Related Party Transactions

9 Months Ended

Sep. 30, 2021

15.	Related Party Transactions

February 2018 dermaPACE® Purchase - On February 13, 2018, the Company entered into an Agreement for Purchase and Sale, Limited Exclusive Distribution and Royalties, and Servicing and Repairs with Premier Shockwave Wound Care, Inc., a Georgia Corporation (“PSWC”), and Premier Shockwave, Inc., a Georgia Corporation (“PS”). Each of PS and PSWC is owned by A. Michael Stolarski, a member of the Company’s board of directors and a shareholder of the Company. The agreement provides for the purchase by PSWC and PS of dermaPACE® System and related equipment sold by the Company along with limited but exclusive distribution rights to provide dermaPACE® Systems to certain governmental healthcare facilities in exchange for the payment of certain royalties to the Company. The agreement also contains provisions whereby in the event of a change of control of the Company (as defined in the agreement), the stockholders of PSWC have the right and option to cause the Company to purchase all of the stock of PSWC, and whereby the Company has the right and option to purchase all issued and outstanding shares of PSWC, in each case based upon certain defined purchase price provisions. The purchase price for this agreement is 5.5 times the annualized EBITDA for the six months trailing the change of control plus the book value of the equipment and working capital.

During the three months ended September 30, 2021 and 2020, the Company recorded $8 thousand and $10 thousand, respectively, in revenue from this related party. During the nine months ended September 30, 2021 and 2020, respectively, the Company recorded $24 thousand and $36 thousand in revenue from this entity. In addition, contract liabilities include a balance of $46 thousand at September 30, 2021 and $69 thousand at December 31, 2020 from this related party.

March 2021 Future Purchase of Equipment - In March 2021, PSWC paid the Company $125 thousand as a deposit in accounts payable for future purchase of new medical equipment. Please see Note 17 – Subsequent Events in the accompanying Condensed Consolidated Financial Statements for discussion of advances from member of our board of directors in October 2021.

July 2021 dermaPACE® Purchase - On July 1, 2021, the Company purchased unused DermaPACE® equipment and applicator inventory from PSWC for $127 thousand. As of September 30, 2021, $127 thousand is included in accounts payable on the condensed consolidated balance sheets related to this transaction.

July 2021 Rental Equipment Agreement - Effective July 1, 2021, the Company entered into a short-term equipment rental agreement with PSWC, whereby the Company obtained DermaPACE® equipment from PSWC for $3,600 per month. The company recorded $99 thousand in revenue from this arrangement.