TELA Bio, Inc.
For the period ended Sep 30, 2026. Filed Nov 10, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 10, 2026
TELA$0.80-7.5%Stored close · as of Nov 10, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-11.
0001104659-26-094039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-10.
0001104659-26-125190
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 123 current paragraphs.
71 unchanged; 35 reworded; 13 added; 3 removed; 4 previous and 4 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
30, 2026 and increased by $3.0 million, or 10% from $29.8 million for the nine months ended September 30, 2025 to $32.8 million for the nine months ended September 30, 2026. We have not been profitable since inception and as of September 30, 2026, we had an accumulated deficit of $430.4 million. We expect to incur losses for the foreseeable future. We announced in August 2026 that we implemented an initiative to strengthen our cost structure and have taken actions to reduce our annual operating expenses by approximately $17.0 million across the organization driven by a targeted headcount reduction of approximately 20% and the streamlining of external resources, while preserving our ability to invest in our core growth priorities and product innovation.
Current report
Other
Current report
Operating expenses classified as other are expenses which we do not consider representative of our ongoing operations. These other expenses primarily consist of employee severance expense and other legal costs related to our reduction in force.
Current report
Research and development expenses decreased by $0.7 million, or 32%, to $1.6 million for the three months ended September 30, 2026 from $2.3 million for the three months ended September 30, 2025. The decrease was primarily due to lower compensation and benefits from a decrease in headcount and lower study costs.
Current report
Other
Current report
Other expenses increased by $1.8 million, to $2.0 million for the three months ended September 30, 2026 from $0.2 million for the three months ended September 30, 2025. The increase was primarily due to our reduction in force.
Current report
Other income increased by $38,000, or 25% to $0.2 million for the three months ended September 30, 2026, from $0.2 million for the three months ended September 30, 2025 primarily due to fluctuations in foreign currency adjustments.
Current report
Comparison of the Nine Months Ended September 30, 2026 and 2025
Current report
Gross margin was 68% for both the nine months ended September 30, 2026 and 2025.
Current report
Other
Current report
Other expenses increased by $2.1 million, to $2.5 million for the nine months ended September 30, 2026, from $0.4 million for the nine months ended September 30, 2025. The increase was primarily due to our reduction in force.
Current report
As further discussed in Note 3, “Going Concern” in the accompanying unaudited interim consolidated financial statements, management’s current forecasts indicate it is probable that the Company will not achieve the minimum revenue threshold required under the Perceptive Credit Agreement during the twelve-month period following the issuance of these consolidated financial statements. If that were to occur, Perceptive could declare an event of default and accelerate repayment of all outstanding principal and accrued interest under the Perceptive Credit Agreement. The Company does not expect to have sufficient liquidity to repay such obligations if repayment were accelerated. These conditions and events raise doubt about the Company’s ability to continue as a going concern within one year after the date these consolidated financial statements are issued.
Current report
On September 28, 2026, the Company entered into the “Limited Consent with Perceptive, pursuant to the Limited Consent, the Consenting Lenders (as defined in the Limited Consent) agreed that the minimum Revenue (as defined in the Credit Agreement) covenant set forth in Section 10.02 of the Credit Agreement shall not be tested with respect to the fiscal quarters ending on or about September 30, 2026 and December 31, 2026. If the Company fails to satisfy the applicable covenant requirements and does not obtain a waiver or amendment from Perceptive in the periods tested following December 31, 2026, the lender could declare an event of default and accelerate repayment of all outstanding principal and accrued interest under the Credit Agreement.
Removed paragraphs (3)
Previous report
Research and development expenses increased by $0.5 million, or 24%, to $2.7 million for the three months ended June 30, 2026 from $2.2 million for the three months ended June 30, 2025. The increase was primarily due to higher compensation and benefits from additional headcount and increased study costs.
Previous report
Comparison of the Six Months Ended June 30, 2026 and 2025
Previous report
Gross margin was 69% for both the six months ended June 30, 2026 and 2025.
Reworded paragraphs (35)
Previous wording
Our OviTex products have received 510(k) clearances from the U.S. Food and Drug Administration, (“FDA”) which clearances were obtained and are currently held by our exclusive contract manufacturer of these products, Aroa. In April 2019, our first OviTex PRS products received 510(k) clearance from the FDA, which clearance was initially obtained by Aroa and is currently held by us. In March 2023, we received an additional 510(k) clearance for our OviTex PRS Long-Term Resorbable device, which is currently held by us. In May 2024, we received clearance of a Special 510(k) related to minor changes to our OviTex PRS Permanent and Short-Term Resorbable devices. 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. 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. 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.
Current wording
Our OviTex products have received 510(k) clearances from the U.S. Food and Drug Administration, (“FDA”) which clearances were obtained and are currently held by our exclusive contract manufacturer of these products, Aroa. In April 2019, our first OviTex PRS products received 510(k) clearance from the FDA, which clearance was initially obtained by Aroa and is currently held by us. In March 2023, we received an additional 510(k) clearance for our OviTex PRS Long-Term Resorbable device, which is currently held by us. In May 2024, we received clearance of a Special 510(k) related to minor changes to our OviTex PRS Permanent and Short-Term Resorbable devices. 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. 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. 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. Additionally, in September 2026, we received 510(k) clearance for our Liora Monofilament Scaffold (“Liora”) product. Liora is a fully resorbable surgical mesh device for soft tissue reinforcement that will enable us to expand our footprint in the soft tissue reconstruction market and is the first implant to be fully developed in our ISO 8 certified cleanroom.
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”)
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
Previous 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.
Current wording
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 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 to $3.0 million based on net sales of NIVIS (now marketed as HELIOGEN) during the first two years following its launch by MiMedx Group, Inc. All amounts have been collected as of September 30, 2026. 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 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.
Current wording
The vast majority of our revenue to date has been generated by the sale of our OviTex products. Our revenue decreased by $1.7 million, or 8%, from $20.7 million for the three months ended September 30, 2025 to $19.0 million for the three months ended September 30, 2026 and by $2.1 million, or 4%, from $59.4 million for the nine months ended September 30, 2025 to $57.3 million for the nine months ended September 30, 2026. Our net loss increased by $0.7 million, or 8%, from $8.6 million for the three months ended September 30, 2025 to $9.3 million for the three months ended September
Previous wording
Financial Strain:* *Market acceptance of our medical products in the U.S. and other countries is dependent upon the procurement practices of our customers, patient need for our products and procedures and the reimbursement of patients’ medical expenses by government healthcare programs and third-party payors. The continuing uncertainty surrounding macroeconomic conditions and financial markets, including the financial strain suffered by hospital customers first arising in response to the COVID-19 pandemic, may adversely affect demand for our products and procedures and result in lower reimbursement rates or coverage for our products, resulting in lower sales volume and downward pricing pressure on our products and slower adoption of new products.
Current wording
Financial Strain:* *Market acceptance of our medical products in the U.S. and other countries is dependent upon the procurement practices of our customers, patient need for our products and procedures and the reimbursement of patients’ medical expenses by government healthcare programs and third-party payors. The continuing uncertainty surrounding macroeconomic conditions and financial markets may adversely affect demand for our products and procedures and result in lower reimbursement rates or coverage for our products, resulting in lower sales volume and downward pricing pressure on our products and slower adoption of new products.
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. 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.
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
Previous wording
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. We purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods, which, subject to a true-up adjustment, results in an amount equal to 27% of our net sales of our OviTex and OviTex PRS products, with the exception of OviTex IHR product configurations, for which we pay the greater of the initial fixed transfer cost or 27% of our net sales of OviTex IHR. 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. Any delay in volume growth, whether due to macroeconomic pressures or otherwise, could lead to additional charges to excess and obsolete inventory.
Current wording
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, including tariffs. We purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods, which, subject to a true-up adjustment, results in an amount equal to 27% of our net sales of our OviTex and OviTex PRS products, with the exception of OviTex IHR product configurations, for which we pay the greater of the initial fixed transfer cost or 27% of our net sales of OviTex IHR. 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. Any delay in volume growth, whether due to macroeconomic pressures or otherwise, could lead to additional charges to excess and obsolete inventory.
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
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 with our manufacturing partner under development agreements related to technology transfer, laboratory materials and supplies and an allocation of related facilities costs. We expense research and development costs as they are incurred.
Previous wording
Revenue decreased by $0.4 million, or 1%, to $38.4 million for the six months ended June 30, 2026 from $38.7 million for the six 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 partially offset by growing international sales. During the six months ended June 30, 2026, we sold 11,555 units of OviTex as compared to 10,170 units of OviTex during the six months ended June 30, 2025, a 14% increase in unit sales volume. Additionally, we sold 2,183 units of OviTex PRS during the six months ended June 30, 2026 as compared to 2,532 units during the six months ended June 30, 2025, a 14% decline in unit sales volume.
Current wording
Revenue decreased by $1.7 million, or 8%, to $19.0 million for the three months ended September 30, 2026, from $20.7 million for the three months ended September 30, 2025. The decrease in revenue was primarily driven by a decline in OviTex PRS which was concentrated in a few accounts partially offset by growing international sales. During the three months ended September 30, 2026, we sold 5,757 units of OviTex as compared to 5,795 units of OviTex during the three months ended September 30, 2025, a 1% decrease in unit sales volume. Additionally, we sold 946 units of OviTex PRS during the three months ended September 30, 2026 as compared to 1,334 units during the three months ended September 30, 2025, a 29% decline in unit sales volume.
Previous wording
Cost of revenue (excluding amortization of intangible assets) decreased by $0.7 million, or 12%, to $5.3 million for the three months ended June 30, 2026 from $6.0 million for the three 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 of $0.6 million
Current wording
Cost of revenue (excluding amortization of intangible assets) decreased by $0.1 million, or 1%, to $6.5 million for the three months ended September 30, 2026 from $6.6 million for the three months ended September 30, 2025. The decrease in cost of revenue was primarily due to the decline in revenue partially offset by a write-off of expired inventory of $1.0 million resulting in a higher charge for excess and obsolete inventory.
Previous wording
Gross profit decreased by $0.2 million, or 1%, to $13.9 million for the three months ended June 30,2026, from $14.1 million for the three months ended June 30, 2025. The decrease was primarily the result of the decline in revenue which offset the refund of tariffs paid.
Current wording
Gross profit decreased by $1.7 million, or 12%, to $12.3 million for the three months ended September 30,2026, from $14.0 million for the three months ended September 30, 2025. The decrease was primarily the result of the decline in revenue and a write-off of expired inventory of $1.0 million resulting in a higher charge for excess and obsolete inventory.
Previous 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.
Current wording
Gross margin decreased to 65% for the three months ended September 30, 2026, from 68% for the three months ended September 30, 2025. The decrease was primarily due to a higher charge for excess and obsolete inventory as a percentage of revenue of 300 basis points.
Previous 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.
Current wording
Sales and marketing expenses decreased by $2.1 million, or 14%, to $13.0 million for the three months ended September 30, 2026, from $15.1 million for the three months ended September 30, 2025. The decrease was due to lower compensation and benefits primarily from a decrease in headcount which offset higher study costs.
Previous wording
General and administrative expenses decreased by $65,000, or 2%, to $4.1 million for the three months ended June 30, 2026, from $4.1 million for the three months ended June 30, 2025. The slight decrease was primarily due to lower compensation costs from a decrease in headcount partially offset by higher professional fees.
Current wording
General and administrative expenses decreased by $0.9 million, or 24%, to $3.0 million for the three months ended September 30, 2026, from $3.9 million for the three months ended September 30, 2025. The increase was primarily due to higher professional fees and bad debt expense which offset lower compensation costs from a decrease in headcount.
Previous 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.
Current wording
We recorded tax expense of $0.1 million related to our foreign jurisdiction for the three months ended September 30, 2026.
Previous 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.
Current wording
Revenue decreased by $2.1 million, or 4%, to $57.3 million for the nine months ended September 30, 2026 from $59.4 million for the nine months ended September 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 partially offset by growing international sales. During the nine months ended September 30, 2026, we sold 17,312 units of OviTex as compared to 15,965 units of OviTex during the nine months ended September 30, 2025, a 8% increase in unit sales volume. Additionally, we sold 3,129 units of OviTex PRS during the nine months ended September 30, 2026 as compared to 3,866 units during the nine months ended September 30, 2025, a 19% decline in unit sales volume.
Previous 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.
Current wording
Cost of revenue (excluding amortization of intangible assets) decreased by $0.3 million, or 2%, to $18.3 million for the nine months ended September 30, 2026, from $18.5 million for the nine months ended September 30, 2025. The decrease in cost of revenue was primarily due to the decline in revenue offset by a refund of tariffs paid in 2025.
Previous wording
Amortization of intangible assets was $0.2 million for both the six months ended June 30, 2026 and 2025.
Current wording
Amortization of intangible assets was $0.3 million for both the nine months ended September 30, 2026 and 2025.
Previous wording
Gross profit decreased by $0.2 million, or 1%, to $26.5 million for the six months ended June 30, 2026, from $26.6 million for the six months ended June 30, 2025. The decrease was primarily the result of the decrease in revenue.
Current wording
Gross profit decreased by $1.8 million, or 4%, to $38.8 million for the nine months ended September 30, 2026, from $40.6 million for the nine months ended September 30, 2025. The decrease was primarily the result of the decrease in revenue.
Previous wording
Sales and marketing expenses decreased by $0.5 million, or 1%, to $33.0 million for the six months ended June 30, 2026, from $33.5 million for the six months ended June 30, 2025. The decrease was primarily due to lower compensation costs primarily from a decrease in headcount and lower travel expenses which offset higher meeting and training costs.
Current wording
Sales and marketing expenses decreased by $2.8 million, or 6%, to $45.5 million for the nine months ended September 30, 2026, from $48.3 million for the nine months ended September 30, 2025. The decrease was primarily due to lower compensation costs primarily from a decrease in headcount and lower travel expenses which offset higher meeting and training costs.
Previous 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.
Current wording
General and administrative expenses decreased by $0.7 million, or 6%, to $11.2 million for the nine months ended September 30, 2026, from $11.9 million for the nine months ended September 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
Research and development expenses increased by $0.3 million, or 7%, to $5.1 million for the six months ended June 30, 2026, from $4.7 million for the six months ended June 30, 2025 primarily due to increased compensation costs from an increase in headcount and higher study and development costs.
Current wording
Research and development expenses decreased by $0.4 million, or 6%, to $6.7 million for the nine months ended September 30, 2026, from $7.1 million for the nine months ended September 30, 2025 primarily due to decreased compensation costs from an decrease in headcount and lower study and development costs.
Previous wording
Interest expense increased by $1.7 million or 72% to $4.1 million for the six months ended June 30, 2026, from $2.4 million for the six months ended June 30, 2025 due to an increase in the borrowing base and the interest rate from our new credit facility.
Current wording
Interest expense increased by $2.6 million or 73% to $6.2 million for the nine months ended September 30, 2026, from $3.6 million for the nine months ended September 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 $0.3 million, or 39%, to $0.5 million for the six months ended June 30, 2026, from $0.9 million for the six months ended June 30, 2025 primarily due to lower interest income from lower cash balances and lower interest rates.
Current wording
Other income decreased by $0.3 million, or 29%, to $0.7 million for the nine months ended September 30, 2026, from $1.0 million for the nine months ended September 30, 2025 primarily due to lower interest income from lower cash balances and lower interest rates.
Previous wording
We recorded tax expense of $0.1 million and $85,000 related to our foreign jurisdiction for the six months ended June 30, 2026 and 2025, respectively.
Current wording
We recorded tax expense of $0.2 million and $85,000 related to our foreign jurisdiction for the nine months ended September 30, 2026 and 2025, respectively.
Previous 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.
Current wording
As of September 30, 2026, we had cash and cash equivalents of $22.7 million, negative working capital of $28.3 million due to the debt reclassification and an accumulated deficit of $430.4 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 June 30, 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.
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 September 30, 2026, we had $60.0 million of borrowings
Previous wording
(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.
Current wording
Based on our current business plan, our existing cash resources may not 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. We may seek to sell common or preferred equity or debt securities or renegotiate our 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 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.
Current wording
During the nine months ended September 30, 2026, we used $29.2 million of cash in operating activities, resulting from our net loss of $32.8 million and changes in operating assets and liabilities of $2.2 million, partially offset by our non-cash items of $5.8 million. Our non-cash items were primarily comprised of stock-based compensation expense of $2.1 million, our excess and obsolete inventory charge of $2.1 million, depreciation and amortization expense of $0.8 million and noncash interest expense of $0.7 million. The change in our operating assets and liabilities was primarily related to an increase in inventory and a decrease in accrued expenses offset by a decrease in accounts receivable. Consistent with historical trends, cash used in operations in the remaining quarter of the fiscal year ending December 31, 2026 is expected to be lower than the amount reported for the nine months ended September 30, 2026.
Previous 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.
Current 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
Previous 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.
Current wording
During the nine months ended September 30, 2026, cash provided by investing activities was $1.4 million consisting of proceeds received from the sale of NIVIS of $1.6 million offset by $0.2 million in purchases of property and equipment.
Previous 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.
Current 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.
Previous 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
Current wording
During the nine months ended September 30, 2026, cash used in financing activities was $0.4 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 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.
Current 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.
Previous wording
The Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants, financial covenants, and conditions that are customarily required for similar financings. The affirmative covenants, among other things, require the Company to undertake various reporting and notice requirements, maintain insurance and maintain in full force and effect all Regulatory Approvals, Material Agreements, Intellectual Property (each as defined in the Credit Agreement) and other rights, interests or assets (whether tangible or intangible) reasonably necessary for the operations of its business. The negative covenants restrict or limit the Company’s ability to, among other things and subject to certain exceptions contained in the Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s business activities; make certain Investments or Restricted Payments (each as defined in the Credit Agreement); change the Company’s fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that has the impact of restricting the Company’s ability to make loan repayments under the Credit Agreement. In addition, the Company must (i) at all times prior to the Maturity Date, maintain minimum Liquidity (as defined in the Credit Agreement) of $5.0 million and (ii) as of each calculation date set forth in the Credit Agreement, maintain Revenue that is not less than the amounts specified in the Credit Agreement. The Credit Agreement also contains certain customary Events of Default which include, among others, non-payment of principal, interest, or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments, cross-defaults to material contracts, certain regulatory-related events and events constituting a change of control. The occurrence of an Event of Default could result in, among other things, the declaration that all outstanding principal and interest under the Perceptive Term Loan Facility are immediately due and payable in whole or in part.
Current wording
among other things, require the Company to undertake various reporting and notice requirements, maintain insurance and maintain in full force and effect all Regulatory Approvals, Material Agreements, Intellectual Property (each as defined in the Credit Agreement) and other rights, interests or assets (whether tangible or intangible) reasonably necessary for the operations of its business. The negative covenants restrict or limit the Company’s ability to, among other things and subject to certain exceptions contained in the Credit Agreement, incur new indebtedness; create liens on assets; engage in certain fundamental corporate changes, such as mergers or acquisitions, or changes to the Company’s business activities; make certain Investments or Restricted Payments (each as defined in the Credit Agreement); change the Company’s fiscal year; pay dividends; repay other certain indebtedness; engage in certain affiliate transactions; or enter into, amend or terminate any other agreements that has the impact of restricting the Company’s ability to make loan repayments under the Credit Agreement. In addition, the Company must (i) at all times prior to the Maturity Date, maintain minimum Liquidity (as defined in the Credit Agreement) of $5.0 million and (ii) as of each calculation date set forth in the Credit Agreement, maintain Revenue that is not less than the amounts specified in the Credit Agreement. The Credit Agreement also contains certain customary Events of Default which include, among others, non-payment of principal, interest, or fees, violation of covenants, inaccuracy of representations and warranties, bankruptcy and insolvency events, material judgments, cross-defaults to material contracts, certain regulatory-related events and events constituting a change of control. The occurrence of an Event of Default could result in, among other things, the declaration that all outstanding principal and interest under the Perceptive Term Loan Facility are immediately due and payable in whole or in part.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
outstanding under our credit facility (the “Perceptive Credit Agreement”) with Perceptive Credit Holdings V, LP (“Perceptive”). The Perceptive Credit Agreement matures in November 2030.
Current report — wording carried from elsewhere
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 report — wording carried from elsewhere
The Credit Agreement contains certain representations and warranties, affirmative covenants, negative covenants, financial covenants, and conditions that are customarily required for similar financings. The affirmative covenants,
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
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.
Previous report — wording carried elsewhere
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 report — wording carried elsewhere
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
Previous report — wording carried elsewhere
employees partially offset by proceeds received from the issuance of common stock under the employee stock purchase plan.