Tactile Systems Technology (TCMD) 10-K 23 Feb 21 2020 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2020	Feb. 19, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2020
Document Transition Report	false
Entity File Number	001-37799
Entity Registrant Name	Tactile Systems Technology, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	41-1801204
Entity Address, Address Line One	3701 Wayzata Blvd, Suite 300
Entity Address, City or Town	Minneapolis
Entity Address, State or Province	MN
Entity Address, Postal Zip Code	55416
City Area Code	612
Local Phone Number	355-5100
Title of 12(b) Security	Common Stock, Par Value $0.001 Per Share
Trading Symbol	TCMD
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		19,507,535
Entity Central Index Key	0001027838
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Public Float			$ 772,006,579

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 47,855	$ 22,770
Marketable securities		22,464
Accounts receivable	43,849	33,444
Net investment in leases	10,708	8,147
Inventories	18,563	19,059
Prepaid expenses and other current assets	2,638	2,451
Total current assets	123,613	108,335
Non-current assets
Property and equipment, net	6,957	7,408
Right of use operating lease assets	20,132	15,885
Intangible assets, net	1,680	5,312
Accounts receivable, non-current	9,433	4,184
Deferred income taxes	10,198	8,970
Other non-current assets	2,074	1,658
Total non-current assets	50,474	43,417
Total assets	174,087	151,752
Current liabilities
Accounts payable	4,197	3,843
Accrued payroll and related taxes	11,588	10,098
Accrued expenses	4,423	4,498
Income taxes payable	2,658	632
Operating lease liabilities	2,006	1,454
Other current liabilities	1,842	903
Total current liabilities	26,714	21,428
Non-current liabilities
Accrued warranty reserve, non-current	3,235	2,541
Income taxes, non-current		54
Operating lease liabilities, non-current	19,388	15,134
Total non-current liabilities	22,623	17,729
Total liabilities	49,337	39,157
Commitments and Contingencies (see Note 12)
Stockholders' equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized; none issued and outstanding as of December 31, 2020 and December 31, 2019
Common stock, $0.001 par value, 300,000,000 shares authorized; 19,492,718 shares issued and outstanding as of December 31, 2020; 19,152,715 shares issued and outstanding as of December 31, 2019	19	19
Additional paid-in capital	104,675	91,874
Retained earnings	20,056	20,676
Accumulated other comprehensive income		26
Total stockholders' equity	124,750	112,595
Total liabilities and stockholders' equity	$ 174,087	$ 151,752

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2020	Dec. 31, 2019
Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	50,000,000	50,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common shares authorized	300,000,000	300,000,000
Common stock, shares, issued	19,492,718	19,152,715
Common stock, shares, outstanding	19,492,718	19,152,715

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Total revenue	$ 187,130	$ 189,492	$ 143,751
Total cost of revenue	54,320	55,256	41,493
Gross profit	132,810	134,236	102,258
Operating expenses
Sales and marketing	79,634	78,920	60,371
Research and development	5,264	5,174	5,289
Reimbursement, general and administrative	51,540	39,644	33,608
Total operating expenses	136,438	123,738	99,268
(Loss) income from operations	(3,628)	10,498	2,990
Other income	1,367	631	486
(Loss) income before income taxes	(2,261)	11,129	3,476
Income tax (benefit) expense	(1,641)	158	(3,147)
Net (loss) income	$ (620)	$ 10,971	$ 6,623
Net (loss) income per common share
Basic (in dollars per share)	$ (0.03)	$ 0.58	$ 0.36
Diluted (in dollars per share)	$ (0.03)	$ 0.56	$ 0.34
Weighted-average common shares used to compute net (loss) income per common share
Basic (in shares)	19,346,929	18,919,007	18,252,689
Diluted (in shares)	19,346,929	19,641,143	19,347,632
Sales revenue
Total revenue	$ 161,497	$ 162,904	$ 128,786
Total cost of revenue	45,309	47,034	36,969
Gross profit	116,188	115,870	91,817
Rental revenue
Total revenue	25,633	26,588	14,965
Total cost of revenue	9,011	8,222	4,524
Gross profit	$ 16,622	$ 18,366	$ 10,441

Consolidated Statements of Comp

Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Consolidated Statements of Comprehensive (Loss) Income
Net (loss) income	$ (620)	$ 10,971	$ 6,623
Other comprehensive (loss) income:
Unrealized (loss) gain on marketable securities	(21)	31	60
Income tax related to items of other comprehensive (loss) income	(5)	3	(24)
Total other comprehensive (loss) income	(26)	34	36
Comprehensive (loss) income	$ (646)	$ 11,005	$ 6,659

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Treasury Stock	Total
Balances at the beginning at Dec. 31, 2017	$ 18	$ 70,224	$ 3,082	$ (44)	$ (493)	$ 72,787
Balances at the beginning (in shares) at Dec. 31, 2017	17,846,379
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		7,974				7,974
Exercise of common stock options and vesting of restricted stock units	$ 1	1,514				1,515
Exercise of common stock options and vesting of restricted stock units (in shares)	725,370
Taxes paid for net share settlement of restricted stock units		(2,379)				(2,379)
Taxes paid for net share settlement of restricted stock units (in shares)	(63,800)
Common shares issued for employee stock purchase plan		(493)			$ 493
Common shares issued for employee stock purchase plan (in shares)	26,086
Shares repurchased to cover taxes from restricted stock award vesting		2,714				2,714
Shares repurchased to cover taxes from restricted stock award vesting (in shares)	97,092
Comprehensive (loss) income for the period			6,623	36		6,659
Balances at the end at Dec. 31, 2018	$ 19	79,554	9,705	(8)		89,270
Balances at the end (in shares) at Dec. 31, 2018	18,631,127
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		9,824				9,824
Exercise of common stock options and vesting of restricted stock units		2,834				2,834
Exercise of common stock options and vesting of restricted stock units (in shares)	512,901
Taxes paid for net share settlement of restricted stock units		(3,391)				(3,391)
Taxes paid for net share settlement of restricted stock units (in shares)	(62,440)
Common shares issued for employee stock purchase plan		3,053				3,053
Common shares issued for employee stock purchase plan (in shares)	71,127
Comprehensive (loss) income for the period			10,971	34		11,005
Balances at the end at Dec. 31, 2019	$ 19	91,874	20,676	26		112,595
Balances at the end (in shares) at Dec. 31, 2019	19,152,715
Increase (Decrease) in Stockholders' Equity
Stock-based compensation		10,689				10,689
Exercise of common stock options and vesting of restricted stock units		1,068				1,068
Exercise of common stock options and vesting of restricted stock units (in shares)	303,709
Taxes paid for net share settlement of restricted stock units		(1,854)				(1,854)
Taxes paid for net share settlement of restricted stock units (in shares)	(37,790)
Common shares issued for employee stock purchase plan		2,898				2,898
Common shares issued for employee stock purchase plan (in shares)	74,084
Comprehensive (loss) income for the period			(620)	$ (26)		(646)
Balances at the end at Dec. 31, 2020	$ 19	$ 104,675	$ 20,056			$ 124,750
Balances at the end (in shares) at Dec. 31, 2020	19,492,718

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities
Net (loss) income	$ (620)	$ 10,971	$ 6,623
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization	2,794	3,538	3,737
Net amortization of premiums and discounts on securities available-for-sale	(91)	(307)	(102)
Deferred income taxes	(1,233)	(146)	(6,182)
Stock-based compensation expense	10,689	9,824	7,974
Gain on other investments and maturities of marketable securities	(11)	7	4
Impairment losses	4,025		2,534
Loss on termination of lease		1,148
Changes in assets and liabilities:
Accounts receivable	(10,405)	(9,112)	(6,709)
Net investment in leases	(2,561)	(8,147)
Inventories	318	(7,870)	(870)
Income taxes	1,972	2,428	165
Prepaid expenses and other assets	(528)	(1,166)	(1,140)
Right of use operating lease assets	559	625
Medicare accounts receivable, non-current	(5,249)	(2,300)	834
Accounts payable	337	(1,389)	690
Accrued payroll and related taxes	1,490	2,677	715
Accrued expenses and other liabilities	1,308	1,729	734
Net cash provided by operating activities	2,794	2,510	9,007
Cash flows from investing activities
Proceeds from sales of securities available-for-sale		1,493	2,000
Proceeds from maturities of securities available-for-sale	22,500	25,000	15,000
Purchases of securities available-for-sale		(22,840)	(21,680)
Purchases of property and equipment	(2,059)	(5,446)	(4,196)
Intangible assets costs	(232)	(542)	(5,350)
Other investments	(30)		(500)
Net cash provided by (used in) investing activities	20,179	(2,335)	(14,726)
Cash flows from financing activities
Taxes paid for net share settlement of restricted stock units	(1,854)	(3,391)	(2,379)
Proceeds from exercise of common stock options	1,068	2,834	1,515
Proceeds from the issuance of common stock from the employee stock purchase plan	2,898	3,053	2,714
Net cash provided by financing activities	2,112	2,496	1,850
Net increase (decrease) in cash and cash equivalents	25,085	2,671	(3,869)
Cash and cash equivalents - beginning of period	22,770	20,099	23,968
Cash and cash equivalents - end of period	47,855	22,770	20,099
Supplemental cash flow disclosure
Cash paid for interest			9
Cash paid for taxes	543	344	2,883
Capital expenditures incurred but not yet paid	$ 17	$ 122	$ 167

Nature of Business and Operatio

Nature of Business and Operations	12 Months Ended
	Dec. 31, 2020
Nature of Business and Operations
Nature of Business and Operations	Note 1. Nature of Business and Operations Tactile Systems Technology, Inc. (“we,” “us,” and “our”) is the sole manufacturer and distributor of the Flexitouch and Entre systems, medical devices that help control symptoms of lymphedema, a chronic and progressive medical condition. We provide our products for use in the home and sell or rent them through vascular, wound and lymphedema clinics throughout the United States. We were originally incorporated in Minnesota under the name Tactile Systems Technology, Inc. on January 30, 1995. During 2006, we established a merger corporation and subsequently, on July 21, 2006, merged with and into this merger corporation, resulting in us being reincorporated as a Delaware corporation. The resulting corporation assumed the name Tactile Systems Technology, Inc. In September 2013, we began doing business as “Tactile Medical.” On August 2, 2016, we closed the initial public offering of our common stock, which resulted in the sale of 4,120,000 shares of our common stock at a public offering price of $10.00 per share. We received net proceeds from the initial public offering of approximately $35.4 million, after deducting underwriting discounts and approximately $2.9 million of transaction expenses. In connection with the closing of the initial public offering, all of our outstanding redeemable convertible preferred stock automatically converted to common stock on August 2, 2016. Our business is affected by seasonality. In the first quarter of each year, when most patients have started a new insurance year and have not yet met their annual out-of-pocket payment obligations, we experience substantially reduced demand for our products. We typically experience higher revenue in the third and fourth quarters of the year when more patients have met their annual insurance deductibles, thereby reducing their out-of-pocket costs for our products, and because patients desire to exhaust their flexible spending accounts at year end. This seasonality applies only to purchases and rentals of our products by patients covered by commercial insurance and is not relevant to Medicare, Medicaid or the Veterans Administration, as those payers either do not have plans that have declining deductibles over the course of the plan year and/or do not have plans that include patient deductibles for purchases or rentals of our products.

Basis of Presentation

Basis of Presentation	12 Months Ended
	Dec. 31, 2020
Basis of Presentation
Basis of Presentation	Note 2. Basis of Presentation Our accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. We have reclassified certain prior year amounts to conform to the current year’s presentation. The results for the year ended December 31, 2020, are not necessarily indicative of results to be expected for any future year. Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation. Risks and Uncertainties Coronavirus (COVID-19) The United States economy in general and our business specifically have been negatively affected by the COVID-19 pandemic. We have seen adverse impacts as it relates to the decline in the number of patients that healthcare facilities and clinics are able to treat due to enhanced safety protocols. There are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. For that reason, we are unable to reasonably estimate the long-term impact of the pandemic on our business at this time. Our first priority with regard to the COVID-19 pandemic is to ensure the safety and health of our employees, clinicians and patients. Subject to that, we are focusing our efforts on attempting to continue our business operations in this unprecedented environment. Part of our strategy includes changing many of our processes and practices in an effort to help mitigate the impact of COVID-19 on our business so that we can support our clinicians and safely make our at-home therapies available to patients. Since the onset of COVID-19, we have remained proactive to ensure we continue to adapt to our employees, clinicians and patients needs. These changes to our business include, but are not limited to: ● Initially, we modified our operations with the primary focus on keeping our employees safe while continuing to serve our clinicians and patients. As an essential business under federal guidelines, we continued to manufacture product and implemented multiple, smaller rotational shifts and other best practices to help protect the health and safety of our workforce. More recently, we have migrated closer to our pre-COVID work shifts, however we have implemented more stringent safety measures including mandatory use of face masks, social distancing and temperature checks for our employees. ● We have continued to incorporate remote and flexible work arrangements for employees whenever possible, including real-time, online training of our new sales representatives. ● We have continued to limit employee travel and contact restrictions to reduce exposure. ● We have continued to collaborate with payers to modify coverage requirements by serving patients virtually. ● In concert with COVID-19 social distancing requirements and recommendations, we temporarily moved to a “no contact” virtual patient training model. This new model substantially reduced the need for in-person contact and visits to patients’ homes and clinics in order to protect the health and limit the exposure of both our trainers and patients. Accordingly in the second quarter of 2020, we inactivated our independent healthcare practitioners, who acted as at-home trainers to educate patients on the proper use of our systems, in order to allow these individuals to have access to specific COVID related financial relief. We have since reactivated a small number of healthcare practitioners in the same capacity as trainers who educate patients on the proper use of our solutions. ● We continue to transition large, in-person medical education programs in favor of conducting virtual meetings whenever possible. ● When in-person visits are required, we are supporting clinicians and patients by using rigorous infection control practices. We cannot assure you that these changes to our processes and practices will be successful in mitigating the impact of COVID-19 on our business. We continue to evaluate and, if appropriate, will adopt other measures in the future related to the ongoing safety of our employees, clinicians and patients. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. ​ Coronavirus Aid, Relief, and Economic Security Act We may receive cash payments from the government during a public health emergency (PHE). We consider the nature and substance of the government funds received and record the cash payment in accordance with the terms and conditions of the funds. In year ended December 31, 2020, we received a grant of from the Public Health and Social Services Emergency Fund (Relief Fund), which was among the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020. During the year ended December 31, 2020, we Comprehensive Income (Loss) Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Our comprehensive income (loss) represents net income (loss) adjusted for unrealized gains and losses on available-for-sale marketable securities and the related taxes. ​

Summary of Significant Accounti

Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2020
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	Note 3. Summary of Significant Accounting Policies Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits and funds invested in available-for-sale securities with original maturities of three months or less at the time of purchase. At December 31, 2020 and 2019, our cash was held primarily in checking and money market accounts. Marketable Securities and Equity Investments We determine the appropriate classification of our marketable securities as available-for-sale or held-to-maturity at the time of purchase and periodically reevaluate such classification. Debt securities are classified as held - to - maturity when we have the positive intent and ability to hold the securities to maturity. Debt securities for which we do not have the intent or ability to hold to maturity are classified as available-for-sale. Debt securities not classified as held-to-maturity are classified as available-for-sale and are reported at fair value, with unrealized gains and losses included in the determination of comprehensive income, a component of stockholders' equity. We review our available-for-sale securities for impairment to determine if the impairment is temporary or other-than-temporary. A temporary impairment charge results in an unrealized loss being recorded in other comprehensive income. Other-than-temporary impairments are recorded in net income in the period the impairment is determined to be other-than-temporary . Equity investments (including equity securities) with readily determinable fair value are reported at fair value, with unrealized gains and losses included in the determination of net income. For equity investments with no readily determinable fair value, we measure these investments at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example. As of December 31, 2020 and 2019, the total carrying value of our equity investments, with no readily determinable fair value, were $0.3 million and $0.7 million, respectively, and are included in other non-current assets on our consolidated balance sheets. On an annual basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired and also monitor for any observable price changes. During the years ended December 31, 2020 and 2019, we did not have any impairment loss on these investments. Accounts Receivable The majority of our accounts receivable and revenue are from commercial insurance payers and government payers, such as Medicare, the Veterans Administration and Medicaid. Accounts receivable are recorded based on management’s assessment of the expected consideration to be received, based on a detailed review of historical pricing adjustments and collections. Management relies on the results of the assessment, which includes payment history of the applicable payer as well as historical patient collections, as a primary source of information in estimating the collectability of our accounts receivable. We update our assessment on a quarterly basis, which to date has not resulted in any material adjustments to the valuation of our accounts receivable. We believe the assessment provides reasonable estimates of our accounts receivable valuation, and therefore we believe that substantially all accounts receivable are fully collectible. A portion of our claims to Medicare are initially denied and enter the appeals process, where many are ultimately reviewed by an Administrative Law Judge. After final adjudication of all claims, approximately 90% of the claims submitted are approved (this is on a number of claims, not a dollars claimed, basis across all our products). The appeals process can be lengthy, lasting more than a year in most cases. Accordingly, we classify a portion of our Medicare accounts receivable as non-current based on our experience with Medicare collections. Inventories Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives of three Major expenditures for property and equipment are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accumulated depreciation accounts and the resulting gains or losses are included in income. The value of demonstration equipment in the possession of our field sales representatives is capitalized and depreciated over the estimated useful life of the equipment. Revenue Recognition We derive revenue from the sales and rentals of our products, which consist of our proprietary line of Flexitouch and Entre systems. We recognize revenue when control of the product has been transferred to our customer, in the amount of the expected consideration to be received for the product. In general, revenue from the sale or rental of a product is recognized upon shipment, unless circumstances dictate that control has not yet passed to the customer. We provide a warranty for our products against defects in material and workmanship for a period of one one of time that may exceed one year. Despite these extended payment terms, no significant financing component is deemed to exist as the terms are not for the benefit of the patient with whom we have the contract. Rather, the extended payment terms occur as a result of an initial claim denial, which subsequently enters the Medicare appeals process as noted below. We commercially distribute our products directly to patients who are referred to us by physicians, therapists or nurses. In most cases, there is a third-party payer, such as a commercial insurer, Medicare or the Veterans Administration involved with the transaction. Our contractual relationship resides with the patient when the third-party payer is either a commercial insurer or Medicare and with the Veterans Administration if the patient is covered under their services. Revenue is recognized from such sales upon transfer of control of the product to the customer at a transaction price determined by collection history. As a result, the transaction price is impacted by multiple factors, including the terms and conditions contracted by various third-party payers, and therefore payments from third-party payers typically are less than our standard charge and represent an implicit price concession, resulting in variable consideration. As most contracts are with each individual sale to a patient, we have elected the portfolio approach to determine the transaction price, and ultimately the expected consideration. The portfolios used to determine transaction price are at the payer level, with pricing for each payer assessed based on the underlying similar characteristics. For any of our products sold to patients covered by private payers, such as commercial insurance companies, revenue is recognized upon shipment. A product is not shipped until we have received a prescription from a physician for our products and, as applicable, receipt of prior authorization from payers. At shipment, we invoice the payer for the total product price, and we recognize revenue in the amount of cash consideration anticipated to be received based on the transaction price. After the insurance payer has remitted payment, we separately invoice the patient for their portion of the payment obligation, such as copayments and deductibles. The transaction price is determined based on the payment history of the applicable payer drawn from actual write-off and collections experience from the payer over a rolling 12-month period, as well as historical patient collections. For our products sold to Medicare patients, we recognize revenue from such sales upon shipment of our products, which can occur only after we have received a prescription from a physician and all applicable patient documentation is obtained. The transaction price for our Entre systems is determined based on the payment history using the same methodology as our private insurers. A portion of our claims for our Flexitouch system are initially denied, and enter the appeals process, which can be lengthy. We assess the variable consideration for each of these claims as a percentage of the total invoice price based on ultimate approval and collection history. For our products sold to the Veterans Administration on behalf of the patient, our contract is with the Veterans Administration rather than the patient. We enter into individual sales contracts with the Veterans Administration on behalf of each patient. These contracts determine the amount of consideration, which is typically paid in full within 2 We incur incremental costs that directly relate to the sales of our products; however, as the amortization period would be less than one year, we have elected the practical expedient to expense these costs as incurred. We sell and rent our products either directly to patients or the Veterans Administration on behalf of patients, who are referred to us by physicians, therapists or nurses. We bill private insurers and other payers, Medicare, and the Veterans Administration directly for purchases or rentals of our product on behalf of a patient and bill patients directly for their cost-sharing amounts, including any portion of an unsatisfied deductible and any copayments or co-insurance obligation. A portion of our revenue is derived from patients who obtain our products under multiple-month rental arrangements. We bill these patients’ insurance payers monthly over the duration of the rental term. Title to these products passes to the patients at the end of the rental period. Patients may return the product before the end of the rental period, and as such these arrangements are deemed to be month-to-month cancelable leases in accordance with Accounting Standards Codification (“ASC”), or ASC 840, “Leases,” if they commenced prior to December 31, 2018. Accordingly, we recognized the related revenue for these rental arrangements monthly, on a pro rata basis, over the lesser of the duration of the rental period or the period during which the patient possesses the product. Rental agreements commencing after January 1, 2019, are recorded as sales-type leases in accordance with Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (Topic 842) (“ASC 842”). Accordingly, as sales-type leases, the transaction price for the entire rental term is recognized upon transfer of control. We elected the practical expedient to not reassess the lease classification for leases in existence at December 31, 2018. Advertising Advertising costs are charged to operations when incurred. Advertising expense was $0.1 million for each of the years ended December 31, 2020, 2019 and 2018. Research and Development Costs We expense research and development costs as incurred, including expenses associated with clinical research studies and development. Shipping and Handling Costs We do not charge any shipping and handling costs to our customers. Shipping and handling costs incurred are included in cost of revenue. Product Warranty We provide a warranty for our products against defects in material and workmanship for a period of one one Impairment of Long-Lived Assets We review long-lived assets, including property and equipment and patents, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. We will assess long-lived assets used in operations for impairment indicators, including when undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount (see Note 8 – “Intangible Assets”). Stock-Based Compensation Stock options are valued using the Black-Scholes option-pricing model, except that the valuation of certain “CEO” related stock options subject to a market condition involve the use of the Monte Carlo Simulation model. The Monte Carlo Simulation and the Black-Scholes valuation models require the input of highly subjective assumptions. The assumptions include the expected term of the option, the expected volatility of the price of our common stock, expected dividend yield and the risk-free interest rate. These estimates involve inherent uncertainties and the significant application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. We recognize compensation expense for these options on a straight-line basis over the requisite service period (see Note 13 – “Stockholders’ Equity”). Income Taxes Income taxes are accounted for under the liability method. Deferred income taxes are provided for temporary differences between the financial reporting and the tax bases of assets and liabilities. If we determine in the future that it is more likely than not that we will not realize all or a portion of the deferred tax assets, we will record a valuation allowance in the period the determination is made (see Note 15 – “Income Taxes”). Changes in tax rates are reflected in the tax provision as they occur. Net Income Per Common Share Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments — Credit Losses” (“ASU 2016-13”), which introduced a new model for recognizing credit losses on financial instruments based on an estimate of the current expected credit losses. The new current expected credit losses (“CECL”) model generally calls for the immediate recognition of all expected credit losses and applies to financial instruments and other assets, including accounts receivable and other financial assets measured at amortized cost, debt securities and other financial assets. This guidance replaces the previous incurred loss model for measuring expected credit losses and requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities. We adopted ASU 2016-13 as of January 1, 2020, and it did not have an impact on the consolidated financial statements.

Marketable Securities

Marketable Securities	12 Months Ended
	Dec. 31, 2020
Marketable Securities
Marketable Securities	Note 4. Marketable Securities There were no investments in marketable securities at December 31, 2020. At December 31, 2019 investments in marketable securities were classified as available-for-sale and consisted of the following : ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2019 ​ Amortized Unrealized Fair (In thousands) ​ Cost ​ Gains ​ Losses ​ Value U.S. government and agency obligations ​ $ 19,950 ​ $ 14 ​ $ 1 ​ $ 19,963 Corporate debt securities ​ 2,493 ​ 8 ​ — ​ 2,501 Marketable securities ​ $ 22,443 ​ $ 22 ​ $ 1 ​ $ 22,464 ​ There were no net pre-tax unrealized gains for marketable securities at December 31, 2020. There were no sales of marketable securities during the year ended December 31, 2020. There were no marketable securities in an unrealized loss position at December 31, 2020. At December 31, 2019, unrealized losses and the fair value of marketable securities aggregated by investment category and the length of time the securities were in a continuous loss position, were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2019 ​ ​ Less than 12 months ​ 12 months or more ​ Total ​ Fair Unrealized Fair Unrealized ​ Fair Unrealized (In thousands) Value Losses Value Losses Value Losses U.S. government and agency obligations ​ $ 5,997 ​ $ 1 ​ $ — ​ $ — ​ $ 5,997 ​ $ 1 Corporate debt securities ​ — ​ — ​ — ​ — ​ — ​ — Marketable securities ​ $ 5,997 ​ $ 1 ​ $ — ​ $ — ​ $ 5,997 ​ $ 1 ​

Accounts Receivable

Accounts Receivable	12 Months Ended
	Dec. 31, 2020
Accounts Receivable
Accounts Receivable	Note 5. Accounts Receivable We had accounts receivable from two insurers representing approximately 37% and 22% of accounts receivable as of December 31, 2020. We had accounts receivable from two insurers representing approximately 17% and 13% of accounts receivable as of December 31, 2019. Revenue from these insurers accounted for 16% and 10% of our total revenue for the year ended December 31, 2020, and 11% and 8% for the year ended December 31, 2019. The credit risks associated with customers which for these purposes are insurers considers aggregation for entities that are known to be under common control.

Inventories

Inventories	12 Months Ended
	Dec. 31, 2020
Inventories
Inventories	Note 6. Inventories Inventories consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, (In thousands) 2020 2019 Finished goods ​ $ 7,129 ​ $ 6,508 Component parts and work-in-process ​ 11,434 ​ 12,551 Total inventories ​ $ 18,563 ​ $ 19,059 ​

Property and Equipment

Property and Equipment	12 Months Ended
	Dec. 31, 2020
Property and Equipment
Property and Equipment	Note 7. Property and Equipment Property and equipment consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, (In thousands) 2020 2019 Equipment ​ $ 6,909 ​ $ 6,224 Tooling ​ 2,774 ​ 2,615 Furniture and fixtures ​ 1,958 ​ 1,925 Leasehold improvements ​ 1,282 ​ 1,135 Construction in Progress ​ ​ 778 ​ ​ 97 Patient rental equipment ​ ​ — ​ ​ 91 Demonstration equipment ​ ​ 632 ​ ​ 632 Subtotal ​ 14,333 ​ 12,719 Less: accumulated depreciation ​ (7,376) ​ (5,311) Property and equipment, net ​ $ 6,957 ​ $ 7,408 ​ Depreciation expense was $2.4 million, $3.0 million and $3.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Intangible Assets

Intangible Assets	12 Months Ended
	Dec. 31, 2020
Intangible Assets
Intangible Assets	Note 8. Intangible Assets Our patents and other intangible assets are summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ At December 31, 2020 ​ ​ Average ​ Gross ​ ​ ​ ​ ​ ​ Amortization ​ Carrying ​ Accumulated ​ Net (In thousands) Period ​ Amount ​ Amortization ​ Amount Patents ​ 11 years ​ $ 413 ​ $ 65 ​ $ 348 Defensive intangible assets ​ 4 years ​ ​ 1,125 ​ ​ 421 ​ ​ 704 Customer accounts ​ 2 years ​ 125 ​ 63 ​ 62 Total amortizable intangible assets ​ ​ ​ ​ 1,663 ​ ​ 549 ​ ​ 1,114 Patents pending ​ ​ ​ ​ 566 ​ ​ — ​ ​ 566 Total intangible assets ​ ​ ​ $ 2,229 ​ $ 549 ​ $ 1,680 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ At December 31, 2019 ​ ​ Average ​ Gross ​ ​ ​ ​ ​ ​ Amortization ​ Carrying ​ Accumulated ​ Net (In thousands) Period ​ Amount ​ Amortization ​ Amount Patents ​ 11 years ​ $ 4,386 ​ $ 447 ​ $ 3,939 Defensive intangible assets ​ 5 years ​ ​ 1,125 ​ ​ 250 ​ ​ 875 Customer accounts ​ 3 years ​ 125 ​ 37 ​ 88 Total amortizable intangible assets ​ ​ ​ ​ 5,636 ​ ​ 734 ​ ​ 4,902 Patents pending ​ ​ ​ ​ 410 ​ ​ — ​ ​ 410 Total intangible assets ​ ​ ​ $ 6,046 ​ $ 734 ​ $ 5,312 ​ Amortization expense was $0.4 million, $0.5 million, and $0.4 million for the years ended December 31, 2020, 2019 and 2018, respectively. Future amortization expenses are expected as follows: ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ 2021 $ 236 2022 ​ ​ 236 2023 ​ 205 2024 ​ 184 2025 ​ 94 Thereafter ​ 159 Total ​ $ 1,114 ​ The weighted-average remaining amortization period for these intangible assets was 6.3 years as of December 31, 2020. As of December 31, 2018, indicators existed, including the calculation of an undiscounted cash flow in comparison to carrying amount, that indicated the patent-related intangible assets for our Actitouch system were impaired. The primary valuation technique used in estimating the fair value of patent intangible assets is a discounted cash flow approach. Specifically, we used a relief of royalty rate method which applies a royalty rate to estimated sales, with the resulting amounts then discounted using an appropriate market discount rate. The relief of royalty rate is the estimated royalty rate a market participant would pay to acquire the right to market/produce the product. If the resulting discounted cash flows are less than the book value of the intangible asset, impairment exists, and the asset value must be written down. Based on impairment testing performed in the fourth quarter of 2018, the Actitouch assets were deemed to be fully impaired. The impairment was due to an evaluation of projected future demand and sales volume in the context of results over the prior three years, which resulted in the determination this product would be discontinued. As such, we wrote off $1.8 million of intangible assets book value, classified within the reimbursement, general and administrative expenses line of the Consolidated Statements of Operations, as well as $0.7 million in inventory related assets, classified within cost of revenue. In the second quarter of 2020, we reevaluated the Airwear wrap go-to market plan, and determined to focus our strategy on more advanced solutions within our core, long-standing Flexitouch and Entre franchises. Accordingly, we made the strategic decision to discontinue the Airwear wrap in the second quarter of 2020. Due to the planned discontinuation of the product line, we recorded a $4.0 million non-cash impairment charge to fully write-off the inventory and long-lived assets of the Airwear wrap in the quarter ended June 30, 2020. The majority of the impairment charge was comprised of the patent intangible assets and property and equipment, totaling $3.6 million, and was classified within the reimbursement, general and administrative expenses line of the Consolidated Statements of Operations. The inventory-related component of the impairment charge was $0.4 million, and was classified within the cost of revenue line of the Consolidated Statements of Operations.

Accrued Expenses

Accrued Expenses	12 Months Ended
	Dec. 31, 2020
Accrued Expenses
Accrued Expenses	Note 9. Accrued Expenses Accrued expenses consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) At December 31, 2020 At December 31, 2019 Warranty ​ $ 1,606 ​ $ 1,218 Legal and consulting ​ ​ 882 ​ ​ 617 In-transit inventory ​ 634 ​ 106 Travel and business ​ ​ 545 ​ ​ 776 Sales and use tax ​ ​ 193 ​ ​ 200 Clinical studies ​ ​ 67 ​ ​ 85 Lease termination costs ​ ​ — ​ ​ 1,200 Other ​ 496 ​ 296 Total ​ $ 4,423 ​ $ 4,498 ​

Warranty Reserves

Warranty Reserves	12 Months Ended
	Dec. 31, 2020
Warranty Reserves
Warranty Reserves	Note 10. Warranty Reserves The reserve for warranties was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands) 2020 2019 Beginning balance ​ $ 3,759 ​ $ 2,566 Warranty provision ​ 2,957 ​ 2,576 Processed warranty claims ​ (1,875) ​ (1,383) Ending balance ​ $ 4,841 ​ $ 3,759 ​ ​ ​ ​ ​ ​ ​ Accrued warranty reserve, current ​ $ 1,606 ​ $ 1,218 Accrued warranty reserve, non-current ​ ​ 3,235 ​ ​ 2,541 Total accrued warranty reserve ​ $ 4,841 ​ $ 3,759 ​

Credit Agreement

Credit Agreement	12 Months Ended
	Dec. 31, 2020
Credit Agreement
Credit Agreement	Note 11. Credit Agreement On August 3, 2018, we entered into a credit agreement with Wells Fargo Bank, National Association, which was amended by a First Amendment dated February 12, 2019, a Waiver and Second Amendment dated March 25, 2019, and a Third Amendment dated August 2, 2019 (collectively, the “Credit Agreement”), which expires on August 3, 2021. The Credit Agreement provides for a $10.0 million revolving credit facility. The revolving credit facility expires on August 3, 2021. Subject to satisfaction of certain conditions, we may increase the amount of the revolving loans available under the Credit Agreement and/or add one or more term loan facilities in an amount not to exceed an incremental $25.0 million in the aggregate, such that the total aggregate principal amount of loans available under the Credit Agreement (including under the revolving credit facility) does not exceed $35.0 million. Amounts drawn under the revolving credit facility bear interest, at our option, at a rate equal to (a) the highest of (i) the prime rate, (ii) the federal funds rate plus 0.50% and (iii) LIBOR for an interest period of one month plus 1% (the “Base Rate”) plus an applicable margin or (b) LIBOR plus the applicable margin. The applicable margin is 0.40% to 1.15% on loans bearing interest at the Base Rate and 1.40% to 2.15% on loans bearing interest at LIBOR, in each case depending on our consolidated total leverage ratio. Undrawn portions of the revolving credit facility are subject to an unused line fee at a rate per annum from 0.200% to 0.275%, depending on our consolidated total leverage ratio. As of December 31, 2020, we did not have any outstanding borrowings under the Credit Agreement. Our obligations under the Credit Agreement are secured by a security interest in substantially all of our and our subsidiaries’ assets and are also guaranteed by our subsidiaries. The Credit Agreement limits our ability to make capital expenditures during a fiscal year in excess of the amounts set forth in the Credit Agreement, which are $5.0 million for 2018, $15.0 million for 2019, $15.0 million for 2020 and $9.0 million for 2021. The Credit Agreement requires that we (i) not permit, as of the last day of each fiscal quarter, our consolidated total leverage ratio to exceed 3.00 to 1.00 and (ii) maintain minimum cash and cash equivalents, measured on the last day of each fiscal quarter, of not less than $7.5 million (subject to a temporary reduction to $5.0 million for the two fiscal quarters immediately following a permitted acquisition). As of December 31, 2020, we were in compliance with all financial covenants under the Credit Agreement. The Credit Agreement also contains certain other restrictions and covenants, which, among other things, restrict our ability to acquire or merge with another entity, dispose of our assets, make investments, loans or guarantees, incur additional indebtedness, create liens or other encumbrances, or pay dividends or make other distributions. Amounts due under the Credit Agreement may be accelerated upon an Event of Default (as defined in the Credit Agreement), such as breach of a representation, covenant or agreement of ours, defaults with respect to certain of our other material indebtedness or the occurrence of bankruptcy if not otherwise waived or cured. We may use the proceeds from advances under the revolving credit facility (i) to finance capital expenditures, (ii) to pay fees, commissions and expenses in connection with the Credit Agreement and (iii) for working capital and general corporate purposes.

Commitments and Contingencies

Commitments and Contingencies	12 Months Ended
	Dec. 31, 2020
Commitments and Contingencies
Commitments and Contingencies	Note 12. Commitments and Contingencies Lease Obligations We lease property and equipment under operating leases, typically with terms greater than 12 months, and determine if an arrangement contains a lease at inception. In general, an arrangement contains a lease if there is an identified asset and we have the right to direct the use of and obtain substantially all of the economic benefit from the use of the identified asset. We record an operating lease liability at the present value of lease payments over the lease term on the commencement date. The related right of use (“ROU”) operating lease asset reflects rental escalation clauses, as well as renewal options and/or termination options. The exercise of lease renewal and/or termination options are at our discretion and are included in the determination of the lease term and lease payment obligations when it is deemed reasonably certain that the option will be exercised. When available, we use the rate implicit in the lease to discount lease payments to present value; however, certain leases do not provide a readily determinable implicit rate. Therefore, we must estimate our incremental borrowing rate to discount the lease payments based on information available at lease commencement. We classify our leases as buildings, vehicles or computer and office equipment and do not separate lease and nonlease components of contracts for any of the aforementioned classifications. In accordance with applicable guidance, we do not record leases with terms that are less than one year on the Consolidated Balance Sheets. None of our lease agreements contain material restrictive covenants or residual value guarantees. Buildings We lease certain office and warehouse space at various locations in the United States where we provide services. These leases are typically greater than one year with fixed, escalating rents over the noncancelable terms and, therefore, ROU operating lease assets and operating lease liabilities are recorded on the Consolidated Balance Sheets, with rent expense recognized on a straight-line basis over the term of the lease. The remaining lease terms vary from approximately two In March 2008, we entered into a noncancelable operating lease agreement for building space for our previous corporate headquarters that provided for monthly rent, real estate taxes and operating expenses that was subsequently extended to July 31, 2021. Due to the move to our new headquarters in September 2019, we entered into a termination agreement for our former corporate headquarters on December 31, 2019. We agreed to pay $1.2 million in order to terminate all future rights and obligations of the lease. The lease was removed from our ROU operating lease assets and operating lease liabilities and the total net loss on termination of $1.1 million was recorded in the reimbursement, general and administrative line of our Consolidated Statements of Operations. We entered into a lease (“initial lease”) in October 2018, for approximately 80,000 square feet of office space for our new corporate headquarters in Minneapolis, Minnesota. In December 2018, we amended the initial lease to add approximately 29,000 square feet of additional office space, which is accounted for as a separate lease (“second lease”) in accordance with ASC 842. In December 2019, we further amended the lease which extended the expiration date of the initial lease, extended the expiration date of and added approximately 4,000 square feet to the second lease, as well as added approximately 37,000 square feet of additional office space, accounted for as a separate lease (“third lease”). The portion of the space under the initial lease was placed in service in September 2019. This portion was recognized as an operating lease and included in the ROU operating lease assets and operating lease liabilities on the Consolidated Balance Sheets. The portion of the space covered under the second lease commenced in the second half of 2020 and the portion of the space covered under the third lease is expected to be occupied and commence in the second half of 2021. Vehicles We lease vehicles for certain members of our field sales organization under a vehicle fleet program whereby the initial, noncancelable lease is for a term of 367 days, thus more than one year. Subsequent to the initial term, the lease becomes a month-to-month, cancelable lease. As of December 31, 2020, we had approximately 59 vehicles with agreements within the initial, noncancelable lease term that are recorded as ROU operating lease assets and operating lease liabilities. In addition to monthly rental fees specific to the vehicle, there are fixed monthly nonlease components that have been included in the ROU operating lease assets and operating lease liabilities. The nonlease components are not significant. Computer and Office Equipment We also have operating lease agreements for certain computer and office equipment. The remaining lease terms as of December 31, 2020, ranged from less than one year to approximately three years with fixed monthly payments that are included in the ROU operating lease assets and operating lease liabilities. The leases provide an option to purchase the related equipment at fair market value at the end of the lease. The leases will automatically renew as a month-to-month rental at the end of the lease if the equipment is not purchased or returned. Lease Position, Undiscounted Cash Flow and Supplemental Information The table below presents information related to our ROU operating lease assets and operating lease liabilities that we have recorded: ​ ​ ​ ​ ​ ​ ​ ​ (In thousands) At December 31, 2020 At December 31, 2019 Right of use operating lease assets ​ $ 20,132 ​ $ 15,885 ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities: ​ ​ ​ ​ ​ ​ Current ​ $ 2,006 ​ $ 1,454 Non-current ​ 19,388 ​ 15,134 Total ​ $ 21,394 ​ $ 16,588 ​ ​ ​ ​ ​ ​ ​ Operating leases: ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ 9.4 years ​ ​ 10.1 years Weighted average discount rate ​ ​ 4.4% ​ ​ 4.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2020 ​ 2019 Supplemental cash flow information for our operating leases: ​ ​ ​ ​ ​ ​ Cash paid for operating lease liabilities ​ $ 2,646 ​ $ 1,799 Non-cash right of use assets obtained in exchange for new operating lease obligations ​ $ 6,789 ​ $ 18,891 ​ The table below reconciles the undiscounted cash flows under the operating lease liabilities recorded on the Consolidated Balance Sheets for the periods presented: ​ ​ ​ ​ ​ (In thousands) ​ ​ ​ 2021 $ 2,894 2022 ​ ​ 2,643 2023 ​ 2,605 2024 ​ 2,575 2025 ​ 2,654 Thereafter ​ 15,345 Total minimum lease payments ​ ​ 28,716 Less: Amount of lease payments representing interest ​ ​ (7,322) Present value of future minimum lease payments ​ ​ 21,394 Less: Current obligations under operating lease liabilities ​ ​ (2,006) Non-current obligations under operating lease liabilities ​ $ 19,388 ​ As of December 31, 2020, we have additional lease commitments of $7.1 million related to amendments to existing building leases that have not yet commenced. As the lessee, we are involved in providing guidance to the lessor for related improvements, however these improvements are managed and owned by the lessor. Operating lease costs accounted for under ASC 842 for the years ended December 31, 2020 and 2019, was $3.0 million and $2.1 million, respectively. Rent expense accounted for under ASC 840 for the year ended December 31, 2018, was $1.5 million. Major Vendors We had purchases from two vendors that accounted for 32% of total purchases for the year ended December 31, 2020. We had purchases from two vendors that accounted for 37% of total purchases for the year ended December 31, 2019. Purchase Commitment We issued purchase orders in 2020 totaling $19.5 million for goods that we expect to receive within the next year. Retirement Plan We maintain a 401(k) retirement plan for our employees to which eligible employees can contribute a percentage of their pre-tax compensation. Discretionary contributions to the 401(k) plan totaled $0.3 million for each of the years ended December 31, 2020 and 2019, and $0.2 million for the year ended December 31, 2018. Legal Proceedings From time to time, we are subject to various claims and legal proceedings arising in the ordinary course of business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. On February 13, 2019, we were served with a sealed amended complaint venued in the United States District Court in the Southern District of Texas, Houston Division, captioned United States ex rel Veterans First Medical Supply, LLC vs. Tactile Medical Systems Technology, Inc., qui tam action on behalf of the United States brought by one of our competitors. The United States has declined to intervene in this action. The complaint alleges that we violated the Federal Anti-Kickback Statute claiming that we submitted false claims and made false statements in connection with the Medicare and Medicaid programs, and that we engaged in unlawful retaliation in violation of the Federal False Claims Act. The complaint seeks damages, statutory penalties, attorneys’ fees, treble damages and costs. We filed a motion to dismiss on April 5, 2019. This motion was denied on February 21, 2020. On March 6, 2020, we filed our answer to the complaint and asserted counterclaims. On May 7, 2020, the plaintiff filed a motion to dismiss our counterclaims. On September 8, 2020, we filed a motion for Partial Summary Judgment. On January 2, 2021, the plaintiff filed a motion for Partial Summary Judgment. These motions are currently pending. We believe that the plaintiff’s allegations are without merit and we intend to continue to vigorously defend against the lawsuit. On September 29, 2020, a complaint in a purported securities class action lawsuit was filed against us and three of our present or former officers in the United States District Court for the District of Minnesota under the following caption: Brian Mart, Individually and on Behalf of All Others Similarly Situated v. Tactile Systems Technology, Inc., et al.

Stockholders' Equity

Stockholders' Equity	12 Months Ended
	Dec. 31, 2020
Stockholders' Equity
Stockholders' Equity	Note 13. Stockholders' Equity We completed an initial public offering of our common stock on August 2, 2016, in which we sold 4,120,000 shares of our common stock at a public offering price of $10.00 per share. Immediately prior to the completion of the initial public offering, all then-outstanding shares of our Series A and Series B preferred stock were converted into 5,924,453 shares of our common stock. Our Series A preferred stock converted to common stock at a ratio of 1-for-1.03 and our Series B preferred stock converted to common stock at a ratio of 1-for-1. In addition, immediately prior to the completion of the initial public offering, we issued 2,354,323 additional shares of our common stock that our Series A and Series B preferred stockholders were entitled to receive in connection with the conversion of the preferred stock, and we issued 956,842 shares of our common stock to pay accrued dividends on our Series B preferred stock. We also paid $8.2 million in cumulative accrued dividends to our Series A convertible preferred stockholders in connection with the initial public offering, including $0.1 million of dividends paid to the holders of the common restricted shares. Stock-Based Compensation Our 2016 Equity Incentive Plan (the “2016 Plan”) authorizes us to grant stock options, stock appreciation rights, restricted stock, stock units and other stock-based awards to employees, non-employee directors and certain consultants and advisors. There were up to 4,800,000 shares of our common stock initially reserved for issuance pursuant to the 2016 Plan. The 2016 Plan provides that the number of shares reserved and available for issuance under the 2016 Plan will automatically increase annually on January 1 of each calendar year, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the lesser of: (a) 5% of the number of common shares of stock outstanding as of December 31 of the immediately preceding calendar year, or (b) 2,500,000 shares; provided, however, that our Board of Directors may determine that any annual increase be a lesser number. In addition, all awards granted under our 2007 Omnibus Stock Plan and our 2003 Stock Option Plan that were outstanding when the 2016 Plan became effective and that are forfeited, expire, are cancelled, are settled for cash or otherwise not issued, will become available for issuance under the 2016 Plan. Pursuant to the automatic increase feature of the 2016 Plan, 972,591 and 952,697 shares were added as available for issuance thereunder on January 1, 2021 and 2020, respectively. ​ Upon adoption and approval of the 2016 Plan, all of our previous equity incentive compensation plans were terminated. However, existing awards under those plans continue to vest in accordance with the original vesting schedules and will expire at the end of their original terms. ​ In the second fiscal quarter of 2020, our Board of Directors appointed a new President and Chief Executive Officer (“CEO”), effective June 8, 2020. In conjunction with the acceptance of the written offer, our CEO received both restricted stock units and stock option awards under our 2016 Plan during the third fiscal quarter of 2020 and the stock options have a seven year term. A portion of the awards will vest on June 30, 2021, with the remaining portion of the awards vesting over a period of three years from the date of grant. Further, all of the stock options included in these awards require that our stock price exceed $40.15 for 20 consecutive trading days during the term of the option in order to vest. The fair value of stock options subject to the market condition was estimated, at the date of grant, using the Monte Carlo Simulation model. The following table sets forth the estimated fair value of stock options granted and the assumptions on which the fair value was determined: ​ ​ ​ ​ 2020 Expected term 4.5 years Expected volatility 45.39% Risk-free interest rate 0.4% Expected dividend yield 0% Fair value on the date of grant $13.60 - $14.70 ​ We recorded total stock-based compensation expense of $10.7 million, $9.8 million and $8.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. This expense was allocated as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands) 2020 2019 2018 Cost of revenue ​ $ 539 ​ $ 329 ​ $ 160 Sales and marketing expenses ​ ​ 5,058 ​ ​ 4,331 ​ ​ 3,255 Research and development expenses ​ ​ 360 ​ ​ 372 ​ ​ 242 Reimbursement, general and administrative expenses ​ ​ 4,732 ​ ​ 4,792 ​ ​ 4,317 Total stock-based compensation expense ​ $ 10,689 ​ $ 9,824 ​ $ 7,974 ​ Total stock-based compensation expense includes a modification of share-based awards held by a former executive resulting in a charge of $0.2 million and $1.0 million for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019, there was no remaining unrecognized pre-tax compensation expense related to this modification. Stock Options Stock options issued to participants other than non-employees typically vest over three or four years and typically have a contractual term of seven or ten years . Stock-based compensation expense included in our Consolidated Statements of Operations for stock options was $4.0 million, $2.7 million and $2.1 million for the years ended December 31, 2020, 2019 and 2018 , respectively. The total grant date fair value of options vested during the year was $3.0 million, $2.3 million and $1.5 million for the years ended December 31, 2020, 2019 and 2018 , respectively. At December 31, 2020 , there was approximately $7.7 million of total unrecognized pre-tax stock option expense under our equity compensation plans, which is expected to be recognized on a straight-line basis over a weighted-average period of 2.0 years. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, other than options that have a market-based vesting condition, which are valued using the Monte Carlo Simulation model. Annually, we make predictive assumptions regarding future stock price volatility, dividend yield, expected term and forfeiture rate. The dividend yield assumption is based on expected annual dividend yield on the grant date. To date, no dividend on common stock has been paid by us. Expected volatility was estimated using the average historical volatility of public companies of similar size and industry over the similar period as the expected term assumption used for our options. The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group. We use the “simplified method” to determine the expected term of the stock option grants. We utilize this method because we do not have sufficient public company exercise data in which to make a reasonable estimate. The following table sets forth the estimated fair values of our stock options granted in each of the years indicated, and the assumptions on which the fair values were determined: ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2019 2018 Expected term 4.5 ​ 4 ​ 4 Expected volatility 44.1 - 46.4% ​ 43.2 - 44.6% ​ 42.7 - 43.4% Risk-free interest rate 0.2 - 0.9% ​ 1.6 - 2.6% ​ 2.6 - 3.1% Expected dividend yield 0% ​ 0% ​ 0% Fair value on the date of grant $13.45 - $18.64 ​ $19.57 - $33.12 ​ $12.46 - $29.07 ​ Our stock option activity for the three years ended December 31, 2020, 2019 and 2018, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Average ​ Average ​ Aggregate ​ ​ Options ​ Exercise Price ​ Remaining ​ Intrinsic (In thousands except options and per share data) ​ Outstanding ​ Per Share (1) ​ Contractual Life ​ Value (2) Balance at December 31, 2017 ​ 1,487,720 ​ $ 8.41 ​ 6.2 years ​ $ 29,611 Granted ​ 203,614 ​ $ 47.25 ​ ​ ​ ​ ​ Exercised ​ (553,375) ​ $ 2.74 ​ ​ ​ $ 25,393 Forfeited ​ (61,424) ​ $ 21.27 ​ ​ ​ ​ ​ Balance at December 31, 2018 ​ 1,076,535 ​ $ 17.94 ​ 6.5 years ​ $ 31,172 Granted ​ 189,076 ​ $ 59.52 ​ ​ ​ ​ ​ Exercised ​ (321,806) ​ $ 8.81 ​ ​ ​ $ 16,026 Forfeited ​ (76,322) ​ $ 36.50 ​ ​ ​ ​ ​ Cancelled/Expired ​ (528) ​ $ 19.64 ​ ​ ​ ​ ​ Balance at December 31, 2019 ​ 866,955 ​ $ 28.76 ​ 6.3 years ​ $ 33,957 Granted ​ 378,695 ​ $ 44.84 ​ ​ ​ ​ ​ Exercised ​ (147,741) ​ $ 7.24 ​ ​ ​ $ 6,540 Forfeited ​ (54,824) ​ $ 50.25 ​ ​ ​ ​ ​ Cancelled/Expired ​ (3,376) ​ $ 63.61 ​ ​ ​ ​ ​ Balance at December 31, 2020 ​ 1,039,709 ​ $ 36.43 ​ 5.6 years ​ $ 13,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at December 31, 2020 ​ 489,866 ​ $ 25.39 ​ 4.8 years ​ $ 11,099 ​ (1) The exercise price of each option granted during the periods shown was equal to the market price of the underlying stock on the date of grant. (2) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period. Options exercisable of 473,222 at December 31, 2019, and 622,675 at December 31, 2018 had weighted average exercise prices of $14.14 and $6.75, respectively. The following summarizes additional information about our stock options: ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, Number of: ​ 2020 ​ 2019 Non-vested options beginning of the year ​ ​ 393,733 ​ ​ 453,860 Non-vested options end of the year ​ ​ 549,843 ​ ​ 393,733 Vested options ​ ​ 489,866 ​ ​ 473,222 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, Weighted-average grant date fair value of: ​ 2020 ​ 2019 Non-vested options beginning of the year ​ $ 19.55 ​ $ 14.80 Non-vested options end of the year ​ ​ 18.03 ​ ​ 19.55 Vested options ​ ​ 10.67 ​ ​ 6.01 Forfeited options ​ ​ 20.54 ​ ​ 16.66 ​ Time-Based Restricted Stock Unit s We have granted time-based restricted stock units to certain participants under the 2016 Plan that are stock-settled with common shares. Time-based restricted stock units granted under the 2016 Plan vest over one to three years . Stock-based compensation expense included in our Consolidated Statements of Operations for time-based restricted stock units was $5.2 million, $4.0 million and $3.5 million for the years ended December 31, 2020, 2019 and 2018 , respectively. As of December 31, 2020 , there was approximately $6.8 million of total unrecognized pre-tax compensation expense related to outstanding time-based restricted stock units that is expected to be recognized over a weighted-average period of 2.0 years. Our time-based restricted stock unit activity for the years ended December 31, 2020, 2019 and 2018 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ Average Grant Aggregate ​ ​ Units ​ Date Fair Value ​ Intrinsic (In thousands except unit and per unit data) ​ Outstanding ​ Per Unit ​ Value (1) Balance at December 31, 2017 ​ 441,507 ​ $ 16.38 ​ $ 12,795 Granted ​ 103,417 ​ $ 38.13 ​ ​ ​ Vested ​ (199,733) ​ $ 15.53 ​ ​ ​ Cancelled ​ (35,559) ​ $ 20.74 ​ ​ ​ Balance at December 31, 2018 ​ 309,632 ​ $ 23.69 ​ $ 14,104 Granted ​ 73,920 ​ $ 64.82 ​ ​ ​ Vested ​ (193,339) ​ $ 20.21 ​ ​ ​ Cancelled ​ (18,526) ​ $ 38.36 ​ ​ ​ Balance at December 31, 2019 ​ 171,687 ​ $ 43.74 ​ $ 11,591 Granted ​ 175,582 ​ $ 46.42 ​ ​ ​ Modification ​ 2,288 ​ $ 21.85 ​ ​ ​ Vested ​ (118,014) ​ $ 37.57 ​ ​ ​ Cancelled ​ (20,074) ​ $ 53.03 ​ ​ ​ Balance at December 31, 2020 ​ 211,469 ​ $ 48.29 ​ $ 9,503 ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred and unissued at December 31, 2020 (2) ​ 6,469 ​ $ 38.94 ​ $ 291 ​ (1) The aggregate intrinsic value of time-based restricted stock units outstanding was based on our closing stock price on the last trading day of the period. (2) For the year ended December 31, 2020 , there were 1,108 restricted stock units granted to non-employee directors in lieu of their quarterly cash retainer payments. These restricted stock units were fully vested upon grant and represent the right to receive one share of common stock, per unit, upon the earlier of the director’s termination of service as a director of ours or the occurrence of a change of control of us. These restricted stock units are included in the “Granted” line in the table above and are also included in the “Vested” line in the table above due to their being fully vested upon grant. On December 31, 2020, upon her departure from our board of directors, we issued 748 shares of common stock to Dr. Pegus, which represented the settlement of restricted stock units that had been previously granted to her in lieu of her quarterly director retainer payments. Excluding those restricted stock units, as of December 31, 2020 , there were 6,469 outstanding restricted stock units that had been previously granted to non-employee directors in lieu of their quarterly director retainer payments. These restricted stock units are not included in the “Balance at December 31, 2020 ” line in the table above because they are fully vested. Performance-Based Restricted Stock Units We have granted performance-based restricted stock units (“PSUs”) to certain participants under the 2016 Plan. These PSUs have both performance-based and time-based vesting features. The PSUs granted in 2018 were earned to the extent performance goals based on revenue and adjusted EBITDA were achieved in 2019. The PSUs granted in 2019 will be earned if and to the extent performance goals based on revenue and adjusted EBITDA are achieved in 2020. The PSUs granted in 2020 will be earned if and to the extent performance goals based on revenue and adjusted EBITDA are achieved in 2021. The number of PSUs earned will depend on the level at which the performance targets are achieved, and can range from 50% of target if threshold performance is achieved and up to 150% of target if maximum performance is achieved. One-third two-thirds Stock-based compensation expense included in our Consolidated Statements of Operations for PSUs was $0.5 million, $2.3 million, and $0.7 million for the years ended December 31, 2020, 2019 and 2018, respectively. The stock-based compensation expense for the year ended December 31, 2020 reflects a $1.0 million benefit due to a change in the estimated payout associated with PSUs granted in 2019 being below the minimum performance target threshold level, as defined. As of December 31, 2020, there was approximately $1.1 million of total unrecognized pre-tax compensation expense related to outstanding PSUs that is expected to be recognized over a weighted average period of 2.0 years. ​ Our performance-based restricted stock unit activity at the estimated payout of 150% of target for the years ended December 31, 2020, 2019 and 2018, was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance- ​ Weighted- ​ ​ ​ ​ Based Average Grant Aggregate ​ ​ Units ​ Date Fair Value ​ Intrinsic (In thousands except unit and per unit data) ​ Outstanding ​ Per Unit ​ Value (1) Balance at December 31, 2017 ​ — ​ $ — ​ $ — Granted ​ 70,680 ​ $ 33.53 ​ ​ ​ Vested ​ — ​ $ — ​ ​ ​ Cancelled ​ (5,253) ​ $ 32.36 ​ ​ ​ Balance at December 31, 2018 ​ 65,427 ​ $ 33.62 ​ $ 2,980 Granted ​ 25,724 ​ $ 72.64 ​ ​ ​ Vested ​ — ​ $ — ​ ​ ​ Cancelled ​ — ​ $ — ​ ​ ​ Balance at December 31, 2019 ​ 91,151 ​ $ 44.63 ​ $ 6,154 Granted ​ 31,731 ​ $ 50.41 ​ ​ ​ Vested ​ (26,204) ​ $ 33.58 ​ ​ ​ Cancelled ​ (17,375) ​ $ 52.87 ​ ​ ​ Balance at December 31, 2020 ​ 79,303 ​ $ 47.83 ​ $ 3,564 ​ (1) The aggregate intrinsic value of performance-based restricted stock units outstanding was based on our closing stock price on the last trading day of the period Employee Stock Purchase Plan Our employee stock purchase plan (“ESPP”), which was approved by our Board of Directors on April 27, 2016 and by our stockholders on June 20, 2016, allows participating employees to purchase shares of our common stock at a discount through payroll deductions. The ESPP is available to all of our employees and employees of participating subsidiaries. Participating employees may purchase common stock, on a voluntary after-tax basis, at a price equal to 85% of the lower of the closing market price per share of our common stock on the first or last trading day of each stock purchase period. The ESPP provides for six-month purchase periods, beginning on May 16 and November 16 of each calendar year. A total of 1,600,000 shares of common stock was initially reserved for issuance under the ESPP. This share reserve will automatically be supplemented each January 1, commencing in 2017 and ending on and including January 1, 2026, by an amount equal to the least of (a) 1% of the shares of our common stock outstanding on the immediately preceding December 31, (b) 500,000 shares or (c) such lesser amount as our Board of Directors may determine. Pursuant to the automatic increase feature of the ESPP, 194,518 and 190,539 shares were added as available for issuance thereunder on January 1, 2021 and 2020, respectively. As of December 31, 2020, 1,587,904 shares were available for future issuance under the ESPP. We recognized $0.9 million, $0.9 million and $0.7 million in stock-based compensation expense related to the ESPP for the years ended December 31, 2020, 2019 and 2018, respectively.

Revenue

Revenue	12 Months Ended
	Dec. 31, 2020
Revenue
Revenue	Note 14. Revenue We derive our revenue from the sale and rental of our compression products to our customers in the United States. The following table presents our revenue, inclusive of sales and rental revenue, disaggregated by product: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, (In thousands) 2020 ​ 2019 ​ 2018 Revenue ​ ​ ​ ​ ​ ​ ​ ​ Flexitouch system $ 163,914 ​ $ 171,323 ​ $ 131,935 Other products (1) 23,216 ​ 18,169 ​ 11,816 Total $ 187,130 ​ $ 189,492 ​ $ 143,751 ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of total revenue ​ ​ ​ ​ ​ ​ ​ ​ Flexitouch system 88% ​ 90% ​ 92% Other products (1) 12% ​ 10% ​ 8% Total 100% ​ 100% ​ 100% ​ (1) The “other products” line primarily includes revenue from our Entre system. The Actitouch system and the Airwear wrap contributed immaterial amounts of revenue for each of the years ended December 30, 2020, 2019 and 2018. Rental revenue for the years ended December 31, 2020, 2019 and 2018, was primarily related to private insurers. Our revenue from third-party payers, inclusive of sales and rental revenue, for the years ended December 31, 2020, 2019 and 2018 are summarized in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, (In thousands) 2020 ​ 2019 ​ 2018 Private insurers and other payers $ 132,789 ​ $ 136,397 ​ $ 102,172 Veterans Administration ​ 24,485 ​ ​ 31,275 ​ ​ 28,043 Medicare ​ 29,856 ​ ​ 21,820 ​ ​ 13,536 Total $ 187,130 ​ $ 189,492 ​ $ 143,751 ​ Our rental revenue is derived from rent-to-purchase arrangements that typically range from three to ten months. Under ASC 840, our rental revenue was recognized as month-to-month, cancelable leases; however, because title transfers to the patient, with whom we have the contract, upon the termination of the lease term and because collectability is probable, under ASC 842, these are recognized as sales-type leases. Each rental agreement contains two components, the controller and related garments, both of which are interdependent and recognized as one lease component. Rental agreements initiated subsequent to January 1, 2019, are recorded as sales-type leases in accordance with ASC 842, whereby rental revenue and cost of rental revenue are recognized upon the lease commencement date. In 2019, in accordance with applicable guidance, we continued to recognize rental agreements commencing prior to December 31, 2018, on a month-to-month basis as an operating lease until they were completed. These rental agreements do not have an impact on the revenue results in 2020. Total rental revenue for the year ended December 31, 2019, includes both operating and sales-type lease revenue. Operating lease revenue was $5.0 million for the year ended December 31, 2019. The revenue and associated cost of revenue of sales-type leases are recognized on the lease commencement date and a net investment in leases is recorded on the Consolidated Balance Sheet. We bill the patients’ insurance payers monthly over the duration of the rental term. We record the net investment in leases and recognize revenue upon commencement of the lease in the amount of the expected consideration to be received through the monthly payments. Similar to our sales revenue, the transaction price is impacted by multiple factors, including the terms and conditions contracted by various third party payers. As the rental contract resides with the patients, we have elected the portfolio approach, at the payer level, to determine the expected consideration, which considers the impact of early terminations. While the contract is with the patient, in certain circumstances, the third party payer elects an initial rental period with an option to extend. We assess the likelihood of extending the lease at the onset of the lease to determine if the option is reasonably certain to be exercised. As the lease is short-term in nature, we anticipate collection of substantially all of the net investment within the first year of the lease agreement. Completion of these payments represents the fair market value of the equipment, and as such, interest income is not applicable. Sales-type lease revenue and the associated cost of revenue for the years ended December 31, 2020 and 2019, was: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) ​ 2020 ​ 2019 Sales-type lease revenue ​ $ 25,633 ​ $ 21,570 Cost of sales-type lease revenue ​ 9,011 ​ 7,510 Sales-type lease gross profit ​ $ 16,622 ​ $ 14,060 ​

Income Taxes

Income Taxes	12 Months Ended
	Dec. 31, 2020
Income Taxes
Income Taxes	Note 15. Income Taxes The provision (benefit) for income tax expense consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 2018 Current income taxes, Federal ​ $ (653) ​ $ 205 ​ $ 2,416 Current income taxes, State ​ ​ 294 ​ ​ 100 ​ ​ 778 ​ ​ ​ (359) ​ ​ 305 ​ ​ 3,194 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred income taxes, Federal ​ (833) ​ (303) ​ (4,804) Deferred income taxes, State ​ ​ (395) ​ ​ 153 ​ ​ (1,537) ​ ​ ​ (1,228) ​ ​ (150) ​ ​ (6,341) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized tax benefit, Federal ​ — ​ — ​ — Unrecognized tax benefit, State ​ ​ (54) ​ ​ 3 ​ ​ — ​ ​ ​ (54) ​ ​ 3 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total (benefit) provision for income taxes ​ $ (1,641) ​ $ 158 ​ $ (3,147) ​ The components of our deferred tax assets and liabilities were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, (In thousands) 2020 2019 Deferred tax assets: ​ ​ ​ ​ ​ ​ Operating lease liability ​ $ 5,329 ​ $ 4,137 Net operating loss carryforwards ​ ​ 312 ​ ​ 3,179 Accounts receivable and inventory reserves ​ ​ 3,887 ​ ​ 2,589 Stock-based compensation ​ ​ 3,558 ​ ​ 2,393 Accrued liabilities ​ 1,489 ​ 1,239 Warranty reserves ​ ​ 1,206 ​ ​ 936 Intangible assets ​ ​ 612 ​ ​ — Valuation allowance ​ ​ — ​ ​ (185) Other ​ 107 ​ 108 Total deferred tax assets ​ $ 16,500 ​ $ 14,396 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Right of use asset ​ (5,016) ​ (3,962) Fixed assets ​ ​ (1,286) ​ ​ (1,292) Intangible assets ​ ​ — ​ ​ (172) Total deferred tax liabilities ​ $ (6,302) ​ $ (5,426) ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets ​ $ 10,198 ​ $ 8,970 ​ A reconciliation of income tax (benefit) expense to the statutory federal tax rate is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 ​ 2019 ​ 2018 Tax expense at statutory rate 21.0 % ​ 21.0 % ​ 21.0 % State income taxes, net of federal benefit ​ (7.9) ​ ​ 7.3 ​ ​ 11.9 ​ Executive compensation ​ (5.5) ​ ​ 9.1 ​ ​ 11.8 ​ Meals and entertainment ​ (10.6) ​ ​ 2.6 ​ ​ 7.6 ​ Incentive stock options (0.4) ​ 0.2 ​ 1.9 ​ Employee Stock Purchase Plan ​ (8.6) ​ ​ 1.7 ​ ​ 4.5 ​ Valuation allowance ​ 8.0 ​ ​ 1.7 ​ ​ — ​ Return to provision ​ 3.6 ​ ​ (0.4) ​ ​ 3.6 ​ IRS Exam 2.5 ​ ​ — ​ ​ 23.3 ​ Deferred reprice - state — ​ (0.1) ​ (0.3) ​ Federal carryback claim deferred rate differential ​ 38.5 ​ ​ — ​ ​ — ​ Unrecognized tax benefits ​ 2.3 ​ ​ — ​ ​ (4.6) ​ Excess benefit on non-qualified stock options and RSUs ​ 28.0 ​ ​ (41.5) ​ ​ (177.6) ​ Interest and penalties ​ 1.9 ​ ​ (0.2) ​ ​ 6.3 ​ Other (0.2) ​ — ​ 0.1 ​ Net effective rate 72.6 % ​ 1.4 % ​ (90.5) % ​ A reconciliation of unrecognized tax benefits (“UTB”) is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2020 2019 2018 Balance beginning of the year ​ $ 54 ​ $ 51 ​ $ 212 Gross change — tax positions in prior year ​ ​ (54) ​ ​ 3 ​ ​ 3,477 Settlement ​ — ​ — ​ (3,638) Balance end of the year ​ $ — ​ $ 54 ​ $ 51 ​ As of December 31, 2020, we had approximately $0.8 million of state net operating loss (“NOL”) carry-forwards. The state NOL carry-forward amounts expire beginning in tax years 2026 if not utilized. We are subject to income tax examinations in the U.S. federal jurisdiction as well as in various state jurisdictions. U.S. federal and state tax years prior to 2017 are closed to examination as of December 31, 2020. We are not currently under examination by any taxing authority. In the event of any future tax assessments, we have elected to record the income taxes and any related interest and penalties as income tax expense on our statement of operations. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in our consolidated financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”). The Tax Act establishes new tax laws effective for tax years beginning after December 31, 2017, including, but not limited to, the reduction of the U.S. federal corporate income tax rate to 21%. Deferred income taxes result from temporary differences between the reporting of amounts for financial statement purposes and income tax purposes. These differences relate primarily to different methods used for income tax purposes including depreciation and amortization, warranty and vacation accruals, and deductions related to allowances for doubtful accounts receivable and inventory reserves. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. On the basis of this evaluation, all deferred tax assets are expected to be realizable. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for growth.

Net (loss) Income Per Common Sh

Net (loss) Income Per Common Share	12 Months Ended
	Dec. 31, 2020
Net (loss) Income Per Common Share
Net (loss) Income Per Common Share	Note 16. Net (Loss) Income Per Common Share The following table sets forth the computation of our basic and diluted net (loss) income per share: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, (In thousands, except share and per share data) 2020 2019 2018 Net (loss) income $ (620) ​ $ 10,971 ​ $ 6,623 Weighted-average shares outstanding ​ 19,346,929 ​ ​ 18,919,007 ​ ​ 18,252,689 Dilutive effect of stock-based awards ​ — ​ ​ 722,136 ​ ​ 1,094,943 Weighted-average shares used to compute diluted net (loss) income per share ​ 19,346,929 ​ ​ 19,641,143 ​ ​ 19,347,632 Net (loss) income per share - Basic $ (0.03) ​ $ 0.58 ​ $ 0.36 Net (loss) income per share - Diluted $ (0.03) ​ $ 0.56 ​ $ 0.34 ​ The following common stock-based awards were excluded from the computation of diluted net (loss) income per common share for the periods presented because including them would have been anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2020 2019 2018 Restricted stock units ​ 218,686 ​ 38,103 ​ 16,283 Common stock options ​ 1,039,709 ​ 278,363 ​ 111,565 Performance stock units ​ 96,383 ​ 25,724 ​ — Employee stock purchase plan ​ 53,205 ​ 45,182 ​ — Total ​ 1,407,983 ​ 387,372 ​ 127,848 ​

Fair Value Measurements

Fair Value Measurements	12 Months Ended
	Dec. 31, 2020
Fair Value Measurements
Fair Value Measurements	Note 17. Fair Value Measurements We determine the fair value of our assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. We use a fair value hierarchy with three levels of inputs, of which the first two are considered observable and the last unobservable, to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1). The next highest priority is based on quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in non-active markets or other observable inputs (Level 2). The lowest priority is given to unobservable inputs (Level 3). The following provides information regarding fair value measurements for our cash equivalents and marketable securities as of December 31, 2020 and 2019, according to the three-level fair value hierarchy: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2020 ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ ​ ​ Assets ​ Inputs ​ Inputs ​ ​ (In thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total Recurring Fair Value Measurements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market mutual funds ​ $ 16,188 ​ $ — ​ $ — ​ $ 16,188 U.S. government and agency obligations ​ — ​ — ​ — ​ — Total ​ $ 16,188 ​ $ — ​ $ — ​ $ 16,188 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2019 ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ ​ ​ Assets ​ Inputs ​ Inputs ​ ​ (In thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total Recurring Fair Value Measurements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market mutual funds ​ $ 481 ​ $ — ​ $ — ​ $ 481 U.S. government and agency obligations ​ 25,954 ​ — ​ — ​ 25,954 Corporate debt securities ​ — ​ 2,501 ​ — ​ 2,501 Total ​ $ 26,435 ​ $ 2,501 ​ $ — ​ $ 28,936 ​ During the year ended December 31, 2020, there were no transfers within the three-level hierarchy. A significant transfer is recognized when the inputs used to value a security have been changed, which merits a transfer between the disclosed levels of the valuation hierarchy. The fair values for our money market mutual funds, U.S. government and agency obligations and corporate debt securities are determined based on valuations provided by external investment managers who obtain them from a variety of industry standard data providers. The carrying amounts of financial instruments such as cash equivalents, accounts receivable, other assets, accounts payable, accrued expenses and other liabilities approximate their related fair values due to the short-term maturities of these items. Non-financial assets, such as equipment and leasehold improvements, and intangible assets are subject to non-recurring fair value measurements if they are deemed impaired. As of June 30, 2020, we re-measured the value of our intangible assets related to the Airwear wrap product line to their fair value, which was deemed to be $0.

Quarterly Financial Information

Quarterly Financial Information (Unaudited)	12 Months Ended
	Dec. 31, 2020
Quarterly Financial Information (Unaudited)
Quarterly Financial Information (Unaudited)	Note 18. Quarterly Financial Information (Unaudited) The quarterly financial data presented below should be read in conjunction with the consolidated financial statements and related notes: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Mar. 31, Jun. 30, Sep. 30, Dec. 31, (In thousands, except per share data) 2020 2020 2020 2020 Revenue ​ $ 43,675 ​ $ 35,120 ​ $ 49,092 ​ $ 59,243 Gross profit ​ 31,073 ​ 24,912 ​ 34,972 ​ 41,853 (Loss) income from operations ​ (4,451) ​ (7,963) ​ 1,794 ​ 6,991 Net (loss) income ​ (1,307) ​ (13,850) ​ 2,424 ​ 12,113 Net (loss) income per share - Basic (1) ​ $ (0.07) ​ $ (0.72) ​ $ 0.12 ​ $ 0.62 Net (loss) income per share - Diluted (1) ​ $ (0.07) ​ $ (0.72) ​ $ 0.12 ​ $ 0.61 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Mar. 31, Jun. 30, Sep. 30, Dec. 31, (In thousands, except per share data) ​ 2019 2019 2019 2019 Revenues ​ $ 37,617 ​ $ 45,200 ​ $ 49,612 ​ $ 57,063 Gross profit ​ 26,258 ​ 31,505 ​ 35,373 ​ 41,100 (Loss) income from operations ​ (1,802) ​ 3,048 ​ 3,203 ​ 6,049 Net income ​ 1,472 ​ 2,785 ​ 2,431 ​ 4,283 Net income per share - Basic (1) ​ $ 0.08 ​ $ 0.15 ​ $ 0.13 ​ $ 0.23 Net income per share - Diluted (1) ​ $ 0.08 ​ $ 0.14 ​ $ 0.12 ​ $ 0.22 ​ (1) The summation of quarterly per share amounts may not equal the calculation for the full year, as each quarterly calculation is performed discretely.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2020
Summary of Significant Accounting Policies
Basis of Presentation	Our accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the SEC. We have reclassified certain prior year amounts to conform to the current year’s presentation. The results for the year ended December 31, 2020, are not necessarily indicative of results to be expected for any future year.
Principles of Consolidation	Principles of Consolidation Our accompanying consolidated financial statements include the accounts of Tactile Systems Technology, Inc. and its wholly owned subsidiary, Swelling Solutions, Inc. All intercompany balances and transactions have been eliminated in consolidation.
Risks and Uncertainties	Risks and Uncertainties Coronavirus (COVID-19) The United States economy in general and our business specifically have been negatively affected by the COVID-19 pandemic. We have seen adverse impacts as it relates to the decline in the number of patients that healthcare facilities and clinics are able to treat due to enhanced safety protocols. There are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. For that reason, we are unable to reasonably estimate the long-term impact of the pandemic on our business at this time. Our first priority with regard to the COVID-19 pandemic is to ensure the safety and health of our employees, clinicians and patients. Subject to that, we are focusing our efforts on attempting to continue our business operations in this unprecedented environment. Part of our strategy includes changing many of our processes and practices in an effort to help mitigate the impact of COVID-19 on our business so that we can support our clinicians and safely make our at-home therapies available to patients. Since the onset of COVID-19, we have remained proactive to ensure we continue to adapt to our employees, clinicians and patients needs. These changes to our business include, but are not limited to: ● Initially, we modified our operations with the primary focus on keeping our employees safe while continuing to serve our clinicians and patients. As an essential business under federal guidelines, we continued to manufacture product and implemented multiple, smaller rotational shifts and other best practices to help protect the health and safety of our workforce. More recently, we have migrated closer to our pre-COVID work shifts, however we have implemented more stringent safety measures including mandatory use of face masks, social distancing and temperature checks for our employees. ● We have continued to incorporate remote and flexible work arrangements for employees whenever possible, including real-time, online training of our new sales representatives. ● We have continued to limit employee travel and contact restrictions to reduce exposure. ● We have continued to collaborate with payers to modify coverage requirements by serving patients virtually. ● In concert with COVID-19 social distancing requirements and recommendations, we temporarily moved to a “no contact” virtual patient training model. This new model substantially reduced the need for in-person contact and visits to patients’ homes and clinics in order to protect the health and limit the exposure of both our trainers and patients. Accordingly in the second quarter of 2020, we inactivated our independent healthcare practitioners, who acted as at-home trainers to educate patients on the proper use of our systems, in order to allow these individuals to have access to specific COVID related financial relief. We have since reactivated a small number of healthcare practitioners in the same capacity as trainers who educate patients on the proper use of our solutions. ● We continue to transition large, in-person medical education programs in favor of conducting virtual meetings whenever possible. ● When in-person visits are required, we are supporting clinicians and patients by using rigorous infection control practices. We cannot assure you that these changes to our processes and practices will be successful in mitigating the impact of COVID-19 on our business. We continue to evaluate and, if appropriate, will adopt other measures in the future related to the ongoing safety of our employees, clinicians and patients.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and to disclose contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Coronavirus Aid, Relief, and Economic Security Act	Coronavirus Aid, Relief, and Economic Security Act We may receive cash payments from the government during a public health emergency (PHE). We consider the nature and substance of the government funds received and record the cash payment in accordance with the terms and conditions of the funds. In year ended December 31, 2020, we received a grant of from the Public Health and Social Services Emergency Fund (Relief Fund), which was among the provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) signed into law on March 27, 2020. During the year ended December 31, 2020, we
Comprehensive Income (Loss)	Comprehensive Income (Loss) Comprehensive income (loss) reflects the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Our comprehensive income (loss) represents net income (loss) adjusted for unrealized gains and losses on available-for-sale marketable securities and the related taxes.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits and funds invested in available-for-sale securities with original maturities of three months or less at the time of purchase. At December 31, 2020 and 2019, our cash was held primarily in checking and money market accounts.
Marketable Securities and Equity Investments	Marketable Securities and Equity Investments We determine the appropriate classification of our marketable securities as available-for-sale or held-to-maturity at the time of purchase and periodically reevaluate such classification. Debt securities are classified as held - to - maturity when we have the positive intent and ability to hold the securities to maturity. Debt securities for which we do not have the intent or ability to hold to maturity are classified as available-for-sale. Debt securities not classified as held-to-maturity are classified as available-for-sale and are reported at fair value, with unrealized gains and losses included in the determination of comprehensive income, a component of stockholders' equity. We review our available-for-sale securities for impairment to determine if the impairment is temporary or other-than-temporary. A temporary impairment charge results in an unrealized loss being recorded in other comprehensive income. Other-than-temporary impairments are recorded in net income in the period the impairment is determined to be other-than-temporary . Equity investments (including equity securities) with readily determinable fair value are reported at fair value, with unrealized gains and losses included in the determination of net income. For equity investments with no readily determinable fair value, we measure these investments at cost less impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. Such observable price changes may include instances where the investee issues equity securities to new investors, thus creating a new indicator of fair value, as an example. As of December 31, 2020 and 2019, the total carrying value of our equity investments, with no readily determinable fair value, were $0.3 million and $0.7 million, respectively, and are included in other non-current assets on our consolidated balance sheets. On an annual basis, we perform a qualitative assessment considering impairment indicators to evaluate whether these investments are impaired and also monitor for any observable price changes. During the years ended December 31, 2020 and 2019, we did not have any impairment loss on these investments.
Accounts Receivable	Accounts Receivable The majority of our accounts receivable and revenue are from commercial insurance payers and government payers, such as Medicare, the Veterans Administration and Medicaid. Accounts receivable are recorded based on management’s assessment of the expected consideration to be received, based on a detailed review of historical pricing adjustments and collections. Management relies on the results of the assessment, which includes payment history of the applicable payer as well as historical patient collections, as a primary source of information in estimating the collectability of our accounts receivable. We update our assessment on a quarterly basis, which to date has not resulted in any material adjustments to the valuation of our accounts receivable. We believe the assessment provides reasonable estimates of our accounts receivable valuation, and therefore we believe that substantially all accounts receivable are fully collectible. A portion of our claims to Medicare are initially denied and enter the appeals process, where many are ultimately reviewed by an Administrative Law Judge. After final adjudication of all claims, approximately 90% of the claims submitted are approved (this is on a number of claims, not a dollars claimed, basis across all our products). The appeals process can be lengthy, lasting more than a year in most cases. Accordingly, we classify a portion of our Medicare accounts receivable as non-current based on our experience with Medicare collections.
Inventories	Inventories Inventories are valued at the lower of cost (first-in, first-out method) or net realizable value.
Property and Equipment	Property and Equipment Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives of three Major expenditures for property and equipment are capitalized. Maintenance, repairs and minor renewals are expensed as incurred. When assets are retired or otherwise disposed of, their costs and related accumulated depreciation are removed from the accumulated depreciation accounts and the resulting gains or losses are included in income. The value of demonstration equipment in the possession of our field sales representatives is capitalized and depreciated over the estimated useful life of the equipment.
Revenue Recognition	Revenue Recognition We derive revenue from the sales and rentals of our products, which consist of our proprietary line of Flexitouch and Entre systems. We recognize revenue when control of the product has been transferred to our customer, in the amount of the expected consideration to be received for the product. In general, revenue from the sale or rental of a product is recognized upon shipment, unless circumstances dictate that control has not yet passed to the customer. We provide a warranty for our products against defects in material and workmanship for a period of one one of time that may exceed one year. Despite these extended payment terms, no significant financing component is deemed to exist as the terms are not for the benefit of the patient with whom we have the contract. Rather, the extended payment terms occur as a result of an initial claim denial, which subsequently enters the Medicare appeals process as noted below. We commercially distribute our products directly to patients who are referred to us by physicians, therapists or nurses. In most cases, there is a third-party payer, such as a commercial insurer, Medicare or the Veterans Administration involved with the transaction. Our contractual relationship resides with the patient when the third-party payer is either a commercial insurer or Medicare and with the Veterans Administration if the patient is covered under their services. Revenue is recognized from such sales upon transfer of control of the product to the customer at a transaction price determined by collection history. As a result, the transaction price is impacted by multiple factors, including the terms and conditions contracted by various third-party payers, and therefore payments from third-party payers typically are less than our standard charge and represent an implicit price concession, resulting in variable consideration. As most contracts are with each individual sale to a patient, we have elected the portfolio approach to determine the transaction price, and ultimately the expected consideration. The portfolios used to determine transaction price are at the payer level, with pricing for each payer assessed based on the underlying similar characteristics. For any of our products sold to patients covered by private payers, such as commercial insurance companies, revenue is recognized upon shipment. A product is not shipped until we have received a prescription from a physician for our products and, as applicable, receipt of prior authorization from payers. At shipment, we invoice the payer for the total product price, and we recognize revenue in the amount of cash consideration anticipated to be received based on the transaction price. After the insurance payer has remitted payment, we separately invoice the patient for their portion of the payment obligation, such as copayments and deductibles. The transaction price is determined based on the payment history of the applicable payer drawn from actual write-off and collections experience from the payer over a rolling 12-month period, as well as historical patient collections. For our products sold to Medicare patients, we recognize revenue from such sales upon shipment of our products, which can occur only after we have received a prescription from a physician and all applicable patient documentation is obtained. The transaction price for our Entre systems is determined based on the payment history using the same methodology as our private insurers. A portion of our claims for our Flexitouch system are initially denied, and enter the appeals process, which can be lengthy. We assess the variable consideration for each of these claims as a percentage of the total invoice price based on ultimate approval and collection history. For our products sold to the Veterans Administration on behalf of the patient, our contract is with the Veterans Administration rather than the patient. We enter into individual sales contracts with the Veterans Administration on behalf of each patient. These contracts determine the amount of consideration, which is typically paid in full within 2 We incur incremental costs that directly relate to the sales of our products; however, as the amortization period would be less than one year, we have elected the practical expedient to expense these costs as incurred. We sell and rent our products either directly to patients or the Veterans Administration on behalf of patients, who are referred to us by physicians, therapists or nurses. We bill private insurers and other payers, Medicare, and the Veterans Administration directly for purchases or rentals of our product on behalf of a patient and bill patients directly for their cost-sharing amounts, including any portion of an unsatisfied deductible and any copayments or co-insurance obligation. A portion of our revenue is derived from patients who obtain our products under multiple-month rental arrangements. We bill these patients’ insurance payers monthly over the duration of the rental term. Title to these products passes to the patients at the end of the rental period. Patients may return the product before the end of the rental period, and as such these arrangements are deemed to be month-to-month cancelable leases in accordance with Accounting Standards Codification (“ASC”), or ASC 840, “Leases,” if they commenced prior to December 31, 2018. Accordingly, we recognized the related revenue for these rental arrangements monthly, on a pro rata basis, over the lesser of the duration of the rental period or the period during which the patient possesses the product. Rental agreements commencing after January 1, 2019, are recorded as sales-type leases in accordance with Accounting Standards Update (“ASU”) No. 2016-02, “Leases” (Topic 842) (“ASC 842”). Accordingly, as sales-type leases, the transaction price for the entire rental term is recognized upon transfer of control. We elected the practical expedient to not reassess the lease classification for leases in existence at December 31, 2018.
Advertising	Advertising Advertising costs are charged to operations when incurred. Advertising expense was $0.1 million for each of the years ended December 31, 2020, 2019 and 2018.
Research and Development Costs	Research and Development Costs We expense research and development costs as incurred, including expenses associated with clinical research studies and development.
Shipping and Handling Costs	Shipping and Handling Costs We do not charge any shipping and handling costs to our customers. Shipping and handling costs incurred are included in cost of revenue.
Product Warranty	Product Warranty We provide a warranty for our products against defects in material and workmanship for a period of one one
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets We review long-lived assets, including property and equipment and patents, for impairment whenever events or changes in business circumstances indicate that the carrying amount of an asset may not be fully recoverable. We will assess long-lived assets used in operations for impairment indicators, including when undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount (see Note 8 – “Intangible Assets”).
Stock-Based Compensation	Stock-Based Compensation Stock options are valued using the Black-Scholes option-pricing model, except that the valuation of certain “CEO” related stock options subject to a market condition involve the use of the Monte Carlo Simulation model. The Monte Carlo Simulation and the Black-Scholes valuation models require the input of highly subjective assumptions. The assumptions include the expected term of the option, the expected volatility of the price of our common stock, expected dividend yield and the risk-free interest rate. These estimates involve inherent uncertainties and the significant application of management’s judgment. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future. We recognize compensation expense for these options on a straight-line basis over the requisite service period (see Note 13 – “Stockholders’ Equity”).
Income Taxes	Income Taxes Income taxes are accounted for under the liability method. Deferred income taxes are provided for temporary differences between the financial reporting and the tax bases of assets and liabilities. If we determine in the future that it is more likely than not that we will not realize all or a portion of the deferred tax assets, we will record a valuation allowance in the period the determination is made (see Note 15 – “Income Taxes”). Changes in tax rates are reflected in the tax provision as they occur.
Net Income Per Common Share	Net Income Per Common Share
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments — Credit Losses” (“ASU 2016-13”), which introduced a new model for recognizing credit losses on financial instruments based on an estimate of the current expected credit losses. The new current expected credit losses (“CECL”) model generally calls for the immediate recognition of all expected credit losses and applies to financial instruments and other assets, including accounts receivable and other financial assets measured at amortized cost, debt securities and other financial assets. This guidance replaces the previous incurred loss model for measuring expected credit losses and requires expected losses on available-for-sale debt securities to be recognized through an allowance for credit losses rather than as reductions in the amortized cost of the securities. We adopted ASU 2016-13 as of January 1, 2020, and it did not have an impact on the consolidated financial statements.

Marketable Securities (Tables)

Marketable Securities (Tables)	12 Months Ended
	Dec. 31, 2020
Marketable Securities
Schedule of marketable securities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2019 ​ Amortized Unrealized Fair (In thousands) ​ Cost ​ Gains ​ Losses ​ Value U.S. government and agency obligations ​ $ 19,950 ​ $ 14 ​ $ 1 ​ $ 19,963 Corporate debt securities ​ 2,493 ​ 8 ​ — ​ 2,501 Marketable securities ​ $ 22,443 ​ $ 22 ​ $ 1 ​ $ 22,464
Schedule of unrealized losses on investment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2019 ​ ​ Less than 12 months ​ 12 months or more ​ Total ​ Fair Unrealized Fair Unrealized ​ Fair Unrealized (In thousands) Value Losses Value Losses Value Losses U.S. government and agency obligations ​ $ 5,997 ​ $ 1 ​ $ — ​ $ — ​ $ 5,997 ​ $ 1 Corporate debt securities ​ — ​ — ​ — ​ — ​ — ​ — Marketable securities ​ $ 5,997 ​ $ 1 ​ $ — ​ $ — ​ $ 5,997 ​ $ 1

Inventories (Tables)

Inventories (Tables)	12 Months Ended
	Dec. 31, 2020
Inventories
Schedule of inventories	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, (In thousands) 2020 2019 Finished goods ​ $ 7,129 ​ $ 6,508 Component parts and work-in-process ​ 11,434 ​ 12,551 Total inventories ​ $ 18,563 ​ $ 19,059

Property and Equipment (Tables)

Property and Equipment (Tables)	12 Months Ended
	Dec. 31, 2020
Property and Equipment
Schedule of components of property and equipment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, (In thousands) 2020 2019 Equipment ​ $ 6,909 ​ $ 6,224 Tooling ​ 2,774 ​ 2,615 Furniture and fixtures ​ 1,958 ​ 1,925 Leasehold improvements ​ 1,282 ​ 1,135 Construction in Progress ​ ​ 778 ​ ​ 97 Patient rental equipment ​ ​ — ​ ​ 91 Demonstration equipment ​ ​ 632 ​ ​ 632 Subtotal ​ 14,333 ​ 12,719 Less: accumulated depreciation ​ (7,376) ​ (5,311) Property and equipment, net ​ $ 6,957 ​ $ 7,408

Intangible Assets (Tables)

Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2020
Intangible Assets
Schedule of finite lived intangible assets	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ At December 31, 2020 ​ ​ Average ​ Gross ​ ​ ​ ​ ​ ​ Amortization ​ Carrying ​ Accumulated ​ Net (In thousands) Period ​ Amount ​ Amortization ​ Amount Patents ​ 11 years ​ $ 413 ​ $ 65 ​ $ 348 Defensive intangible assets ​ 4 years ​ ​ 1,125 ​ ​ 421 ​ ​ 704 Customer accounts ​ 2 years ​ 125 ​ 63 ​ 62 Total amortizable intangible assets ​ ​ ​ ​ 1,663 ​ ​ 549 ​ ​ 1,114 Patents pending ​ ​ ​ ​ 566 ​ ​ — ​ ​ 566 Total intangible assets ​ ​ ​ $ 2,229 ​ $ 549 ​ $ 1,680 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ At December 31, 2019 ​ ​ Average ​ Gross ​ ​ ​ ​ ​ ​ Amortization ​ Carrying ​ Accumulated ​ Net (In thousands) Period ​ Amount ​ Amortization ​ Amount Patents ​ 11 years ​ $ 4,386 ​ $ 447 ​ $ 3,939 Defensive intangible assets ​ 5 years ​ ​ 1,125 ​ ​ 250 ​ ​ 875 Customer accounts ​ 3 years ​ 125 ​ 37 ​ 88 Total amortizable intangible assets ​ ​ ​ ​ 5,636 ​ ​ 734 ​ ​ 4,902 Patents pending ​ ​ ​ ​ 410 ​ ​ — ​ ​ 410 Total intangible assets ​ ​ ​ $ 6,046 ​ $ 734 ​ $ 5,312
Schedule of future amortization expense	​ ​ ​ ​ ​ (In thousands) ​ ​ ​ 2021 $ 236 2022 ​ ​ 236 2023 ​ 205 2024 ​ 184 2025 ​ 94 Thereafter ​ 159 Total ​ $ 1,114

Accrued Expenses (Tables)

Accrued Expenses (Tables)	12 Months Ended
	Dec. 31, 2020
Accrued Expenses
Schedule of Accrued Expenses	​ ​ ​ ​ ​ ​ ​ ​ (In thousands) At December 31, 2020 At December 31, 2019 Warranty ​ $ 1,606 ​ $ 1,218 Legal and consulting ​ ​ 882 ​ ​ 617 In-transit inventory ​ 634 ​ 106 Travel and business ​ ​ 545 ​ ​ 776 Sales and use tax ​ ​ 193 ​ ​ 200 Clinical studies ​ ​ 67 ​ ​ 85 Lease termination costs ​ ​ — ​ ​ 1,200 Other ​ 496 ​ 296 Total ​ $ 4,423 ​ $ 4,498

Warranty Reserves (Tables)

Warranty Reserves (Tables)	12 Months Ended
	Dec. 31, 2020
Warranty Reserves
Schedule of warranty reserves	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands) 2020 2019 Beginning balance ​ $ 3,759 ​ $ 2,566 Warranty provision ​ 2,957 ​ 2,576 Processed warranty claims ​ (1,875) ​ (1,383) Ending balance ​ $ 4,841 ​ $ 3,759 ​ ​ ​ ​ ​ ​ ​ Accrued warranty reserve, current ​ $ 1,606 ​ $ 1,218 Accrued warranty reserve, non-current ​ ​ 3,235 ​ ​ 2,541 Total accrued warranty reserve ​ $ 4,841 ​ $ 3,759

Commitments and Contingencies (

Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2020
Commitments and Contingencies
Summary of lease-related assets and liabilities	​ ​ ​ ​ ​ ​ ​ ​ (In thousands) At December 31, 2020 At December 31, 2019 Right of use operating lease assets ​ $ 20,132 ​ $ 15,885 ​ ​ ​ ​ ​ ​ ​ Operating lease liabilities: ​ ​ ​ ​ ​ ​ Current ​ $ 2,006 ​ $ 1,454 Non-current ​ 19,388 ​ 15,134 Total ​ $ 21,394 ​ $ 16,588 ​ ​ ​ ​ ​ ​ ​ Operating leases: ​ ​ ​ ​ ​ ​ Weighted average remaining lease term ​ 9.4 years ​ ​ 10.1 years Weighted average discount rate ​ ​ 4.4% ​ ​ 4.6% ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ ​ 2020 ​ 2019 Supplemental cash flow information for our operating leases: ​ ​ ​ ​ ​ ​ Cash paid for operating lease liabilities ​ $ 2,646 ​ $ 1,799 Non-cash right of use assets obtained in exchange for new operating lease obligations ​ $ 6,789 ​ $ 18,891
Summary of undiscounted cash flows	​ ​ ​ ​ ​ (In thousands) ​ ​ ​ 2021 $ 2,894 2022 ​ ​ 2,643 2023 ​ 2,605 2024 ​ 2,575 2025 ​ 2,654 Thereafter ​ 15,345 Total minimum lease payments ​ ​ 28,716 Less: Amount of lease payments representing interest ​ ​ (7,322) Present value of future minimum lease payments ​ ​ 21,394 Less: Current obligations under operating lease liabilities ​ ​ (2,006) Non-current obligations under operating lease liabilities ​ $ 19,388

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	12 Months Ended
	Dec. 31, 2020
Schedule of allocation of total stock-based compensation expense	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, (In thousands) 2020 2019 2018 Cost of revenue ​ $ 539 ​ $ 329 ​ $ 160 Sales and marketing expenses ​ ​ 5,058 ​ ​ 4,331 ​ ​ 3,255 Research and development expenses ​ ​ 360 ​ ​ 372 ​ ​ 242 Reimbursement, general and administrative expenses ​ ​ 4,732 ​ ​ 4,792 ​ ​ 4,317 Total stock-based compensation expense ​ $ 10,689 ​ $ 9,824 ​ $ 7,974
Schedule of estimated fair values and assumptions for stock options granted	​ ​ ​ ​ 2020 Expected term 4.5 years Expected volatility 45.39% Risk-free interest rate 0.4% Expected dividend yield 0% Fair value on the date of grant $13.60 - $14.70 ​ ​ ​ ​ ​ ​ ​ ​ 2020 ​ 2019 2018 Expected term 4.5 ​ 4 ​ 4 Expected volatility 44.1 - 46.4% ​ 43.2 - 44.6% ​ 42.7 - 43.4% Risk-free interest rate 0.2 - 0.9% ​ 1.6 - 2.6% ​ 2.6 - 3.1% Expected dividend yield 0% ​ 0% ​ 0% Fair value on the date of grant $13.45 - $18.64 ​ $19.57 - $33.12 ​ $12.46 - $29.07
Schedule of stock option activity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Average ​ Average ​ Aggregate ​ ​ Options ​ Exercise Price ​ Remaining ​ Intrinsic (In thousands except options and per share data) ​ Outstanding ​ Per Share (1) ​ Contractual Life ​ Value (2) Balance at December 31, 2017 ​ 1,487,720 ​ $ 8.41 ​ 6.2 years ​ $ 29,611 Granted ​ 203,614 ​ $ 47.25 ​ ​ ​ ​ ​ Exercised ​ (553,375) ​ $ 2.74 ​ ​ ​ $ 25,393 Forfeited ​ (61,424) ​ $ 21.27 ​ ​ ​ ​ ​ Balance at December 31, 2018 ​ 1,076,535 ​ $ 17.94 ​ 6.5 years ​ $ 31,172 Granted ​ 189,076 ​ $ 59.52 ​ ​ ​ ​ ​ Exercised ​ (321,806) ​ $ 8.81 ​ ​ ​ $ 16,026 Forfeited ​ (76,322) ​ $ 36.50 ​ ​ ​ ​ ​ Cancelled/Expired ​ (528) ​ $ 19.64 ​ ​ ​ ​ ​ Balance at December 31, 2019 ​ 866,955 ​ $ 28.76 ​ 6.3 years ​ $ 33,957 Granted ​ 378,695 ​ $ 44.84 ​ ​ ​ ​ ​ Exercised ​ (147,741) ​ $ 7.24 ​ ​ ​ $ 6,540 Forfeited ​ (54,824) ​ $ 50.25 ​ ​ ​ ​ ​ Cancelled/Expired ​ (3,376) ​ $ 63.61 ​ ​ ​ ​ ​ Balance at December 31, 2020 ​ 1,039,709 ​ $ 36.43 ​ 5.6 years ​ $ 13,381 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Options exercisable at December 31, 2020 ​ 489,866 ​ $ 25.39 ​ 4.8 years ​ $ 11,099 ​ (1) The exercise price of each option granted during the periods shown was equal to the market price of the underlying stock on the date of grant. (2) The aggregate intrinsic value of options exercised represents the difference between the exercise price of the option and the closing stock price of our common stock on the date of exercise. The aggregate intrinsic value of options outstanding represents the difference between the exercise price of the option and the closing stock price of our common stock on the last trading day of the period.
Schedule of Nonvested Share Activity	​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, Number of: ​ 2020 ​ 2019 Non-vested options beginning of the year ​ ​ 393,733 ​ ​ 453,860 Non-vested options end of the year ​ ​ 549,843 ​ ​ 393,733 Vested options ​ ​ 489,866 ​ ​ 473,222 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, Weighted-average grant date fair value of: ​ 2020 ​ 2019 Non-vested options beginning of the year ​ $ 19.55 ​ $ 14.80 Non-vested options end of the year ​ ​ 18.03 ​ ​ 19.55 Vested options ​ ​ 10.67 ​ ​ 6.01 Forfeited options ​ ​ 20.54 ​ ​ 16.66
Time-Based Restricted Stock Units
Schedule of stock-settled restricted stock unit activity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ Average Grant Aggregate ​ ​ Units ​ Date Fair Value ​ Intrinsic (In thousands except unit and per unit data) ​ Outstanding ​ Per Unit ​ Value (1) Balance at December 31, 2017 ​ 441,507 ​ $ 16.38 ​ $ 12,795 Granted ​ 103,417 ​ $ 38.13 ​ ​ ​ Vested ​ (199,733) ​ $ 15.53 ​ ​ ​ Cancelled ​ (35,559) ​ $ 20.74 ​ ​ ​ Balance at December 31, 2018 ​ 309,632 ​ $ 23.69 ​ $ 14,104 Granted ​ 73,920 ​ $ 64.82 ​ ​ ​ Vested ​ (193,339) ​ $ 20.21 ​ ​ ​ Cancelled ​ (18,526) ​ $ 38.36 ​ ​ ​ Balance at December 31, 2019 ​ 171,687 ​ $ 43.74 ​ $ 11,591 Granted ​ 175,582 ​ $ 46.42 ​ ​ ​ Modification ​ 2,288 ​ $ 21.85 ​ ​ ​ Vested ​ (118,014) ​ $ 37.57 ​ ​ ​ Cancelled ​ (20,074) ​ $ 53.03 ​ ​ ​ Balance at December 31, 2020 ​ 211,469 ​ $ 48.29 ​ $ 9,503 ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred and unissued at December 31, 2020 (2) ​ 6,469 ​ $ 38.94 ​ $ 291 ​ (1) The aggregate intrinsic value of time-based restricted stock units outstanding was based on our closing stock price on the last trading day of the period. (2) For the year ended December 31, 2020 , there were 1,108 restricted stock units granted to non-employee directors in lieu of their quarterly cash retainer payments. These restricted stock units were fully vested upon grant and represent the right to receive one share of common stock, per unit, upon the earlier of the director’s termination of service as a director of ours or the occurrence of a change of control of us. These restricted stock units are included in the “Granted” line in the table above and are also included in the “Vested” line in the table above due to their being fully vested upon grant. On December 31, 2020, upon her departure from our board of directors, we issued 748 shares of common stock to Dr. Pegus, which represented the settlement of restricted stock units that had been previously granted to her in lieu of her quarterly director retainer payments. Excluding those restricted stock units, as of December 31, 2020 , there were 6,469 outstanding restricted stock units that had been previously granted to non-employee directors in lieu of their quarterly director retainer payments. These restricted stock units are not included in the “Balance at December 31, 2020 ” line in the table above because they are fully vested.
Performance-based stock-settled restricted stock units
Schedule of stock-settled restricted stock unit activity	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Performance- ​ Weighted- ​ ​ ​ ​ Based Average Grant Aggregate ​ ​ Units ​ Date Fair Value ​ Intrinsic (In thousands except unit and per unit data) ​ Outstanding ​ Per Unit ​ Value (1) Balance at December 31, 2017 ​ — ​ $ — ​ $ — Granted ​ 70,680 ​ $ 33.53 ​ ​ ​ Vested ​ — ​ $ — ​ ​ ​ Cancelled ​ (5,253) ​ $ 32.36 ​ ​ ​ Balance at December 31, 2018 ​ 65,427 ​ $ 33.62 ​ $ 2,980 Granted ​ 25,724 ​ $ 72.64 ​ ​ ​ Vested ​ — ​ $ — ​ ​ ​ Cancelled ​ — ​ $ — ​ ​ ​ Balance at December 31, 2019 ​ 91,151 ​ $ 44.63 ​ $ 6,154 Granted ​ 31,731 ​ $ 50.41 ​ ​ ​ Vested ​ (26,204) ​ $ 33.58 ​ ​ ​ Cancelled ​ (17,375) ​ $ 52.87 ​ ​ ​ Balance at December 31, 2020 ​ 79,303 ​ $ 47.83 ​ $ 3,564 ​ (1) The aggregate intrinsic value of performance-based restricted stock units outstanding was based on our closing stock price on the last trading day of the period

Revenue (Tables)

Revenue (Tables)	12 Months Ended
	Dec. 31, 2020
Revenue
Summary of revenue disaggregated by product	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, (In thousands) 2020 ​ 2019 ​ 2018 Revenue ​ ​ ​ ​ ​ ​ ​ ​ Flexitouch system $ 163,914 ​ $ 171,323 ​ $ 131,935 Other products (1) 23,216 ​ 18,169 ​ 11,816 Total $ 187,130 ​ $ 189,492 ​ $ 143,751 ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage of total revenue ​ ​ ​ ​ ​ ​ ​ ​ Flexitouch system 88% ​ 90% ​ 92% Other products (1) 12% ​ 10% ​ 8% Total 100% ​ 100% ​ 100% ​ (1) The “other products” line primarily includes revenue from our Entre system. The Actitouch system and the Airwear wrap contributed immaterial amounts of revenue for each of the years ended December 30, 2020, 2019 and 2018.
Summary of revenue from third-party payers	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, (In thousands) 2020 ​ 2019 ​ 2018 Private insurers and other payers $ 132,789 ​ $ 136,397 ​ $ 102,172 Veterans Administration ​ 24,485 ​ ​ 31,275 ​ ​ 28,043 Medicare ​ 29,856 ​ ​ 21,820 ​ ​ 13,536 Total $ 187,130 ​ $ 189,492 ​ $ 143,751
Sales-type lease revenue and the associated cost of goods sold	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) ​ 2020 ​ 2019 Sales-type lease revenue ​ $ 25,633 ​ $ 21,570 Cost of sales-type lease revenue ​ 9,011 ​ 7,510 Sales-type lease gross profit ​ $ 16,622 ​ $ 14,060

Income Taxes (Tables)

Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2020
Income Taxes
Schedule of provision (benefit) for income tax expense	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (In thousands) 2020 2019 2018 Current income taxes, Federal ​ $ (653) ​ $ 205 ​ $ 2,416 Current income taxes, State ​ ​ 294 ​ ​ 100 ​ ​ 778 ​ ​ ​ (359) ​ ​ 305 ​ ​ 3,194 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deferred income taxes, Federal ​ (833) ​ (303) ​ (4,804) Deferred income taxes, State ​ ​ (395) ​ ​ 153 ​ ​ (1,537) ​ ​ ​ (1,228) ​ ​ (150) ​ ​ (6,341) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrecognized tax benefit, Federal ​ — ​ — ​ — Unrecognized tax benefit, State ​ ​ (54) ​ ​ 3 ​ ​ — ​ ​ ​ (54) ​ ​ 3 ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total (benefit) provision for income taxes ​ $ (1,641) ​ $ 158 ​ $ (3,147)
Schedule of components of the Company's deferred tax assets	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, (In thousands) 2020 2019 Deferred tax assets: ​ ​ ​ ​ ​ ​ Operating lease liability ​ $ 5,329 ​ $ 4,137 Net operating loss carryforwards ​ ​ 312 ​ ​ 3,179 Accounts receivable and inventory reserves ​ ​ 3,887 ​ ​ 2,589 Stock-based compensation ​ ​ 3,558 ​ ​ 2,393 Accrued liabilities ​ 1,489 ​ 1,239 Warranty reserves ​ ​ 1,206 ​ ​ 936 Intangible assets ​ ​ 612 ​ ​ — Valuation allowance ​ ​ — ​ ​ (185) Other ​ 107 ​ 108 Total deferred tax assets ​ $ 16,500 ​ $ 14,396 ​ ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ ​ Right of use asset ​ (5,016) ​ (3,962) Fixed assets ​ ​ (1,286) ​ ​ (1,292) Intangible assets ​ ​ — ​ ​ (172) Total deferred tax liabilities ​ $ (6,302) ​ $ (5,426) ​ ​ ​ ​ ​ ​ ​ Net deferred tax assets ​ $ 10,198 ​ $ 8,970
Schedule of reconciliation of income tax expense (benefit)	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2020 ​ 2019 ​ 2018 Tax expense at statutory rate 21.0 % ​ 21.0 % ​ 21.0 % State income taxes, net of federal benefit ​ (7.9) ​ ​ 7.3 ​ ​ 11.9 ​ Executive compensation ​ (5.5) ​ ​ 9.1 ​ ​ 11.8 ​ Meals and entertainment ​ (10.6) ​ ​ 2.6 ​ ​ 7.6 ​ Incentive stock options (0.4) ​ 0.2 ​ 1.9 ​ Employee Stock Purchase Plan ​ (8.6) ​ ​ 1.7 ​ ​ 4.5 ​ Valuation allowance ​ 8.0 ​ ​ 1.7 ​ ​ — ​ Return to provision ​ 3.6 ​ ​ (0.4) ​ ​ 3.6 ​ IRS Exam 2.5 ​ ​ — ​ ​ 23.3 ​ Deferred reprice - state — ​ (0.1) ​ (0.3) ​ Federal carryback claim deferred rate differential ​ 38.5 ​ ​ — ​ ​ — ​ Unrecognized tax benefits ​ 2.3 ​ ​ — ​ ​ (4.6) ​ Excess benefit on non-qualified stock options and RSUs ​ 28.0 ​ ​ (41.5) ​ ​ (177.6) ​ Interest and penalties ​ 1.9 ​ ​ (0.2) ​ ​ 6.3 ​ Other (0.2) ​ — ​ 0.1 ​ Net effective rate 72.6 % ​ 1.4 % ​ (90.5) %
Schedule of unrecognized tax benefits ("UTB")	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, (In thousands) 2020 2019 2018 Balance beginning of the year ​ $ 54 ​ $ 51 ​ $ 212 Gross change — tax positions in prior year ​ ​ (54) ​ ​ 3 ​ ​ 3,477 Settlement ​ — ​ — ​ (3,638) Balance end of the year ​ $ — ​ $ 54 ​ $ 51

Net (loss) Income Per Common _2

Net (loss) Income Per Common Share (Tables)	12 Months Ended
	Dec. 31, 2020
Net (loss) Income Per Common Share
Schedule of computation of the basic and diluted net (loss) income per common share	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ December 31, (In thousands, except share and per share data) 2020 2019 2018 Net (loss) income $ (620) ​ $ 10,971 ​ $ 6,623 Weighted-average shares outstanding ​ 19,346,929 ​ ​ 18,919,007 ​ ​ 18,252,689 Dilutive effect of stock-based awards ​ — ​ ​ 722,136 ​ ​ 1,094,943 Weighted-average shares used to compute diluted net (loss) income per share ​ 19,346,929 ​ ​ 19,641,143 ​ ​ 19,347,632 Net (loss) income per share - Basic $ (0.03) ​ $ 0.58 ​ $ 0.36 Net (loss) income per share - Diluted $ (0.03) ​ $ 0.56 ​ $ 0.34
Schedule of potentially dilutive securities outstanding	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ 2020 2019 2018 Restricted stock units ​ 218,686 ​ 38,103 ​ 16,283 Common stock options ​ 1,039,709 ​ 278,363 ​ 111,565 Performance stock units ​ 96,383 ​ 25,724 ​ — Employee stock purchase plan ​ 53,205 ​ 45,182 ​ — Total ​ 1,407,983 ​ 387,372 ​ 127,848

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	12 Months Ended
	Dec. 31, 2020
Fair Value Measurements
Schedule of fair value measurements for our cash equivalents and marketable securities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2020 ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ ​ ​ Assets ​ Inputs ​ Inputs ​ ​ (In thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total Recurring Fair Value Measurements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market mutual funds ​ $ 16,188 ​ $ — ​ $ — ​ $ 16,188 U.S. government and agency obligations ​ — ​ — ​ — ​ — Total ​ $ 16,188 ​ $ — ​ $ — ​ $ 16,188 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At December 31, 2019 ​ Quoted Prices ​ ​ ​ ​ ​ ​ ​ ​ in Active ​ Significant ​ ​ ​ ​ ​ ​ ​ ​ Markets for ​ Other ​ Significant ​ ​ ​ ​ Identical ​ Observable ​ Unobservable ​ ​ ​ ​ Assets ​ Inputs ​ Inputs ​ ​ (In thousands) ​ (Level 1) ​ (Level 2) ​ (Level 3) ​ Total Recurring Fair Value Measurements: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Money market mutual funds ​ $ 481 ​ $ — ​ $ — ​ $ 481 U.S. government and agency obligations ​ 25,954 ​ — ​ — ​ 25,954 Corporate debt securities ​ — ​ 2,501 ​ — ​ 2,501 Total ​ $ 26,435 ​ $ 2,501 ​ $ — ​ $ 28,936

Quarterly Financial Informati_2

Quarterly Financial Information (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2020
Quarterly Financial Information (Unaudited)
Schedule of quarterly financial information	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Mar. 31, Jun. 30, Sep. 30, Dec. 31, (In thousands, except per share data) 2020 2020 2020 2020 Revenue ​ $ 43,675 ​ $ 35,120 ​ $ 49,092 ​ $ 59,243 Gross profit ​ 31,073 ​ 24,912 ​ 34,972 ​ 41,853 (Loss) income from operations ​ (4,451) ​ (7,963) ​ 1,794 ​ 6,991 Net (loss) income ​ (1,307) ​ (13,850) ​ 2,424 ​ 12,113 Net (loss) income per share - Basic (1) ​ $ (0.07) ​ $ (0.72) ​ $ 0.12 ​ $ 0.62 Net (loss) income per share - Diluted (1) ​ $ (0.07) ​ $ (0.72) ​ $ 0.12 ​ $ 0.61 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ Mar. 31, Jun. 30, Sep. 30, Dec. 31, (In thousands, except per share data) ​ 2019 2019 2019 2019 Revenues ​ $ 37,617 ​ $ 45,200 ​ $ 49,612 ​ $ 57,063 Gross profit ​ 26,258 ​ 31,505 ​ 35,373 ​ 41,100 (Loss) income from operations ​ (1,802) ​ 3,048 ​ 3,203 ​ 6,049 Net income ​ 1,472 ​ 2,785 ​ 2,431 ​ 4,283 Net income per share - Basic (1) ​ $ 0.08 ​ $ 0.15 ​ $ 0.13 ​ $ 0.23 Net income per share - Diluted (1) ​ $ 0.08 ​ $ 0.14 ​ $ 0.12 ​ $ 0.22 ​ (1) The summation of quarterly per share amounts may not equal the calculation for the full year, as each quarterly calculation is performed discretely.

Nature of Business and Operat_2

Nature of Business and Operations (Details) - IPO $ / shares in Units, $ in Millions	Aug. 02, 2016USD ($)$ / sharesshares
Subsidiary, Sale of Stock
Number of shares of common stock sold | shares	4,120,000
IPO price per share (in dollars per share) | $ / shares	$ 10
Proceeds from IPO	$ 35.4
Expense Relating To Initial Public Offering	$ 2.9

Basis of presentation (Details)

Basis of presentation (Details) $ in Millions	12 Months Ended
	Dec. 31, 2020USD ($)
Proceeds from grant from relief fund	$ 1.2
Other income
Grant income from relief funds	$ 1.2

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Equity Securities
Equity security without readily determinable fair value	$ 300	$ 700
Accounts Receivable
Percentage of claims	90.00%
Revenue Recognition
Medicare receivables period of time	1 year
Revenue for practical expedient	true
Advertising
Advertising Expense	$ 100	100	$ 100
Recent Accounting Pronouncements
Lease practical expedients package	true
Right of Use assets	$ 20,132	15,885
Lease liabilities	$ 21,394	$ 16,588
Minimum
Property and Equipment
Useful life	3 years
Revenue Recognition
Period for consideration payment after shipment date	2 days
Maximum
Property and Equipment
Useful life	7 years
Revenue Recognition
Period for consideration payment after shipment date	3 days
Garments | Minimum
Product Warranty
Product Warranty	1 year
Garments | Maximum
Product Warranty
Product Warranty	5 years
Controllers | Minimum
Product Warranty
Product Warranty	1 year
Controllers | Maximum
Product Warranty
Product Warranty	2 years

Marketable Securities (Details)

Marketable Securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Marketable Securities
Amortized Cost		$ 22,443
Unrealized Gains		22
Unrealized Losses		1
Fair Value	$ 0	22,464
Number of marketable securities in an unrealized loss position	0
Fair value less than 12 months		5,997
Unrealized losses, less than 12 months		1
Fair value, Total		5,997
Unrealized loss, Total		1
Unrealized holding loss on marketable debt securities in other comprehensive loss	$ 0
Marketable securities		22,464
Marketable securities sold	$ 0
U.S. government and agency obligations
Marketable Securities
Amortized Cost		19,950
Unrealized Gains		14
Unrealized Losses		1
Fair Value		19,963
Fair value less than 12 months		5,997
Unrealized losses, less than 12 months		1
Fair value, Total		5,997
Unrealized loss, Total		1
Corporate debt securities
Marketable Securities
Amortized Cost		2,493
Unrealized Gains		8
Fair Value		$ 2,501

Accounts Receivable (Details)

Accounts Receivable (Details) - item	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Accounts Receivable
Number of insurers	2	2
Insurer One | Customer Concentration Risk | Revenue
Accounts Receivable
Revenues (in percentage)	16.00%	11.00%
Insurer One | Credit Concentration Risk | Accounts Receivable
Accounts Receivable
Percentage of concentration	37.00%	17.00%
Insurer Two | Customer Concentration Risk | Revenue
Accounts Receivable
Revenues (in percentage)	10.00%	8.00%
Insurer Two | Credit Concentration Risk | Accounts Receivable
Accounts Receivable
Percentage of concentration	22.00%	13.00%

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventories
Finished goods	$ 7,129	$ 6,508
Component parts and work-in-process	11,434	12,551
Total inventories	$ 18,563	$ 19,059

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and Equipment
Subtotal	$ 14,333	$ 12,719
Less: accumulated depreciation	(7,376)	(5,311)
Property and equipment, net	6,957	7,408
Depreciation expense	2,400	3,000	$ 3,300
Equipment
Property and Equipment
Subtotal	6,909	6,224
Tooling
Property and Equipment
Subtotal	2,774	2,615
Furniture and Fixtures
Property and Equipment
Subtotal	1,958	1,925
Leasehold improvements
Property and Equipment
Subtotal	1,282	1,135
Construction in Progress
Property and Equipment
Subtotal	778	97
Patient rental equipment
Property and Equipment
Subtotal		91
Demonstration equipment
Property and Equipment
Subtotal	$ 632	$ 632

Intangible Assets (Details)

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Jun. 30, 2020	Dec. 31, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Patents and Intangibles
Weighted Average Amortization Period			6 years 3 months 18 days
Gross Carrying Amount			$ 1,663	$ 5,636
Accumulated Amortization			549	734
Total			1,114	4,902
Total intangible assets (Gross)			2,229	6,046
Total intangible assets (Net)			1,680	5,312
Amortization expense			400	500	$ 400
Asset impairment charges			4,025		$ 2,534
Future Amortization
2021			236
2022			236
2023			205
2024			184
2025			94
Thereafter			159
Total			1,114	4,902
Patents
Patents and Intangibles
Patents pending			$ 566	$ 410
Patents
Patents and Intangibles
Weighted Average Amortization Period			11 years	11 years
Gross Carrying Amount			$ 413	$ 4,386
Accumulated Amortization			65	447
Total			348	3,939
Future Amortization
Total			$ 348	$ 3,939
Defensive intangible assets
Patents and Intangibles
Weighted Average Amortization Period			4 years	5 years
Gross Carrying Amount			$ 1,125	$ 1,125
Accumulated Amortization			421	250
Total			704	875
Future Amortization
Total			$ 704	$ 875
Customer accounts
Patents and Intangibles
Weighted Average Amortization Period			2 years	3 years
Gross Carrying Amount			$ 125	$ 125
Accumulated Amortization			63	37
Total			62	88
Future Amortization
Total			$ 62	$ 88
Entre/Actitouch systems
Patents and Intangibles
Reduction in demand and sales volume, period		3 years
Entre/Actitouch systems | Cost of revenue
Patents and Intangibles
Inventory wrote off		$ 700
Entre/Actitouch systems | Reimbursement, general and administrative
Patents and Intangibles
Intangible assets wrote off		$ 1,800
Airwear Product
Patents and Intangibles
Asset impairment charges	$ 4,000
Airwear Product | Cost of revenue
Patents and Intangibles
Inventory wrote off	400
Airwear Product | Reimbursement, general and administrative
Patents and Intangibles
Intangible assets wrote off	$ 3,600

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued Expenses
Warranty	$ 1,606	$ 1,218
Legal and consulting	882	617
In-transit inventory	634	106
Travel and business	545	776
Sales and use tax	193	200
Clinical studies	67	85
Lease termination costs		1,200
Other	496	296
Total	$ 4,423	$ 4,498

Warranty Reserves (Details)

Warranty Reserves (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 3,759	$ 2,566
Warranty provision	2,957	2,576
Processed warranty claims	(1,875)	(1,383)
Ending balance	4,841	3,759
Accrued warranty reserve, current	1,606	1,218
Accrued warranty reserve, non-current	3,235	2,541
Total accrued warranty reserve	$ 4,841	$ 3,759

Credit Agreement (Details)

Credit Agreement (Details) - USD ($) $ in Millions	Aug. 03, 2018	Dec. 31, 2020
Credit Agreement
Line of credit	$ 10
Aggregate Borrowings	25
Total aggregate principal amount of loans	$ 35
Credit facility outstanding amount		$ 0
Capital expenditures
2018		5
2019		15
2020		15
2021		$ 9
Maximum leverage Ratio	300.00%
Minimum cash and cash equivalents	$ 7.5
Cash and cash equivalents, temporary reduction	$ 5
Federal Funds
Credit Agreement
Basis spread (as a percent)	0.50%
Base Rate
Credit Agreement
Basis spread (as a percent)	1.00%
Maximum
Credit Agreement
Unused line fee (as a percent)	0.275%
Maximum | Base Rate
Credit Agreement
Basis spread (as a percent)	1.15%
Maximum | LIBOR
Credit Agreement
Basis spread (as a percent)	2.15%
Minimum
Credit Agreement
Unused line fee (as a percent)	0.20%
Minimum | Base Rate
Credit Agreement
Basis spread (as a percent)	0.40%
Minimum | LIBOR
Credit Agreement
Basis spread (as a percent)	1.40%

Commitments and Contingencies -

Commitments and Contingencies - Lease Obligations (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020item	Dec. 31, 2019USD ($)ft²	Dec. 31, 2018ft²	Oct. 31, 2018ft²
Lessee, Lease, Description [Line Items]
Lease Termination Fee | $		$ 1,200
Total net loss on termination of lease | $		$ 1,148
Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	12 months
Building | Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	2 years
Building | Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	10 years
Vehicles
Lessee, Lease, Description [Line Items]
Remaining lease terms	367 days
Number of vehicles with agreements within the initial, noncancelable lease term | item	59
Equipment
Lessee, Lease, Description [Line Items]
Option to renew	true
Equipment | Minimum
Lessee, Lease, Description [Line Items]
Remaining lease terms	1 year
Equipment | Maximum
Lessee, Lease, Description [Line Items]
Remaining lease terms	3 years
Initial lease
Lessee, Lease, Description [Line Items]
Area of office space				80,000
Second lease
Lessee, Lease, Description [Line Items]
Area of office space			29,000
Additional office space added to the lease		4,000
Third lease
Lessee, Lease, Description [Line Items]
Additional office space added to the lease		37,000

Commitments and Contingencies_2

Commitments and Contingencies - Lease related assets and liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Lease-related assets and liabilities
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Right of use operating lease assets	Right of use operating lease assets
Right of use operating lease assets	$ 20,132	$ 15,885
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Operating lease liabilities, Current	Operating lease liabilities, Current
Operating lease liabilities, Current	$ 2,006	$ 1,454
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Operating lease liabilities, non-current	Operating lease liabilities, non-current
Operating lease liabilities, non-current	$ 19,388	$ 15,134
Operating Lease, Liability, Statement of Financial Position [Extensible List]	us-gaap:OperatingLeaseLiabilityCurrent us-gaap:OperatingLeaseLiabilityNoncurrent	us-gaap:OperatingLeaseLiabilityCurrent us-gaap:OperatingLeaseLiabilityNoncurrent
Present value of future minimum lease payments	$ 21,394	$ 16,588
Weighted average remaining lease term	9 years 4 months 24 days	10 years 1 month 6 days
Weighted average discount rate	4.40%	4.60%
Cash paid for operating lease liabilities	$ 2,646	$ 1,799
Non-cash right of use assets obtained in exchange for new operating lease obligations	$ 6,789	$ 18,891

Commitments and Contingencies_3

Commitments and Contingencies - Undiscounted cash flows (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Undiscounted cash flows
2021	$ 2,894
2022	2,643
2023	2,605
2024	2,575
2025	2,654
Thereafter	15,345
Total minimum lease payments	28,716
Less: Amount of lease payments representing interest	(7,322)
Present value of future minimum lease payments	21,394	$ 16,588
Less: Current obligations under operating lease liabilities	(2,006)	(1,454)
Non-current obligations under operating lease liabilities	$ 19,388	$ 15,134

Commitments and Contingencies_4

Commitments and Contingencies - Lease commitments and operating lease cost (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Commitments and Contingencies
Additional lease commitments	$ 7.1
Operating lease cost	$ 3	$ 2.1
Rent expense			$ 1.5

Commitments and Contingencies_5

Commitments and Contingencies - Major Vendors (Details) - item	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Commitments and Contingencies
Number of vendors	2	2
Purchases | Vendor
Commitments and Contingencies
Accounts Receivable (in percentage)	32.00%	37.00%

Commitments and Contingencies_6

Commitments and Contingencies - Purchase Commitments (Details) $ in Millions	Dec. 31, 2020USD ($)
Purchase commitments
Purchase orders issued	$ 19.5

Commitments and Contingencies_7

Commitments and Contingencies - Retirement Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
401(k)
Retirement Plan
Discretionary contributions	$ 0.3	$ 0.3	$ 0.2

Stockholders' Equity - Series A

Stockholders' Equity - Series A & B Preferred Stock (Details) $ / shares in Units, $ in Millions	Aug. 02, 2016USD ($)$ / sharesshares
Preferred stock
Conversion of preferred stock to common stock (in shares)	5,924,453
Number of new stock issued relating to the IPO that Series A and Series B preferred stockholders are entitled to receive	2,354,323
IPO
Preferred stock
Number of shares of common stock sold	4,120,000
Share price (in dollars per share) | $ / shares	$ 10
Series B Preferred Stock
Preferred stock
Preferred stock to common stock conversion ratio	1
Number of new stock issued to pay accrued stock dividends relating to initial offering price	956,842
Series A Preferred Stock
Preferred stock
Preferred stock to common stock conversion ratio	1.03
Accrued Cumulative Dividends | $	$ 8.2
Payment of dividends | $	$ 0.1

Stockholders' Equity - Stock-Ba

Stockholders' Equity - Stock-Based Compensation General Information (Details)	Dec. 31, 2020shares
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized	4,800,000

Stockholders' Equity - Stock-_2

Stockholders' Equity - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	Jan. 01, 2021	Jan. 01, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock-based compensation
Compensation expense			$ 10,689	$ 9,824	$ 7,974
Unrecognized stock-based compensation
Unrecognized stock-based compensation expense				0
Former executive
Stock-based compensation
Compensation expense				200	1,000
Cost of revenue
Stock-based compensation
Compensation expense			539	329	160
Sales and marketing
Stock-based compensation
Compensation expense			5,058	4,331	3,255
Research and development
Stock-based compensation
Compensation expense			360	372	242
Reimbursement, general and administrative
Stock-based compensation
Compensation expense			$ 4,732	4,792	4,317
2016 Plan
Stock-based compensation
Shares available for future issuance			5,538,891
Automatic annual increase to the number of shares reserved and available for issuance as a percentage of outstanding common stock (as a percent)			5.00%
Automatic annual increase to the number of shares reserved and available for issuance			2,500,000
Increase in number of shares reserved and available for issuance	972,591	952,697
Common stock options
Stock-based compensation
Compensation expense			$ 4,000	$ 2,700	$ 2,100
Unrecognized stock-based compensation
Unrecognized stock-based compensation expense, period for recognition			2 years

Stockholders' Equity - Stock Op

Stockholders' Equity - Stock Options and Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Sep. 30, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Stock-based compensation, general disclosures.
Stock-based compensation expense		$ 10,689	$ 9,824	$ 7,974
Dividends paid to date		$ 0
Estimated fair values and assumptions for stock options granted
Expected term		4 years 6 months
Expected volatility (as a percent)		45.39%
Risk-free interest rate (as a percent)		0.40%
Expected dividend yield (as a percent)		0.00%
Restricted stock unit awards, Average Intrinsic Value
Restricted stock unit awards, Average Intrinsic Value				14,104	$ 12,795
Minimum
Estimated fair values and assumptions for stock options granted
Fair value per share of options on the date of grant (in dollars per share)		$ 13.60
Other information
Fair value per share of options on the date of grant (in dollars per share)		13.60
Maximum
Estimated fair values and assumptions for stock options granted
Fair value per share of options on the date of grant (in dollars per share)		14.70
Other information
Fair value per share of options on the date of grant (in dollars per share)		$ 14.70
Common stock options
Stock-based compensation, general disclosures.
Stock-based compensation expense		$ 4,000	2,700	2,100
Total unrecognized pre-tax compensation expense related to nonvested stock option awards		$ 7,700
Weighted-average period over which unrecognized compensation cost is expected to be recognized		2 years
Total grant date fair value of options vested during the period		$ 3,000	$ 2,300	$ 1,500
Estimated fair values and assumptions for stock options granted
Expected term		4 years 6 months
Expected dividend yield (as a percent)		0.00%	0.00%	0.00%
Options
Outstanding at beginning of period		866,955	1,076,535	1,487,720
Granted		378,695	189,076	203,614
Exercised		(147,741)	(321,806)	(553,375)
Forfeited		(54,824)	(76,322)	(61,424)
Cancelled/Expired		(3,376)	(528)
Outstanding at end of period		1,039,709	866,955	1,076,535	1,487,720
Weighted Average Exercise Price ($/share)
Outstanding at beginning of period		$ 28.76	$ 17.94	$ 8.41
Granted		44.84	59.52	47.25
Exercised		7.24	8.81	2.74
Forfeited		50.25	36.50	21.27
Cancelled/Expired		63.61	19.64
Outstanding at end of period		$ 36.43	$ 28.76	$ 17.94	$ 8.41
Other information
Options exercisable number of shares exercisable		489,866	473,222	622,675
Options exercisable, weighted-average exercise price		$ 25.39	$ 14.14	$ 6.75
Options outstanding		$ 13,381	$ 33,957	$ 31,172	$ 29,611
Exercised		6,540	$ 16,026	$ 25,393
Options exercisable		$ 11,099
Weighted average remaining contractual life (in years)		5 years 7 months 6 days	6 years 3 months 18 days	6 years 6 months	6 years 2 months 12 days
Options exercisable, weighted-average remaining contractual life		4 years 9 months 18 days
Number of:
Non vested options beginning of the year		393,733	453,860
Non-vested options end of the year		549,843	393,733	453,860
Vested options		489,866	473,222
Weighted-average grant date fair value of:
Non-vested options beginning of the year		$ 19.55	$ 14.80
Non-vested options end of the year		18.03	19.55	$ 14.80
Vested options		10.67	6.01
Forfeited options		$ 20.54	$ 16.66
Common stock options | Minimum
Stock-based compensation, general disclosures.
Vesting period (in years)		3 years
Term (in years)		7 years
Estimated fair values and assumptions for stock options granted
Expected term			4 years	4 years
Expected volatility (as a percent)		44.10%	43.20%	42.70%
Risk-free interest rate (as a percent)		0.20%	1.60%	2.60%
Fair value per share of options on the date of grant (in dollars per share)		$ 13.45	$ 19.57	$ 12.46
Other information
Fair value per share of options on the date of grant (in dollars per share)		$ 13.45	$ 19.57	$ 12.46
Common stock options | Maximum
Stock-based compensation, general disclosures.
Vesting period (in years)		4 years
Term (in years)		10 years
Estimated fair values and assumptions for stock options granted
Expected term			6 years	6 years
Expected volatility (as a percent)		46.40%	44.60%	43.40%
Risk-free interest rate (as a percent)		0.90%	2.60%	3.10%
Fair value per share of options on the date of grant (in dollars per share)		$ 18.64	$ 33.12	$ 29.07
Other information
Fair value per share of options on the date of grant (in dollars per share)		$ 18.64	$ 33.12	$ 29.07
Common stock options | Chief Executive Officer [Member]
Stock-based compensation, general disclosures.
Share-based payment award, term	7 years
Vesting period (in years)	3 years
Number of consecutive trading days	20 days
Common stock options | Chief Executive Officer [Member] | Minimum
Stock-based compensation, general disclosures.
Stock price	$ 40.15
Time-Based Restricted Stock Units | Non-employee Directors
Stock-based compensation, general disclosures.
Stock Issued During Period On Settlement Of Restricted Stock Units		748
Number of Stock-Settled Restricted Stock Unit Awards Outstanding
Granted (in shares)		1,108
Number of share of common stock that restricted stock unit has the right to convert to		1
Number of granted and vested restricted stock units		6,469
2016 Plan | Time-Based Restricted Stock Units
Stock-based compensation, general disclosures.
Stock-based compensation expense		$ 5,200	$ 4,000	$ 3,500
Total unrecognized pre-tax compensation expense related to nonvested stock option awards		$ 6,800
Weighted-average period over which unrecognized compensation cost is expected to be recognized		2 years
Number of Stock-Settled Restricted Stock Unit Awards Outstanding
Restricted stock unit awards outstanding at the beginning of the period (in shares)		171,687	309,632	441,507
Granted (in shares)		175,582	73,920	103,417
Modification (in shares)		(2,288)
Vested (in shares)		118,014	193,339	199,733
Cancelled (in shares)		(20,074)	(18,526)	(35,559)
Restricted stock unit awards outstanding at the end of the period (in shares)		211,469	171,687	309,632	441,507
Deferred and unissued (in shares)		6,469
Weighted Average Grant Date Fair Value Per Share
Restricted stock unit awards outstanding at the beginning of the period (in dollars per share)		$ 43.74	$ 23.69	$ 16.38
Granted (in dollars per share)		46.42	64.82	38.13
Modification (in dollars per share)		21.85
Vested (in dollars per share)		37.57	20.21	15.53
Cancelled (in dollars per share)		53.03	38.36	20.74
Restricted stock unit awards outstanding at the end of the period (in dollars per share)		48.29	$ 43.74	$ 23.69	$ 16.38
Deferred and unissued (in dollars per share)		$ 38.94
Restricted stock unit awards, Average Intrinsic Value
Restricted stock unit awards, Average Intrinsic Value		$ 9,503	$ 11,591
Restricted stock unit awards deferred and unissued, Average Intrinsic Value		$ 291
2016 Plan | Time-Based Restricted Stock Units | Minimum
Stock-based compensation, general disclosures.
Vesting period (in years)		1 year
2016 Plan | Time-Based Restricted Stock Units | Maximum
Stock-based compensation, general disclosures.
Vesting period (in years)		3 years
2016 Plan | Performance-based stock-settled restricted stock units
Stock-based compensation, general disclosures.
Estimated payout		$ 1,000
Stock-based compensation expense		500	$ 2,300	$ 700
Total unrecognized pre-tax compensation expense related to awards		$ 1,100
Weighted-average period over which unrecognized compensation cost is expected to be recognized			2 years
Number of Stock-Settled Restricted Stock Unit Awards Outstanding
Restricted stock unit awards outstanding at the beginning of the period (in shares)		91,151	65,427
Granted (in shares)		31,731	25,724	70,680
Vested (in shares)		26,204
Cancelled (in shares)		(17,375)		(5,253)
Restricted stock unit awards outstanding at the end of the period (in shares)		79,303	91,151	65,427
Payout percentage		150.00%	150.00%	150.00%
Weighted Average Grant Date Fair Value Per Share
Restricted stock unit awards outstanding at the beginning of the period (in dollars per share)		$ 44.63	$ 33.62
Granted (in dollars per share)		50.41	72.64	$ 33.53
Vested (in dollars per share)		33.58
Cancelled (in dollars per share)		52.87		32.36
Restricted stock unit awards outstanding at the end of the period (in dollars per share)		$ 47.83	$ 44.63	$ 33.62
Restricted stock unit awards, Average Intrinsic Value
Restricted stock unit awards, Average Intrinsic Value		$ 3,564	$ 6,154
Restricted stock unit awards deferred and unissued, Average Intrinsic Value				$ 2,980
2016 Plan | Performance-based stock-settled restricted stock units | Minimum
Number of Stock-Settled Restricted Stock Unit Awards Outstanding
Percentage to earn or vest the performance-based stock-settled restricted stock units		50.00%
2016 Plan | Performance-based stock-settled restricted stock units | Maximum
Number of Stock-Settled Restricted Stock Unit Awards Outstanding
Percentage to earn or vest the performance-based stock-settled restricted stock units		150.00%
2016 Plan | Tranche one | Performance-based stock-settled restricted stock units
Stock-based compensation, general disclosures.
Compensation arrangement		33.33%
2016 Plan | Tranche two | Performance-based stock-settled restricted stock units
Stock-based compensation, general disclosures.
Compensation arrangement		66.67%

Stockholders' Equity - Employee

Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands	Jan. 01, 2021	Jan. 01, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Apr. 27, 2017
Stockholders' Equity
Stock-based compensation expense			$ 10,689	$ 9,824	$ 7,974
Employee Stock Purchase Plan
Stockholders' Equity
Purchase price of common stock under plan (as a percent)			85.00%
Offering period (in months)			6 months
Shares reserved			1,587,904			1,600,000
Incremental share increase (in shares)			500,000
Incremental share increase (as a percent)			1.00%
Increase in number of shares reserved and available for issuance	194,518	190,539
Stock-based compensation expense			$ 900	$ 900	$ 700

Revenue (Details)

Revenue (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenue
Revenue	$ 59,243	$ 49,092	$ 35,120	$ 43,675	$ 57,063	$ 49,612	$ 45,200	$ 37,617	$ 187,130	$ 189,492	$ 143,751
Percentage of total revenue (in percent)									100.00%	100.00%	100.00%
Operating lease revenue										$ 5,000
Revenue from sale type lease
Sales-type lease revenue									$ 25,633	21,570
Cost of sales-type lease revenue									9,011	7,510
Sales-type lease gross profit									16,622	14,060
Private insurers and other payers
Revenue
Revenue									132,789	136,397	$ 102,172
Veterans Administration
Revenue
Revenue									24,485	31,275	28,043
Medicare
Revenue
Revenue									29,856	21,820	13,536
Flexitouch system
Revenue
Revenue									$ 163,914	$ 171,323	$ 131,935
Percentage of total revenue (in percent)									88.00%	90.00%	92.00%
Other products
Revenue
Revenue									$ 23,216	$ 18,169	$ 11,816
Percentage of total revenue (in percent)									12.00%	10.00%	8.00%
Rental revenue
Revenue
Revenue									$ 25,633	$ 26,588	$ 14,965

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Current income taxes, Federal	$ (653)	$ 205	$ 2,416
Current income taxes, State	294	100	778
Current income taxes	(359)	305	3,194
Deferred income taxes, Federal	(833)	(303)	(4,804)
Deferred income taxes, State	(395)	153	(1,537)
Deferred income taxes	(1,228)	(150)	(6,341)
Unrecognized tax benefit	(54)	3
Total (benefit) provision for income taxes	(1,641)	158	$ (3,147)
Components of Deferred Tax Assets
Operating lease liability	5,329	4,137
Net operating loss carryforwards	312	3,179
Accounts receivable and inventory reserves	3,887	2,589
Stock-based compensation	3,558	2,393
Accrued liabilities	1,489	1,239
Warranty reserves	1,206	936
Intangible assets	612
Valuation allowance		(185)
Other	107	108
Total deferred tax assets	16,500	14,396
Deferred tax liabilities:
Right-of-use asset	(5,016)	(3,962)
Fixed assets	(1,286)	(1,292)
Intangible assets		(172)
Total deferred tax liabilities	(6,302)	(5,426)
Net deferred tax assets	$ 10,198	$ 8,970
Effective Income Tax Rate Reconciliation, Percent
Tax expense at statutory rate	21.00%	21.00%	21.00%
State income taxes, net of federal benefit	(7.90%)	7.30%	11.90%
Executive compensation	(5.50%)	9.10%	11.80%
Meals and entertainment	(10.60%)	2.60%	7.60%
Incentive stock options	(0.40%)	0.20%	1.90%
Employee Stock Purchase Plan	(8.60%)	1.70%	4.50%
Valuation allowance	8.00%	1.70%
Return to provision	3.60%	(0.40%)	3.60%
IRS Exam	2.50%		23.30%
Deferred reprice - state		(0.10%)	(0.30%)
Federal carryback claim deferred rate differential	38.50%
Unrecognized tax benefits	2.30%		(4.60%)
Excess benefit on non-qualified stock options and RSUs	28.00%	(41.50%)	(177.60%)
Interest and penalties	1.90%	(0.20%)	6.30%
Other	(0.20%)		0.10%
Net effective rate	72.60%	1.40%	(90.50%)
Reconciliation of unrecognized tax benefits
Balance beginning of the year	$ 54	$ 51	$ 212
Gross change - tax positions in prior year	(54)	3	3,477
Settlement			(3,638)
Balance end of the year		54	$ 51
State
Income Taxes
Unrecognized tax benefit	(54)	$ 3
Components of Deferred Tax Assets
Net operating loss carryforwards	$ 800

Net (loss) Income Per Common _3

Net (loss) Income Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net (loss) Income Per Common Share
Net (loss) income	$ 12,113	$ 2,424	$ (13,850)	$ (1,307)	$ 4,283	$ 2,431	$ 2,785	$ 1,472	$ (620)	$ 10,971	$ 6,623
Weighted-average shares outstanding									19,346,929	18,919,007	18,252,689
Dilutive effect of stock-based awards										722,136	1,094,943
Weighted-average shares used to compute diluted net (loss) income per share									19,346,929	19,641,143	19,347,632
Net (loss) income per share - Basic	$ 0.62	$ 0.12	$ (0.72)	$ (0.07)	$ 0.23	$ 0.13	$ 0.15	$ 0.08	$ (0.03)	$ 0.58	$ 0.36
Net (loss) income per share - Diluted	$ 0.61	$ 0.12	$ (0.72)	$ (0.07)	$ 0.22	$ 0.12	$ 0.14	$ 0.08	$ (0.03)	$ 0.56	$ 0.34

Net (loss) Income Per Common _4

Net (loss) Income Per Common Share (Details) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net Income (Loss) Per Share Attributable to Common Stockholders
Antidilutive securities excluded from computation of earnings per share	1,407,983	387,372	127,848
Common stock options
Net Income (Loss) Per Share Attributable to Common Stockholders
Antidilutive securities excluded from computation of earnings per share	1,039,709	278,363	111,565
Performance stock units
Net Income (Loss) Per Share Attributable to Common Stockholders
Antidilutive securities excluded from computation of earnings per share	96,383	25,724
Restricted Stock Units
Net Income (Loss) Per Share Attributable to Common Stockholders
Antidilutive securities excluded from computation of earnings per share	218,686	38,103	16,283
Employee stock purchase plan
Net Income (Loss) Per Share Attributable to Common Stockholders
Antidilutive securities excluded from computation of earnings per share	53,205	45,182

Fair Value Measurements (Detail

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Fair Value Measurements
Available for sale debt securities	$ 0	$ 22,464
Amount of transfers of marketable securities within the three level hierarchy	0
Intangible assets	1,680	5,312
U.S. government and agency obligations
Fair Value Measurements
Available for sale debt securities		19,963
Corporate debt securities
Fair Value Measurements
Available for sale debt securities		2,501
Recurring
Fair Value Measurements
Available for sale debt securities	16,188	28,936
Recurring | Money market mutual funds
Fair Value Measurements
Money market mutual funds	16,188	481
Recurring | U.S. government and agency obligations
Fair Value Measurements
Available for sale debt securities		25,954
Recurring | Corporate debt securities
Fair Value Measurements
Available for sale debt securities		2,501
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Measurements
Available for sale debt securities	16,188	26,435
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market mutual funds
Fair Value Measurements
Money market mutual funds	16,188	481
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. government and agency obligations
Fair Value Measurements
Available for sale debt securities		25,954
Recurring | Significant Other Observable Inputs (Level 2)
Fair Value Measurements
Available for sale debt securities		2,501
Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities
Fair Value Measurements
Available for sale debt securities		$ 2,501
Non-recurring | Significant Unobservable Inputs (Level 3) | Airwear Product
Fair Value Measurements
Intangible assets	$ 0

Quarterly Financial Informati_3

Quarterly Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Quarterly Financial Information (Unaudited)
Revenue	$ 59,243	$ 49,092	$ 35,120	$ 43,675	$ 57,063	$ 49,612	$ 45,200	$ 37,617	$ 187,130	$ 189,492	$ 143,751
Gross profit	41,853	34,972	24,912	31,073	41,100	35,373	31,505	26,258	132,810	134,236	102,258
(Loss) income from operations	6,991	1,794	(7,963)	(4,451)	6,049	3,203	3,048	(1,802)	(3,628)	10,498	2,990
Net (loss) income	$ 12,113	$ 2,424	$ (13,850)	$ (1,307)	$ 4,283	$ 2,431	$ 2,785	$ 1,472	$ (620)	$ 10,971	$ 6,623
Net (loss) income per share - Basic	$ 0.62	$ 0.12	$ (0.72)	$ (0.07)	$ 0.23	$ 0.13	$ 0.15	$ 0.08	$ (0.03)	$ 0.58	$ 0.36
Net (loss) income per share - Diluted	$ 0.61	$ 0.12	$ (0.72)	$ (0.07)	$ 0.22	$ 0.12	$ 0.14	$ 0.08	$ (0.03)	$ 0.56	$ 0.34