TELA Bio, Inc.

Previous wording

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. In October 2022, the 24-month results of our single arm, multicenter post-market clinical study, which we refer to as our BRAVO study, were

Current wording

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. In October 2022, the 24-month results of our single arm, multicenter post-market clinical study, which we refer to as our BRAVO study, were

Previous wording

Our OviTex PRS portfolio is supported by non-human primate data that demonstrated more rapid tissue integration and tissue remodeling compared to the market leading biologic matrix used in this indication. In addition, there have been a growing number of published or presented works evaluating the use of OviTex PRS in plastic and reconstruction 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. 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.

Current wording

Our OviTex PRS portfolio is supported by non-human primate data that demonstrated more rapid tissue integration and tissue remodeling compared to the market leading biologic matrix used in this indication. In addition, there have been a growing number of published or presented works evaluating the use of OviTex PRS in plastic and reconstruction applications. 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.

Previous wording

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. Some additional product offerings include or have included atraumatic mesh fixation devices or surgical wound management and infection control solutions. In September 2023, we entered into a distribution agreement with Advanced Medical Solutions Limited, a company registered in England, to distribute their LiquiFix Hernia Mesh Fixation Devices (LIQUIFIX FIX8™ and LIQUIFIX Precision™). In March 2024, we announced the full commercial launch of LiquiFix in the U.S. We previously co-developed and commercialized the NIVIS Fibrillar Collagen Pack, (“NIVIS”) an absorbent matrix of Type I and Type III bovine collagen designed to manage moderately to heavily exudating wounds

Current wording

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. Some additional product offerings include or have included atraumatic mesh fixation devices or surgical wound management and infection control solutions. In September 2023, we entered into a distribution agreement with Advanced Medical Solutions Limited, a company registered in England, to distribute their LIQUIFIX Hernia Mesh Fixation Devices (LIQUIFIX FIX8™ and LIQUIFIX Precision™). In March 2024, we announced the full commercial launch of LIQUIFIX in the U.S. We previously co-developed and commercialized the NIVIS Fibrillar Collagen Pack, (“NIVIS”) an absorbent matrix of Type I and Type III bovine collagen designed to manage moderately to heavily exudating

Previous wording

and to control minor bleeding, in partnership with Regenity Biosciences. 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) during the first two years following its launch by MiMedx Group, Inc. 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.

Current wording

wounds and to control minor bleeding, in partnership with Regenity Biosciences. 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) during the first two years following its launch by MiMedx Group, Inc. 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.

Previous wording

We primarily market our products through a single direct sales force, predominantly in the U.S., with a small number of sales representatives in the United Kingdom and European Union, and also utilize a smaller number of independent contractors and distributors in the United States and certain European countries. 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 September 30, 2025, we had 79 sales territories in the U.S. and 19 sales territories in Europe. We believe we can enhance the productivity of our sales force by improving customer segmentation and targeting, implementing and further refining our proprietary training programs, leveraging support from our medical education and medical affairs functions to drive physician awareness, education and clinical understanding of our products, and utilizing engagement analytics to support further product development and enhancement opportunities. Additionally, we have contracted with three national group purchasing organizations (“GPOs”) in the United States covering our OviTex and OviTex PRS products and plan to continue to contract with additional GPOs and other integrated delivery networks (“IDNs”) to increase access to and penetration of hospital accounts for all products we commercialize.

Current wording

We primarily market our products through a single direct sales force, predominantly in the U.S., with a small number of sales representatives in the United Kingdom and European Union, and also utilize a smaller number of independent contractors and distributors in the United States and certain European countries. We have invested in our direct sales and marketing infrastructure to expand our presence and to promote awareness and adoption of our products. We believe we can enhance the productivity of our sales force by improving customer segmentation and targeting, implementing and further refining our proprietary training programs, leveraging support from our medical education and medical affairs functions to drive physician awareness, education and clinical understanding of our products, and utilizing engagement analytics to support further product development and enhancement opportunities. Additionally, we have contracted with three national group purchasing organizations (“GPOs”) in the United States covering our OviTex and OviTex PRS products and plan to continue to contract with additional GPOs and other integrated delivery networks (“IDNs”) to increase access to and penetration of hospital accounts for all products we commercialize.

Previous wording

The vast majority of our revenue to date has been generated by the sale of our OviTex products. Our revenue increased by $1.7 million, or 9%, from $19.0 million for the three months ended September 30, 2024 to $20.7 million for the three months ended September 30, 2025 and by $7.8 million, or 15%, from $51.7 million for the nine months ended September 30, 2024 to $59.4 million for the nine months ended September 30, 2025. Our net loss decreased by $1.8 million, or 17%, from $10.4 million for the three months ended September 30, 2024 to $8.6 million for the three months ended September 30, 2025 and increased by $1.1 million, or 4% from $28.6 million for the nine months ended September 30, 2024 to $29.8 million for the nine months ended September 30, 2025. The nine months ended September 30, 2024 included a recognized gain of $7.6 million on the sale of NIVIS to the MiMedx Group, Inc. We have not been

Current wording

The vast majority of our revenue to date has been generated by the sale of our OviTex products. Our revenue increased by $0.5 million, or 3%, from $18.5 million for the three months ended March 31, 2025 to $19.1 million for the three months ended March 31, 2026. Our net loss increased by $1.0 million, or 9%, from $11.3 million for the three months ended March 31, 2025 to $12.3 million for the three months ended March 31, 2026. We have not been profitable since inception and as of March 31, 2026, we had an accumulated deficit of $409.8 million. We expect to incur losses for the foreseeable future.

Previous wording

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), 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. Due to this uncertainty and other factors, we have experienced high volatility in our stock price over the prior year. Continued uncertainty, perception of worsening market conditions and the introduction of new products which may, or may be perceived to, negatively impact the demand for our products now or in the future could result in a decline in our stock price, high inflation, an increase in our cost of capital and an adverse effect on our ability to access the capital markets in the future on terms acceptable to us or at all.

Current wording

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 tensions or the outbreak of hostilities or war, have contributed to increased market volatility and diminished expectations for economic growth in the world. Due to this uncertainty and other factors, we have experienced high volatility in our stock price over the prior year. Continued uncertainty, perception of worsening market conditions and the introduction of new products which may, or may be perceived to, negatively impact the demand for our products now or in the future could result in a decline in our stock price, high inflation, an increase in our cost of capital and an adverse effect on our ability to access the capital markets in the future on terms acceptable to us or at all.

Previous wording

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 15% tariff on imports from New Zealand, including on the import of medical devices. 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.

Current wording

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. 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.

Previous wording

The majority of our revenue consists of direct sales of our products to hospital accounts in the U.S. Depending on the terms of our agreements with our customers, we recognize revenue related to product sales when control transfers, which generally occurs when the product is shipped to the customer, or when the product is utilized in a surgical procedure in the case of consignment agreements. Fees charged to customers for shipping are recognized as revenue. 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

Current wording

The majority of our revenue consists of direct sales of our products to hospital accounts in the U.S. Depending on the terms of our agreements with our customers, we recognize revenue related to product sales when control transfers, which generally occurs when the product is shipped to the customer, or when the product is utilized in a surgical procedure in the case of consignment agreements. Fees charged to customers for shipping are recognized as revenue. 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 Quarterly 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.

Previous wording

Research and development expenses consist primarily of product research, engineering, product development, regulatory compliance and clinical development. 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 expense research and development costs as they are incurred.

Current wording

Research and development expenses consist primarily of product research, engineering, product development, regulatory compliance and clinical development. 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

Previous wording

Interest expense consists of cash interest under our credit facilities and non-cash interest attributable to the amortization of final payment fees and the amortization of deferred financing costs related to our indebtedness.

Current wording

Interest expense consists of cash interest under our credit facilities and non-cash interest attributable to the amortization of deferred financing costs related to our indebtedness.

Previous wording

Revenue increased by $1.7 million, or 9%, to $20.7 million for the three months ended September 30, 2025 from $19.0 million for the three months ended September 30, 2024. The increase in revenue was primarily driven by the addition of new customers, growing international sales and the U.S. launch of 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. During the three months ended September 30, 2025, we sold 5,795 units of OviTex as compared to 4,767 units of OviTex during the three months ended September 30, 2024, a 22% increase in unit sales volume. Additionally, we sold 1,334 units of OviTex PRS during the three months ended September 30, 2025 as compared to 1,293 units during the three months ended September 30, 2024, a 3% increase in unit sales volume.

Current wording

Revenue increased by $0.5 million, or 3%, to $19.1 million for the three months ended March 31, 2026 from $18.5 million for the three months ended March 31, 2025. The increase in revenue was primarily driven by growing international sales, partially offset by price mix headwinds in the U.S. related to growth of smaller sized units. During the three months ended March 31, 2026, we sold 5,779 units of OviTex as compared to 4,992 units of OviTex during the three months ended March 31, 2025, a 16% increase in unit sales volume. Additionally, we sold 1,133 units of OviTex PRS during the three months ended March 31, 2026 as compared to 1,170 units during the three months ended March 31, 2025, a 3% decline in unit sales volume.

Previous wording

Cost of revenue (excluding amortization of intangible assets) increased by $0.6 million, or 10%, to $6.6 million for the three months ended September 30, 2025 from $6.0 million for the three months ended September 30, 2024. The increase in cost of revenue was primarily the result of an increase in products purchased to support demand from our higher unit sales.

Current wording

Cost of revenue (excluding amortization of intangible assets) increased by $0.5 million, or 9%, to $6.4 million for the three months ended March 31, 2026 from $5.9 million for the three months ended March 31, 2025. 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.

Previous wording

Sales and marketing expenses decreased by $1.2 million, or 8%, to $15.2 million for the three months ended September 30, 2025 from $16.5 million for the three months ended September 30, 2024. 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.

Current wording

Sales and marketing expenses decreased by $0.1 million, to $16.5 million for the three months ended March 31, 2026 from $16.6 million for the three months ended March 31, 2025. The decrease was due to lower compensation and benefits primarily from lower commission expense, which offset higher meeting and training costs.

Previous wording

General and administrative expenses increased by $0.3 million, or 7%, to $3.9 million for the three months ended September 30, 2025 from $3.7 million for the three months ended September 30, 2024. The increase was primarily due to higher compensation and benefits and professional fees.

Current wording

General and administrative expenses increased by $0.3 million, or 9%, to $4.2 million for the three months ended March 31, 2026 from $3.8 million for the three months ended March 31, 2025. The increase was primarily due to higher professional fees and travel expenses.

Previous wording

Other income decreased by $0.2 million, or 55%, to $0.2 million for the three months ended September 30, 2025 from $0.3 million for the three months ended September 30, 2024 due primarily to foreign currency translation adjustments.

Current wording

Other income decreased by $0.1 million, or 24%, to $0.4 million for the three months ended March 31, 2026 from $0.5 million for the three months ended March 31, 2025 due primarily to lower interest income from lower cash balances and lower interest rates.

Previous wording

We recorded deferred tax expense of $85,000 for the nine months ended September 30, 2025 related to our foreign jurisdiction. No tax expense was recorded during the nine months ended September 30, 2024.

Current wording

We recorded tax expense of $60,000 and $52,000 related to our foreign jurisdiction for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

As of September 30, 2025, we had cash and cash equivalents of $29.7 million, working capital of $39.1 million and an accumulated deficit of $388.5 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.

Current wording

As of March 31, 2026, we had cash and cash equivalents of $39.5 million, working capital of $46.5 million and an accumulated deficit of $409.8 million. 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.

Previous wording

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. As of September 30, 2025, 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.

Current wording

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. As of March 31, 2026, 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.

Previous wording

Based on our current business plan, we believe that our existing cash resources inclusive of the proceeds received in the debt refinancing and proceeds to be received upon the closing of the underwritten registered direct offering, each of which is described above will be sufficient to meet our capital requirements, debt repayment obligations and fund our operations for at least the next 12 months from the issuance of this Quarterly Report. If these sources are insufficient to satisfy our liquidity requirements, we may seek to sell common or preferred equity or debt securities or enter into a new credit facility. 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. No sales were made under the Equity Agreement during the nine months ended September 30, 2025. 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. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. 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, changes in trade policies, changes in interest rates or other factors. 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.

Current wording

Based on our current business plan, we believe that our existing cash resources will be sufficient to meet our capital requirements and fund our operations for at least the next 12 months from the issuance of this Quarterly Report. If these sources are insufficient to satisfy our liquidity requirements, we may seek to sell common or preferred equity or debt securities or enter into a new credit facility. 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. 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. Debt financing, if available, may involve covenants restricting our operations or our ability to incur additional debt. 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, changes in trade policies, changes in interest rates or other factors. 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.

Previous wording

During the nine months ended September 30, 2024, we used $34.1 million of cash in operating activities, resulting from our net loss of $28.6 million, non-cash items of $1.6 million and the change in operating assets and liabilities of $3.8 million. Our non-cash items were comprised of the gain on sale of NIVIS of $7.6 million offset by stock-based compensation expense of $3.3 million, our excess and obsolete inventory charge of $1.6 million, depreciation and amortization expense of $0.7 million and noncash interest expense of $0.5 million. The change in our operating assets and liabilities was primarily related to changes in inventory and accounts receivable partially offset by increases in accounts payable.

Current wording

During the three months ended March 31, 2026, we used $11.2 million of cash in operating activities, resulting from our net loss of $12.3 million and changes in operating assets and liabilities of $1.2 million, partially offset by our non-cash items of $2.3 million. Our non-cash items were primarily comprised of stock-based compensation expense of $0.8 million, our excess and obsolete inventory charge of $0.9 million, depreciation and amortization expense of $0.3 million and noncash interest expense of $0.2 million. The change in our operating assets and liabilities was primarily related to an increase in inventory and a decrease in accrued expenses and other current liabilities offset by an increase in accounts payable. Consistent with historical trends, cash used in operations in each of the remaining quarters of the fiscal year ending December 31, 2026 is expected to be lower than the amount reported for the three months ended March 31, 2026.

Previous wording

During the nine months ended September 30, 2025, we used $23.3 million of cash in operating activities, resulting from our net loss of $29.8 million, partially offset by our non-cash items of $6.1 million and changes in operating assets and liabilities of $0.4 million. Our non-cash items were primarily comprised of stock-based compensation expense of $3.0 million, our excess and obsolete inventory charge of $1.5 million, depreciation and amortization expense of $0.8 million and noncash interest expense of $0.4 million. The change in our operating assets and liabilities was primarily related changes in accounts receivable and inventory offset by increases in accounts payable and accrued expenses.

Current wording

During the three months ended March 31, 2025, we used $9.7 million of cash in operating activities, resulting from our net loss of $11.3 million, changes in operating assets and liabilities of $0.6 million partially offset by our non-cash items of $2.1 million. Our non-cash items were comprised of stock-based compensation expense of $1.0 million, our excess and obsolete inventory charge of $0.6 million, depreciation and amortization expense of $0.3 million and noncash interest expense of $0.2 million. The change in our operating assets and liabilities was primarily related to changes in inventory and accounts receivable and a decrease in accrued expenses and other current liabilities partially offset by increases in accounts payable.

Previous wording

During the nine months ended September 30, 2025, cash provided by investing activities was $0.7 million consisting of proceeds received from the sale of NIVIS of $1.0 million offset by $0.4 million in purchases of property and equipment.

Current wording

During the three months ended March 31, 2026, cash provided by investing activities was $0.2 million consisting of proceeds received from the sale of NIVIS of $0.3 million offset by $0.1 million in purchases of property and equipment.

Previous wording

During the nine months ended September 30, 2024, cash provided by investing activities was $4.6 million consisting of proceeds received from the sale of NIVIS of $5.4 million offset by $0.7 million in purchases of property and equipment.

Current wording

During the three months ended March 31, 2025, cash provided by investing activities was $0.1 million consisting of proceeds received from the sale of NIVIS of $0.2 million offset by $32,000 in purchases of property and equipment.

Previous wording

During the nine months ended September 30, 2024, cash provided by financing activities was $0.1 million, consisting primarily of proceeds received from the exercise of stock options and from the issuance of common stock under the employee stock purchase plan partially offset by the payment of withholding taxes related to stock-based compensation to employees.

Current wording

During the three months ended March 31, 2026, cash used in financing activities was $0.3 million, consisting primarily of payments of accrued offering costs and payments of withholding taxes related to stock-based compensation to employees partially offset by proceeds received from the issuance of common stock under the employee stock purchase plan.

Previous wording

During the nine months ended September 30, 2025, cash used in financing activities was $0.1 million, consisting primarily of payments of withholding taxes related to stock-based compensation to employees partially offset by proceeds received from the issuance of common stock under the employee stock purchase plan.

Current wording

During the three months ended March 31, 2025, cash used in financing activities was $0.1 million, consisting primarily of payments of withholding taxes related to stock-based compensation to employees partially offset by proceeds received from the issuance of common stock under the employee stock purchase plan.