributor or hospital to exceed the specified volume of purchases in the annual period, it recognizes revenue at a blended rate based on estimated total annual volume and sales revenue. This effectively defers a portion of the transaction price on initial purchases below the specified volumes for recognition when the higher discount is earned on purchases in excess of specified volumes.
Sales to homecare distributors include the SmartVest system which is considered one performance obligation as described previously in the Homecare section. For our hospital and other customers, generators, hoses, and wraps (used in institutional and other settings rather than vests) are sold separately. Accordingly, each product is distinct and considered a separate performance obligation. Transfer of control of the products occurs upon shipment or delivery to the customer as applicable. Payment is made within normal credit terms, usually within 30 days.
In addition to outright sales, within the hospital market, the Company also enters into wrap usage agreements. Under these transactions, the Company provides a generator device at no cost to the hospital in return for a fixed annual commitment to purchase consumable wraps. These agreements are cancellable upon at least sixty days prior written notice by either party. If cancelled, the generator is returned to the Company, where it can be refurbished and used again later. Revenue for the consumable wraps is recognized when control transfers to the customer.
Product warranty. The Company offers warranties on its products. These warranties are assurance type warranties not sold on a standalone basis or are otherwise considered immaterial in the context of the contract and therefore are not considered distinct performance obligations under ASC 606. The Company estimates the costs that may be incurred under its warranties and records a liability in the amount of such costs at the time the product is sold.
Contract costs. Costs related to products delivered are recognized in the period incurred, unless criteria for capitalization of costs under Accounting Standards Codification (“ASC”) 340-40, “Other Assets and Deferred Costs” (“ASC 340”), or other applicable guidance are met.
The Company includes shipping and handling fees in net revenues. Shipping and handling costs associated with the shipment of the SmartVest System or individual generators, hoses, and wraps after control has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues in the Statements of Operations.
Contract balances. The following table provides information about accounts receivable and contracts assets from contracts with customers:
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Receivables, included in “Accounts receivable, net of allowance for credit losses” | $ | $ | ||||||
| Contract Assets | $ | $ | ||||||
Total Accounts receivable, net of allowances for credit losses, as of June 30, 2024, were $
Changes in the Company’s allowance for credit losses are as follows:
| Year Ended | Year Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Increase (decrease) | Increase (decrease) | |||||||
| Allowance for credit losses, beginning | $ | $ | ||||||
| Provision for credit losses | ||||||||
| Write Offs | ||||||||
| Recoveries | ||||||||
| Allowance for credit losses, ending | $ | $ | ||||||
Significant changes in contract assets during the period are as follows:
| Year Ended | Year Ended | |||||||
| June 30, 2026 | June 30, 2025 | |||||||
| Increase (decrease) | Increase (decrease) | |||||||
| Contract assets, beginning | $ | $ | ||||||
| Reclassification of contract assets to accounts receivable | ( | ) | ( | ) | ||||
| Contract assets recognized | ||||||||
| Increase (decrease) as a result of changes in the estimate of amounts to be realized from payers, excluding amounts transferred to receivables during the period | ( | ) | ||||||
| Contract assets, ending | $ | $ | ||||||
| Note 3. | Selected Balance Sheet Information |
Inventory consists of the following:
| As of June 30, 2026 | As of June 30, 2025 | |||||||
| Parts inventory | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods | ||||||||
| Estimated inventory to be returned | ||||||||
| Less: Reserve for obsolescence | ( | ) | ( | ) | ||||
| Total | $ | $ | ||||||
Other assets consist of the following:
| As of June 30, 2026 | As of June 30, 2025 | |||||||
| Capitalized software costs | $ | $ | ||||||
| Right of use assets | ||||||||
| Other assets | ||||||||
| Total | $ | $ | ||||||
Other accrued liabilities consist of the following:
| As of June 30, 2026 | As of June 30, 2025 | |||||||
| Accrued insurance recoupments | $ | $ | ||||||
| Other accrued expenses | ||||||||
| Total | $ | $ | ||||||
| Note 4. | Property and Equipment |
Property and equipment are as follows:
| Estimated Useful | As of June 30, | |||||||||||
| Lives (Years) | 2026 | 2025 | ||||||||||
| Building and building improvements | $ | $ | ||||||||||
| Land | N/A | |||||||||||
| Land improvements | ||||||||||||
| Equipment | ||||||||||||
| Software | ||||||||||||
| Demonstration and rental equipment | ||||||||||||
| Construction in progress | N/A | |||||||||||
| Less: Accumulated depreciation | ( | ) | ( | ) | ||||||||
| Net property and equipment | $ | $ | ||||||||||
| Note 5. | Finite-life Intangible Assets |
The carrying value of patents and trademarks includes the original cost of obtaining the patents, periodic renewal fees, and other costs associated with maintaining and defending patent and trademark rights. Patents and trademarks are amortized over their estimated useful lives, generally
The Company assesses intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be fully recoverable. If impairment indicators are present, the Company performs a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to these long-lived assets to their carrying value. In the fourth quarter of fiscal 2025, the Company determined that the current carrying value of several of its patents was not recoverable. An impairment charge of $
The activity and net balances of finite-life intangible assets are as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Balance, beginning | $ | $ | ||||||
| Additions | ||||||||
| Amortization expense | ( | ) | ( | ) | ||||
| Impairment | ( | ) | ||||||
| Balance, ending | $ | $ | ||||||
Based on the carrying value as of June 30, 2026, future amortization is expected to be as follows:
| Fiscal years ending June 30: | ||||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| Total | $ |
| Note 6. | Financing Arrangements |
On December 16, 2025, the Company entered into a credit agreement with BMO Bank N.A. The credit agreement provides the Company with a senior security credit facility with a $
The documents governing the credit facility contain certain customary financial and non-financial covenants that include a maximum total funded debt ratio of not more than and a minimum fixed charge coverage ratio of at least (as each such term is defined in the credit agreement), as well as restrictions on the Company's ability to incur certain additional indebtedness. So long as there is no default or event of default, the governing documents of our current credit facility do not restrict the Company’s ability to pay dividends.
| Note 7. | Common Stock |
Authorized shares: The Company’s Articles of Incorporation, as amended, have established
On September 9, 2025, the Company announced the approval of a stock repurchase authorization. Under the authorization, the Company could repurchase up to $
| Note 8. | Share-Based Compensation |
Share-based compensation expense for fiscal 2026 and 2025 was $
Equity plans: In November 2023, the Company’s shareholders approved the 2023 Equity Incentive Plan (the “2023 Plan”) which superseded the 2017 Omnibus Incentive Plan (the “2017 Plan”) and the 2014 Equity Incentive Plan (the “2014 Plan”). The 2023 Plan allows the Board to grant stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards, as well as cash incentive awards to all employees, non-employee directors, and advisors or consultants of the Company. The vesting schedule and term for each award are determined by the Board upon each grant. Upon vesting, and the Company’s determination that any necessary conditions precedent to the exercise of shares (such as satisfaction of tax withholding and compliance with applicable legal requirements) have been satisfied, shares purchased are delivered to the participant in a manner prescribed or permitted by the Board. The maximum number of shares of common stock available for issuance under the 2023 Plan is (i)
Employee options: The Company has historically granted stock options to employees as long-term incentive compensation. Options expire years from the grant date and typically vest over a period of years. There were
The Company recognizes compensation expenses related to share-based payment transactions in the financial statements based on the estimated fair value of the award issued. The fair value of each option is estimated using the Black-Scholes pricing model at the time of award grant. The Company estimates the expected life of options based on the expected holding period by the option holder. The risk-free interest rate is based upon observed U.S. Treasury interest rates for the expected term of the options. The Company makes assumptions with respect to expected stock price volatility based upon the historical volatility of its stock price. Forfeitures are accounted for as they occur.
The following assumptions were used to estimate the fair value of options granted:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Risk-free interest rate | % | % | ||||||
| Expected term (years) | ||||||||
| Expected volatility | % | % | ||||||
The following table presents employee stock option activity for fiscal 2026 and 2025:
| Weighted- | ||||||||||||||||
| Weighted- | Average | |||||||||||||||
| Average | Weighted- | Remaining | ||||||||||||||
| Number of | Grant Date | Average | Contractual | |||||||||||||
| Shares | Fair Value | Exercise Price | Life (in Years) | |||||||||||||
| Options outstanding as of June 30, 2024 | $ | $ | ||||||||||||||
| Granted | $ | $ | — | |||||||||||||
| Exercised | ( | ) | $ | $ | — | |||||||||||
| Canceled or forfeited | ( | ) | $ | $ | — | |||||||||||
| Options outstanding as of June 30, 2025 | $ | $ | ||||||||||||||
| Options exercisable as of June 30, 2025 | $ | $ | ||||||||||||||
| Granted | $ | $ | — | |||||||||||||
| Exercised | ( | ) | $ | $ | — | |||||||||||
| Canceled or forfeited | ( | ) | $ | $ | — | |||||||||||
| Options outstanding as of June 30, 2026 | $ | $ | ||||||||||||||
| Options exercisable as of June 30, 2026 | $ | $ | ||||||||||||||
The intrinsic value of a stock option is the amount by which the fair value of the underlying stock exceeds its exercise price. At June 30, 2026, the weighted average remaining contractual term for all outstanding stock options was
Restricted stock: The 2023 Plan permits the Personnel and Compensation Committee of the Board to grant other stock-based awards, including shares of restricted stock. The Company makes restricted stock grants to key employees and non-employee directors that vest over months to years following the applicable grant date.
The Company issued restricted stock awards to employees consisting of
| Weighted-Average | ||||||||
| Shares of | Grant Date Fair | |||||||
| Restricted Stock | Value per Share | |||||||
| Unvested awards outstanding as of June 30, 2024 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Canceled or forfeited | $ | |||||||
| Unvested awards outstanding as of June 30, 2025 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Canceled or forfeited | $ | |||||||
| Unvested awards outstanding as of June 30, 2026 | $ | |||||||
Restricted stock units: The Company issued restricted stock units to employees during fiscal 2026 consisting of opportunities to receive up to
| Weighted-Average | ||||||||
| Shares Underlying | Grant Date Fair | |||||||
| Restricted Stock Units | Value per Share | |||||||
| Unvested units outstanding as of June 30, 2024 | $ | |||||||
| Granted | $ | |||||||
| Vested | $ | |||||||
| Canceled or forfeited | ( | ) | $ | |||||
| Unvested units outstanding as of June 30, 2025 | $ | |||||||
| Granted | $ | |||||||
| Vested | ( | ) | $ | |||||
| Canceled or forfeited | ( | ) | $ | |||||
| Unvested units outstanding as of June 30, 2026 | $ | |||||||
Performance-based restricted stock units: The Company granted
There were
| Note 9. | Income Taxes |
Components of the provision for income taxes were as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Current: | ||||||||
| Current federal | $ | $ | ||||||
| Current state | ||||||||
| Total current | ||||||||
| Deferred: | ||||||||
| Deferred federal | ( | ) | ||||||
| Deferred state | ( | ) | ||||||
| Total deferred | ( | ) | ||||||
| Total income tax expense | $ | $ | ||||||
Actual income tax expense differs from the expected tax expense, computed by applying the statutory federal income tax rate to the Company’s earnings before income taxes, as follows:
| Year Ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| Amount | Percentage | Amount | Percentage | |||||||||||||
| Tax expense at statutory federal rate | $ | % | $ | % | ||||||||||||
| Domestic federal | ||||||||||||||||
| Tax credits | ||||||||||||||||
| Research and development credit | ( | ) | ( | )% | ||||||||||||
| Nontaxable and nondeductible items | ||||||||||||||||
| Meals and entertainment | % | % | ||||||||||||||
| Stock-based compensation | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| Non-deductible officer's compensation | % | % | ||||||||||||||
| Other non-deductible expenses | % | |||||||||||||||
| Other adjustments | ||||||||||||||||
| Other reconciling items | ( | ) | ( | )% | % | |||||||||||
| State taxes, net of federal benefit | % | % | ||||||||||||||
| Total income tax expense | $ | % | $ | % | ||||||||||||
The effective tax rates for fiscal 2026 and 2025 were
The components of income before income taxes are as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| The components of income before income taxes | ||||||||
| Domestic | $ | $ | ||||||
| Foreign | ||||||||
| Total | $ | $ | ||||||
The significant components of deferred income taxes were as follows:
| As of June 30, | ||||||||
| 2026 | 2025 | |||||||
| Deferred tax assets: | ||||||||
| Revenue recognition and accounts receivable reserves | $ | $ | ||||||
| Inventory reserve | ||||||||
| Warranty reserve | ||||||||
| Accrued compensation | ||||||||
| UNICAP | ||||||||
| Stock based compensation | ||||||||
| Lease liability | ||||||||
| MN R&D tax credits | ||||||||
| Amortization | ||||||||
| Capitalized research and development | ||||||||
| Subtotal | ||||||||
| Less: Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | ||||||||
| Deferred tax liabilities: | ||||||||
| Property and equipment | ( | ) | ( | ) | ||||
| Prepaid insurance | ( | ) | ||||||
| Right of use asset | ( | ) | ( | ) | ||||
| Allowance for returned inventory | ( | ) | ( | ) | ||||
| Amortization | ( | ) | ||||||
| Other deferred tax liabilities | ( | ) | ||||||
| Deferred tax liabilities | ( | ) | ( | ) | ||||
| Total net deferred tax assets | $ | $ | ||||||
The following is a schedule of cash paid for income taxes:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Jurisdiction | ||||||||
| U.S. Federal | $ | $ | ||||||
| State | ||||||||
| Foreign | ||||||||
| Total cash paid for income taxes (net of refunds) | $ | $ | ||||||
The Company has research and development state tax credit carryforwards, net of federal tax impacts, of $
The Company’s effective tax rates for the fiscal years ended June 30, 2026, and 2025 differ from its
The Company applies the accounting standard for uncertain tax positions pursuant to which a more-likely-than-not threshold is utilized to determine the recognition and derecognition of uncertain tax positions. Once the more-likely-than-not threshold is met, the amount of benefit to be recognized is the largest amount of tax benefit that is greater than 50 percent likely of being ultimately realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period of such a change. The Company does believe that it has any material uncertain tax positions as of June 30, 2026, and June 30, 2025.
The Company is subject to U.S. federal income tax as well as income tax of multiple state jurisdictions. With limited exceptions, the Company is no longer subject to federal and state income tax examinations by tax authorities for fiscal years ended prior to . The Company is not under any current income tax examinations by any other state or local taxing authority. If any issues addressed in the Company’s tax audits are resolved in a manner not consistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs.
The One, Big, Beautiful Bill Act (the “Act”) was signed into law on July 4, 2025. The Act contains tax law changes with various effective dates affecting business taxpayers. Among the tax law changes are provisions affecting the Company related to the timing of certain tax deductions, including depreciation expense, research and development expenditures, and interest expense. The Company adopted the applicable provisions of the Act during fiscal 2026. The Act did not have a material impact on the Company's overall income tax expense for the year ended June 30, 2026; however, certain provisions of the Act affected the timing of tax deductions and resulted in changes in the relative amounts of current and deferred tax expense.
| Note 10. | Leases |
The Company has leases for office and warehouse space and office equipment that require monthly payments. These leases have payments ranging from $
The Company has recognized total right of use assets associated with its operating leases of $
As of June 30, 2026, and June 30, 2025, the Company had a weighted-average lease term of
Maturities of lease liabilities, which are included in other accrued liabilities and other long-term liabilities on the Balance Sheet, are as follows:
| Fiscal years ending June 30: | ||||
| 2027 | $ | |||
| 2028 | ||||
| Total lease payments | ||||
| Less: Interest | ( | ) | ||
| Present value of lease liabilities | $ |
| Note 11. | Earnings Per Common Share ("EPS") |
The computations of basic and diluted EPS amounts were as follows:
| Year Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net Income | $ | $ | ||||||
| Weighted-average common shares outstanding: | ||||||||
| Basic | ||||||||
| Effect of dilutive common stock equivalents | ||||||||
| Diluted | ||||||||
| Earnings per common share: | ||||||||
| Basic | $ | $ | ||||||
| Diluted | $ | $ | ||||||
Common stock equivalents excluded from the calculation of diluted earnings per share because their impact was anti-dilutive were
| Note 12. | Commitments and Contingencies |
Litigation: The Company is occasionally involved in claims and disputes arising in the ordinary course of business. The Company insures certain business risks where possible to mitigate the financial impact of individual claims and establishes reserves for an estimate of any probable cost of settlement or other disposition. We are not aware of any undisclosed actual or threatened litigation that would have a material adverse effect on our financial condition or results of operations.
401(k) Profit Sharing Plan: The Company has an employee benefit plan under Section 401(k) of the Internal Revenue Code covering all employees who are
Employment Agreements: The Company is party to employment agreements with its President and Chief Executive Officer and its Chief Financial Officer, as may be amended from time to time. These agreements provide these officers with, among other things, months of base salary upon a termination of employment without “Cause” or in the event the employee resigns for “Good Reason.” The employment agreements also provide these officers with, among other things, increased severance payments in connection with a termination that occurs within months of a “Change in Control,” as defined in the respective employment agreements.
| Note 13. | Related Parties |
The Company uses a parts supplier whose founder and president was a director of the Company through November 12, 2021. The former director has remained a beneficial owner of greater than 5% of the Company’s outstanding common stock through June 30, 2026. The Company made payments to the supplier of $
| Note 14. | Segment Reporting |
We have determined that we have a reportable and operating segment structure. Our President and Chief Executive Officer is our chief operating decision maker (“CODM”). The CODM reviews financial information, including long-lived assets, presented on a consolidated basis, accompanied by information about revenue by market, for purposes of allocating resources and evaluating financial performance. Furthermore, the CODM uses consolidated net income (loss) as the measure of our sole segment’s profit or loss. Significant segment expenses are those expenses reported in the Consolidated Statement of Operations. We have a single active product and engage in the single business activity of selling and supporting that single product. There are no managers who are held accountable for operations, operating results or plans for levels or components below the consolidated level. We and our CODM evaluate our performance based on revenue from our single product in the markets in which the Company operates and consolidated net income (loss), which is reflected in the Consolidated Statement of Operations. Revenue by market is described above in Note 2.
| Note 15. | Subsequent Events |
The Company evaluates, as of each reporting period, events or transactions that occur after the balance sheet date through the date the financial statements are issued for either disclosure or adjustment to the Company’s financial results. There have been no events subsequent to June 30, 2026, which would require recognition in the Financial Statements or Notes to the Financial Statements.
| Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. |
None.
| Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
Our principal executive officer and principal financial officer evaluated the effectiveness of our disclosure controls and procedures as of the end of the period subject to this Annual Report on Form 10-K. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Internal control over financial reporting refers to the process designed by, or under the supervision of, our President and Chief Executive Officer and our Chief Financial Officer, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that:
(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorization of our management and directors; and
(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of preventing and detecting misstatements on a timely basis. It is possible to design safeguards into the process to reduce, though not eliminate, the risk that misstatements are not prevented or detected on a timely basis. Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.
Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework set forth in the report entitled Internal Control-Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. Based on this assessment, management has concluded that, as of June 30, 2026, our internal control over financial reporting was effective.
This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to the rules of the SEC that exempt smaller reporting companies from the auditor attestation requirement.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the fourth quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
| Other Information. |
During the three months ended June 30, 2026, director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
| Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. |
Not applicable.
Certain information required by Part III is incorporated by reference from our definitive Proxy Statement for the annual meeting of shareholders to be held in 2026 (the “Proxy Statement”). Except for those portions specifically incorporated in this Annual Report on Form 10-K by reference to the Proxy Statement, no other portions of the Proxy Statement are deemed to be filed as part of this Annual Report on Form 10-K.
| Directors, Executive Officers and Corporate Governance. |
Information about our Executive Officers
The following sets forth certain information about our current executive officers:
James L. Cunniff, age 61, joined Electromed in July 2023 as the Company’s President and Chief Executive Officer. Prior to joining Electromed, Mr. Cunniff most recently served as President and Chief Executive Officer of Provista Inc., from 2017 to May 2022. Previously, he served as President and Chief Executive Officer at Denver Solutions, LLC (d/b/a Leiters Health) from 2015 to 2017 and as Senior Vice President, Americas, at Acelity L.P. Inc., from 2012 to 2014. Mr. Cunniff holds a bachelor’s degree in advertising and business from the University of Illinois Urbana-Champaign and has completed the Advanced Management Program at Harvard Business School.
Bradley M. Nagel, age 44, joined Electromed in November 2022 as the Company’s Chief Financial Officer, Treasurer and Secretary. Prior to joining Electromed, Mr. Nagel most recently served as Divisional Chief Financial Officer of Global Lung Health and Visualization at Medtronic plc from June 2018 to November 2022. Previously, he served at Medtronic as Sr. Manager, Accounting and Sales Operations from 2016 to June 2018 and Accounting Manager from 2015 to 2016. Before joining Medtronic, Mr. Nagel held various roles of increasing responsibility in sales, operations and accounting at Target Corporation and TCF Financial Corporation. Mr. Nagel holds a bachelor’s degree in business & finance from Calvin University.
Code of Ethics
Our Board annually reviews and approves revisions to our Code of Ethics and Business Conduct (the “Code of Ethics”) that applies to all employees, directors, and officers, including the Chief Executive Officer and the Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer). The Code of Ethics is available in the “Investor Relations” section of our website at www.smartvest.com. We intend to disclose on our website any amendment to or waiver from any provision of the Code of Ethics that applies to our Chief Executive Officer or our Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), and that relates to any element of the Code of Ethics identified in Item 406(b) of Regulation S-K, as promulgated by the SEC. Such disclosure will be provided promptly following the date of the amendment or waiver. We are not including the information contained on our website as part of, or incorporating it by reference into, this report or any other filing or document submitted to the SEC.
The additional information required by this item is incorporated herein by reference to the sections labeled “Election of Directors,” “Corporate Governance,” “Security Holder Communications to the Board of Directors,” “Security Ownership Certain Beneficial Owners and Management” and, if any, under “Delinquent Section 16(a) Reports” in the Proxy Statement.
Insider Trading Policy
We have an Insider Trading Policy governing the purchase, sale and /or other dispositions of our securities by directors, officers and employees. Our Insider Trading Policy is filed as Exhibit 19.
| Executive Compensation. |
The information required by this item is incorporated herein by reference to the sections labeled “Executive Compensation,” “Director Compensation,” and “Corporate Governance – Personnel and Compensation Committee” in the Proxy Statement.
| Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
The information required by this item relating to the security ownership of certain holders is incorporated herein by reference to the sections labeled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement.
| Certain Relationships and Related Transactions, and Director Independence. |
The information required by this item is incorporated herein by reference to the sections labeled “Corporate Governance” and “Certain Relationships and Related-Party Transactions” in the Proxy Statement.
| Principal Accountant Fees and Services. |
Our independent registered public accounting firm is RSM US LLP, Minneapolis, MN.
The information required by this item is incorporated herein by reference to the subsections labeled “Audit Fees” and “Audit Committee Pre-Approval” under the “Ratification of the Appointment of the Company’s Independent Registered Public Accounting Firm” heading in the Proxy Statement.
| Exhibits and Financial Statement Schedules. |
| (a) | Documents filed as part of this report. |
| (1) | Financial Statements. The following financial statements are included in Part II, Item 8 of this Annual Report on Form 10-K: |
| ● | Report of Independent Registered Public Accounting Firm, PCAOB ID: |
| ● | Balance Sheets as of June 30, 2026, and 2025 |
| ● | Statements of Operations for the years ended June 30, 2026, and 2025 |
| ● | Statements of Shareholders’ Equity for the years ended June 30, 2026, and 2025 |
| ● | Statements of Cash Flows for the years ended June 30, 2026, and 2025 |
| ● | Notes to Financial Statements |
| (2) | Financial Statement Schedules. No financial statement schedule is required to be included in this Annual Report on Form 10-K. |
| Exhibit |
Description |
Method of Filing |
||
| Incorporated by Reference |
| Amended and Restated Bylaws, effective November 15, 2024 (incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed November 18, 2024). | Incorporated by Reference |
|||
| Incorporated by Reference |
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| Incorporated by Reference |
||||
| 10.2 | Form of Nonqualified Stock Option Agreement under the Electromed, Inc. 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to Current Report on Form 8-K filed November 25, 2014)* | Incorporated by Reference | ||
| Incorporated by Reference |
||||
| Incorporated by Reference |
||||
| Incorporated by Reference |
||||
| Incorporated by Reference |
||||
| Incorporated by Reference |
||||
| Incorporated by Reference |
||||
| Incorporated by Reference |
||||
| Incorporated by Reference |
| Exhibit |
Description |
Method of Filing |
| 97 | Compensation Recoupment Policy (incorporated by reference to Exhibit 97 to Annual Report on Form 10-K for the fiscal year ended June 30, 2024) | Incorporated by Reference | ||
| 101 |
Financial statements from the annual report on Form 10-K for the year ended June 30, 2026, as filed with the Securities and Exchange Commission, formatted in inline eXtensible Business Reporting Language (iXBRL): (i) Balance Sheets; (ii) Statements of Operations, (iii) Statements of Shareholders’ Equity, (iv) Statements of Cash Flows, (v) Notes to Financial Statements, and (vi) the information set forth in Part II, Item 9B. |
Filed Electronically |
||
| 104 |
Cover Page Interactive Data File (embedded within the inline XBRL Document) |
Filed Electronically |
| * |
Management compensatory contract or arrangement. |
| Form 10-K Summary. |
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ELECTROMED, INC. |
||
| Date: August 25, 2026 |
By |
/s/ James L. Cunniff |
| James L. Cunniff |
||
| President and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| Signature |
Title |
Date |
||
| /s/ James L. Cunniff |
President and Chief Executive Officer and Director |
August 25, 2026 | ||
| James L. Cunniff |
(principal executive officer) |
|||
| /s/ Bradley M. Nagel |
Chief Financial Officer |
August 25, 2026 | ||
| Bradley M. Nagel |
(principal financial and accounting officer) |
|||
| * |
Director |
August 25, 2026 | ||
| Stan K. Erickson |
||||
| * |
Director |
August 25, 2026 | ||
| Gregory J. Fluet |
||||
| * |
Director |
August 25, 2026 | ||
| Joseph L. Galatowitsch |
||||
| * |
Director |
August 25, 2026 | ||
| Kathleen S. Skarvan |
||||
| * |
Director |
August 25, 2026 | ||
| Andrew J. Summers |
||||
| * |
Director |
August 25, 2026 | ||
| Kathleen A. Tune |
||||
| * |
Director |
August 25, 2026 | ||
| Andrea M. Walsh |
| * |
The undersigned, by signing his name hereto, does hereby sign this document on behalf of each of the above-named directors of the registrant pursuant to powers of attorney duly executed by such persons. |
| By |
/s/ James L. Cunniff |
|
| James L. Cunniff |
||
| Attorney-in-Fact |