# EDGAR Filing Document

**Accession Number:** 0001488917
**File Stem:** 0000897101-23-000086
**Filing Date:** 2023-2
**Character Count:** 33692
**Document Hash:** 9f9bf16d4b928f403fc453cb5bd43ba8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000897101-23-000086.hdr.sgml**: 20230214

**ACCESSION NUMBER**: 0000897101-23-000086

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 15

**CONFORMED PERIOD OF REPORT**: 20230214

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

**ITEM INFORMATION**: Regulation FD Disclosure

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230214

**DATE AS OF CHANGE**: 20230214

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Electromed, Inc.
- **CENTRAL INDEX KEY:** 0001488917
- **STANDARD INDUSTRIAL CLASSIFICATION:** ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
- **IRS NUMBER:** 411732920
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-34839
- **FILM NUMBER:** 23629312

**BUSINESS ADDRESS:**
- **STREET 1:** 500 SIXTH AVENUE NW
- **CITY:** NEW PRAGUE
- **STATE:** MN
- **ZIP:** 56071
- **BUSINESS PHONE:** 952-758-9299

**MAIL ADDRESS:**
- **STREET 1:** 500 SIXTH AVENUE NW
- **CITY:** NEW PRAGUE
- **STATE:** MN
- **ZIP:** 56071

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934**

Date of report (Date of earliest event reported): **February 14, 2023**

**ELECTROMED, INC.**

(Exact Name of Registrant as Specified in Its Charter)

---

| | | |
|:---|:---|:---|
| **Minnesota** | **001-34839** | **41-1732920** |
| (State or Other Jurisdiction of<br> Incorporation) | (Commission File Number) | (I.R.S. Employer Identification<br> Number) |

---

**500 Sixth Avenue NW**

**New Prague, MN 56071**

(Address of Principal Executive Offices) (Zip Code)

**(952) 758-9299**

(Registrant's Telephone Number, Including Area Code)

**Not Applicable**

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Common Stock, $0.01 par value** | **ELMD** | **NYSE American LLC** |
| (Title of each class) | (Trading Symbol) | (Name of each exchange on which registered) |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

---

| | |
|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition.** |

---

On February 14, 2023, Electromed, Inc., a Minnesota corporation (the "Company"), issued a press release announcing its financial results for the fiscal quarter ended December 31, 2022. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference into this Item 2.02.

---

| | |
|:---|:---|
| **Item 5.02** | **Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.** |

---

On February 14, 2023, Kathleen S. Skarvan, the President and Chief Executive Officer of the Company, notified the Company of her intention to retire from the Company effective on or about July 1, 2023 (the "Retirement Date"). The Board of Directors of the Company (the "Board") has commenced a search process to identify the Company's next Chief Executive Officer. The search will include both internal and external candidates.

Following the Retirement Date, Ms. Skarvan is expected to serve as a non-employee member and Chair of the Board, subject to certain terms and conditions set forth in a letter agreement with the Company (the "Letter Agreement"). The Letter Agreement further provides that so long as Ms. Skarvan does not terminate her employment with the Company before the Retirement Date and does not voluntarily resign from the Board, she will remain eligible to receive her base salary through July 1, 2023 and her annual bonus for the full fiscal year ending June 30, 2023.

The foregoing description of the material terms of the Letter Agreement is qualified by the full text thereof, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference into this Item 5.02.

---

| | |
|:---|:---|
| **Item 7.01** | **Regulation FD Disclosure.** |

---

The full text of the Company's press release announcing Ms. Skarvan's retirement from the Company is furnished as Exhibit 99.2 to this Current Report on Form 8-K and incorporated by reference into this Item 7.01.

---

| | |
|:---|:---|
| **Item 9.01** | **Financial Statements and Exhibits.** |

---

(d) Exhibits:

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| [10.1](elmd230175_ex10-1.htm) | [Letter Agreement with Kathleen S. Skarvan, dated February 14, 2023](elmd230175_ex10-1.htm) |
| [99.1](elmd230175_ex99-1.htm) | [Press Release (Earnings Announcement) dated February 14, 2023](elmd230175_ex99-1.htm) |
| [99.2](elmd230175_ex99-2.htm) | [Press Release (Electromed Announces CEO Retirement and Succession Plan) dated February 14, 2023](elmd230175_ex99-2.htm) |
| 104 | Cover Page Interactive Data File (embedded in the cover page and formatted in inline XBRL) |

---

The information contained in Item 7.01, Exhibit 99.1 and Exhibit 99.2 of this Current Report on Form 8-K shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

**Cautionary Statements**

*Certain statements in this Current Report on Form 8-K constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as "anticipate," "assume," "believe," "expect," "may," "potential," "should," "will," and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements. Forward-looking statements cannot be guaranteed, and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties for the Company include, but are not limited to, the duration, extent and severity of the COVID-19 pandemic, including its effects on its business, supply chain, operations and employees as well as its impact on its customers and distribution channels and on economies and markets more generally; the competitive nature of the Company's market; changes to Medicare, Medicaid, or private insurance reimbursement policies; changes to state and federal health care laws; changes affecting the medical device industry; the Company's ability to develop new sales channels for its products such as the homecare distributor channel; the Company's need to maintain regulatory compliance and to gain future regulatory approvals and clearances; new drug or pharmaceutical discoveries; general economic and business conditions; the Company's ability to renew its line of credit or obtain additional credit as necessary; the Company's ability to protect and expand its intellectual property portfolio; the risks associated with expansion into international markets, as well as other factors the Company may describe from time to time in its reports filed with the Securities and Exchange Commission (including the Company's most recent Annual Report on Form 10-K, as amended from time to time, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on "forward-looking statements," as such statements speak only as of the date of this Current Report on Form 8-K. The Company undertakes no obligation to update them in light of new information or future events.*

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | ELECTROMED, INC. | ELECTROMED, INC. |
| Date: February 14, 2023 | By: /s/ Bradley M. Nagel | By: /s/ Bradley M. Nagel |
|  | Name: | Bradley M. Nagel |
|  | Title: | Chief Financial Officer |

---

## Exhibit 10.1

Exhibit 10.1

February 14, 2023

Kathleen S. Skarvan<br> 2624 30<sup>th</sup> Avenue<br> Elk Mound, WI 54739

Dear Kathleen:

On behalf of the Board of Directors (the "*Board*") of Electromed, Inc. (the "*Company*"), this letter acknowledges receipt of your notice of voluntary resignation as the Company's President and Chief Executive Officer and as an employee of the Company, effective as of July 1, 2023 (the "*Anticipated Resignation Date*").

Provided that you (i) remain employed by the Company through the Anticipated Resignation Date or such earlier date as the Company may request in writing (the "*Resignation Date*"), (ii) thereafter sign a release of claims in a form determined by the Company, and (iii) do not voluntarily resign from the Board, the Company agrees that:

&nbsp;&nbsp;&nbsp;&nbsp;(A) the Board and all applicable committees of the Board will take all necessary actions to include your name in its slate of nominees
for election as directors at the Company's annual meeting of shareholders to be held in 2023 (the "*Covered Meeting* ");

&nbsp;&nbsp;&nbsp;&nbsp;(B) the Board will recommend, support and solicit proxies for your election at the Covered Meeting in the same manner as it recommends,
supports and solicits proxies for the election of the Company's other director nominees;

&nbsp;&nbsp;&nbsp;&nbsp;(C) the Board and all applicable committees of the Board will take all necessary actions to elect you to serve as Chair of the Board effective
as of the Resignation Date;

&nbsp;&nbsp;&nbsp;&nbsp;(D) you will receive your base salary through the Anticipated Resignation Date, payable in regular installments in accordance with the
Company's standard payroll practices;

&nbsp;&nbsp;&nbsp;&nbsp;(E) you will receive your normal annual bonus <sup>1</sup> for the fiscal
year ending June 30, 2023, and

&nbsp;&nbsp;&nbsp;&nbsp;(F) while you remain on the Board of Directors, you will retain all of the equity grants you received as an employee and continue to vest
in those equity grants as if you were still an employee.

On behalf of the entire Board, I thank you for your years of service to the Company, and I look forward to working with you as you transition to retirement during the first half of 2023.

Sincerely,

ELECTROMED, INC.

By: <u>/s/ Lee A. Jones</u> <br> Lee A. Jones<br> Chair of the Board of Directors

<sup>1</sup> For the avoidance of doubt, you will be entitled to receive an amount equal to your current annual cash incentive compensation for the full fiscal year ending June 30, 2023 regardless of your Resignation Date, which amount will be determined based on the Company's actual performance for the fiscal year relative to the Company performance goals without any exercise of negative discretion.

## Exhibit 99.1

**Exhibit 99.1**

**Electromed, Inc. Announces Fiscal 2023 Second Quarter Results**

*Growth initiatives help drive record quarterly revenue*

NEW PRAGUE, Minn.--(BUSINESS WIRE)-- Electromed, Inc. ("Electromed") (NYSE American: ELMD), a leader in innovative airway clearance technologies, today announced financial results for the three months ended December 31, 2022 ("Q2 FY 2023").

**Q2 FY 2023 Highlights** 

● Net revenue was $11.7 million for the three months ended December 31, 2022, a quarterly record and a 15% increase from $10.2 million for the three months ended December 31, 2021 ("Q2 FY 2022")

● Homecare revenue increased to $10.7 million in the quarter, up 14% from $9.4 million in Q2 FY 2022.

● Operating income increased to $1.3 million, compared to $1.1 million in Q2 FY 2022

● Net income was $977,000, or $0.11 per diluted share, compared to $838,000, or $0.10 per diluted share, in Q2 FY 2022.

● Cash as of December 31, 2022 was $6.9 million, positive cash flow of $911,000 in Q2 FY2023.

● Brad Nagel appointed Chief Financial Officer in November 2022.

● Next generation SmartVest<sup>®</sup> Clearway<sup>®</sup> Airway Clearance System received 510(k) clearance from the U.S. Food and Drug Administration.

"I am very pleased to report record quarterly revenues for the second fiscal quarter of 2023 and 15% revenue growth from the prior year period as the Electromed team continues to perform at a high level while executing our multi-pronged strategic growth initiatives. Our performance resulted in improvement in operating margin and cashflow this quarter which is equally as impressive as the topline growth given the inflationary macroeconomic environment.," said Kathleen Skarvan, President and Chief Executive Officer.

"One of our key growth initiatives is the introduction of our fifth generation SmartVest Clearway, which is now on the market in a limited release. Patient feedback has been overwhelmingly positive, and we are excited to introduce Clearway to more patients and physicians over the next few months. We continued to expand the commercial team, which is operating at a high level of productivity, and we believe the building blocks are in place as our company works to drive our SmartVest Airway Clearance therapy to wider adoption in the airway clearance market."

**Fiscal Second Quarter Results** 

Net revenue for Q2 FY 2023 increased by 14.5% year over year to $11,729,000, compared to $10,248,000 in the same period in the prior year. The increase over the prior year period was driven by increased referrals and approvals as a result of an expanded sales force and reimbursement team. Field sales employees totaled 57 as of December 31, 2022, 48 of which were direct sales representatives, compared to 48 field sales employees and 39 direct sales representatives as of December 31, 2021. Sales force productivity remained within our expected range during the quarter, with annualized home care revenue per direct sales representative at $927,000, within Electromed's target range of $850,000 to $950,000.

Home care revenue increased by $1,328,000, or 14.1%, for Q2 FY 2023 compared to the same period in the prior year. Institutional revenue increased by $256,000, or 76.9%, for Q2 FY 2023 compared to the same period in the prior year. Home care distributor revenue decreased by $51,000, or 13.2%, for Q2 FY 2023 compared to the same period in the prior year. International revenue decreased by $52,000, or 41.9%, for Q2 FY 2023 compared to the same period in the prior year.

Gross profit increased to $8,682,000, or 74.0% of net revenues for Q2 FY 2023, from $7,880,000, or 76.9% of net revenues, in the same period in the prior year. The decrease in gross profit as a percentage of net revenues compared to the same period in the prior year is primarily due to increased material costs and higher shipping expenses to expedite inventory purchases.

Selling, general and administrative ("SG&A") expenses were $7,254,000 for Q2 FY 2023, representing an increase of $779,000, or 12.0% compared to the same period in the prior year. The increase was primarily due to additional headcount in our sales and reimbursement departments representing our investments in growth.

Operating income for Q2 FY 2023 was $1,274,000, compared to $1,076,000 for the same period in the prior year. The increase in operating income in the three months ended December 31, 2022 was primarily due to revenue growth partially offset by increased operating expenses reflecting expansion of headcount and other growth initiatives.

Net income for Q2 FY 2023 was $977,000, compared to $838,000 for the same period in the prior year. The increase in net income in the three months ended December 31, 2022 was primarily due to revenue growth.

As of December 31, 2022, Electromed had $6.9 million in cash, $21.6 million in accounts receivable, working capital of $28.2 million, and total shareholders' equity of $35.4 million.

**Conference Call and Webcast Information**

Interested parties may participate in the call by dialing (877) 407-0789 (Domestic) or (201) 689-8562 (International). Listeners may also bypass the operator and get instant telephone access by using the call me feature via this link:<br> <u>https://callme.viavid.com/viavid/?callme=true&passcode=13729193&h=true&info=company&r=true&B=6</u>

A live webcast of the call will be accessible in the Investor Relations section of Electromed's web site and directly via the following link: <u>https://viavid.webcasts.com/starthere.jsp?ei=1596017&tp_key=9bc6fba7a8</u>

For those who cannot listen to the live broadcast, a replay will be available by dialing (844) 512-2921 (Domestic) or (412) 317-6671 (International) and referencing the replay pin number 13736069. Additionally, an online replay will be available in the Investor Relations section of Electromed's web site at: http://investors.smartvest.com/.

**About Electromed, Inc.** 

Electromed, Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest® Airway Clearance System, to patients with compromised pulmonary function. It is headquartered in New Prague, Minnesota, and was founded in 1992. Further information about Electromed can be found at <u>www.smartvest.com</u>.

***Cautionary Statements***

*Certain statements in this press release constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as "anticipate," "assume," "believe," "continue," "expect," "may," "potential," "should," "will," and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements. Forward-looking statements cannot be guaranteed, and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties for Electromed include, but are not limited to, component or raw material shortages, changes to lead times or significant price increases, changes to Medicare, Medicaid, or private insurance reimbursement policies; the duration, extent and severity of the COVID-19 pandemic, including its effects on our business, supply chain, operations and employees as well as its impact on our customers and distribution channels and on economies and markets more generally; the competitive nature of our market; changes to state and federal health care laws; changes affecting the medical device industry; our ability to develop new sales channels for our products such as the homecare distributor channel; our need to maintain regulatory compliance and to gain future regulatory approvals and clearances; new drug or pharmaceutical discoveries; general economic and business conditions; our ability to renew our line of credit or obtain additional credit as necessary; our ability to protect and expand our intellectual property portfolio; the risks associated with expansion into international markets, as well as other factors we may describe from time to time in Electromed's reports filed with the Securities and Exchange Commission (including Electromed's most recent Annual Report on Form 10-K, as amended from time to time, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on "forward-looking statements," as such statements speak only as of the date of this press release. We undertake no obligation to update them in light of new information or future events.*

Contacts

Brad Nagel, Chief Financial Officer<br> (952) 758-9299<br> <u>investorrelations@electromed.com</u>

Mike Cavanaugh, Investor Relations<br> ICR Westwicke<br> (617) 877-9641<br> <u>mike.cavanaugh@westwicke.com</u>

Source: Electromed, Inc.

**Financial Tables Follow:** 

**Electromed, Inc.**

**Condensed Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **December 31,<br> 2022** | **June 30,**<br> **2022** |
|  | **(Unaudited)** |  |
| **Assets** |  |  |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $6909000 | $8153000 |
| &nbsp;&nbsp;&nbsp;Accounts receivable (net of allowances for doubtful accounts of $45,000) | 21555000 | 21052000 |
| &nbsp;&nbsp;&nbsp;Contract assets | 507000 | 286000 |
| &nbsp;&nbsp;&nbsp;Inventories | 3473000 | 3178000 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 1720000 | 1870000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current assets** | 34164000 | 34539000 |
| Property and equipment, net | 5038000 | 4568000 |
| Finite-life intangible assets, net | 584000 | 599000 |
| Other assets | 80000 | 120000 |
| Deferred income taxes | 1528000 | 1538000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $41394000 | $41364000 |
| **Liabilities and Shareholders' Equity** |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | 785000 | 1261000 |
| &nbsp;&nbsp;&nbsp;Accrued compensation | 2210000 | 2742000 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 130000 | 51000 |
| &nbsp;&nbsp;&nbsp;Warranty reserve | 1337000 | 1256000 |
| &nbsp;&nbsp;&nbsp;Other accrued liabilities | 1549000 | 1840000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total current liabilities** | 6011000 | 7150000 |
| Other long-term liabilities | 33000 | 41000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 6044000 | 7191000 |
| Commitments and Contingencies |  |  |
| Shareholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.01 par value per share, 13,000,000 shares authorized; |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8,514,164 and 8,475,438 shares issued and outstanding, as of December 31, 2022 and June 30, 2022, respectively | 85000 | 85000 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 18580000 | 18308000 |
| &nbsp;&nbsp;&nbsp;Retained earnings | 16685000 | 15780000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total shareholders' equity** | 35350000 | 34173000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and shareholders' equity** | $41394000 | $41364000 |

---

**Electromed, Inc.**

**Condensed Statements of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | **Six Months Ended** | **Six Months Ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Net revenues | $11729000 | $10248000 | $22387000 | $20249000 |
| Cost of revenues | 3047000 | 2368000 | 5374000 | 4668000 |
| &nbsp;&nbsp;&nbsp;**Gross profit** | 8682000 | 7880000 | 17013000 | 15581000 |
| Operating expenses |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Selling, general and administrative | 7254000 | 6475000 | 15243000 | 13262000 |
| &nbsp;&nbsp;&nbsp;Research and development | 154000 | 329000 | 452000 | 705000 |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | 7408000 | 6804000 | 15695000 | 13967000 |
| &nbsp;&nbsp;&nbsp;**Operating income** | 1274000 | 1076000 | 1318000 | 1614000 |
| Interest income, net | 7000 | 6000 | 11000 | 15000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income before income taxes** | 1281000 | 1082000 | 1329000 | 1629000 |
| Income tax expense | 304000 | 244000 | 271000 | 352000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net income** | $977000 | $838000 | $1058000 | $1277000 |
| Income per share: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $0.12 | $0.10 | $0.13 | $0.15 |
| &nbsp;&nbsp;&nbsp;Diluted | $0.11 | $0.10 | $0.12 | $0.15 |
| Weighted-average common shares outstanding: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 8442939 | 8478394 | 8442684 | 8501041 |
| &nbsp;&nbsp;&nbsp;Diluted | 8684352 | 8760946 | 8685184 | 8788194 |

---

**Electromed, Inc.**

**Condensed Statements of Cash Flows**

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended December 31,** | **Six Months Ended December 31,** |
|  | **2022** | **2021** |
| Cash Flows From Operating Activities |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $1058000 | $1277000 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation | 272000 | 221000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of finite-life intangible assets | 47000 | 79000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Share-based compensation expense | 316000 | 526000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 10000 | 37000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable | (503000) | (2082000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contract assets | (221000) | 111000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (321000) | 334000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 176000 | (265000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax payable, net | 79000 | (366000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | (711000) | 435000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued compensation | (532000) | (413000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by operating activities** | (330000) | (106000) |
| Cash Flows From Investing Activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in property and equipment | (687000) | (511000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in finite-life intangible assets | (30000) | (69000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in investing activities** | (717000) | (580000) |
| Cash Flows From Financing Activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issuance of common stock upon exercise of options | 16000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Taxes paid on stock options exercised on a net basis | (60000) | (70000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase of common stock | (153000) | (663000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in financing activities** | (197000) | (733000) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net (decrease) increase in cash** | (1244000) | (1419000) |
| Cash And Cash Equivalents |  |  |
| &nbsp;&nbsp;&nbsp;Beginning of period | 8153000 | 11889000 |
| &nbsp;&nbsp;&nbsp;End of period | $6909000 | $10470000 |

---

## Exhibit 99.2

**Exhibit 99.2**

**Electromed Announces CEO Retirement and Succession Plan**

NEW PRAGUE, Minn.--(BUSINESS WIRE)-- Electromed, Inc. (NYSE American: ELMD), a leader in innovative airway clearance technologies, today announced that Kathleen Skarvan will retire as President and Chief Executive Officer with a target effective date on or around July 1, 2023. After her retirement she will serve as a non-employee member and chair of the company's board of directors. The Board of Directors is conducting a comprehensive search to identify a new President and CEO and engaged a national executive search firm to assist in the process.

Ms. Skarvan has served as the company's Chief Executive Officer since 2012, joined the board of directors in 2013 and added the title of President in 2016. During her tenure leading the company, Ms. Skarvan has helped position Electromed as a leader in HFCWO airway clearance technology and has overseen a tripling of revenues and consistent profitability since 2015. Most recently, she implemented a multi-pronged strategic growth initiative that has resulted in a larger and more productive commercial team, increased market share and recently announced the limited market release of the fifth generation of innovation in airway clearance, the SmartVest<sup>®</sup> Clearway<sup>™</sup>.

"It has been a privilege to lead Electromed for over ten years, and with the Company well positioned for continued success, I believe now is the right time to begin the transition to the next generation of leadership," stated Ms. Skarvan. "I look forward to continuing to work with the Board and management team over the coming months to identify an exemplary leader for our business and to ensure a successful transition."

"On behalf of the Board, I would like to thank Kathleen for her vision and dedication during her tenure as CEO, and we are excited to welcome her as Board Chair following her retirement," said Lee Jones, Chair of the Board. "In the meantime, the Board is committed to finding a world-class successor for Kathleen, and is grateful to have her continued leadership and guidance throughout this transition process."

**About Electromed, Inc.**

Electromed, Inc. manufactures, markets, and sells products that provide airway clearance therapy, including the SmartVest<sup>®</sup> Airway Clearance System, to patients with compromised pulmonary function. It is headquartered in New Prague, Minnesota, and was founded in 1992. Further information about Electromed can be found at <u>www.smartvest.com</u>.

***Cautionary Statements***

*Certain statements in this press release, including the timing of potential executive transitions, constitute forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can generally be identified by words such as "expect," "target," "will," and similar expressions, including the negative of these terms, but they are not the exclusive means of identifying such statements. Forward-looking statements cannot be guaranteed, and actual results may vary materially due to the uncertainties and risks, known or unknown associated with such statements. Examples of risks and uncertainties for the company include, but are not limited to, the duration, extent and severity of the COVID-19 pandemic, including its effects on our business, operations and employees as well as its impact on our customers and distribution channels and on economies and markets more generally; the competitive nature of our market; changes to Medicare, Medicaid, or private insurance reimbursement policies; changes to state and federal health care laws; changes affecting the medical device industry; our ability to develop new sales channels for our products such as the homecare distributor channel; our need to maintain regulatory compliance and to gain future regulatory approvals and clearances; new drug or pharmaceutical discoveries; general economic and business conditions; our ability to renew our line of credit or obtain additional credit as necessary; our ability to protect and expand our intellectual property portfolio; the risks associated with expansion into international markets, as well as other factors we may describe from time to time in the company's reports filed with the Securities and Exchange Commission (including the company's most recent Annual Report on Form 10-K, as amended from time to time, and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K). Investors should not consider any list of such factors to be an exhaustive statement of all of the risks, uncertainties or potentially inaccurate assumptions investors should take into account when making investment decisions. Shareholders and other readers should not place undue reliance on "forward-looking statements," as such statements speak only as of the date of this press release. We undertake no obligation to update them in light of new information or future events.*

Contacts

Brad Nagel, Chief Financial Officer<br> (952) 758-9299<br> <u>investorrelations@electromed.com</u>

Mike Cavanaugh, Investor Relations<br> ICR Westwicke<br> (617) 877-9641<br> <u>mike.cavanaugh@westwicke.com</u>