TELA Bio, Inc.

Previous wording

Our OviTex portfolio consists of multiple product configurations intended to address various surgical procedures within hernia repair and abdominal wall reconstruction, including ventral, inguinal, and hiatal hernia repair. In addition, we have also designed an OviTex product specifically for use in laparoscopic and robotic-assisted hernia repair, which we market as OviTex LPR and began commercializing in November 2018. 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.

Current wording

Our OviTex portfolio consists of multiple product configurations intended to address various surgical procedures within hernia repair and abdominal wall reconstruction, including ventral, inguinal, and hiatal hernia repair. In addition, we have also designed an OviTex product specifically for use in laparoscopic and robotic-assisted hernia repair, which we market as OviTex LPR and began commercializing in November 2018. 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 (“RTM”), 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. In April 2026, we launched OviTex RTM with Long-Term Resorbable Reinforcement (PLGA).

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 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

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-

Previous wording

published in theAnnals of Medicine and Surgery. The BRAVO study was designed to evaluate the clinical performance of OviTex for primary or recurrent ventral hernias using open, laparoscopic, or robotic techniques in 92 enrolled patients. The recurrence rate at the 24-month time point was 2.6%, and surgical site occurrences (“SSOs”), were observed in 38% of the study population. 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, chronic obstructive pulmonary disease (“COPD”), diabetes mellitus, coronary artery disease, or advanced age (≥75 years). The results also indicated that BRAVO patients experienced statistically significant and clinically meaningful improvements in their quality of life and perceived health based on patient responses to the EuroQol-5 Dimension (EQ-5D) health assessment and the validated 12-question Hernia-Related Quality of Life survey (HerQLes). 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 wall reconstruction procedures. Among these other initiatives, we continue to enroll patients for our BRAVO II study, a prospective study evaluating the use of OviTex in robot-assisted ventral and inguinal hernia repairs.

Current wording

month results of our single arm, multicenter post-market clinical study, which we refer to as our BRAVO study, were published in theAnnals of Medicine and Surgery. The BRAVO study was designed to evaluate the clinical performance of OviTex for primary or recurrent ventral hernias using open, laparoscopic, or robotic techniques in 92 enrolled patients. The recurrence rate at the 24-month time point was 2.6%, and surgical site occurrences (“SSOs”), were observed in 38% of the study population. 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, chronic obstructive pulmonary disease (“COPD”), diabetes mellitus, coronary artery disease, or advanced age (≥75 years). The results also indicated that BRAVO patients experienced statistically significant and clinically meaningful improvements in their quality of life and perceived health based on patient responses to the EuroQol-5 Dimension (EQ-5D) health assessment and the validated 12-question Hernia-Related Quality of Life survey (HerQLes). 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 wall reconstruction procedures. Among these other initiatives, we continue to enroll patients for our BRAVO II study, a prospective study evaluating the use of OviTex in robot-assisted ventral and inguinal hernia repairs.

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

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”)

Previous 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.

Current wording

an absorbent matrix of Type I and Type III bovine collagen designed to manage moderately to heavily exudating 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

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.

Current wording

The vast majority of our revenue to date has been generated by the sale of our OviTex products. Our revenue decreased by $0.9 million, or 4%, from $20.2 million for the three months ended June 30, 2025 to $19.3 million for the three months ended June 30, 2026 and by $0.4 million, or 1%, from $38.7 million for the six months ended June 30, 2025 to $38.4 million for the six months ended June 30, 2026. Our net loss increased by $1.3 million, or 13%, from $9.9 million for the three months ended June 30, 2025 to $11.3 million for the three months ended June 30, 2026 and increased by $2.3 million, or 11% from $21.2 million for the six months ended June 30, 2025 to $23.5 million for the six months ended June 30, 2026. We have not been profitable since inception and as of June 30, 2026, we had an accumulated deficit of $421.1 million. We expect to incur losses for the foreseeable future.

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 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.

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 12.5% 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 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.

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. The recent revenue decline has been driven by decreasing OviTex PRS sales and price mix headwinds in the U.S. related to growth of smaller sized units.

Previous 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.

Current wording

Revenue decreased by $0.9 million, or 4%, to $19.3 million for the three months ended June 30, 2026, from $20.2 million for the three months ended June 30, 2025. The decrease in revenue was primarily driven by a decline in OviTex PRS sales and price mix headwinds in the U.S. related to growth of smaller sized units and partially offset by growing international sales. During the three months ended June 30, 2026, we sold 5,776 units of OviTex as compared to 5,178 units of OviTex during the three months ended June 30, 2025, a 12% increase in unit sales volume. Additionally, we sold 1,050 units of OviTex PRS during the three months ended June 30, 2026 as compared to 1,362 units during the three months ended June 30, 2025, a 23% decline in unit sales volume.

Previous wording

Gross margin decreased to 66% for the three months ended March 31, 2026 from 68% for the three months ended March 31, 2025. The decrease was primarily due to a higher charge for excess and obsolete inventory as a percentage of revenue.

Current wording

Gross margin increased to 72% for the three months ended June 30, 2026, from 70% for the three months ended June 30, 2025. The increase was primarily due to a lower charge for excess and obsolete inventory as a percentage of revenue and the tariff refund.

Previous 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.

Current wording

Sales and marketing expenses decreased by $0.4 million, or 2%, to $16.4 million for the three months ended June 30, 2026, from $16.9 million for the three months ended June 30, 2025. The decrease was due to lower compensation and benefits primarily from a decrease in headcount which offset higher meeting and training costs.

Previous wording

Interest expense increased by $0.8 million, or 68% to $2.1 million for the three months ended March 31, 2026 from $1.2 million for the three months ended March 31, 2025 due to an increase in the borrowing base and the interest rate from our new credit facility.

Current wording

Interest expense increased by $0.9 million, or 75% to $2.1 million for the three months ended June 30, 2026, from $1.2 million for the three months ended June 30, 2025 due to an increase in the borrowing base and the interest rate from our new credit facility.

Previous 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.

Current wording

Other income decreased by $0.2 million, or 59%, to $0.2 million for the three months ended June 30, 2026, from $0.4 million for the three months ended June 30, 2025 primarily due to lower interest income from lower cash balances and lower interest rates.

Previous 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.

Current wording

We recorded tax expense of $60,000 and $33,000 related to our foreign jurisdiction for the three months ended June 30, 2026 and 2025, respectively.

Previous 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.

Current wording

Cost of revenue (excluding amortization of intangible assets) decreased by $0.2 million, or 2%, to $11.7 million for the six months ended June 30, 2026, from $11.9 million for the six months ended June 30, 2025. The decrease in cost of revenue was primarily due to the decline in revenue and a refund of tariffs paid in 2025.

Previous 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.

Current wording

General and administrative expenses increased by $0.3 million, or 3%, to $8.2 million for the six months ended June 30, 2026, from $8.0 million for the six months ended June 30, 2025. The increase was primarily due to increased professional fees and bad debt expense which offset lower compensation costs primarily from a decrease in headcount.

Previous 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.

Current wording

As of June 30, 2026, we had cash and cash equivalents of $30.4 million, working capital of $36.3 million and an accumulated deficit of $421.1 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

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.

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(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 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.

Current wording

During the six months ended June 30, 2026, we used $20.6 million of cash in operating activities, resulting from our net loss of $23.5 million and changes in operating assets and liabilities of $0.8 million, partially offset by our non-cash items of $3.8 million. Our non-cash items were primarily comprised of stock-based compensation expense of $1.4 million, our excess and obsolete inventory charge of $1.2 million, depreciation and amortization expense of $0.5 million and noncash interest expense of $0.5 million. The change in our operating assets and liabilities was primarily related to an increase in inventory 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 six months ended June 30, 2026.

Previous 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.

Current wording

During the six months ended June 30, 2025, we used $17.6 million of cash in operating activities, resulting from our net loss of $21.2 million, changes in operating assets and liabilities of $0.2 million partially offset by our non-cash items of $3.8 million. Our non-cash items were primarily comprised of stock-based compensation expense of $2.0 million, our excess and obsolete inventory charge of $0.9 million, depreciation and amortization expense of $0.5 million and noncash interest expense of $0.3 million. The change in our operating assets and liabilities was primarily related to an increase in accounts receivable partially offset by a decrease in inventory.

Previous 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.

Current wording

During the six months ended June 30, 2026, cash provided by investing activities was $0.4 million consisting of proceeds received from the sale of NIVIS of $0.6 million offset by $0.2 million in purchases of property and equipment.

Previous 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.

Current wording

During the six months ended June 30, 2025, cash provided by investing activities was $0.3 million consisting of proceeds received from the sale of NIVIS of $0.5 million offset by $0.1 million in purchases of property and equipment.

Previous 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.

Current wording

During the six months ended June 30, 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

Previous 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.

Current wording

During the six months ended June 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.

Previous wording

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. 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”). 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. The Perceptive Term Loan Facility has a maturity date of November 14, 2030.

Current wording

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. 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”). 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 contingent on it achieving net revenue thresholds and satisfying certain customary conditions precedent. The Perceptive Term Loan Facility has a maturity date of November 14, 2030.