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What changed in TELA Bio, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of TELA Bio, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+421 added−348 removedSource: 10-K (2026-03-25) vs 10-K (2025-03-21)

Top changes in TELA Bio, Inc.'s 2025 10-K

421 paragraphs added · 348 removed · 310 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

111 edited+20 added−9 removed279 unchanged
Biggest changeAt the state level, legislatures have increasingly passed legislation and implemented regulations designed to control healthcare costs, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. 37 Table of Contents We expect that additional federal, state and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
Biggest changeAt the state level, legislatures have increasingly passed legislation and implemented regulations designed to control healthcare costs, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Limitations of permanent synthetic mesh products may include: ● significant persistent foreign body inflammatory response that can result in encapsulation of the implant by fibrotic tissue or contraction of the mesh; 11 Table of Contents ● chronic post-operative pain; ● scar tissue formation and lack of regeneration of soft-tissue; ● permanent susceptibility to mesh infection; ● significant cost associated with subsequent repairs or failed and infected mesh; ● compromised abdominal wall anatomy due to damaged and eroded tissue rendering subsequent surgical repairs challenging; and ● migration of the permanent synthetic mesh which can result in organ erosion or perforation.
Limitations of permanent synthetic mesh products may include: ● significant persistent foreign body inflammatory response that can result in encapsulation of the implant by fibrotic tissue or contraction of the mesh; ● chronic post-operative pain; ● scar tissue formation and lack of regeneration of soft-tissue; ● permanent susceptibility to mesh infection; 11 Table of Contents ● significant cost associated with subsequent repairs or failed and infected mesh; ● compromised abdominal wall anatomy due to damaged and eroded tissue rendering subsequent surgical repairs challenging; and ● migration of the permanent synthetic mesh which can result in organ erosion or perforation.
In October 2024, we received approval from the FDA for our investigational device exemption application relating to the study of the safety and effectiveness of our OviTex PRS product in implant-based breast reconstruction.
In October 2024, we received approval from the FDA for our investigational device exemption application relating to the study of the safety and effectiveness of our OviTex PRS product in implant-based breast reconstruction.
These include: ● the FDA’s Quality Systems Regulations (“QSR”), which requires manufacturers, including third party manufacturers, to follow stringent design, testing, production, control, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures during all aspects of the manufacturing process; ● labeling and marketing regulations which require that promotion is truthful, not misleading, fairly balanced and provides adequate directions for use and that all claims are substantiated; ● complying with requirements for Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; ● advertising and promotion requirements, including FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses and FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; ● restrictions on sale, distribution or use of a device; ● device establishment, registration and listing requirements and annual reporting requirements; ● approval or clearance of modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; ● medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● medical device correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● recall requirements, including a mandatory recall if there is a reasonable probability that the device would cause serious adverse health consequences or death; ● an order of repair, replacement or refund; 31 Table of Contents ● device tracking requirements; and ● post-market surveillance activities and regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include: ● the FDA’s “QMSR”, which requires manufacturers, including third party manufacturers, to follow stringent design, testing, production, control, supplier/contractor selection, complaint handling, documentation and other quality assurance procedures during all aspects of the manufacturing process; ● labeling and marketing regulations which require that promotion is truthful, not misleading, fairly balanced and provides adequate directions for use and that all claims are substantiated; ● complying with requirements for Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; ● advertising and promotion requirements, including FDA prohibitions against the promotion of products for uncleared, unapproved or off-label uses and FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; ● restrictions on sale, distribution or use of a device; ● device establishment, registration and listing requirements and annual reporting requirements; ● approval or clearance of modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; 31 Table of Contents ● medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur; ● medical device correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; ● recall requirements, including a mandatory recall if there is a reasonable probability that the device would cause serious adverse health consequences or death; ● an order of repair, replacement or refund; ● device tracking requirements; and ● post-market surveillance activities and regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
Our OviTex products are sterile reinforced tissue matrices derived from ovine rumen with either polypropylene or PGA. The product is provided in a dry, hydratable form and packaged in a double pouched configuration. The product can be stored at room temperature and only needs five minutes of rehydration for use.
Our OviTex products are sterile reinforced tissue matrices derived from ovine rumen with either polypropylene, PGA or PLGA. The product is provided in a dry, hydratable form and packaged in a double pouched configuration. The product can be stored at room temperature and only needs five minutes of rehydration for use.
Our executive team has led and managed companies through significant growth and introduction and commercialization of multiple new products, including driving surgeon adoption of biologic and biosurgery technologies. Members of our team have held leading positions with medical technology companies such as Orthovita Inc., Stryker Corporation, OraSure Technologies, Inc., LifeCell and Medtronic plc.
Our executive team has led and managed companies through significant growth and introduction and commercialization of multiple new products, including driving surgeon adoption of biologic and biosurgery technologies. Members of our team have held leading positions with medical technology companies such as Orthovita Inc., Stryker Corporation, OraSure Technologies, Inc., Abiomed, LifeCell and Medtronic plc.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: ● warning letters, untitled letters, Form 483s, fines, injunctions, consent decrees and civil penalties; ● recall or seizure of products; ● operating restrictions, partial suspension or total shutdown of production; ● the FDA’s refusal of requests for 510(k) clearance or premarket approval of new products, new intended uses or modifications to existing products; ● the FDA’s refusal to issue certificates to foreign governments needed to export products for sale in other countries; ● withdrawing approvals that have already been granted; and ● criminal prosecution.
Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: ● warning letters, untitled letters, FDA Form 483s, fines, injunctions, consent decrees and civil penalties; ● recall or seizure of products; ● operating restrictions, partial suspension or total shutdown of production; ● the FDA’s refusal of requests for 510(k) clearance or premarket approval of new products, new intended uses or modifications to existing products; ● the FDA’s refusal to issue certificates to foreign governments needed to export products for sale in other countries; ● withdrawing approvals that have already been granted or reclassifying the devices; and ● criminal prosecution.
Transparency Laws The federal Physician Payments Sunshine Act (“Sunshine Act”) which was enacted as part of the Patient Protection and Affordable Care Act (“PPACA”) generally requires certain manufacturers of a drug, device, biologic or other medical supply that is covered by Medicare, Medicaid or the Children’s Health Insurance Program and applicable GPOs to report on an annual basis: (i) certain payments and other transfers of value given to certain healthcare professionals and 35 Table of Contents teaching hospitals and (ii) any ownership or investment interest that U.S. physicians, or their immediate family members, have in their company.
Transparency Laws The federal Physician Payments Sunshine Act (“Sunshine Act”) which was enacted as part of the Patient Protection and Affordable Care Act (“PPACA”) generally requires certain manufacturers of a drug, device, biologic or other medical supply that is covered by Medicare, Medicaid or the Children’s Health Insurance Program and applicable GPOs to report on an annual basis: (i) certain payments and other transfers of value given to certain healthcare professionals and teaching hospitals and (ii) any ownership or investment interest that U.S. physicians, or their immediate family members, have in their company.
Our OviTex IHR product was specifically designed for use in laparoscopic and robotic-assisted inguinal hernia repair and is available in anatomical and rectangle shapes. ​ 20 Table of Contents OviTex Portfolio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OviTex ​ OviTex 1S ​ OviTex 2S ​ OviTex LPR ​ OviTex IHR ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Size and Shape ​ 4x8 cm to 25x40 cm* (Rectangle or Square) ​ 4x8 cm to 25x40 cm* (Rectangle or Square) ​ 4x8 cm to 25x40 cm* (Rectangle or Square) ​ 12x18 cm to 15x25 cm* (Ellipse); 9cm to 15cm (Round) ​ 10x17 cm (Anatomical); 13x17 cm (Rectangle) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Strength ​ + ​ ++ ​ +++ ​ + ​ + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Layers of Ovine Rumen ​ Four ​ Six ​ Eight ​ Four ​ Three or Four (anatomical); Three (Rectangle) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Procedures ​ Moderate ventral hernia (pre-peritoneal placement), inguinal hernia, hiatal hernia ​ Moderate to complex ventral hernia, can be placed intraperitoneally ​ Complex ventral hernia and abdominal wall reconstruction and can be used for bridging, can be placed intraperitoneally ​ Laparoscopic or Robotic-assisted surgery ​ Laparoscopic or Robotic-assisted inguinal hernia repair ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Polymer ​ Resorbable (PGA) or Permanent (Polypropylene) ​ Resorbable (PGA) or Permanent (Polypropylene) ​ Resorbable (PGA) or Permanent (Polypropylene) ​ Permanent (Polypropylene) ​ Permanent (Polypropylene) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shelf Life ​ Resorbable‑18 months Permanent-36 months ​ Resorbable‑18 months Permanent-36 months ​ Resorbable‑18 months Permanent-36 months ​ 36 months ​ 36 months ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Configuration ​ Exposed polymer on both sides ​ Exposed polymer on one side, and one smooth side ​ Two smooth sides ​ Exposed polymer on one side, and one smooth side ​ Exposed polymer on both sides ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Availability ​ U.S.
Our OviTex IHR product was specifically designed for use in laparoscopic and robotic-assisted inguinal hernia repair and is available in anatomical and rectangle shapes. ​ 20 Table of Contents OviTex Portfolio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OviTex ​ OviTex 1S ​ OviTex 2S ​ OviTex LPR ​ OviTex IHR ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Size and Shape ​ 4x8 cm to 25x40 cm* (Rectangle or Square) ​ 4x8 cm to 25x40 cm* (Rectangle or Square) ​ 4x8 cm to 25x40 cm* (Rectangle or Square) ​ 12x18 cm to 15x25 cm* (Ellipse); 6cm**, 9cm to 15cm (Circle) ​ 10x17 cm (Anatomical); 13x17 cm (Rectangle) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Strength ​ + ​ ++ ​ +++ ​ + ​ + ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Layers of Ovine Rumen ​ Four ​ Six ​ Eight ​ Four ​ Three or Four (Anatomical); Three (Rectangle) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Common Procedures ​ Moderate ventral hernia (pre-peritoneal placement), inguinal hernia, hiatal hernia ​ Moderate to complex ventral hernia, can be placed intraperitoneally ​ Complex ventral hernia and abdominal wall reconstruction and can be used for bridging, can be placed intraperitoneally ​ Laparoscopic or Robotic-assisted surgery ​ Laparoscopic or Robotic-assisted inguinal hernia repair ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Polymer ​ Resorbable (PGA or PLGA) or Permanent (Polypropylene) ​ Resorbable (PGA or PLGA) or Permanent (Polypropylene) ​ Resorbable (PGA or PLGA) or Permanent (Polypropylene) ​ Resorbable (PLGA) or Permanent (Polypropylene) ​ Resorbable (PLGA) or Permanent (Polypropylene) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shelf Life ​ Resorbable‑18 months Permanent-36 months ​ Resorbable‑18 months Permanent-36 months ​ Resorbable‑18 months Permanent-36 months ​ Resorbable‑18 months Permanent-36 months ​ Resorbable‑18 months Permanent-36 months ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Configuration ​ Exposed polymer on both sides ​ Exposed polymer on one side, and one smooth side ​ Two smooth sides ​ Exposed polymer on one side, and one smooth side ​ Exposed polymer on both sides ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Commercial Availability ​ U.S.
We provide our employees and their families with access to a variety of flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being; that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.
We provide our employees and their families with access to a variety of flexible and convenient health and wellness programs, including benefits that provide protection and security so they can 38 Table of Contents have peace of mind concerning events that may require time away from work or that impact their financial well-being; that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.
Some of our competitors have: ● significantly greater name recognition; ● broader or deeper relations with healthcare professionals, customers and third-party payors; ● more established distribution networks; 26 Table of Contents ● greater experience in conducting research and development, manufacturing, clinical trials, marketing and obtaining regulatory clearance or approval for products; ● greater financial and human resources for product development, sales and marketing and patent prosecution; and ● more established, wider-ranging and deeper contractual relationships with GPO and IDNs that can be leveraged to drive greater utilization of their products.
Some of our competitors have: ● significantly greater name recognition; ● broader or deeper relations with healthcare professionals, customers and third-party payors; ● more established distribution networks; ● greater experience in conducting research and development, manufacturing, clinical trials, marketing and obtaining regulatory clearance or approval for products; ● greater financial and human resources for product development, sales and marketing and patent prosecution; and ● more established, wider-ranging and deeper contractual relationships with GPO and IDNs that can be leveraged to drive greater utilization of their products.
The FDA has broad post-market and regulatory enforcement powers. Medical device manufacturers are subject to unannounced inspections by the FDA and other state, local and foreign regulatory authorities to assess compliance with the QSR and other applicable regulations, and these inspections may include the manufacturing facilities of any suppliers.
The FDA has broad post-market and regulatory enforcement powers. Medical device manufacturers are subject to unannounced inspections by the FDA and other state, local and foreign regulatory authorities to assess compliance with the QMSR and other applicable regulations, and these inspections may include the manufacturing facilities of any suppliers.
There can be no assurance that submission of an IDE will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified 30 Table of Contents number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria.
There can be no assurance that submission of an IDE will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE allows clinical testing to go forward for a specified number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and efficacy, even if the trial meets its intended success criteria.
The FCPA also obligates companies whose securities are listed in the U.S. to comply with accounting provisions requiring us to maintain books and records, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation, including international subsidiaries, if any, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements.
The FCPA also obligates companies whose securities are listed in the 36 Table of Contents U.S. to comply with accounting provisions requiring us to maintain books and records, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the corporation, including international subsidiaries, if any, and to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements.
Despite improvements compared to the use of permanent synthetic mesh or biologic matrices, current limitations of resorbable synthetic mesh may include: ● significant foreign body inflammatory response that can result in encapsulation or contraction of the mesh until resorbed; ● scar tissue formation and lack of remodeling of soft-tissue; ● mesh infection until resorbed; ● migration of the mesh until resorbed which can result in organ erosion or perforation; and ● lack of mid-term and long-term soft-tissue reinforcement as resorption progresses.
Despite improvements 12 Table of Contents compared to the use of permanent synthetic mesh or biologic matrices, current limitations of resorbable synthetic mesh may include: ● significant foreign body inflammatory response that can result in encapsulation or contraction of the mesh until resorbed; ● scar tissue formation and lack of remodeling of soft-tissue; ● mesh infection until resorbed; ● migration of the mesh until resorbed which can result in organ erosion or perforation; and ● lack of mid-term and long-term soft-tissue reinforcement as resorption progresses.
Among other requirements, the GDPR regulates cross-border transfers of personal data and requires transferee countries to have protections equivalent to protections available in the EU. In July 2023, the EU adopted the EU-U.S. Data Privacy Framework (“DPF”) to facilitate cross-border transfers of data from the EU to the U.S.
Among other requirements, the GDPR regulates cross-border transfers of personal data and requires transferee countries to have protections equivalent to protections available in the EEA and UK. In July 2023, the EU adopted the EU-U.S. Data Privacy Framework (“DPF”) to facilitate cross-border transfers of data from the EU to the U.S.
The letter-to-file is in lieu of submitting a new 510(k) to obtain clearance for every change. The FDA can always review these letters-to-file in an inspection. If the FDA disagrees with a manufacturer’s determination, the FDA can 28 Table of Contents require the manufacturer to cease marketing and/or request the recall of the modified device until marketing authorization is obtained.
The letter-to-file is in lieu of submitting a new 510(k) to obtain clearance for every change. The FDA can always review these letters-to-file in an inspection. If the FDA disagrees with a manufacturer’s determination, the FDA can require the manufacturer to cease marketing and/or request the recall of the modified device until marketing authorization is obtained.
With respect to OviTex PRS, in addition to independent, third-party publications evaluating the use of the product in various soft tissue applications, we also continue to enroll patients in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions.
With respect to OviTex PRS, in addition to independent, third-party publications evaluating the use of the product in various soft tissue applications, we also continue to enroll patients in our OPERA study, a retrospective-prospective trial 18 Table of Contents evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions.
Given the limitations of and lack of innovation in existing biologic matrices for plastic and reconstructive surgical procedures, we believe a significant market opportunity exists for our OviTex PRS products. 10 Table of Contents Current Materials Used in Hernia Repair and Abdominal Wall Reconstruction and Their Limitations Hernia Repair and Abdominal Wall Reconstruction The vast majority of hernias are treated with surgical repair.
Given the limitations of and lack of innovation in existing biologic matrices for plastic and reconstructive surgical procedures, we believe a significant market opportunity exists for our OviTex PRS products. Current Materials Used in Hernia Repair and Abdominal Wall Reconstruction and Their Limitations Hernia Repair and Abdominal Wall Reconstruction The vast majority of hernias are treated with surgical repair.
We have also focused on evaluating and publishing clinical data on the effectiveness and safety of our OviTex products. To date, there have been over forty published or presented works relating to these clinical findings, either by us or a third-party evaluating one or more product configurations in our OviTex portfolio.
We have also focused on evaluating and publishing clinical data on the effectiveness and safety of our OviTex products. To date, there have been over sixty-five published or presented works relating to these clinical findings, either by us or a third-party evaluating one or more product configurations in our OviTex portfolio.
Long-term pain or discomfort at the hernia repair site is one of the most serious complications of hernia surgery and may, in some cases, persist for years. Given the limitations of and lack of innovation in existing hernia repair products, we believe a significant market opportunity exists for our portfolio of OviTex products.
Long-term pain 9 Table of Contents or discomfort at the hernia repair site is one of the most serious complications of hernia surgery and may, in some cases, persist for years. Given the limitations of and lack of innovation in existing hernia repair products, we believe a significant market opportunity exists for our portfolio of OviTex products.
Our OviTex PRS products are designed with a patented corner-lock stitch pattern designed to resist deformation and to control the degree and direction of stretching of the product. Our capabilities in polymer science, biologics, textile engineering and analytical testing enable us to quickly design innovative products for development and manufacture.
Our OviTex PRS products are designed with a patented corner-lock stitch pattern designed to resist deformation and to control the degree and direction of stretching of the product. 13 Table of Contents Our capabilities in polymer science, biologics, textile engineering and analytical testing enable us to quickly design innovative products for development and manufacture.
As a consequence, they are able to spend more on product development, marketing, sales and other product initiatives than we can, while also benefiting from greater brand awareness. We also compete with smaller medical device companies that have single products or a limited range of products.
As a consequence, they are able to spend more on product development, marketing, sales and other product initiatives than we 26 Table of Contents can, while also benefiting from greater brand awareness. We also compete with smaller medical device companies that have single products or a limited range of products.
Following surgical hernia repair, convalescence has a significant 9 Table of Contents socioeconomic impact. Absence from work during this period can range from approximately five to 14 days according to one study. Pain is the most common cause of delay in returning to work, followed by wound problems.
Following surgical hernia repair, convalescence has a significant socioeconomic impact. Absence from work during this period can range from approximately five to 14 days according to one study. Pain is the most common cause of delay in returning to work, followed by wound problems.
Polymer fibers are interwoven through the layers of biologic 13 Table of Contents material in unique embroidered patterns and contribute to approximately 5% of the overall device by mass. The interwoven polymer utilized can be either permanent, made from polypropylene, or resorbable, made from polyglycolic acid (“PGA”) or polylactic-co-glycolic acid (“PLGA”).
Polymer fibers are interwoven through the layers of biologic material in unique embroidered patterns and contribute to approximately 5% of the overall device by mass. The interwoven polymer utilized can be either permanent, made from polypropylene, or resorbable, made from polyglycolic acid (“PGA”) or polylactic-co-glycolic acid (“PLGA”).
In addition, we believe that the trade secrets developed with Aroa create additional barriers to entry. ● Highly accomplished executive team with proven track record. Our executive team consists of seasoned medical device professionals with deep industry experience, and a broad network of relationships within the industry and the medical community.
In addition, we believe that the trade secrets developed with Aroa create additional barriers to entry. 17 Table of Contents ● Highly accomplished executive team with proven track record. Our executive team consists of seasoned medical device professionals with deep industry experience, and a broad network of relationships within the industry and the medical community.
In addition, under the Aroa License, Aroa is our exclusive manufacturer and supplier for the development of our bovine and ovine extracellular matrix products. 23 Table of Contents Pursuant to the terms of the Aroa License, we made upfront payments to Aroa totaling $2.3 million and granted Aroa 74,316 newly issued shares of our restricted common stock.
In addition, under the Aroa License, Aroa is our exclusive manufacturer and supplier for the development of our bovine and ovine extracellular matrix products. Pursuant to the terms of the Aroa License, we made upfront payments to Aroa totaling $2.3 million and granted Aroa 74,316 newly issued shares of our restricted common stock.
We believe this team is well-positioned to lead us through the commercial expansion of our products and development and launch of future products. 17 Table of Contents Our Growth Strategy Our goal is to become the leading provider of soft-tissue reconstruction products. The key elements of our strategy include: ● Successfully deploy our U.S. commercial organization to support our growth.
We believe this team is well-positioned to lead us through the commercial expansion of our products and development and launch of future products. Our Growth Strategy Our goal is to become the leading provider of soft-tissue reconstruction products. The key elements of our strategy include: ● Successfully deploy our U.S. commercial organization to support our growth.
To be used in surgery our OviTex product is placed in a sterile dish, rehydrated with sterile saline for five minutes, trimmed to fit the site, if needed, and then positioned to achieve maximum contact between the device and the surrounding tissue. The device may be sutured, stapled or tacked into place.
To be used in surgery our OviTex product is trimmed to fit the site, if needed, rehydrated with sterile saline for five minutes and then positioned to achieve maximum contact between the device and the surrounding tissue. The device may be sutured, stapled or tacked into place.
Ovine rumen, the forestomach of a sheep, is the source of the biologic material used in both of our OviTex and OviTex PRS products. 8 Table of Contents We use biologic material from ovine rumen because of its plentiful supply, optimal biomechanical profile and open collagen architecture that allows for rapid cellular infiltration.
Ovine rumen, the forestomach of a sheep, is the source of the biologic material used in both of our OviTex and OviTex PRS products. We use biologic material from ovine rumen because of its plentiful supply, optimal biomechanical profile and open collagen architecture that allows for rapid cellular infiltration.
Of the enrolled patients, 78% 15 Table of Contents were characterized as high risk for experiencing an SSO based on at least one known risk factor, which included obesity, active smoking, COPD, diabetes mellitus, coronary artery disease, or advanced age (≥75 years).
Of the enrolled patients, 78% were characterized as high risk for experiencing an SSO based on at least one known risk factor, which included obesity, active smoking, COPD, diabetes mellitus, coronary artery disease, or advanced age (≥75 years).
The biologic matrix is derived from ovine rumen and utilizes a patented process to create a reinforced tissue matrix that is optimized for soft-tissue reconstruction. Our OviTex and OviTex PRS products are available in resorbable and permanent polymer versions in a variety of configurations and sizes.
The biologic matrix is derived from ovine rumen and utilizes a patented process to create a reinforced tissue matrix that is optimized for soft-tissue reconstruction. Our OviTex and OviTex PRS products are available in resorbable and permanent polymer 16 Table of Contents versions in a variety of configurations and sizes.
All clinical investigations of investigational devices to determine safety and effectiveness must be conducted in accordance with the FDA’s IDE regulations which govern investigational device labeling, prohibit promotion of the investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.
All clinical investigations of investigational devices to determine safety and effectiveness must be conducted in accordance with the FDA’s IDE regulations which govern investigational device labeling, prohibit promotion of the 30 Table of Contents investigational device, and specify an array of recordkeeping, reporting and monitoring responsibilities of study sponsors and study investigators.
In addition, an increasing emphasis on managed care in the U.S. has increased and will continue to increase the pressure on medical product and service pricing. Human Capital Resources As of December 31, 2024, we had 209 employees worldwide. None of our employees are represented by a collective bargaining agreement and we have never experienced a work stoppage.
In addition, an increasing emphasis on managed care in the U.S. has increased and will continue to increase the pressure on medical product and service pricing. Human Capital Resources As of December 31, 2025, we had 218 employees worldwide. None of our employees are represented by a collective bargaining agreement and we have never experienced a work stoppage.
We plan to continue to expand our product offerings and the treatment capabilities of our products to address a broader patient base within soft-tissue reconstruction. As we innovate and develop our 18 Table of Contents products, the new features and improved surgical techniques expand the clinical applications for soft-tissue reinforcement.
We plan to continue to expand our product offerings and the treatment capabilities of our products to address a broader patient base within soft-tissue reconstruction. As we innovate and develop our products, the new features and improved surgical techniques expand the clinical applications for soft-tissue reinforcement.
Our reinforced tissue matrices are constructed to provide increased surface area and permeability, allowing for rapid absorption of wound fluids and blood during implantation and enabling oxygen supply, cellular infiltration, migration, and repopulation for revascularization and functional tissue remodeling during healing.
Our reinforced tissue matrices are constructed to provide increased surface area and permeability, allowing for rapid absorption of wound fluids and blood during implantation and enabling oxygen supply, cellular infiltration, migration, and repopulation for 15 Table of Contents revascularization and functional tissue remodeling during healing.
We are currently devoting research and development resources to develop additional variations of our OviTex and OviTex PRS products, including larger versions of our current OviTex PRS product configurations, the development of OviTex configurations with longer-acting resorbable polymers and other potential product and packaging enhancements to extend the shelf life of our products.
We are currently devoting research and development resources to develop additional variations of our OviTex and OviTex PRS products, including the development of OviTex configurations with longer-acting resorbable polymers and other potential product and packaging enhancements to extend the shelf life of our products.
Further 33 Table of Contents legislation will be put in place in 2025 and 2026 to introduce new pre-market requirements, including an international reliance procedure for approval of certain medical devices for the Great Britain market. ​ Privacy and Security Laws There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information, including health information.
Further legislation will be put in place in 2026 to introduce new pre-market requirements, including an international reliance procedure for approval of certain medical devices for the Great Britain market. ​ Privacy and Security Laws There are numerous U.S. federal and state laws and regulations related to the privacy and security of personal information, including health information.
In addition to our U.S. intellectual property, we also own eight issued non-U.S. patents and seven pending non-U.S. patent applications, including six applications under the Patent Cooperation Treaty (“PCT”), which, subject to issuance, would be projected to expire between 2036 and 2044 and have exclusively licensed issued patents in Europe and Canada that will expire in 2029.
In addition to our U.S. intellectual property, we also own eleven issued non-U.S. patents and fourteen pending non-U.S. patent applications, including seven applications under the Patent Cooperation Treaty (“PCT”), which, subject to issuance, would be projected to expire between 2036 and 2044 and have exclusively licensed issued patents in Europe and Canada that will expire in 2029.
Indications for use include the repair of hernias and/or abdominal wall defects that require the use of reinforcing 19 Table of Contents or bridging material to obtain the desired surgical outcome. Our OviTex products can be used in a variety of hernia repairs, including simple and complex ventral, inguinal and hiatal hernias, as well as abdominal wall reconstructions.
Indications for use include the repair of hernias and/or abdominal wall defects that require the use of reinforcing material to obtain the desired surgical outcome. Our OviTex products can be used in a variety of hernia repairs, including simple and complex ventral, inguinal and hiatal hernias, as well as abdominal wall reconstructions.
The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for the device in accordance with the de novo classification procedure, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.
The device sponsor must then fulfill more rigorous PMA requirements, or can request a risk-based classification determination for 28 Table of Contents the device in accordance with the de novo classification procedure, which is a route to market for novel medical devices that are low to moderate risk and are not substantially equivalent to a predicate device.
Machine punched regularly spaced fenestrations, or holes and die-cut slits in the product facilitate fluid management, allow for rapid cellular infiltration and create a directional bias to the stretch. The third option, the long-term resorbable PRS, provides bi-directional stretch and longer resorption profile utilizing PLGA.
Machine punched regularly spaced fenestrations, or holes and die-cut slits in the product facilitate fluid management, allow for rapid cellular infiltration and create a directional bias to the stretch. The third option, the long-term resorbable PRS, provides bi-directional stretch and longer resorption profile 21 Table of Contents utilizing PLGA.
Patents As of December 31, 2024, we exclusively license two issued U.S. patents that will expire in 2029 and 2031.
Patents As of December 31, 2025, we exclusively license two issued U.S. patents that will expire in 2029 and 2031.
Liability arises, primarily, when an entity knowingly submits, or causes another to submit, a false claim for reimbursement to the federal government, but also may arise when an entity knowingly makes a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the federal government.
Liability arises, primarily, when an entity knowingly submits, or causes another to submit, a false claim for reimbursement to the federal government, but also may 35 Table of Contents arise when an entity knowingly makes a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the federal government.
During this review period, the FDA may request additional information or clarification of information already provided, or the FDA may issue a major deficiency letter to the applicant, requesting the applicant’s response to deficiencies communicated by the FDA.
During this review 29 Table of Contents period, the FDA may request additional information or clarification of information already provided, or the FDA may issue a major deficiency letter to the applicant, requesting the applicant’s response to deficiencies communicated by the FDA.
We also continue to enroll patients in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions. Based on the current sales of biologic matrices in the U.S., we estimate the annual U.S. current addressable market opportunity for our OviTex PRS products to be approximately $800 million.
We also continue to collect patient data in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions. Based on the current sales of biologic matrices in the U.S., we estimate the annual U.S. current addressable market opportunity for our OviTex PRS products to be approximately $800 million.
Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the Quality Systems Regulations, or QSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials.
Class I includes devices with the lowest risk to the patient and are those for which safety and effectiveness can be reasonably assured by adherence to a set of FDA regulations, referred to as the General Controls for Medical Devices, which require compliance with the applicable portions of the Quality Management System Regulation, or QMSR, facility registration and product listing, reporting of adverse events and malfunctions, and appropriate, truthful and non-misleading labeling and promotional materials.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million (£17.5 million for the UK GDPR) or 4% of the annual global revenues of the corporate group of the noncompliant company, whichever is greater.
Surgical hernia repair is performed either through open repair, which uses a single incision to open the abdomen or groin across the hernia, or minimally invasive repair, which involves laparoscopic or robotic-assisted techniques. Laparoscopic surgery is a minimally invasive surgical technique performed in the abdomen or groin through small incisions.
Surgical hernia repair is performed either through open repair, which uses a single incision to open the abdomen or groin across the hernia, or minimally invasive repair, which 10 Table of Contents involves laparoscopic or robotic-assisted techniques. Laparoscopic surgery is a minimally invasive surgical technique performed in the abdomen or groin through small incisions.
This embroidery process creates hundreds of micro-channels to allow the multi-directional passage of the patients’ native cells and fluids throughout the product.
This embroidery process creates hundreds of micro-channels to allow the multi-directional passage of the patients’ native cells and fluids 19 Table of Contents throughout the product.
This preclinical data is supported by our compelling clinical evidence showing the safety and efficacy of our OviTex products in published data on over 1,200 hernia patients. 16 Table of Contents ● Long-term supply agreement that provides pricing flexibility.
This preclinical data is supported by our compelling clinical evidence showing the safety and efficacy of our OviTex products in published data on over 1,300 hernia patients. ● Long-term supply agreement that provides pricing flexibility.
Some Class I devices, also called Class I reserved devices, also require premarket clearance 27 Table of Contents by the FDA through the 510(k) premarket notification process described below. Most Class I products are exempt from the premarket notification requirements.
Some Class I devices, also called Class I reserved devices, also require premarket clearance by the FDA through the 510(k) premarket notification process described below. Most Class I products are exempt from the premarket notification requirements.
We own twenty-three U.S. issued or allowed patents which will expire between 2035 and 2041 and twelve pending U.S. patent applications, which subject to issuance, are projected to expire between 2035 and 2045, without taking into account potential patent term extensions or adjustments.
We own twenty-six U.S. issued patents which will expire between 2035 and 2041 and ten pending U.S. patent applications, which subject to issuance, are projected to expire between 2035 and 2045, without taking into account potential patent term extensions or adjustments.
In addition to our broad-based equity award programs, we have used targeted equity-based grants with vesting conditions to enhance retention of personnel. Corporate Information We were incorporated on April 17, 2012. 38 Table of Contents Our primary executive offices are located at 1 Great Valley Parkway, Suite 24, Malvern, Pennsylvania 19355 and our telephone number is (484) 320-2930.
In addition to our broad-based equity award programs, we have used targeted equity-based grants with vesting conditions to enhance retention of personnel. Corporate Information We were incorporated on April 17, 2012. Our primary executive offices are located at 1 Great Valley Parkway, Suite 24, Malvern, Pennsylvania 19355 and our telephone number is (484) 320-2930. Our website address is www.telabio.com.
OviTex Reinforced Tissue Matrix Our OviTex Reinforced Tissue Matrix has received 510(k) clearance from the FDA, which clearance was obtained and is currently held by Aroa and is intended for use as a surgical mesh to reinforce and/or repair soft-tissue where weakness exists.
OviTex Reinforced Tissue Matrix Our OviTex Reinforced Tissue Matrix has received multiple 510(k) clearances from the FDA, which were obtained and are currently held by Aroa. OviTex is intended for use as a surgical mesh to reinforce and/or repair soft-tissue where weakness exists.
We expect our clinical evidence will provide surgeons with safety and efficacy data on the appropriate use of our products and we plan to obtain further clinical evidence to support additional regulatory clearances or approvals of our reinforced tissue matrices for additional indications for use in the future. 22 Table of Contents Preclinical Programs Our pre-clinical program is paramount in the design of our products.
We expect our clinical evidence will provide surgeons with safety and efficacy data on 22 Table of Contents the appropriate use of our products and we plan to obtain further clinical evidence to support additional regulatory clearances or approvals of our reinforced tissue matrices for additional indications for use in the future.
Our analysis of patients in the BRAVO study reaching 24-month follow-up was published in the Annals of Medicine and Surgery in October 2022. We have begun our next post-market prospective study, BRAVO II, which evaluates OviTex LPR, OviTex Core Permanent and OviTex 1S Permanent in the robotic repair of ventral and inguinal hernias over 24 months.
Our analysis of patients in the BRAVO study reaching 24-month follow-up was published in the Annals of Medicine and Surgery in October 2022. Our post-market prospective study, BRAVO II, is ongoing and evaluates OviTex LPR, OviTex Core Permanent and OviTex 1S Permanent in the robotic repair of ventral and inguinal hernias over 24 months.
We believe that increasing the size of our product configurations will support utilization in new surgical applications or with certain patient populations. Increasing product permeability encourages a more-natural healing response. Longer-acting polymers can provide additional support for patients that need more time to heal.
Improving the surgical handling and implementation of our devices benefits both the clinician and patient. We believe that increasing the size of our product configurations will support utilization in new surgical applications or with certain patient populations. Increasing product permeability encourages a more-natural healing response. Longer-acting polymers can provide additional support for patients that need more time to heal.
Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021 and subsequent legislation, Medicare payments to providers were further reduced starting on January 1, 2025; however, legislation has been introduced (but not passed) in the U.S. Congress that would, if enacted, reverse these payment reductions.
Due to the Statutory Pay-As-You-Go Act of 2010, estimated budget deficit increases resulting from the American Rescue Plan Act of 2021 and subsequent legislation, Medicare payments to providers were further reduced starting on January 1, 2025; however, legislation has been introduced (but not passed) in the U.S.
Our website address is www.telabio.com. The information contained in, or that can be accessed through, our website is not part of this Annual Report.
The information contained in, or that can be accessed through, our website is not part of this Annual Report.
As of December 31, 2024, we had 133 employees in our U.S. based commercial organization in 75 sales territories, which includes sales management, territory managers, marketing and administrative and field- 25 Table of Contents based support staff. We plan to hire additional territory managers and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.
As of December 31, 2025, we had 150 employees in our U.S. based commercial organization, which includes sales management, territory managers, marketing and administrative and field-based support staff. We plan to hire additional territory managers and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.
Following receipt of our investigational device exemption application in October 2024 relating to the study of the safety and effectiveness of our OviTex PRS product in implant-based breast reconstruction, we continue to evaluate and finalize the clinical study protocol to eventually support a pre-market application to obtain approval for an indication for OviTex PRS for use in breast reconstruction. ● Advance our portfolio of reinforced tissue matrices with the introduction of new product features and designs.
Following receipt of our investigational device exemption application in October 2024 relating to the study of the safety and effectiveness of our OviTex PRS product in implant-based breast reconstruction, we continue to evaluate and finalize the clinical study protocol to eventually support a pre-market application to obtain approval for an indication for OviTex PRS for use in breast reconstruction.
We primarily sell our products through a single direct sales organization in the U.S. As of December 31, 2024, we had 75 sales territories in the U.S. which are supported by 133 employees in our U.S. based commercial organization. We plan to hire additional territory managers and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.
We primarily sell our products through a single direct sales organization in the U.S. As of December 31, 2025, we had 150 employees in our U.S. based commercial organization. We plan to hire additional territory managers and field-based support employees to support and service new accounts for soft-tissue reconstruction procedures.
For example, the California Consumer Privacy Act (“CCPA”) is a comprehensive privacy law that created individual privacy rights for California residents and increased the privacy and security obligations of entities handling certain personal data, including sensitive personal information.
For example, the California Consumer Privacy Act (“CCPA”) is a comprehensive privacy law that created individual privacy rights for California residents and increased the privacy and security obligations of entities handling certain personal data, including sensitive personal information. Certain states have also passed laws regulating specific aspects of privacy.
The MDR went into effect on May 26, 2021, and it: ● strengthens the rules on placing devices on the market and reinforces surveillance once they are available; ● establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● sets up a central database (Eudamed) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and 32 Table of Contents ● strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
There is a transition period during which certificates issued under the MDD remain valid, subject to compliance with certain requirements under the MDR (e.g. having put in place a quality management system in accordance with the MDR by May 26, 2024). 32 Table of Contents The MDR went into effect on May 26, 2021, and it: ● strengthens the rules on placing devices on the market and reinforces surveillance once they are available; ● establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● improves the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● sets up a central database (Eudamed) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
In February 2023, we launched two larger configurations of OviTex LPR, designed for ventral and incisional hernias. In April 2024, we launched OviTex IHR Reinforced Tissue Matrix, a new OviTex configuration specifically designed to address inguinal hernia procedures performed robotically and laparoscopically.
In February 2023, we launched two larger configurations of OviTex LPR, designed for ventral and incisional hernias. In April 2024, we launched OviTex IHR Reinforced Tissue Matrix, a new OviTex configuration specifically designed to address inguinal hernia procedures performed robotically and laparoscopically in the U.S., followed by a launch in the European markets in June 2025.
Our OviTex PRS portfolio is a sterile reconstructive reinforced tissue matrix that comes in three different options. The short-term resorbable and permanent PRS options are composed of two or three layers of ovine rumen joined by a patented corner-lock embroidered diamond patterned polymer (PGA or polypropylene) that allows the product to stretch uni-directionally while also maintaining its shape.
The short-term resorbable and permanent PRS options are composed of two or three layers of ovine rumen joined by a patented corner-lock embroidered diamond patterned polymer (PGA or polypropylene) that allows the product to stretch uni-directionally while also maintaining its shape.
Our intellectual property applies to our differentiated product construction and materials. In addition, we believe our exclusive manufacturing and long-term supply and license agreement with Aroa (the “Aroa License”) creates a competitive advantage by allowing us to secure an exclusive supply of ovine rumen at a low cost.
In addition, we believe our exclusive manufacturing and long-term supply and license agreement with Aroa (the “Aroa License”) creates a 8 Table of Contents competitive advantage by allowing us to secure an exclusive supply of ovine rumen at a low cost.
We intend to continue to make investments in research and development efforts to develop improvements and enhancements to our product portfolio. Our revenue for the years ended December 31, 2024 and 2023 was $69.3 million and $58.5 million, respectively, which represents an increase of $10.8 million, or 19% for the year ended December 31, 2024.
We intend to continue to make investments in research and development efforts to develop improvements and enhancements to our product portfolio. Our revenue for the years ended December 31, 2025 and 2024 was $80.3 million and $69.3 million, respectively, which represents an increase of $11.0 million, or 16% for the year ended December 31, 2025.
Aroa License In August 2012, we entered into the Aroa License, which was amended and restated in July 2015, pursuant to which we obtained an exclusive license to certain patents and know-how to develop, commercialize and sell bovine and ovine extracellular matrix products for hernia repair, abdominal wall and breast reconstruction in North America and Europe, which we refer to as the Licensed Territory.
We also rely on know-how and continuing technological innovation to develop and maintain our competitive position. 23 Table of Contents Aroa License In August 2012, we entered into the Aroa License, which was amended and restated in July 2015, pursuant to which we obtained an exclusive license to certain patents and know-how to develop, commercialize and sell bovine and ovine extracellular matrix products for hernia repair, abdominal wall and breast reconstruction in North America and Europe, which we refer to as the Licensed Territory.
The Affordable Care Act has also been subject to challenges in the courts since it was enacted. On June 17, 2021, for example, the Supreme Court dismissed the most recent challenge to the Affordable Care Act, ruling that the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.
On June 17, 2021, for example, the Supreme Court dismissed the most recent challenge to the Affordable Care Act, ruling that the plaintiffs lacked standing to challenge the law as they had not alleged personal injury traceable to the allegedly unlawful conduct.
The results showed our reinforced tissue matrices exhibited a minimal inflammatory response, rapid cellular infiltration and revascularization and demonstrated early and complete remodeling into functional tissue. The OviTex results have been published in the peer-reviewed journal Hernia (https://doi.org/10.1007/s10029-019-02119-z). The OviTex PRS results have been published in the peer-reviewed journal ePlasty (ePlasty 2022;22:e43).
In these studies, we compared our OviTex and OviTex PRS products to market leading competitive materials. The results showed our reinforced tissue matrices exhibited a minimal inflammatory response, rapid cellular infiltration and revascularization and demonstrated early and complete remodeling into functional tissue. The OviTex results have been published in the peer-reviewed journal Hernia (https://doi.org/10.1007/s10029-019-02119-z).
Enforcement actions may be brought by the Department of Justice or the SEC, and recent enacted legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims such as those under the FCPA from five years to ten years. 36 Table of Contents International Laws In Europe, and throughout the world, other countries have enacted anti-bribery laws and/or regulations similar to the FCPA.
Enforcement actions may be brought by the Department of Justice or the SEC, and recent enacted legislation has expanded the SEC’s power to seek disgorgement in all FCPA cases filed in federal court and extended the statute of limitations in SEC enforcement actions in intent-based claims such as those under the FCPA from five years to ten years.
Surgeons continue to use our OviTex PRS reinforced tissue matrices in their surgeries and, in addition to a potential IDE study, we have also commenced our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions. ​ Intellectual Property Our success depends in part on our ability to obtain, maintain, protect and enforce our proprietary technology and intellectual property rights, in particular, our patent and trademark rights, preserving the confidentiality of our trade secrets, and operating without infringing the valid and enforceable patents and other proprietary rights of third parties.
Surgeons continue to use our OviTex PRS reinforced tissue matrices in their surgeries and, in addition to a potential IDE study, we have also commenced our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions. ​ ​ Lastly, we have initiated the collection of real-world quality improvement data on 1,100 patients across the entire OviTex and OviTex PRS portfolio of products and will be evaluating these patients over a 24 month follow-up period. ​ ​ Intellectual Property Our success depends in part on our ability to obtain, maintain, protect and enforce our proprietary technology and intellectual property rights, in particular, our patent and trademark rights, preserving the confidentiality of our trade secrets, and operating without infringing the valid and enforceable patents and other proprietary rights of third parties.
The U.S. government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls and restrictions on reimbursement.
Healthcare Reform The U.S. and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system. The U.S. government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls and restrictions on reimbursement.
The RICH study, a multicenter, prospective study sponsored by LifeCell Corporation (“LifeCell”) that evaluated the performance of Strattice, the industry leader for biological tissue matrices in complex abdominal wall reconstruction, in open ventral incisional hernia repair in contaminated abdominal wall defects, demonstrated post-operative hernia recurrence rates of 19% and 28% at 12-months and 24-months follow-up, respectively. 12 Table of Contents Resorbable Synthetic Mesh Resorbable synthetic mesh, including biologically-derived synthetic mesh, was introduced as a third category of hernia repair materials and as an alternative to permanent synthetic mesh and biologic matrices.
The RICH study, a multicenter, prospective study sponsored by LifeCell Corporation (“LifeCell”) that evaluated the performance of Strattice, the industry leader for biological tissue matrices in complex abdominal wall reconstruction, in open ventral incisional hernia repair in contaminated abdominal wall defects, demonstrated post-operative hernia recurrence rates of 19% and 28% at 12-months and 24-months follow-up, respectively.
We have invested in our direct sales and marketing infrastructure in order to expand our presence to promote awareness and adoption of our products. We market our products to hospitals, ambulatory surgery centers, surgeons, GPOs, IDNs and medical device supply chain participants primarily through our direct sales force. Our sales representatives and sales managers have substantial medical device experience.
We market our products to hospitals, ambulatory surgery centers, surgeons, GPOs, IDNs and medical device supply chain participants primarily through our direct sales force. Our sales representatives and sales managers have substantial medical device experience.
The United Kingdom formally left the EU on January 31, 2020. In respect of medical devices, since the end of the Brexit transitional period on January 1, 2021, medical devices must be registered with the Medicines and Healthcare products Regulatory Agency (“MHRA”) (the UK medicines and medical devices regulator) before being placed on the Great Britain market.
In Great Britain (England, Wales and Scotland), in respect of medical devices, since the end of the Brexit transitional period on January 1, 2021, medical devices must be registered with the Medicines and Healthcare products Regulatory Agency (“MHRA”) (the UK medicines and medical devices regulator) before they are placed on the market.
Europe ​ U.S. Europe ​ U.S. Europe ​ U.S. Europe ​ U.S. ​ * 25 x 30 cm and 25 x 40 cm sizes currently only available with permanent (polypropylene) polymer. + Denotes relative level of strength.
Europe*** ​ * 25 x 30 cm and 25 x 40 cm sizes currently only available with permanent (polypropylene) polymer. ** OviTex LPR 6 cm circle currently only available with resorbable (PLGA) polymer. *** Resorbable PLGA variants of OviTex currently only available in the U.S. + Denotes relative level of strength.
We rely on a combination of patent, trademark, trade secret and other intellectual property rights and measures to protect the intellectual property rights that we consider important to our business. We also rely on know-how and continuing technological innovation to develop and maintain our competitive position.
We rely on a combination of patent, trademark, trade secret and other intellectual property rights and measures to protect the intellectual property rights that we consider important to our business.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

128 edited+64 added−13 removed408 unchanged
Biggest changeIf we fail to comply with our reporting obligations, the FDA could take action, including untitled letters, warning letters, administrative actions, criminal 62 Table of Contents prosecution, imposition of civil monetary penalties, revocation of related approvals, seizure of our products or delay in clearance or approval of future products.
Biggest changeIf we fail to comply with our reporting obligations, the FDA could take action, which could include untitled letters, warning letters, FDA Form 483s, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of related approvals, seizure of our products or delay in clearance or approval of future products. 63 Table of Contents The FDA and foreign regulatory agencies have the authority to require the recall of commercialized products in the event of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable risk to health.
While some third-party payors currently cover and provide reimbursement for procedures using our currently cleared or approved products, we can give no assurance that these third-party payors will continue to provide coverage and adequate reimbursement for the 46 Table of Contents procedures using our products, to permit hospitals and surgeons to offer procedures using our products to patients requiring treatment, or that current reimbursement levels for procedures using our products will continue.
While some third-party payors currently cover and provide reimbursement for procedures using our currently cleared or approved products, we can give 46 Table of Contents no assurance that these third-party payors will continue to provide coverage and adequate reimbursement for the procedures using our products, to permit hospitals and surgeons to offer procedures using our products to patients requiring treatment, or that current reimbursement levels for procedures using our products will continue.
The FDA’s 510(k) clearance process usually takes from three to 12 months, but can last longer. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is filed with the FDA.
The FDA’s 510(k) clearance process usually takes from three to 12 months, but can generally last longer. The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from one to three years, or even longer, from the time the application is filed with the FDA.
If guidelines for soft-tissue reconstruction surgery change or the standard of care evolves, we may need to redesign and seek new marketing authorization from the FDA for our OviTex and OviTex PRS products or other products we may commercialize in the future.
If guidelines for soft-tissue reconstruction surgery change or the standard of care evolves, we may need to redesign and seek new marketing authorization from the FDA for our OviTex, OviTex PRS products or other products we may commercialize in the future.
Our fourth amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United State District Court for the District of Delaware) is the exclusive forum, to the fullest extent permitted by law, for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our fourth amended and restated certificate of incorporation or third amended and restated bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, except, in each case, (A) any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than such court, or (C) for which such court does not have subject matter jurisdiction, in all cases subject to the courts having jurisdiction over indispensable parties named as defendants.
Our fourth amended and restated certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware (or, if the Court of Chancery does not have jurisdiction, the United State District Court for the District of Delaware) is the exclusive forum, to the fullest extent permitted by law, for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our fourth amended and restated certificate of incorporation, as amended, or third amended and restated bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine, except, in each case, (A) any claim as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within 10 days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than such court, or (C) for which such court does not have subject matter jurisdiction, in all cases subject to the courts having jurisdiction over indispensable parties named as defendants.
The FDA and other foreign equivalents regulate, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; premarket clearance and approval; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market approval studies; and product import and export.
The FDA and other foreign equivalents regulate, among other things, with respect to medical devices: design, development and manufacturing; testing, labeling, content and language of instructions for use and storage; clinical trials; product safety; establishment registration and device listing; marketing, sales and distribution; premarket clearance and approval; record keeping procedures; advertising and promotion; recalls and field safety corrective actions; post-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; post-market approval studies; and product import and export restrictions.
For example: ● others may be able to make products that are similar to our products or utilize similar technology but that are not covered by the claims of our patents or that incorporate certain technology in our products that is in the public domain; ● we, or our future licensors or collaborators, might not have been the first to make the inventions covered by the applicable issued patent or pending patent application that we own now or may own or license in the future; ● we, or our future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● we may not be able to successfully commercialize our products before our relevant patents we may have, or to which we have ownership rights through licensing agreements, expire; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; 57 Table of Contents ● it is possible that our current or future pending patent applications will not lead to issued patents; ● issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; ● our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● the patents of others may harm our business; and ● we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: ● others may be able to make products that are similar to our products or utilize similar technology but that are not covered by the claims of our patents or that incorporate certain technology in our products that is in the public domain; ● we, or our future licensors or collaborators, might not have been the first to make the inventions covered by the applicable issued patent or pending patent application that we own now or may own or license in the future; ● we, or our future licensors or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● we may not be able to successfully commercialize our products before our relevant patents we may have, or to which we have ownership rights through licensing agreements, expire; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; 58 Table of Contents ● it is possible that our current or future pending patent applications will not lead to issued patents; ● issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; ● our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● the patents of others may harm our business; and ● we may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
Factors that may cause fluctuations in our quarterly and annual results include: ● surgeon and patient adoption of our products; ● timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors; ● changes in coverage policies by third-party payors that affect the reimbursement of procedures in which our products are used; ● unanticipated pricing pressure; ● established relationships or product purchase-level commitments of GPOs, IDNs and other third-party payors with whom we and our competitors contract; 69 Table of Contents ● our ability to obtain and maintain regulatory clearance or approval for any products in development or for our current products for additional indications or in additional jurisdictions; ● the hiring, retention and continued productivity of our sales representatives; ● our ability to expand the geographic reach of our sales and marketing efforts; ● results of clinical research and trials on our existing products and products in development; ● delays in, or failure of, component and raw material deliveries by Aroa; ● recalls or other field safety corrective actions by Aroa; ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters such as earthquakes, floods or public health emergencies such as the COVID-19 pandemic; and ● positive or negative coverage in the media or clinical publications of our products or products of our competitors or our industry.
Factors that may cause fluctuations in our quarterly and annual results include: ● surgeon and patient adoption of our products; ● timing of new product offerings, acquisitions, licenses or other significant events by us or our competitors; ● changes in coverage policies by third-party payors that affect the reimbursement of procedures in which our products are used; ● unanticipated pricing pressure; ● established relationships or product purchase-level commitments of GPOs, IDNs and other third-party payors with whom we and our competitors contract; ● our ability to obtain and maintain regulatory clearance or approval for any products in development or for our current products for additional indications or in additional jurisdictions; ● the hiring, retention and continued productivity of our sales representatives; ● our ability to expand the geographic reach of our sales and marketing efforts; ● results of clinical research and trials on our existing products and products in development; ● delays in, or failure of, component and raw material deliveries by Aroa; ● recalls or other field safety corrective actions by Aroa; ● business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters such as earthquakes, floods or public health emergencies such as the COVID-19 pandemic; and 72 Table of Contents ● positive or negative coverage in the media or clinical publications of our products or products of our competitors or our industry.
It is also possible that other federal, state or non-U.S. enforcement authorities might take action under other regulatory authority if they consider our business activities to constitute promotion of an off-label use, or are otherwise objectionable, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
It is also possible that other federal, state or non-U.S. enforcement authorities might take action under other regulatory authorities if they consider our business activities to constitute promotion of an off-label use, or are otherwise objectionable, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
These provisions provide, among other things, that: ● our board of directors has the exclusive right to expand the size of our board of directors and to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; ● our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; ● our stockholders may not act by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; ● a special meeting of stockholders may be called only by the chair of our board of directors, our chief executive officer (or president, in the absence of a chief executive officer) or a majority of our board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; ● our fourth amended and restated certificate of incorporation prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ● our board of directors may alter certain provisions of our third amended and restated bylaws without obtaining stockholder approval; ● the approval of the holders of at least two-thirds of our shares entitled to vote at an election of our board of directors is required to adopt, amend or repeal our third amended and restated bylaws or repeal the provisions of our fourth amended and restated certificate of incorporation regarding the election and removal of directors; ● stockholders must provide advance notice and additional disclosures to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting, which may 78 Table of Contents discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain voting control of our shares; and ● our board of directors is authorized to issue shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer.
These provisions provide, among other things, that: ● our board of directors has the exclusive right to expand the size of our board of directors and to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; ● our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving staggered three-year terms, which may delay the ability of stockholders to change the membership of a majority of our board of directors; ● our stockholders may not act by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; ● a special meeting of stockholders may be called only by the chair of our board of directors, our chief executive officer (or president, in the absence of a chief executive officer) or a majority of our board of directors, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; ● our fourth amended and restated certificate of incorporation, as amended, prohibits cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; 81 Table of Contents ● our board of directors may alter certain provisions of our third amended and restated bylaws without obtaining stockholder approval; ● the approval of the holders of at least two-thirds of our shares entitled to vote at an election of our board of directors is required to adopt, amend or repeal our third amended and restated bylaws or repeal the provisions of our fourth amended and restated certificate of incorporation, as amended, regarding the election and removal of directors; ● stockholders must provide advance notice and additional disclosures to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain voting control of our shares; and ● our board of directors is authorized to issue shares of preferred stock and to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer.
If we are unable to establish redundant manufacturing facilities in a timely manner, any disruption in the manufacture of our OviTex and OviTex PRS products at Aroa’s manufacturing and warehouse facility, the continued commercialization of our OviTex and OviTex PRS products, the supply of our OviTex and OviTex PRS products to customers and the development of any new reinforced tissue matrix products will be delayed, limited or prevented, which could have material adverse effect on our business, financial condition and results of operations.
If we are unable to establish redundant manufacturing facilities in a timely manner, any disruption in the manufacture of our OviTex and OviTex PRS products at Aroa’s manufacturing and warehouse facility, the continued commercialization of our OviTex and OviTex PRS products, the supply of our OviTex and OviTex PRS products to customers and the development of any new reinforced tissue matrix products will be suspended, delayed, limited or prevented, which could have material adverse effect on our business, financial condition and results of operations.
The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including: ● the volume and timing of sales of our products; ● the introduction of new products or product enhancements by us or others in our industry; ● disputes or other developments with respect to our or others’ intellectual property rights; ● our ability to develop, obtain regulatory clearance for, and market new and enhanced products on a timely basis; ● product liability claims or other litigation; ● quarterly variations in our results of operations or those of others in our industry; ● media exposure of our products or of those of others in our industry; 76 Table of Contents ● changes in governmental regulations or in reimbursement; ● changes in earnings estimates or recommendations by securities analysts; ● broad trends impacting companies within the pharmaceutical, biotechnology and medical technology industries; and ● general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors, including global pandemic such as the COVID-19 pandemic, or macroeconomic factors such as geopolitical tensions, tariffs, or the outbreak or escalation of hostilities or war.
The market price of our common stock is likely to be highly volatile and may fluctuate substantially due to many factors, including: ● the volume and timing of sales of our products; ● the introduction of new products or product enhancements by us or others in our industry; ● disputes or other developments with respect to our or others’ intellectual property rights; ● our ability to develop, obtain regulatory clearance for, and market new and enhanced products on a timely basis; ● product liability claims or other litigation; ● quarterly variations in our results of operations or those of others in our industry; ● media exposure of our products or of those of others in our industry; ● changes in governmental regulations or in reimbursement; ● changes in earnings estimates or recommendations by securities analysts; ● broad trends impacting companies within the pharmaceutical, biotechnology and medical technology industries; and ● general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors, including global pandemic such as the COVID-19 pandemic, or 79 Table of Contents macroeconomic factors such as geopolitical tensions, tariffs, or the outbreak or escalation of hostilities or war.
Alternatively, if a court were to find the choice of forum provision contained in our fourth amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. This provision will not apply to actions arising under the Securities Act or Exchange Act.
Alternatively, if a court were to find the choice of forum provision contained in our fourth amended and restated certificate of incorporation, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions. This provision will not apply to actions arising under the Securities Act or Exchange Act.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA and applicable state regulatory authorities, which may include any of the following sanctions: ● issue warning or untitled letters that would result in adverse publicity or may require corrective advertising; ● fines, injunctions, consent decrees and civil penalties; ● recalls, termination of distribution, administrative detention, or seizure of our products; ● customer notifications or repair, replacement or refunds; ● operating restrictions or partial suspension or total shutdown of production; ● delays in or refusal to grant our requests for future clearances under Section 510(k) or premarket approvals or EU regulatory approvals of new products, new intended uses, or modifications to existing products; ● withdrawal or suspension of regulatory clearances or approvals; ● FDA refusal to issue certificates to non-U.S. governments needed to export products for sale in other countries; and ● criminal prosecution.
Our failure to comply with applicable regulatory requirements could result in enforcement action by the FDA or applicable state, or non-U.S. regulatory authorities, which may include any of the following sanctions: ● issue FDA Form 483s, warning or untitled letters that would result in adverse publicity or may require corrective advertising; ● fines, injunctions, consent decrees and civil penalties; ● recalls, termination of distribution, administrative detention, or seizure of our products; ● customer notifications or repair, replacement or refunds; ● operating restrictions or partial suspension or total shutdown of production; ● delays in or refusal to grant our requests for future clearances under Section 510(k) or premarket approvals or EU regulatory approvals of new products, new intended uses, or modifications to existing products; ● withdrawal or suspension of regulatory clearances or approvals; ● FDA refusal to issue certificates to non-U.S. governments needed to export products for sale in other countries; and ● criminal prosecution.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our fourth amended and restated certificate of incorporation to be inapplicable or unenforceable in such action.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a court could find the choice of forum provisions contained in our fourth amended and restated certificate of incorporation, as amended, to be inapplicable or unenforceable in such action.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the FDA have fluctuated in recent years as a result.
The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, leadership and policy changes. Average review times at the FDA have fluctuated in recent years as a result.
Our fourth amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our fourth amended and restated certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
From time to time, we may publicly disclose interim or preliminary data from our clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a full analyses of all data related to the particular trial.
From time to time, we may publicly disclose interim or preliminary data from our clinical studies, which is based on a initial analysis of then-available data, and the results and related findings and conclusions are subject to change following a full analyses of all data related to the particular trial.
Provisions in our fourth amended and restated certificate of incorporation and our third amended and restated bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.
Provisions in our fourth amended and restated certificate of incorporation, as amended, and our third amended and restated bylaws may discourage, delay or prevent a merger, acquisition or other change in control of us that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares.
If we or our licensors fail to maintain the patents and patent applications covering our product or if we or our licensors otherwise allow our patents or patent applications to be abandoned or lapse, it can create opportunities for competitors to enter the market, which would hurt our competitive position and could impair our ability to successfully commercialize our products. 56 Table of Contents Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.
If we or our licensors fail to maintain the patents and patent applications covering our product or if we or our licensors otherwise allow our patents or patent applications to be abandoned or lapse, it can create opportunities for competitors to enter the market, which would hurt our competitive position and could impair our ability to successfully commercialize our products. 57 Table of Contents Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.
In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular drug, product candidate or our business.
In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular current or future product candidate or our business.
If regulatory sanctions are applied or if regulatory clearance or approval is withdrawn, it would have a material adverse effect on our business, financial condition and results of operations. 61 Table of Contents Our products must be manufactured in accordance with federal and state regulations, and we could be forced to recall our products or terminate production if we fail to comply with these regulations.
If regulatory sanctions are applied or if regulatory clearance or approval is withdrawn, it would have a material adverse effect on our business, financial condition and results of operations. 62 Table of Contents Our products must be manufactured in accordance with federal and state regulations, and we could be forced to recall our products or terminate production if we fail to comply with these regulations.
European sales are subject to a number of risks, including: ● difficulties in staffing and managing international operations; ● increased competition as a result of more products and procedures receiving regulatory approval in international markets; ● longer accounts receivable payment cycles and difficulties in collecting accounts receivable; ● fluctuations in currency exchange rates; ● non-U.S. certification and regulatory clearance or approval requirements; ● difficulties in developing effective marketing campaigns in unfamiliar countries; ● customs clearance and shipping delays; ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; ● political, social, and economic instability abroad, terrorist attacks, and security concerns in general; ● the impact of the macroeconomic factors, including pandemics, epidemics and other public health outbreaks, inflationary pressures and geopolitical conflicts, such as the ongoing Russia-Ukraine conflict and the current conflict in the Middle East (including any escalation or expansion); ● natural disasters and pandemics, epidemics or public health outbreaks, which result in lock-downs, travel restrictions and other restrictions on our ability to operate internationally; ● preference for locally produced products; ● potentially adverse tax consequences, including the complexities of non-U.S. value-added tax systems, tax inefficiencies related to our corporate structure, and restrictions on the repatriation of earnings; 48 Table of Contents ● the burdens of complying with a wide variety of non-U.S. laws and different legal standards; and ● increased financial accounting and reporting burdens and complexities.
European sales are subject to a number of risks, including: ● difficulties in staffing and managing international operations; ● increased competition as a result of more products and procedures receiving regulatory approval in international markets; ● longer accounts receivable payment cycles and difficulties in collecting accounts receivable; ● fluctuations in currency exchange rates; ● non-U.S. certification and regulatory clearance or approval requirements; ● difficulties in developing effective marketing campaigns in unfamiliar countries; ● customs clearance and shipping delays; ● complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; ● political, social, and economic instability abroad, terrorist attacks, and security concerns in general; ● the impact of the macroeconomic factors, including pandemics, epidemics and other public health outbreaks, inflationary pressures and geopolitical conflicts, such as the ongoing Russia-Ukraine conflict, recent events in Venezuela and the current conflicts in the Middle East (including any escalation or expansion); ● natural disasters and pandemics, epidemics or public health outbreaks, which result in lock-downs, travel restrictions and other restrictions on our ability to operate internationally; ● preference for locally produced products; ● potentially adverse tax consequences, including the complexities of non-U.S. value-added tax systems, tax inefficiencies related to our corporate structure, and restrictions on the repatriation of earnings; ● the burdens of complying with a wide variety of non-U.S. laws and different legal standards; and ● increased financial accounting and reporting burdens and complexities.
Our officers, directors and principal stockholders each holding more than 5% of our common stock, collectively, control approximately 49% of our outstanding common stock. As a result, these stockholders, if they act together, will be able to significantly influence our management and affairs and most matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.
Our officers, directors and principal stockholders each holding more than 5% of our common stock, collectively, control approximately 56% of our outstanding common stock. As a result, these stockholders, if they act together, will be able to significantly influence our management and affairs and most matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions.
The failure to comply with applicable regulations could jeopardize our ability to sell our reinforced tissue matrix products and result in enforcement actions such as: ● warning letters, untitled letters or Form 483s; ● fines; ● injunctions; 59 Table of Contents ● civil penalties; ● termination of distribution; ● recalls or seizures of products; ● delays in the introduction of products into the market; ● total or partial suspension of production; ● refusal to grant future clearances or approvals; ● withdrawals or suspensions of current clearances or approvals, resulting in prohibitions on sales of our products; and ● in the most serious cases, criminal penalties.
The failure to comply with applicable regulations could jeopardize our ability to sell our reinforced tissue matrix products and result in enforcement actions such as: ● warning letters, untitled letters or FDA Form 483s; ● fines; ● injunctions; 60 Table of Contents ● civil penalties; ● termination of distribution; ● recalls or seizures of products; ● delays in the introduction of products into the market; ● total or partial suspension of production; ● refusal to grant future clearances or approvals; ● withdrawals or suspensions of current clearances or approvals, resulting in prohibitions on sales of our products; and ● in the most serious cases, criminal penalties.
The methods used in, and the facilities used for, the manufacture of our products must comply with the FDA’s QSR which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices.
The methods used in, and the facilities used for, the manufacture of our products must comply with the FDA’s QMSR which is a complex regulatory scheme that covers the procedures and documentation of the design, testing, production, process controls, quality assurance, labeling, packaging, handling, storage, distribution, installation, servicing and shipping of medical devices.
A prolonged government shutdown, significant leadership, personnel, and/or policy changes, or other substantial modification in agency activities 64 Table of Contents could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. ​ The U.S.
A prolonged government shutdown, significant leadership, personnel, and/or policy changes, or other substantial modification in agency activities could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. ​ 65 Table of Contents The U.S.
Our ability to accurately forecast demand for such products could be negatively affected by many factors, including: ● product introductions by competitors; ● an increase or decrease in surgeon demand for our products or for products of our competitors; ● our failure to accurately manage our expansion strategy; 73 Table of Contents ● our failure to accurately forecast surgeon acceptance of new products; ● our failure to obtain contracts with a significant number of GPOs and IDNs; ● unanticipated changes in general market conditions or regulatory matters; ● the severity and duration of market disruptions as a result of the COVID-19 outbreak; and ● weakening of economic conditions or consumer confidence.
Our ability to accurately forecast demand for such products could be negatively affected by many factors, including: ● product introductions by competitors; ● an increase or decrease in surgeon demand for our products or for products of our competitors; ● our failure to accurately manage our expansion strategy; ● our failure to accurately forecast surgeon acceptance of new products; ● our failure to obtain contracts with a significant number of GPOs and IDNs; ● unanticipated changes in general market conditions or regulatory matters; ● the severity and duration of market disruptions as a result of the COVID-19 outbreak; and ● weakening of economic conditions or consumer confidence.
To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, 58 Table of Contents and either have the same technological characteristics as the predicate device or have different technological characteristics and the information in the premarket notification demonstrates that the device is as safe and effective and does not raise different questions of safety or effectiveness than the predicate device.
To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, 59 Table of Contents and either have the same technological characteristics as the predicate device or have different technological characteristics and the information in the premarket notification demonstrates that the device is as safe and effective and does not raise different questions of safety or effectiveness than the predicate device.
Although Aroa obtains its supply of ovine rumen from jurisdictions with sheep that are not currently known to carry any prion disease (progressive neurodegenerative disorders, including scrapie disease), there can be no assurance that these flocks will remain prion disease-free or that a future outbreak or presence of other unintended and potentially hazardous agents 50 Table of Contents would not adversely affect our products or patients that may receive them.
Although Aroa obtains its supply of ovine rumen from jurisdictions with sheep that are not currently known to carry any prion disease (progressive neurodegenerative disorders, including scrapie disease), there can be no assurance that these flocks will remain prion disease-free or that a future outbreak or presence of other unintended and potentially hazardous agents would not adversely affect our products or patients that may receive them.
In addition, the MidCap credit facility contains certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests, including the incurrence of additional indebtedness, effecting certain corporate changes, making certain investments, acquisitions or dispositions and paying dividends.
In addition, the Perceptive credit facility contains certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests, including the incurrence of additional indebtedness, effecting certain corporate changes, making certain investments, acquisitions or dispositions and paying dividends.
We cannot be sure that our 75 Table of Contents cyber insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of any such disruption in, or failure or security incident or breach of, our systems or third-party systems where information important to our business operations or commercial development is stored, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
We cannot be sure that our cyber insurance coverage will be adequate or sufficient to protect us from or to mitigate liabilities arising out of any such disruption in, or failure or security incident or breach of, our systems or third-party systems where information important to our business operations or commercial development is stored, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
For example, these stockholders could attempt to delay or prevent a change in control, even if such change in control would benefit our other stockholders, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our capital stock or our assets, and might affect the prevailing market price of our common stock due to investors’ perceptions that conflicts of interest may exist or arise.
For example, these stockholders could attempt to delay or prevent a change in control, even if such change in control would benefit our other stockholders, which could deprive our 80 Table of Contents stockholders of an opportunity to receive a premium for their common stock as part of a sale of our capital stock or our assets, and might affect the prevailing market price of our common stock due to investors’ perceptions that conflicts of interest may exist or arise.
The GDPR imposes strict rules on the transfer of personal data to countries outside the EEA, Switzerland or the United Kingdom, including the United States, to other countries in respect of which the European Commission or the United Kingdom government has not issued a so-called “adequacy decision” or “ adequacy regulation” (known as “third countries”), unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data.
The GDPR imposes strict rules on the transfer of personal data to countries outside the EEA, Switzerland or the United Kingdom, including the United States, to other countries in respect of which the European Commission or the United Kingdom government has not issued a so-called “adequacy decision” or “ adequacy regulation” (known as “third countries”), unless the parties to the transfer have implemented specific 69 Table of Contents safeguards to protect the transferred personal data.
As such, we are highly dependent upon Aroa’s continued ability to supply our OviTex and OviTex PRS products at the levels we require and any production shortfall that impairs the supply of our OviTex and OviTex PRS products could have a material adverse effect on our business, financial condition and results of operations and adversely affect our ability to satisfy demand for our OviTex and OviTex PRS products, which could adversely affect our product sales and operating results materially.
As such, we are highly dependent upon Aroa’s continued ability to supply our OviTex and OviTex PRS products at the levels we require and any production shortfall that impairs the supply of our 50 Table of Contents OviTex and OviTex PRS products could have a material adverse effect on our business, financial condition and results of operations and adversely affect our ability to satisfy demand for our OviTex and OviTex PRS products, which could adversely affect our product sales and operating results materially.
There can be no assurance that we would be able to timely implement any mitigation plans relating to our supply chain. ​ Continued concerns about the systemic impact of potential economic slowdown or recession, liquidity constraints, failures and instability in the U.S. and international financial banking systems, and geopolitical turmoil, including the ongoing Russia-Ukraine conflict and the current conflict in the Middle East (including any escalation or expansion), have contributed to increased market volatility and diminished expectations for economic growth in the world.
There can be no assurance that we would be able to timely implement any mitigation plans relating to our supply chain. ​ Continued concerns about the systemic impact of potential economic slowdown or recession, liquidity constraints, failures and instability in the U.S. and international financial banking systems, and geopolitical turmoil, including the ongoing Russia-Ukraine conflict, recent events in Venezuela and the current conflicts in the Middle East (including any escalation or expansion), have contributed to increased market volatility and diminished expectations for economic growth in the world.
In these circumstances, we may be subject to significant enforcement actions, including significant fines or penalties. 60 Table of Contents International regulatory approval processes may take more or less time than the FDA clearance or approval process.
In these circumstances, we may be subject to significant enforcement actions, including significant fines or penalties. 61 Table of Contents International regulatory approval processes may take more or less time than the FDA clearance or approval process.
Product development involves a high degree of risk, and there can be no assurance that our new product development efforts will result in any commercially successful products. To successfully market and sell our products in markets outside of the U.S., we must address many international business risks with which we have limited experience.
Product development involves a high degree of risk, and there can be no assurance that our new product development efforts will result in any commercially successful products. 48 Table of Contents To successfully market and sell our products in markets outside of the U.S., we must address many international business risks with which we have limited experience.
Although we and Aroa intend to establish redundant production facilities to lessen the risk of production disruptions, we will need to ensure that any manufacturing facility complies with our quality expectations and applicable regulatory requirements.
Although we and Aroa intend to establish redundant production facilities to lessen the risk of production disruptions, we will need to ensure that any manufacturing facility complies with our quality expectations and applicable regulatory requirements, including QMSR.
In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on 55 Table of Contents a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes.
In addition, some countries limit the enforceability of patents against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes.
If we breach any material obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture and sell products that are covered by the licensed technology, having to negotiate new or reinstated licenses on less favorable terms, or enabling a competitor to gain access to the licensed technology.
If we breach any material obligations, or use the intellectual property licensed to us in an unauthorized manner, we may be required to pay damages and the licensor may have the right to terminate the license, which could result in us being unable to develop, manufacture and sell products that are 52 Table of Contents covered by the licensed technology, having to negotiate new or reinstated licenses on less favorable terms, or enabling a competitor to gain access to the licensed technology.
Increased inflation may result in decreased demand for our products, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve has raised, and may in the future raise, interest rates in response to concerns about inflation.
Increased inflation may result in decreased demand for our products, increased operating costs (including our labor costs), reduced liquidity, and limitations on our ability to access credit or otherwise raise debt and equity capital. In addition, the United States Federal Reserve has in the past raised, and may again raise, interest rates in response to concerns about inflation.
Finalizing the implementation of the updated SCCs and UK IDTA, and conducting the required risk assessments, may continue to necessitate significant contractual overhaul of our data transfer arrangements with customers, sub-processors and vendors.
The continued implementation of the updated SCCs and UK IDTA, and conducting the required risk assessments, may continue to necessitate significant contractual overhaul of our data transfer arrangements with customers, sub-processors and vendors.
A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect on our business, financial condition and results of operations. The continuing development of our products depends upon our maintaining strong working relationships with surgeons.
A product liability claim, recall or other claim with respect to uninsured liabilities or for amounts in excess of insured liabilities could have a material adverse effect on our business, financial condition and results of operations. 74 Table of Contents The continuing development of our products depends upon our maintaining strong working relationships with surgeons.
Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, 74 Table of Contents including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations, which could have a material adverse effect on our business, financial condition and results of operations.
Whether or not we are successful in defending against any such actions or investigations, we could incur substantial costs, including legal fees, and divert the attention of management in defending ourselves against any of these claims or investigations, which could have a material adverse effect on our business, financial condition and results of operations.
We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
We may also make assumptions, estimations, calculations and conclusions as part of our preliminary or topline analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.
If one or more of these risks are realized, our business, financial condition and results of operations could be adversely affected. Risks Related to Our Reliance on Third Parties We are highly dependent upon Aroa, as the exclusive manufacturer and supplier of our OviTex and OviTex PRS products.
If one or more of these risks are realized, our business, financial condition and results of operations could be adversely affected. 49 Table of Contents Risks Related to Our Reliance on Third Parties We are highly dependent upon Aroa, as the exclusive manufacturer and supplier of our OviTex and OviTex PRS products.
Additionally, in the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and marketing new brands. Our competitors may infringe our trademarks, and we may not have adequate resources to enforce our trademarks.
Additionally, in the event that our trademarks are successfully challenged, we could be forced to rebrand our products, which could result in loss of brand recognition and could require us to devote resources to advertising and 56 Table of Contents marketing new brands. Our competitors may infringe our trademarks, and we may not have adequate resources to enforce our trademarks.
In addition, while having a contract with a major purchaser for a given product category can facilitate sales, sales volumes of those products may not be maintained or may be limited based on preferential economic terms that can be offered by larger competitors across product categories.
In addition, while having a 73 Table of Contents contract with a major purchaser for a given product category can facilitate sales, sales volumes of those products may not be maintained or may be limited based on preferential economic terms that can be offered by larger competitors across product categories.
Supply chain disruptions could adversely impact our operations and financial condition. ​ Global supply chains have been impacted because of severe weather, recent geopolitical tensions such as the ongoing Russia-Ukraine conflict and the current conflict in the Middle East (including any escalation or expansion) and other factors, and this may impact the availability of raw materials and components used in the manufacture of our products.
Supply chain disruptions could adversely impact our operations and financial condition. ​ Global supply chains have been impacted because of severe weather, recent geopolitical tensions such as the ongoing Russia-Ukraine conflict, recent events in Venezuela, the current conflicts in the Middle East (including any escalation or expansion) and tensions in other regions and other factors, and this may impact the availability of raw materials and components used in the manufacture of our products.
Additionally, we are subject to the risk that a portion of our inventory will expire, which could have a material adverse effect on our earnings and cash flows due to the resulting costs associated with the inventory impairment charges and costs required to replace such inventory.
Additionally, we are subject to the risk that a portion of our inventory will expire, which could have a material adverse effect on our earnings and cash flows due to the resulting costs associated with the inventory impairment charges and costs required to replace such 76 Table of Contents inventory.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control healthcare costs, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control healthcare costs, including price or patient reimbursement constraints, discounts, restrictions on certain product access 70 Table of Contents and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. 79 Table of Contents General Risk Factors Our ability to maintain our competitive position depends on our ability to attract and retain senior management and other highly qualified personnel.
Accordingly, there is uncertainty as to whether a court would enforce such a forum selection provision as written in connection with claims arising under the Securities Act. General Risk Factors Our ability to maintain our competitive position depends on our ability to attract and retain senior management and other highly qualified personnel.
Approximately 15%, 10% and 8% of our revenue for the years ended December 31, 2024, 2023 and 2022, respectively, came from sales in markets outside of the U.S. Part of our sales strategy is to maintain our European presence.
Approximately 15%, 15% and 10% of our revenue for the years ended December 31, 2025, 2024 and 2023, respectively, came from sales in markets outside of the U.S. Part of our sales strategy is to maintain our European presence.
In addition, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be 54 Table of Contents compromised by disclosure during this type of litigation.
In addition, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Products in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical studies and earlier clinical trials. ​ 72 Table of Contents Interim or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
Products in later stages of clinical trials may fail to show the desired safety and efficacy despite having progressed through nonclinical studies and earlier clinical trials. ​ Interim “top-line” or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data.
We have received, and we may in the future receive, letters or other threats or claims from third parties inviting us to take licenses under, or alleging that we infringe, their patents. 53 Table of Contents Moreover, we may become party to adversarial proceedings regarding our or third-party patent portfolios.
We have received, and we may in the future receive, letters or other threats or claims from third parties inviting us to take licenses under, or alleging that we infringe, their patents. Moreover, we may become party to adversarial proceedings regarding our or third-party patent portfolios.
Significant political, trade, or regulatory developments in the jurisdictions in which we sell our products, such as those stemming from the change in U.S. federal administration, are difficult to predict and may have a material adverse effect on us.
Our business may be impacted by political, trade or regulatory developments in the jurisdictions in which we sell our products. Significant political, trade, or regulatory developments in the jurisdictions in which we sell our products, such as those stemming from the change in U.S. federal administration, are difficult to predict and may have a material adverse effect on us.
Our fourth amended and restated certificate of incorporation and third amended and restated bylaws further provide that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
Our fourth amended and restated certificate of incorporation, as amended, and third amended and restated bylaws further provide 82 Table of Contents that the federal district courts of the U.S. will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.
We may be unable to prevent the unauthorized disclosure or use of our technical knowledge or trade secrets by consultants, suppliers, vendors, former employees and current employees.
We may be unable to prevent the unauthorized disclosure or use of our technical knowledge or trade 53 Table of Contents secrets by consultants, suppliers, vendors, former employees and current employees.
Like other companies in our industry, we have experienced and may in the future experience, threats and cybersecurity incidents relating to our, our third-party vendors’, and our customers’ information systems.
Like other companies in our industry, we have experienced and may in the future experience, threats and cybersecurity incidents or data breaches relating to our, our third-party vendors’, and our customers’ information systems.
Although an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against 52 Table of Contents competitors with similar products.
Although an issued patent is presumed valid and enforceable, its issuance is not conclusive as to its validity or its enforceability and it may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products.
Our license and other agreements impose, and any future collaboration agreements or license agreements we enter into are likely to impose 51 Table of Contents various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us.
Our license and other agreements impose, and any future collaboration agreements or license agreements we enter into are likely to impose various development, commercialization, funding, milestone, royalty, diligence, sublicensing, insurance, patent prosecution and enforcement or other obligations on us.
Third parties may also gain access to users’ accounts using stolen or inferred credentials, computer malware, viruses, spamming, phishing attacks or other means, and may use such access to obtain users’ personal data or prevent use of their accounts.
Third parties may also gain access to users’ accounts using stolen or inferred credentials, computer malware, viruses, spamming, social engineering (including via phishing attacks) or other means, and may use such access to obtain users’ personal data or prevent use of their accounts.
Our ability to supply our OviTex and OviTex PRS products commercially and to develop any future products depends, in part, on our ability to obtain these materials, components and products in accordance with regulatory requirements and in sufficient quantities for 49 Table of Contents commercialization and clinical testing.
Our ability to supply our OviTex and OviTex PRS products commercially and to develop any future products depends, in part, on our ability to obtain these materials, components and products in accordance with regulatory requirements and in sufficient quantities for commercialization and clinical testing.
Any prolonged delays in normalized levels of elective surgeries by governmental, hospital or payor actions would continue to impair net sales of our products. ​ General supply chain disruptions, initially arising from COVID-19, have in the wake of severe weather events and geopolitical turmoil, such as the ongoing Russia-Ukraine conflict and the current conflict in the Middle East (including any escalation or expansion) continue to threaten trade globally and weaken supply systems.
Any prolonged delays in normalized levels of elective surgeries by governmental, hospital or payor actions would continue to impair net sales of our products. ​ General supply chain disruptions, have in the wake of severe weather events and geopolitical turmoil, such as the ongoing Russia-Ukraine conflict, recent events in Venezuela and the current conflicts in the Middle East (including any escalation or expansion) continue to threaten trade globally and weaken supply systems.
We conducted this study to support the marketing of our OviTex products for their cleared indicated uses, and do not currently have any clinical data for use of our OviTex PRS products in patients.
We conducted this study to support the marketing of our OviTex products for their cleared indicated uses, and currently have limited clinical data for use of our OviTex PRS products in patients.
There is a transition period during which certificates issued under the MDD remain valid, subject to compliance with certain requirements under the MDR (e.g. having put in place a quality management system in accordance with the MDR by May 26, 2024).
In the EU, the MDR repealed and replaced the MDD on May 26, 2021. There is a transition period during which certificates issued under the MDD remain valid, subject to compliance with certain requirements under the MDR (e.g. having put in place a quality management system in accordance with the MDR by May 26, 2024).
In addition to our OviTex products, we have also commercialized our OviTex PRS products for use in surgery for soft-tissue repair or reinforcement in plastic and reconstructive procedures and most recently the LIQUIFIX Hernia Mesh Fixation Devices (LIQUIFIX FIX8™ and LIQUIFIX Precision™) pursuant to our distribution agreement with Advanced Medical Solutions Limited.
In addition to our OviTex products, we have also commercialized our OviTex PRS products for use in surgery for soft-tissue repair or reinforcement in plastic and reconstructive procedures, introduced our larger sized OviTex PRS products and continue to distribute the LIQUIFIX Hernia Mesh Fixation Devices (LIQUIFIX FIX8™ and LIQUIFIX Precision™) pursuant to our distribution agreement with Advanced Medical Solutions Limited.
We may also occasionally use these proceedings to challenge the patent rights of others. We cannot be certain that any particular challenge will be successful in limiting or eliminating the challenged patent rights of the third party. Any lawsuits resulting from such allegations could subject us to significant liability for damages and/ or invalidate our proprietary rights.
We cannot be certain that any particular challenge will be successful in limiting or eliminating the challenged patent rights of the third party. Any lawsuits resulting from such allegations could subject us to significant liability for damages and/ or invalidate our proprietary rights.
The federal carry forwards for losses incurred prior to 2018 will begin expiring in 2032 for federal purposes. Federal net operating losses incurred in 2018 and onward have an indefinite expiration under the 2017 Tax Cut & Jobs Act. The state carry forwards will begin expiring in 2026.
Federal net operating losses incurred in 2018 and onward have an indefinite expiration under the 2017 Tax Cut & Jobs Act. The state carry forwards will begin expiring in 2026.
As of December 31, 2024, our commercial organization consisted of 133 employees in the U.S. and 16 employees in Europe. To generate future revenue growth, we plan to continue to expand the size and geographic scope of our direct 41 Table of Contents sales organization.
As of December 31, 2025, our commercial organization consisted of 150 employees in the U.S. and 19 employees in Europe. To generate future revenue growth, we plan to continue to expand the size and geographic scope of our direct 41 Table of Contents sales organization.
Sales of our OviTex products accounted for 66%, 67% and 70% of total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.
Sales of our OviTex products accounted for 64%, 66% and 67% of total revenue for the years ended December 31, 2025, 2024 and 2023, respectively.
These systems affect, among other things, ordering and managing products, shipping products to customers, processing transactions, summarizing and reporting results of operations, complying with regulatory, legal and tax requirements, data security and other processes necessary to manage our business.
We rely extensively on information technology systems to conduct our business. These systems affect, among other things, ordering and managing products, shipping products to customers, processing transactions, summarizing and reporting results of operations, complying with regulatory, legal and tax requirements, data security and other processes necessary to manage our business.
We are subject to anti-bribery, anti-corruption, and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, in which violations of these laws could result in substantial penalties and prosecution. We are exposed to trade and economic sanctions and other restrictions imposed by the U.S. and other governments and organizations. The U.S.
Foreign Corrupt Practices Act, in which violations of these laws could result in substantial penalties and prosecution. We are exposed to trade and economic sanctions and other restrictions imposed by the U.S. and other governments and organizations. The U.S.
We own twenty-three issued or allowed U.S. patents and have twelve pending U.S. patent applications. As of December 31, 2024, we had rights, whether through ownership or licensing, to twenty-five issued or allowed U.S. patents, twelve pending U.S. patent applications, eight issued non-U.S. patents and seven pending non-U.S. patent applications., including six applications under the Patent Cooperation Treaty (“PCT”).
We own twenty-six issued U.S. patents and have ten pending U.S. patent applications. As of December 31, 2025, we had rights, whether through ownership or licensing, to twenty-eight issued or allowed U.S. patents, ten pending U.S. patent applications, eleven issued non-U.S. patents and fourteen pending non-U.S. patent applications., including seven applications under the Patent Cooperation Treaty (“PCT”).
We rely on our own direct sales force, which as of December 31, 2024 consisted of 91 representatives in the U.S. and 12 representatives in Europe, to market and sell our products.
We rely on our own direct sales force, which as of December 31, 2025 consisted of 71 quota-carrying representatives in the U.S. and 12 quota-carrying representatives in Europe, to market and sell our products.
Our business processes personal data, including some data related to health. When conducting clinical trials, we face risks associated with collecting trial participants’ data, especially health data, in a manner consistent with applicable laws and regulations. We also face risks inherent in handling large volumes of data and in protecting the security of such data.
When conducting clinical trials, we face risks associated with collecting trial participants’ data, especially health data, in a manner consistent with applicable laws and regulations. We also face risks inherent in handling large volumes of data and in protecting the security of such data.
The success of any new product offerings or product enhancements to our OviTex and OviTex PRS products will depend on several factors, including our ability to: ● properly identify and anticipate surgeon and patient needs; ● develop and introduce new products and product enhancements in a timely manner; ● avoid infringing upon the intellectual property rights of third parties; ● ensure the quality, manufacture and supply of new products by Aroa or other third-party manufacturers we engage; ● demonstrate, if required, the safety and efficacy of new products with data from preclinical studies, clinical trials and post-market clinical studies; ● obtain the necessary regulatory clearances or approvals for expanded indications, new products or product modifications; ● be fully FDA-compliant with marketing of new devices or products; ● provide adequate training to potential users of our new products; ● receive adequate coverage and reimbursement for procedures performed with our new products; and ● develop and expand an effective and dedicated sales and marketing team. 47 Table of Contents If we are not successful in introducing new product indications and developing and commercializing new products and product enhancements, our ability to increase our revenue may be impaired, which could have a material adverse effect on our business, financial condition and results of operations.
The success of any new product offerings or product enhancements to our OviTex and OviTex PRS products will depend on several factors, including our ability to: ● properly identify and anticipate surgeon and patient needs; ● develop and introduce new products and product enhancements in a timely manner; ● avoid infringing upon the intellectual property rights of third parties; ● ensure the quality, manufacture and supply of new products by Aroa or other third-party manufacturers we engage; ● demonstrate, if required, the safety and efficacy of new products with data from preclinical studies, clinical trials and post-market clinical studies; ● obtain the necessary regulatory clearances or approvals for expanded indications, new products or product modifications; ● be fully FDA-compliant with marketing of new devices or products; ● provide adequate training to potential users of our new products; ● receive adequate coverage and reimbursement for procedures performed with our new products; and ● develop and expand an effective and dedicated sales and marketing team.
The MDR introduces new regulations which, among other things: ● strengthen the rules on placing devices on the market and reinforce surveillance once they are available; ● establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● establish a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● strengthen rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.
The Medical Devices Regulation is intended to, among other things, establish a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation. 64 Table of Contents The MDR introduces new regulations which, among other things: ● strengthen the rules on placing devices on the market and reinforce surveillance once they are available; ● establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; ● improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; ● establish a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and ● strengthen rules for the assessment of certain high-risk devices, which may have to undergo an additional check by experts before they are placed on the market.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeBefore contracting with certain third parties, such as those that have access to our IT networks, we have a process to conduct diligence on those third parties, which includes a security assessment. We have also implemented a process for employees to undergo cybersecurity training during onboarding, and thereafter, on an annual basis as part of our larger compliance training program.
Biggest changeBefore contracting with certain third parties, such 83 Table of Contents as those that have access to our IT networks, we have a process to conduct diligence on those third parties, which includes a security assessment.
Our IT department further supports and has dedicated resources to assist our IT Officer in monitoring, preventing, detecting, mitigating, and remediating any cybersecurity incidents pursuant to our policies and procedures. ​ We have also established a Disclosure Committee, which regularly reviews relevant information related to potential public disclosure of critical business risks and material events. ​ We have not identified any cybersecurity incidents or threats that have materially affected our information or system or are reasonably likely to materially affect our information and systems, including our business strategy, results of operations, or financial condition.
Our IT department further supports and has dedicated resources to assist our IT Officer in monitoring, preventing, detecting, mitigating, and remediating any cybersecurity incidents or data breaches pursuant to our policies and procedures. ​ We have also established a Disclosure Committee, which regularly reviews relevant information related to potential public disclosure of critical business risks and material events. ​ We have not identified any cybersecurity incidents, data breaches or threats that have materially affected our information or system or are reasonably likely to materially affect our information and systems, including our business strategy, results of operations, or financial condition.
Our IT Officer is also supported by a cross-functional incident response team, which is empowered to review, assess, report, monitor and take action to mitigate or remedy any cybersecurity incidents pursuant to our business continuity and incident response plan.
Our IT Officer is also supported by a cross-functional incident response team, which is empowered to review, assess, report, monitor and take action to mitigate or remedy any cybersecurity incidents or data breaches pursuant to our business continuity and incident response plan.
As part of our cybersecurity risk management, we have adopted a business continuity and incident response plan, which is designed 80 Table of Contents to establish our processes for identifying and responding to significant events that may lead to a business disruption or crisis, including those arising from or related to cybersecurity threats.
As part of our cybersecurity risk management, we have adopted a business continuity and incident response plan, which is designed to establish our processes for identifying and responding to significant events that may lead to a business disruption or crisis, including those arising from or related to cybersecurity threats.
The Audit Committee receives quarterly updates from our Vice President, Information Technology (“IT Officer”) relating to IT and cybersecurity matters, including cybersecurity risks and threats. The Audit Committee provides periodic updates to our board of directors on cybersecurity matters discussed at such meetings.
The Audit Committee receives quarterly updates from our Director, Information Technology (“IT Officer”) relating to IT and cybersecurity matters, including cybersecurity risks and threats. The Audit Committee provides periodic updates to our board of directors on cybersecurity matters discussed at such meetings.
Our IT Officer reports to our Chief Operating Officer and Chief Financial Officer and is a member of our Compliance Committee. Our IT Officer coordinates with our legal department and relevant third parties, such as consultants and external legal advisors, to assess and manage material risks from cybersecurity threats.
Our IT Officer coordinates with our legal department and relevant third parties, such as consultants and external legal advisors, to assess and manage material risks from cybersecurity threats.
Our IT Officer also provides these and similar reports to the full board of directors on a biannual basis. Our IT Officer oversees the day-to-day management of the Company’s cybersecurity risk management program. Our IT Officer has over 15 years of experience in IT leadership and has managed IT for our company for approximately 10 years.
Our IT Officer also provides these and similar reports to the full board of directors on a biannual basis. Our IT Officer oversees the day-to-day management of the Company’s cybersecurity risk management program.
We have established monitoring procedures in our effort to mitigate risks related to cybersecurity incidents.
We have also implemented a process for employees to undergo cybersecurity training during onboarding, and thereafter, on an annual basis as part of our larger compliance training program. We have established monitoring procedures in our effort to mitigate risks related to cybersecurity incidents and data breaches.
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Our IT Officer has over 30 years of experience in IT operations and spent the previous 11 years consulting for the Company and has managed IT for the Company for approximately 1 year. Our IT Officer reports to our Chief Operating Officer and Chief Financial Officer.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease our corporate headquarters in Malvern, Pennsylvania, which houses our research and development operations, controlled environment room, and office space, and currently totals approximately 41,000 square feet until June 30, 2025, after which we will relinquish approximately 5,000 square feet of excess office and warehouse space.
Biggest changeWe lease our corporate headquarters in Malvern, Pennsylvania, which houses our research and development operations, controlled environment room, and office space, and currently totals approximately 36,000 square feet of office and warehouse space. In June 2025, we relinquished approximately 5,000 square feet of office space and warehouse space.
We believe that our current facilities meet our current and future anticipated needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations. We believe appropriate office space will be readily available on commercially reasonable terms.
We believe that our current facilities meet our current and future anticipated needs, although we may seek to negotiate new leases or evaluate additional or alternate space for our operations. We believe appropriate office space will be readily available on commercially reasonable terms. 84 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe cannot predict the results of any such disputes, and despite the potential outcomes, the existence thereof may have an adverse material impact on us due to diversion of management time and attention as well as the financial costs related to resolving such disputes. ITEM 4. MINE SAFETY DISCLOSURES 81 Table of Contents Not applicable. PART II
Biggest changeWe cannot predict the results of any such disputes, and despite the potential outcomes, the existence thereof may have an adverse material impact on us due to diversion of management time and attention as well as the financial costs related to resolving such disputes. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information under the heading “Securities Authorized for Issuance Under Equity Compensation Plans” will be filed in the Company’s definitive proxy statement for the 2025 annual meeting of stockholders and is incorporated herein by reference. Recent Sales of Unregistered Securities None. Issuer Purchases of Equity Securities None. ITEM 6.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The information under the heading “Securities Authorized for Issuance Under Equity Compensation Plans” will be filed in the Company’s definitive proxy statement for the 2026 annual meeting of stockholders and is incorporated herein by reference.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been publicly traded on the Nasdaq Global Market under the symbol “TELA” since November 8, 2019. Holders As of March 14, 2025, the Company had approximately 58 record holders of its common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock has been publicly traded on the Nasdaq Global Market under the symbol “TELA” since November 8, 2019. Holders As of March 16, 2026, we had approximately 50 record holders of our common stock.
Dividends The Company has not declared or paid any dividends since its inception nor does it expect to pay dividends in the foreseeable future.
Dividends We have not declared or paid any dividends since our inception nor do we expect to pay dividends in the foreseeable future.
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Recent Sales of Unregistered Securities As consideration for entering into the Credit Agreement with Perceptive, on November 14, 2025, we issued to Perceptive warrants to purchase up to 2,000,000 shares of our common stock with an exercise price of $1.11. We relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act to issue such securities.
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Issuer Purchases of Equity Securities None. ITEM 6. RESERVED 85 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

48 edited+23 added−15 removed63 unchanged
Biggest changeOther Income Other income consists primarily of income earned on our cash and cash equivalents offset by miscellaneous tax expenses and foreign currency exchange gains and losses. ​ ​ 88 Table of Contents Results of Operations Comparison of the Year Ended December 31, 2024 and 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ 2024 2023 ​ Dollar Percentage ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue $ 69,300 ​ $ 58,453 ​ $ 10,847 19 % Cost of revenue (excluding amortization of intangible assets) 22,432 ​ 17,961 ​ 4,471 25 ​ Amortization of intangible assets 380 ​ 380 ​ — — ​ Gross profit 46,488 ​ 40,112 ​ 6,376 16 ​ Gross margin 67 % 69 % ​ ​ ​ Operating expenses: ​ ​ ​ Sales and marketing 64,648 ​ 59,681 ​ 4,967 8 ​ General and administrative 14,722 ​ 14,887 ​ (165) (1) ​ Research and development 8,813 ​ 9,619 ​ (806) (8) ​ Total operating expenses 88,183 ​ 84,187 ​ 3,996 5 ​ Other operating income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of product line ​ 7,580 ​ ​ — ​ ​ 7,580 NA ​ Loss from operations (34,115) ​ (44,075) ​ 9,960 (23) ​ Other (expense) income: ​ ​ ​ ​ Interest expense (5,290) ​ (5,223) ​ (67) 1 ​ Other income 1,420 ​ 2,634 ​ (1,214) (46) ​ Total other expense (3,870) ​ (2,589) ​ (1,281) 49 ​ Loss before income tax benefit ​ (37,985) ​ ​ (46,664) ​ ​ 8,679 ​ (19) ​ Income tax benefit ​ 144 ​ ​ — ​ ​ 144 ​ NA ​ Net loss $ (37,841) ​ $ (46,664) ​ $ 8,823 (19) % Revenue Revenue increased by $10.8 million, or 19%, to $69.3 million for the year ended December 31, 2024 from $58.5 million for the year ended December 31, 2023.
Biggest changeOther Income Other income consists primarily of income earned on our cash and cash equivalents offset by miscellaneous tax expenses and foreign currency exchange gains and losses. ​ 91 Table of Contents Results of Operations Comparison of the Year Ended December 31, 2025 and 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ Change ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Dollar ​ ​ ​ Percentage ​ ​ (in thousands, except percentages) Revenue ​ $ 80,275 ​ $ 69,300 ​ $ 10,975 16 % Cost of revenue (excluding amortization of intangible assets) ​ 25,554 ​ 22,432 ​ 3,122 14 ​ Amortization of intangible assets ​ 380 ​ 380 ​ — — ​ Gross profit ​ 54,341 ​ 46,488 ​ 7,853 17 ​ Gross margin ​ 68 % 67 % ​ ​ ​ ​ Operating expenses: ​ ​ ​ ​ ​ ​ ​ ​ Sales and marketing ​ 63,182 ​ 64,648 ​ (1,466) (2) ​ General and administrative ​ 15,694 ​ 14,722 ​ 972 7 ​ Research and development ​ 9,220 ​ 8,813 ​ 407 5 ​ Total operating expenses ​ 88,096 ​ 88,183 ​ (87) (0) ​ Other operating income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Gain on sale of product line ​ ​ — ​ ​ 7,580 ​ ​ (7,580) (100) ​ Loss from operations ​ (33,755) ​ (34,115) ​ 360 (1) ​ Other (expense) income: ​ ​ ​ ​ ​ ​ ​ ​ Interest expense ​ (5,245) ​ (5,290) ​ 45 (1) ​ Loss on extinguishment of debt ​ ​ (888) ​ ​ — ​ ​ (888) NA ​ Other income ​ 1,287 ​ 1,420 ​ (133) (9) ​ Total other expense, net ​ (4,846) ​ (3,870) ​ (976) 25 ​ Loss before income tax expense ​ ​ (38,601) ​ ​ (37,985) ​ ​ (616) ​ 2 ​ Income tax (expense) benefit ​ ​ (230) ​ ​ 144 ​ ​ (374) ​ (260) ​ Net loss ​ $ (38,831) ​ $ (37,841) ​ $ (990) 3 % Revenue Revenue increased by $11.0 million, or 16%, to $80.3 million for the year ended December 31, 2025 from $69.3 million for the year ended December 31, 2024.
In November 2023, we entered into a new Equity Distribution Agreement (the “2023 Equity Agreement”) with Piper Sandler & Co, (“Piper”) in connection with the establishment of an at-the-market offering program under which we may sell shares of our common stock, from time to time through Piper as sales agent, in an initial amount of up to $50 million.
In November 2023, we entered into a new Equity Distribution Agreement (the “Equity Agreement”) with Piper Sandler & Co, (“Piper”) in connection with the establishment of an at-the-market offering program under which we may sell shares of our common stock, from time to time through Piper as sales agent, in an initial amount of up to $50 million.
We may assess additional strategic partnerships with medical device companies whereby we may enter into distribution, product development and/or licensing agreements for additional products complimentary to, or related to, existing and future products in our distribution channel, which could result in the payment by us of single digit percentage royalties or other product acquisition costs We have a broad portfolio of intellectual property protecting our products that we believe, when combined with the proprietary manufacturing processes associated with our products and our know-how, provides significant barriers to entry.
We may assess additional strategic partnerships with medical device companies whereby we may enter into distribution, product development and/or licensing agreements for additional products complimentary to, or related to, existing and future products in our distribution channel, which could result in the payment by us of single digit percentage royalties or other product acquisition costs. 87 Table of Contents We have a broad portfolio of intellectual property protecting our products that we believe, when combined with the proprietary manufacturing processes associated with our products and our know-how, provides significant barriers to entry.
We cannot be assured that additional equity, equity-linked or debt financing will be available on terms favorable to us or our stockholders, or at all, including as a result of market volatility stemming from macroeconomic conditions, including those related to banking instability, increasing interest rates or other factors.
We cannot be assured that additional equity, equity-linked or debt financing will be available on terms favorable to us or our stockholders, or at all, including as a result of market volatility stemming from macroeconomic conditions, including those related to banking instability, changing interest rates or other factors.
These expenses include salaries and related benefits including stock-based compensation, for employees focused on these efforts, consulting services, costs associated with our preclinical studies and clinical studies undertaken to obtain regulatory clearance for new or expanded product indications, costs incurred 87 Table of Contents with our manufacturing partner under development agreements related to technology transfer, costs incurred from license agreements with no alternative future uses, laboratory materials and supplies and an allocation of related facilities costs.
These expenses include salaries and related benefits including stock-based compensation, for employees focused on these efforts, consulting services, costs associated with our preclinical studies and clinical studies undertaken to obtain regulatory clearance for new or expanded product indications, costs incurred with our manufacturing partner under development agreements related to technology transfer, costs incurred from license agreements with no alternative future uses, laboratory materials and supplies and an allocation of related facilities costs.
We expect research and development expenses as a percentage of revenue to vary over time depending on the level and timing of new product development and clinical trial initiatives. Gain on Sale of Product Line In March 2024, we entered into an asset purchase agreement with MiMedx Group, Inc. to sell certain assets related to NIVIS.
We expect research and development expenses as a percentage of revenue to vary over time depending on the level and timing of new product development and clinical trial initiatives. 90 Table of Contents Gain on Sale of Product Line In March 2024, we entered into an asset purchase agreement with MiMedx Group, Inc. to sell certain assets related to NIVIS.
In addition to the BRAVO study, we have also initiated other clinical data collection initiatives evaluating the use of OviTex across a variety of hernia and abdominal 83 Table of Contents wall reconstruction procedures.
In addition to the BRAVO study, we have also initiated other clinical data collection initiatives evaluating the use of OviTex across a variety of hernia and abdominal 86 Table of Contents wall reconstruction procedures.
We have also focused on evaluating and publishing clinical data on the effectiveness and safety of our OviTex products. To date, there have been over forty published or presented works relating to these clinical findings, either by us or a third-party evaluating one or more product configurations in our OviTex portfolio.
We have also focused on evaluating and publishing clinical data on the effectiveness and safety of our OviTex products. To date, there have been over sixty-five published or presented works relating to these clinical findings, either by us or a third-party evaluating one or more product configurations in our OviTex portfolio.
Our intellectual property applies to our differentiated product construction and materials. In addition, we believe 84 Table of Contents our exclusive manufacturing and long-term supply and license agreement with Aroa (the “Aroa License”) creates a competitive advantage by allowing us to secure an exclusive supply of ovine rumen at a low cost.
Our intellectual property applies to our differentiated product construction and materials. In addition, we believe our exclusive manufacturing and long-term supply and license agreement with Aroa (the “Aroa License”) creates a competitive advantage by allowing us to secure an exclusive supply of ovine rumen at a low cost.
The initial term of our Aroa License terminates on the expiration of the last patent covering bovine and ovine products, with an option to extend for an additional ten-year period. We expect our cost of revenue to increase in absolute dollars as, and to the extent, our sales volume grows.
The initial term of our Aroa License terminates on the expiration of the last patent covering bovine and ovine products, with an option to extend for an additional ten-year period. We expect our cost of revenue to increase in absolute dollars as, and to the extent, our 89 Table of Contents sales volume grows.
We are currently devoting research and development resources to develop additional variations of our OviTex and OviTex PRS products, including larger versions of our current OviTex PRS product configurations, the development of OviTex configurations with longer-acting resorbable polymers and other potential product and packaging enhancements to extend the shelf life of our products.
We are currently devoting research and development resources to develop additional variations of our OviTex and OviTex PRS products, including the development of OviTex configurations with longer-acting resorbable polymers and other potential product and packaging enhancements to extend the shelf life of our products.
Investing Activities During the year ended December 31, 2024, cash provided by investing activities was $4.5 million, consisting of proceeds received from the sale of NIVIS of $5.4 million, partially offset by $1.0 million in purchases of property and equipment.
Investing Activities During the year ended December 31, 2025, cash provided by investing activities was $0.8 million, consisting of proceeds received from the sale of NIVIS of $1.3 million, partially offset by $0.4 million in purchases of property and equipment During the year ended December 31, 2024, cash provided by investing activities was $4.5 million, consisting of proceeds received from the sale of NIVIS of $5.4 million, partially offset by $1.0 million in purchases of property and equipment.
We also continue to enroll patients in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions. Based on the current sales of biologic matrices in the U.S., we estimate the annual U.S. current addressable market opportunity for our OviTex PRS products to be approximately $800 million.
We also continue to collect patient data in our OPERA study, a retrospective-prospective trial evaluating the safety profile of OviTex PRS in previous pre-pectoral and sub-pectoral implant-based breast reconstructions. Based on the current sales of biologic matrices in the U.S., we estimate the annual U.S. current addressable market opportunity for our OviTex PRS products to be approximately $800 million.
These factors have and may continue to impact us in the following ways: 85 Table of Contents General Economic Uncertainty : Continued concerns about the systemic impact of a potential economic downturn or recession, increasing interest rates, further economic downturn or banking instability, monetary policy including the imposition of tariffs, changes and geopolitical issues, including the ongoing Russia-Ukraine conflict, the current conflict in the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan, have contributed to increased market volatility and diminished expectations for economic growth in the world.
These factors have and may continue to impact us in the following ways: 88 Table of Contents General Economic Uncertainty : Continued concerns about the systemic impact of a potential economic downturn or recession, changes in interest rates, further economic downturn or banking instability, monetary policy, changes in trade policies (including the imposition of tariffs and trade protection measures), geopolitical issues, including the ongoing Russia-Ukraine conflict, recent events in Venezuela, the current conflicts in the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan, have contributed to increased market volatility and diminished expectations for economic growth in the world.
Our non-cash items were comprised of stock-based compensation expense of $4.0 million, our excess and obsolete inventory charge of $1.9 million, loss on extinguishment of debt of $1.2 million, depreciation and amortization expense of $1.2 million and noncash interest expense of $0.7 million.
Our non-cash items were primarily comprised of stock-based compensation expense of $3.8 million, our excess and obsolete inventory charge of $2.4 million, noncash loss on extinguishment of debt of $0.9 million, depreciation and amortization expense of $1.0 million and noncash interest expense of $0.5 million.
The change in our operating assets 91 Table of Contents and liabilities was primarily related to increases in accounts receivable and inventory, partially offset by increases in accrued expenses.
The change in our operating assets and liabilities was primarily related to increases in accounts receivable and inventory, partially offset by increases in accrued expenses.
Interest Expense Interest expense increased by $0.1 million, or 1%, to $5.3 million for the year ended December 31, 2024 from $5.2 million for the year ended December 31, 2023 due to increases in the variable component of our interest rate.
Interest Expense Interest expense decreased by $0.1 million, or 1%, to $5.2 million for the year ended December 31, 2025 from $5.3 million for the year ended December 31, 2024 due to decreases in the variable component of our interest rate.
No sales were made under the 2023 Equity Agreement or during the year ended December 31, 2024. If we raise additional funds by issuing equity or equity-linked securities, our stockholders would experience dilution and any new equity securities could have rights, preferences and privileges superior to those of holders of our common stock.
No sales have ever been made under the Equity Agreement. If we raise additional funds by issuing equity or equity-linked securities, our stockholders would experience dilution and any new equity securities could have rights, preferences and privileges superior to those of holders of our common stock.
Financing Activities During the year ended December 31, 2024, cash provided by financing activities was $43.1 million, consisting primarily of $42.9 million in proceeds received from the sale of our common stock and pre-funded warrants. $0.3 million of proceeds received from the issuance of stock under the employee stock purchase plan and $0.2 million of proceeds received from the exercise of stock options, partially offset by the payment of withholding taxes related to stock-based compensation to employees.
Financing Activities During the year ended December 31, 2025, cash provided by financing activities was $25.7 million, consisting primarily of $60.0 million in proceeds from the issuance of long-term debt and warrants, $11.8 million of proceeds received from the sale of our common stock and pre-funded warrants, partially offset by the payment of $42.4 million of long-term debt and $3.6 million of debt financing costs. 95 Table of Contents During the year ended December 31, 2024, cash provided by financing activities was $43.1 million, consisting primarily of $42.9 million in proceeds received from the sale of our common stock and pre-funded warrants, $0.3 million of proceeds received from the issuance of stock under the employee stock purchase plan and $0.2 million of proceeds received from the exercise of stock options, partially offset by the payment of withholding taxes related to stock-based compensation to employees.
Business Update Regarding Macroeconomic Conditions Our business, results of operations and commercial operations have been, and may continue to be impacted by macroeconomic conditions outside of our control, including general economic uncertainty, external cybersecurity events impacting our customers, disruptions in supply of critical surgical supplies for procedures utilizing our products, inflationary pressures, tariffs, regulatory changes in the market in which we operate, fluctuations in foreign currency in the jurisdictions in which we operate, banking instability, monetary policy changes and geopolitical conflicts.
The vast majority of our revenue to date has been generated from sales of our OviTex and OviTex PRS products in the U.S., with the remainder generated from sales of our OviTex products in Europe and the sale of other products. ​ Business Update Regarding Macroeconomic Conditions Our business, results of operations and commercial operations have been, and may continue to be impacted by macroeconomic conditions outside of our control, including general economic uncertainty, external cybersecurity events impacting our customers, disruptions in supply of critical surgical supplies for procedures utilizing our products, inflationary pressures, tariffs, regulatory changes in the market in which we operate, fluctuations in foreign currency in the jurisdictions in which we operate, banking instability, monetary policy changes and geopolitical conflicts.
In February 2023, we launched two larger configurations of OviTex LPR, designed for ventral and incisional hernias. In April 2024, we launched OviTex IHR Reinforced Tissue Matrix, a new OviTex configuration specifically designed to address inguinal hernia procedures performed robotically and laparoscopically.
In February 2023, we launched two larger configurations of OviTex LPR, designed for ventral and incisional hernias. In April 2024, we launched OviTex IHR Reinforced Tissue Matrix, a new OviTex configuration specifically designed to address inguinal hernia procedures performed robotically and laparoscopically in the U.S., followed by a launch in the European markets in June 2025.
We intend to continue to make investments in research and development efforts to develop improvements and enhancements to our product portfolio. Our revenue for the years ended December 31, 2024 and 2023 was $69.3 million and $58.5 million, respectively, which represents an increase of $10.8 million, or 19% for the year ended December 31, 2024.
We intend to continue to make investments in research and development efforts to develop improvements and enhancements to our product portfolio. Our revenue for the years ended December 31, 2025 and 2024 was $80.3 million and $69.3 million, respectively, which represents an increase of $11.0 million, or 16% for the year ended December 31, 2025.
Our net loss for the same time periods was $37.8 million and $46.7 million, respectively, which represents a decrease of $8.8 million, or 19% for the year ended December 31, 2024 inclusive of the gain recognized of $7.6 million on the sale of NIVIS to the MiMedx Group, Inc.
Our net loss for the same time periods was $38.8 million and $37.8 million, respectively, which represents an increase of $1.0 million, or 3% for the year ended December 31, 2025 inclusive of the gain recognized of $7.6 million on the sale of NIVIS to the MiMedx Group, Inc for the year ended December 31, 2024 .
The increase in revenue was primarily driven by an increase in unit sales of our products due to the addition of new customers and growing international sales. This growth was partially offset by a decrease in average selling prices caused by product mix as the share of smaller-sized units increased.
The increase in revenue was primarily driven by the addition of new customers, growing international sales and the U.S. launch of the new larger-sized PRS configuration. This growth was partially offset by a decrease in average selling prices for our hernia products caused by product mix as the share of smaller-sized units increased.
Recent revenue growth has been driven by increasing revenue from product sales due to our expanding customer base and deeper penetration across procedures in existing customer accounts, although macroeconomic pressures described in this Annual Report may impair our ability to continue to generate revenue, expand our customer base, and increase utilization of our products in existing customer accounts at historic rates. 86 Table of Contents Cost of Revenue Cost of revenue primarily consists of the costs of licensed products, charges related to excess and obsolete inventory adjustments, royalties and costs related to shipping.
Recent revenue growth has been driven by increasing revenue from product sales due to our expanding customer base and deeper penetration across procedures in existing customer accounts, although macroeconomic pressures described in this Annual Report may impair our ability to continue to generate revenue, expand our customer base, and increase utilization of our products in existing customer accounts at historic rates.
The change in our operating assets and liabilities was primarily related to an increase in our inventory and accounts receivable, partially offset by increases in accrued expenses and other current and long-term liabilities.
The change in our operating assets and liabilities was primarily related to increases in accounts payable and accrued expenses partially offset by changes in accounts receivable and inventory.
Cost of Revenue Cost of revenue (excluding amortization of intangible assets) increased by $4.5 million, or 25%, to $22.4 million for the year ended December 31, 2024 from $18.0 million for the year ended December 31, 2023.
Cost of Revenue Cost of revenue (excluding amortization of intangible assets) increased by $3.1 million, or 14%, to $25.6 million for the year ended December 31, 2025 from $22.4 million for the year ended December 31, 2024.
Liquidity and Capital Resources Overview As of December 31, 2024, we had cash and cash equivalents of $52.7 million, working capital of $62.5 million and an accumulated deficit of $358.9 million. As of December 31, 2023, we had cash and cash equivalents of $46.7 million, working capital of $54.8 million and an accumulated deficit of $320.9 million.
Liquidity and Capital Resources Overview As of December 31, 2025, we had cash and cash equivalents of $50.8 million, working capital of $57.6 million and an accumulated deficit of $397.6 million. As of December 31, 2024, we had cash and cash equivalents of $52.7 million, working capital of $62.5 million and an accumulated deficit of $358.7 million.
During the year ended December 31, 2024, we sold 18,121 units of OviTex compared to 13,675 units of OviTex during the year ended December 31, 2023, a 33% increase in unit sales volume. Additionally, we sold 4,645 units of OviTex PRS compared to 3,544 units during the year ended December 31, 2023, a 31% increase in unit sales volume.
During the year ended December 31, 2025, we sold 22,063 units of OviTex compared to 18,121 units of OviTex during the year ended December 31, 2024, a 22% increase in unit sales volume. Additionally, we sold 5,189 units of OviTex PRS compared to 4,645 units during the year ended December 31, 2023, a 12% increase in unit sales volume.
During the year ended December 31, 2022, we used $40.7 million of cash in operating activities, resulting from our net loss of $44.3 million and the change in operating assets and liabilities of $5.3 million, offset by non-cash items of $8.9 million.
During the year ended December 31, 2024, we used $41.6 million of cash in operating activities, resulting from our net loss of $37.8 million and the change in operating assets and liabilities of $4.9 million, offset by non-cash items of $1.1 million.
The offering resulted in net proceeds of $42.9 million, after deducting underwriting discounts and commissions and other estimated offering expenses and assuming no subsequent exercise of the pre-funded warrants.
The offering closed on November 17, 2025. The offering resulted in net proceeds of approximately $11.6 million, after deducting underwriting discounts and commissions and other estimated offering expenses and assuming no subsequent exercise of the pre-funded warrants.
During the year ended December 31, 2023, cash used in investing activities was $0.6 million consisting of purchases of property and equipment. During the year ended December 31, 2022, cash used in investing activities was $1.9 million consisting of a $1.0 million payment made for our intangible asset and purchases of property and equipment.
During the year ended December 31, 2023, cash used in investing activities was $0.6 million consisting of purchases of property and equipment.
Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2024 ​ 2023 2022 Cash used in operating activities $ (41,595) ​ $ (40,857) ​ $ (40,748) Cash provided by (used in) investing activities 4,451 ​ (599) ​ (1,872) Cash provided by financing activities 43,057 ​ 46,267 ​ 40,852 Effect of exchange rate changes on cash and cash equivalents 28 ​ 164 ​ (144) Net increase (decrease) in cash and cash equivalents and restricted cash $ 5,941 ​ $ 4,975 ​ $ (1,912) Operating Activities During the year ended December 31, 2024, we used $41.6 million of cash in operating activities, resulting from our net loss of $37.8 million and the change in operating assets and liabilities of $4.9 million, offset by non-cash items of $1.1 million.
If we are unable to obtain adequate financing, we may be required to delay or reduce the current development, commercialization and marketing plans for our products. ​ 94 Table of Contents Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2025 ​ 2024 ​ ​ ​ 2023 Cash used in operating activities $ (28,219) ​ $ (41,595) ​ $ (40,857) Cash provided by (used in) investing activities 846 ​ 4,451 ​ (599) Cash provided by financing activities 25,750 ​ 43,057 ​ 46,267 Effect of exchange rate changes on cash and cash equivalents (217) ​ 28 ​ 164 Net (decrease) increase in cash and cash equivalents and restricted cash $ (1,840) ​ $ 5,941 ​ $ 4,975 Operating Activities During the year ended December 31, 2025, we used $28.2 million of cash in operating activities, resulting from our net loss of $38.8 million, partially offset by our non-cash items of $9.3 million and changes in operating assets and liabilities of $1.5 million.
We continue to evaluate and finalize the clinical study protocol and anticipate additional FDA interactions related to such to support a pre-market application to obtain approval for an indication for OviTex PRS for use in breast reconstruction. ​ Historically, we have sought to expand our service offerings beyond our OviTex and OviTex PRS products through commercial partnerships to distribute complimentary soft tissue preservation and restoration solutions.
We continue to evaluate and finalize the clinical study protocol and anticipate additional FDA interactions related to such to support a pre-market application to obtain approval for an indication for OviTex PRS for use in breast reconstruction.
We have invested in our direct sales and marketing infrastructure to expand our presence and to promote awareness and adoption of our products. As of December 31, 2024, we had 75 sales territories in the U.S. and 13 sales territories in Europe.
We have invested in our direct sales and marketing infrastructure to expand our presence and to promote awareness and adoption of our products.
(3) Reflects payments due for our lease of office and laboratory space in Malvern, Pennsylvania under an operating lease agreement that expires in 2030.
The interest rate on borrowings under the Perceptive Credit Facility is variable and resets monthly. (2) Reflects payments due for our lease of office and laboratory space in Malvern, Pennsylvania under an operating lease agreement that expires in 2030.
General and Administrative General and administrative expenses decreased by $0.2 million, or 1%, to $14.7 million for the year ended December 31, 2024 from $14.9 million for the year ended December 31, 2023. The decrease was primarily due to decreases in professional fees, bad debt and insurance expense, partially offset by higher compensation costs.
General and Administrative General and administrative expenses increased by $1.0 million, or 7%, to $15.7 million for the year ended December 31, 2025 from $14.7 million for the year ended December 31, 2024. The increase was primarily due to higher compensation and benefits and professional fees.
The decrease was primarily due to higher expense recognized for excess and obsolete inventory adjustments as a percentage of revenue which resulted from the introduction of newer generation products. 89 Table of Contents Sales and Marketing Sales and marketing expenses increased by $5.0 million, or 8%, to $64.6 million for the year ended December 31, 2024 from $59.7 million for the year ended December 31, 2023.
The increase was primarily due to lower expense recognized for excess and obsolete inventory adjustments as a percentage of revenue. Sales and Marketing Sales and marketing expenses decreased by $1.5 million, or 2%, to $63.2 million for the year ended December 31, 2025 from $64.6 million for the year ended December 31, 2024.
Gain on Sale of Product Line In March 2024, we entered into an asset purchase agreement with MiMedx Group, Inc. to sell certain assets related to NIVIS. These assets mainly included our existing inventory of NIVIS, with a net carrying value of $0.8 million, and certain intellectual property rights to sell NIVIS, with no carrying value.
These assets mainly included our existing inventory of NIVIS, with a net carrying value of $0.8 million, and certain intellectual property rights to sell NIVIS, with no carrying value. We transferred control of the nonfinancial asset group in March 2024 and recognized a gain of $7.6 million during the year ended December 31, 2024.
The increase was primarily due to higher compensation costs, primarily from commissions on an increased revenue base and severance costs, increased travel and consulting expense, and additional selling-related expenses related to product sampling and meeting expenses, which were partially offset by decreased marketing expenses.
The decrease was primarily due to lower compensation and benefits primarily from lower severance costs, consulting and travel expenses which offset higher commission expense on an increased revenue base.
The exercise of the pre-funded warrants, if any, is not expected to provide significant additional funding to the Company. ​ In March 2024, we sold our distribution rights to MiMedx Group, Inc. in exchange for an initial $5.0 million payment and additional future payments aggregating between a minimum of $3.0 million and a maximum of $7.0 million based on net sales of NIVIS (now marketed as HELIOGEN) over the subsequent two years. ​ We have incurred operating losses since our inception, and we anticipate that our operating losses will continue in the near term as we seek to invest in our sales and marketing initiatives to support our growth in existing and new markets and in additional research and development activities.
The exercise of the pre-funded warrants, if any, is not expected to provide significant additional funding to us. ​ We have incurred operating losses since our inception, and we anticipate that our operating losses will continue in the near term as we seek to invest in our sales and marketing initiatives to support our growth in existing and new markets and in additional research and development activities.
The increase in cost of revenue was primarily the result of an increase in products purchased to support demand from our higher unit sales and a higher charge for excess and obsolete inventory. Amortization of Intangible Assets Amortization of intangible assets was $0.4 million for both the years ended December 31, 2024 and 2023.
The increase in cost of revenue was primarily the result of an increase in products purchased to support demand from our higher unit sales.
On October 24, 2024, we completed an underwritten public offering of 14,670,000 shares of our common stock, including the exercise in full of the underwriters’ overallotment option to purchase additional shares of common stock, at a price to the public of $2.25 per share and, in lieu of common stock to investors who so chose, pre-funded warrants to purchase 5,800,000 shares of common stock at a public offering price of $2.2499 per pre-funded warrant, which 90 Table of Contents represents the per share public offering price for the shares of common stock less the $0.0001 per share exercise price for each pre-funded warrant.
On November 13, 2025, we executed an underwriting agreement in connection with an underwritten registered direct offering of 4,189,000 shares of our common stock, at a price of $1.11 per share and, in lieu of common stock to investors who so chose, pre-funded warrants to purchase 7,523,000 shares of our common stock at an offering price of $1.1099 per pre-funded warrant, which represents the per share offering price for the shares of common stock less the $0.0001 per share exercise price for each pre-funded warrant.
Other Income (Expense) Other income (expense) decreased by $1.2 million primarily due to lower interest income on cash balances and foreign currency translation adjustments. Income Tax Benefit We recorded a tax benefit of $0.1 million related to our foreign jurisdiction as we released a valuation allowance against our net operating loss tax asset.
Other Income Other income decreased by $0.1 million primarily due to lower interest income due to lower interest rates and lower cash balances through 2025. 93 Table of Contents Income Tax (Expense) Benefit We recorded tax expense of $0.2 million related to our foreign jurisdiction for the year ended December 31, 2025.We recorded an income tax benefit of $0.1 million for the year ended December 31, 2024 also related to our foreign jurisdiction.
Research and Development Research and development expenses decreased by $0.8 million, or 8%, to $8.8 million for the year ended December 31, 2024 from $9.6 million for the year ended December 31, 2023. The decrease was primarily due to reduced clinical and preclinical study costs, including associated consulting expense, partially offset by higher compensation costs.
Research and Development Research and development expenses increased by $0.4 million, or 5%, to $9.2 million for the year ended December 31, 2025 from $8.8 million for the year ended December 31, 2024.
As of December 31, 2024, we had $40.0 million of borrowings outstanding under our Credit and Security Agreement (the “MidCap Credit Agreement”) with MidCap Financial Trust, as agent and certain lender parties thereto. The MidCap Credit Agreement matures in May 2027.
As of December 31, 2025, we had $60.0 million of borrowings outstanding under our credit facility (the “Perceptive Credit Agreement”) with Perceptive Credit Holdings V, LP (“Perceptive”). The Perceptive Credit Agreement matures in November 2030.
We are also required to pay an exit fee at the time of maturity or prepayment event equal to 5% of all principal borrowings (or in the event of a prepayment event, the amount of principal being prepaid). ​ Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2024 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by Period ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) Total 1 year 1 to 3 years 3 to 5 years Thereafter Principal payments on long-term debt (1) ​ $ 40,000 ​ $ — ​ $ 40,000 ​ $ — ​ $ — Interest and end of term charge on long-term debt (2) ​ 12,188 ​ 4,361 ​ 7,827 ​ — ​ — Operating lease commitments (3) ​ 3,135 ​ 580 ​ ​ 1,127 ​ 1,178 ​ 250 Total ​ $ 55,323 ​ $ 4,941 ​ $ 48,954 ​ $ 1,178 ​ $ 250 ​ (1) Assumes extension of Interest-Only Period to 48 months under the MidCap Credit Facility.
Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2025 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Payments due by Period ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ (in thousands) ​ ​ ​ Total ​ ​ ​ 1 year ​ ​ ​ 1 to 3 years ​ ​ ​ 3 to 5 years ​ ​ ​ Thereafter Principal payments on long-term debt ​ $ 60,000 ​ $ — ​ $ — ​ $ 60,000 ​ $ — Interest on long-term debt (1) ​ 35,453 ​ 7,260 ​ 14,520 ​ 13,673 ​ — Operating lease commitments (2) ​ 2,555 ​ 557 ​ ​ 1,153 ​ 845 ​ — Total ​ $ 98,008 ​ $ 7,817 ​ $ 15,673 ​ $ 74,518 ​ $ — ​ (1) Interest payable reflects the rate in effect as of December 31, 2025.
Gross Margin Gross margin decreased to 67% for the year ended December 31, 2024 from 69% for the year ended December 31, 2023.
Amortization of Intangible Assets Amortization of intangible assets was $0.4 million for both the years ended December 31, 2025 and 2024. 92 Table of Contents Gross Margin Gross margin increased to 68% for the year ended December 31, 2025 from 67% for the year ended December 31, 2024.
Removed
As of December 31, 2024, we had an accumulated deficit of $358.7 million. The vast majority of our revenue to date has been generated from sales of our OviTex and OviTex PRS products in the U.S., with the remainder generated from sales of our OviTex products in Europe and the sale of other products.
Added
In March 2025, we announced the U.S. launch of larger sizes of OviTex PRS, which we believe may reduce the need for multiple smaller pieces and have the potential to simplify more complex plastic and reconstructive procedures.
Removed
External Cybersecurity Events : The sale of our medical products is correlated to the frequency of surgical procedural volumes at current and prospective hospital accounts.
Added
In December 2024, we received clearance of a Special 510(k) related to two new additional large size product offerings in our OviTex PRS portfolio. ​ Historically, we have sought to expand our service offerings beyond our OviTex and OviTex PRS products through commercial partnerships to distribute complimentary soft tissue preservation and restoration solutions.
Removed
During the second quarter of 2024, we became aware of multiple cybersecurity events, including ransomware attacks and other similar system disruptions and outages, in the U.S. and Europe that adversely impacted the procedural volumes at current customer accounts, including those affiliated across one of our GPOs.
Added
As of December 31, 2025, we had an accumulated deficit of $397.6 million.
Removed
To the extent current or future cybersecurity events continue to impact the hospital systems we serve, or otherwise affect third-party payors or other vendors within the healthcare industry critical to the patient care, we may experience additional reductions in procedural volumes that lead to lower sales volume for our products.
Added
Imposition of Tariffs on Import of Product : Our OviTex and OviTex PRS products are manufactured by Aroa at their FDA registered and ISO 13485 compliant facility in Auckland, New Zealand. As of the date of this report, the U.S. has imposed a 10% tariff on imports from New Zealand, including on the import of medical devices.
Removed
We transferred control of the nonfinancial asset group in March 2024 and recognized a gain of $7.6 million during the year ended December 31, 2024.
Added
While the terms of our agreement with Aroa provide that each of Aroa and our company will share equally the cost of the tariffs, the cost to cover such tariffs could lead us to increase the price of certain of our products, which may adversely impact demand for our products and competitive positioning.
Removed
If we are unable to obtain adequate financing, we may be required to delay or reduce the current development, commercialization and marketing plans for our products.
Added
Cost of Revenue Cost of revenue primarily consists of the costs of licensed products, charges related to excess and obsolete inventory adjustments, royalties and costs related to shipping.
Removed
During the year ended December 31, 2022, cash provided by financing activities was $40.9 million, consisting primarily of $34.4 million in proceeds from an underwritten public offering, $40.0 million in proceeds received from the issuance of long-term debt, partially offset by $30.0 million in repayments of long-term debt and $3.5 million in payments of issuance costs.
Added
Loss on Extinguishment of Debt Loss on extinguishment of debt consists of the excess consideration paid over the net carrying value of our debt at the time of extinguishment.
Removed
Indebtedness On May 26, 2022, we entered into the MidCap Credit Agreement with MidCap Financial Trust, as agent and certain lender parties thereto. The MidCap Credit Agreement provides for up to $40.0 million in MidCap Term Loans.
Added
The increase was primarily due to higher study and development costs which offset lower compensation and benefits Gain on Sale of Product Line In March 2024, we entered into an asset purchase agreement with MiMedx Group, Inc. to sell certain assets related to NIVIS.
Removed
Upon closing, we used a portion of the proceeds to fully repay borrowings under the OrbiMed Credit Facility and intend to use the remaining proceeds to fund operations and other general corporate purposes. ​ 92 Table of Contents Pursuant to the MidCap Credit Agreement, we provided a first priority security interest in all existing and future acquired assets, including intellectual property, owned by us.
Added
We expect interest expense to increase next year with the new credit facility with Perceptive due to the increase in the borrowing base and the increase in the interest rate.
Removed
The MidCap Credit Agreement contains certain covenants that limit our ability to engage in certain transactions that may be in our long-term best interests, including the incurrence of additional indebtedness, effecting certain corporate changes, making certain investments, acquisitions or dispositions and paying dividends. ​ The MidCap Credit Agreement also contains customary indemnification obligations and customary events of default, including, among other things, (i) non-payment, (ii) breach of warranty, (iii) non-performance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (vi) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) termination of a pension plan, (xi) regulatory matters, (xii) material adverse effect and (xiii) breach of material contracts. ​ In addition, we must maintain minimum net revenue levels tested quarterly.
Added
Loss on Extinguishment of Debt We recorded a loss on the extinguishment of debt of $0.9 million during the year ended December 31, 2025 related to the repayment of borrowings of our former credit facility with MidCap in November. The losses were primarily comprised of the write-off of unamortized debt discounts and prepayment penalties at the time of extinguishment.
Removed
In the event of default under the MidCap Credit Agreement, we would be required to pay interest on principal and all other due and unpaid obligations at the current rate in effect plus 2%. ​ The MidCap Term Loans mature on May 1, 2027 and bear interest at a rate equal to 6.25% plus the greater of one-month Term SOFR (as defined in the MidCap Credit Agreement) or 1.0%.
Added
Indebtedness On November 13, 2025, the Company entered into a Credit Agreement and Guaranty (the “Credit Agreement”) with Perceptive, which provides for a senior secured term loan facility in an aggregate principal amount of up to $70.0 million.
Removed
We are required to make 36 monthly interest payments beginning on June 1, 2022 (the “Interest-Only Period”).
Added
An initial loan in an aggregate principal amount of $60.0 million (the “Initial Loan”) was funded under the Perceptive Term Loan Facility on November 14, 2025 (the “Closing Date”).
Removed
If we are in covenant compliance at the end of the Interest-Only Period, we will have the option to extend the Interest-Only Period by 12 months to 48 monthly interest payments, followed by 12 months of straight-line amortization, with the entire principal payment due at maturity.
Added
In addition to the Initial Loan, the Perceptive Term Loan Facility includes an additional delayed draw loan in an aggregate principal amount of $10.0 million to be available in a single drawing after the Closing Date on or prior to the Delayed Draw Commitment Termination Date (as defined in the Credit Agreement but not later than April 30, 2027) (the “Delayed Draw Loan,” together with the Initial Loan, the “Loans”), which will be accessible by the Company so long as it satisfies certain customary conditions precedent, including but not limited to, the achievement of net revenue thresholds.
Removed
If we are not in covenant compliance at the end of the Interest-Only Period, we are required to make 24 months of straight-line amortization payments, with the entire principal amount due at maturity. ​ Subject to certain limitations, the MidCap Term Loans have a prepayment fee equal to 1.0% of the prepaid principal.
Added
The Perceptive Term Loan Facility has a maturity date of November 14, 2030.
Removed
(2) Interest payable reflects the rate in effect as of December 31, 2024. The interest rate on borrowings under the MidCap Credit Facility is variable and resets monthly. End of term fee reflects final payment fee due at maturity.
Added
The Perceptive Term Loan Facility accrues interest at an annual rate equal to the sum of (a) an applicable margin of 7.85% (the “Applicable Margin”) plus (b) the greater of (i) the Reference Rate (as defined in the Credit Agreement) and (ii) four and one quarter percent (4.25%). Accrued interest on the Term Loans is payable monthly in arrears.
Added
Upon an Event of Default (as defined in the Credit Agreement), the Applicable Margin will automatically increase by an additional 3.00% per annum. Prior to the Maturity Date, there will be no scheduled principal payments under the Perceptive Term Loan Facility.
Added
On the Maturity Date, the Company is required to pay Perceptive the aggregate outstanding principal amount of the Loans and all accrued and unpaid interest thereon. The Term Loans may be prepaid at any time, subject to a prepayment premium equal to 2% to 10% of the aggregate outstanding principal amount being prepaid, depending on the date of prepayment.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−1 removed9 unchanged
Biggest changeA significant decrease in demand could result in an increase in the amount of excess inventory on hand, which could lead to additional charges for excess and obsolete inventory. The need to maintain substantial levels of inventory impacts our estimates for excess and obsolete inventory.
Biggest changeWe evaluate the carrying value of our inventory in relation to the estimated forecast of product demand, which takes into consideration the expiration date of the products. A significant decrease in demand could result in an increase in the amount of excess inventory on hand, which could lead to additional charges for excess and obsolete inventory.
A 1% increase in interest rates would have resulted in a $0.4 million increase to our interest expense for the year ended December 31, 2024. Inflationary factors, such as increases in our cost of revenue and operating expenses, may adversely affect our operating results.
A 1% increase in interest rates would have resulted in a $0.4 million increase to our interest expense for the year ended December 31, 2025. Inflationary factors, such as increases in our cost of revenue and operating expenses, may adversely affect our operating results.
Following the events relating to Silicon Valley Bank in 2023, we established a redundant 93 Table of Contents account at a high-credit-quality financial institution to mitigate liquidity risk to our cash and cash equivalents from any further instability in the financial industry.
Following the events relating to Silicon Valley Bank in 2023, we established a redundant account at a high-credit-quality financial institution to mitigate liquidity risk to our cash and cash equivalents from any further instability in the financial industry.
As discussed above in the section of this Annual Report entitled “Liquidity and Capital Resources — Indebtedness,” the MidCap Credit Facility bears interest at a floating rate of interest, which resets monthly and is equal to 6.25% plus the greater of one-month Term SOFR or 1.0%. As a result, we are exposed to risks from changes in interest rates.
As discussed above in the section of this Annual Report entitled “Liquidity and Capital Resources — Indebtedness,” the Perceptive Credit Facility bears interest at a floating rate of interest, which resets monthly and is equal to 7.85% plus the greater of one-month Term SOFR or 4.25 %. As a result, we are exposed to risks from changes in interest rates.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item is set forth on pages F-1 through F-28 hereto. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required by this Item is set forth on pages F-1 through F-31 hereto. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 98 Table of Contents
Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain and increase our gross margin or decrease our operating expenses as a percentage of our revenue if our selling prices of our products do not increase as much or more than our costs increase.
Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain and increase our gross margin or decrease our operating expenses as a percentage of our revenue if our selling prices of our products do not increase as much or more than our costs increase. 97 Table of Contents We do not currently have any material exposure to foreign currency fluctuations and do not engage in any hedging activities as part of our normal course of business.
In addition, we continue to introduce new products and sizes, which we believe will increase our revenue. As a result, we may be required to take additional charges for excess and obsolete inventory in the future if the purchased units do not align with sales.
As a result, we may be required to take additional charges for excess and obsolete inventory in the future if the purchased units do not align with sales.
We do not currently have any material exposure to foreign currency fluctuations and do not engage in any hedging activities as part of our normal course of business. Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”).
Inventory Valuation Inventory is stated at the lower of cost or net realizable value, with cost determined using the first-in-first-out method.
Inventory Valuation Inventory is stated at the lower of cost or net realizable value, with cost determined using the first-in-first-out method. Inventory, which consists primarily of our OviTex and OviTex PRS products held on consignment or held in our warehouse, is considered finished goods and is purchased from a third party.
Removed
Inventory, which consists primarily of our OviTex and OviTex PRS products held on consignment or held in our warehouse, is considered finished goods and is purchased from a third party. 94 Table of Contents We evaluate the carrying value of our inventory in relation to the estimated forecast of product demand, which takes into consideration the expiration date of the products.
Added
The need to maintain substantial levels of inventory impacts our estimates for excess and obsolete inventory. In addition, we continue to introduce new products and sizes, which we believe will increase our revenue.

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