ESTABLISHMENT LABS HOLDINGS INC.

Previous wording

Our line of silicone gel-filled breast implants, branded as Motiva Implants, is the centerpiece of our medical technology platform and, to date, are commercially available in 95 countries, including, most recently, in the United States. Our post-market surveillance data (which was not generated in connection with a United States Food and Drug Administration, or FDA, pre-market approval, or PMA, study collected at defined follow-ups but was patient or practitioner reported) and published third-party registries and data indicate that Motiva Implants have low rates of adverse events (including rupture, capsular contracture, and safety related reoperations) that we believe compare favorably with those of our competitors. We believe the proprietary technologies that differentiate our Motiva Implants enable improved safety and aesthetic outcomes and drive our revenue growth. We have developed other complementary products and services, which are aimed at further enhancing patient outcomes.

Current wording

Our line of silicone gel-filled breast implants, branded as Motiva Implants, is the centerpiece of our medical technology platform and, to date, are commercially available in over 90 countries, including, most recently, in the United States. Our post-market surveillance data (which was not generated in connection with a United States Food and Drug Administration, or FDA, pre-market approval, or PMA, study collected at defined follow-ups but was patient or practitioner reported) and published third-party registries and data indicate that Motiva Implants have low rates of adverse events (including rupture, capsular contracture, and safety related reoperations) that we believe compare favorably with those of our competitors. We believe the proprietary technologies that differentiate our Motiva Implants enable improved safety and aesthetic outcomes and drive our revenue growth. We have developed other complementary products and services, which are aimed at further enhancing patient outcomes.

Previous wording

Our revenue for the three months ended March 31, 2025 and 2024 was $41.4 million and $37.2 million, respectively, an increase of $4.2 million, or 11.3%. Net losses were $20.7 million for the three months ended March 31, 2025 as compared to $16.2 million for the three months ended March 31, 2024. As of March 31, 2025 we had an accumulated deficit of $465.4 million.

Current wording

Our revenue for the six months ended June 30, 2025 and 2024 was $92.7 million and $81.3 million, respectively, an increase of $11.4 million, or 14.0%. Net losses were $37.3 million for the six months ended June 30, 2025 as compared to $33.4 million for the six months ended June 30, 2024. As of June 30, 2025 we had an accumulated deficit of $482.0 million.

Previous wording

Our cash balance as of March 31, 2025 was $69.2 million.

Current wording

Our cash balance as of June 30, 2025 was $54.6 million.

Previous wording

We commenced sales of our Motiva Implants in October 2010, which have historically accounted for the majority of our revenues. Sales of our Motiva Implants accounted for over 95% of our revenues for the three months ended March 31, 2025, and we expect our revenues to continue to be driven primarily by sales of these products.

Current wording

We commenced sales of our Motiva Implants in October 2010, which have historically accounted for the majority of our revenues. Sales of our Motiva Implants accounted for over 95% of our revenues for the six months ended June 30, 2025, and we expect our revenues to continue to be driven primarily by sales of these products. We primarily derive revenue from sales of our Motiva Implants to two types of customers: (1) medical distributors and (2) direct sales to physicians, hospitals, and clinics.

Previous wording

We expect our R&D expenses to remain elevated for the foreseeable future as we continue to advance our products under development, as well as initiate and prepare for additional clinical studies. We received an approval of an IDE from the FDA and enrolled the first patient in 2018. In September 2024, we received FDA approval for our Motiva Implants. As part of the post market approval condition requirements, in addition to the continuing follow-ups related to the IDE, the FDA requires a post-approval study, or PAS, to investigate the general post-market usage and endpoints not addressed during premarket evaluations. This study focuses on women undergoing primary breast augmentation and revision surgeries, along with a control group engaged in an aesthetic procedure other than breast implants. PAS is a decade-long study that will enroll 2,400 patients divided into three cohorts across up to 50 study sites in the U.S. Enrollment for the study sites began in April 2025, with the first patients scheduled to be enrolled in May 2025.

Current wording

We expect our R&D expenses to remain elevated for the foreseeable future as we continue to advance our products under development, as well as initiate and prepare for additional clinical studies. We received an approval of an IDE from the FDA and enrolled the first patient in 2018. In September 2024, we received FDA approval for our Motiva Implants. As part of the post market approval condition requirements, in addition to the continuing follow-ups related to the IDE, the FDA requires a post-approval study, or PAS, to investigate the general post-market usage and endpoints not addressed during premarket evaluations. This study focuses on women undergoing primary breast augmentation and revision surgeries, along with a control group engaged in an aesthetic procedure other than breast implants. PAS is a decade-long study that will enroll 2,400 patients divided into three cohorts across up to 50 study sites in the U.S. Enrollment for the study sites began in April 2025, with the first patients scheduled to be enrolled in May 2025. We estimate we will incur between $4.0 million to $5.0 million in connection with PAS over the next 10 years.

Previous wording

Our initial projections estimated the cost of the IDE clinical trial between $30.0 million and $40.0 million over the duration of the clinical trial period of ten years. As of March 31, 2025, approximately $32.8 million has been spent on the trial to date. We also have other products under development for which we may be required to conduct clinical trials in future periods in order to receive regulatory approval to market these products.

Current wording

Our initial projections estimated the cost of the IDE clinical trial between $30.0 million and $40.0 million over the duration of the clinical trial period of ten years. As of June 30, 2025, approximately $32.9 million has been spent on the trial to date. We also have other products under development for which we may be required to conduct clinical trials in future periods in order to receive regulatory approval to market these products.

Previous wording

•Financial Results: Demand in fiscal 2025 improved in our EMEA market. Latin America, Brazil in particular, continues to suffer from weaker underlying demand for aesthetic and reconstructive plastic surgery compared to prior year; however, we saw a slight increase in revenue this quarter as compared to the fourth quarter of fiscal 2024. Our revenue in our Asia-Pacific market, China specifically, decreased as compared to the corresponding period of the prior year primarily due to our China distributor selling through inventory purchased in fiscal 2024 in preparation for commercial operations. This is a normal trajectory for a new distributor market, particularly one the size and complexity of China. In September 2024, we received FDA approval to sell Motiva Implants in the United States and continue to see strong demand from the plastic surgeon community and positive feedback. Motiva Implants generated $6.2 million in sales within the United States in the first quarter of 2025, and we foresee this momentum accelerating in the quarters ahead.

Current wording

•Financial Results: Outside the United States, we saw sequential growth in all our geographic regions in the second quarter of fiscal 2025 as compared to the first quarter. As compared to the prior year, demand in fiscal 2025 improved in our EMEA markets, especially direct markets. Latin America, and Brazil in particular, continues to suffer from weaker underlying demand for aesthetic and reconstructive plastic surgery; however, we are seeing stabilizing results in Brazil and continued strong growth in Argentina. Our revenue in our Asia-Pacific market decreased as compared to the corresponding period of the prior year primarily due to our China distributor still selling through inventory purchased in fiscal 2024 for the commercial launch. This downturn is attributed to several factors, including lower consumer demand for aesthetic procedures. Management, in collaboration with our distribution partner, is dedicated to establishing Motiva as the leading implant in China, mirroring its success in other Asian markets.

Previous wording

•Outlook: Demand for our products is dependent on the relative strength of the global and regional medical device markets, which are sensitive to general macroeconomic conditions. The current global macroeconomic environment remains complex, with escalating trade tensions, declining consumer sentiment and elevated inflation and interest rates driving reductions in discretionary spending in the markets we operate. While several regions are currently showing a good performance, the outlook remains dynamic. Following the commercial launch of Motiva Implants in the United States in October 2024, we have been able to achieve higher selling prices for our Motiva Implants in the United States compared to other geographies and expect a positive impact on our gross margins in 2025 correlated to the U.S. revenue growth. Our commercial and operational activities increased following the FDA approval of Motiva Implants. As a result, we expect overall operating expenses to increase as compared to 2024, although we remain focused on managing operating expenses.

Current wording

•Outlook: Demand for our products is dependent on the relative strength of the global and regional medical device and aesthetic markets, which are sensitive to general macroeconomic conditions. The current global macroeconomic environment remains complex, with escalating trade tensions, uncertainty regarding tariffs, volatility in the capital markets, fluctuating exchange rates, declining consumer sentiment and elevated inflation and interest rates driving reductions in discretionary spending in the markets we operate. While several regions are currently showing good performance, as explained above, the outlook remains dynamic. Following the commercial launch of Motiva Implants in the United States in October 2024, we have been able to achieve higher selling prices for our Motiva Implants in the United States compared to other geographies and expect a positive impact on our gross margins in 2025 correlated to the U.S. revenue growth. Our commercial and operational activities increased following the FDA approval of Motiva Implants. As a result, we expect overall operating expenses to increase as compared to 2024, although we remain focused on managing operating expenses.

Previous wording

Cost of revenue increased $0.8 million, or 6.2%, to $13.6 million for the three months ended March 31, 2025 compared to $12.8 million for the three months ended March 31, 2024. The increase in cost of revenue is in line with the increase in revenue.

Current wording

Cost of revenue increased $0.8 million, or 5.3%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. The increase in cost of revenue is in line with the increase in revenue.

Previous wording

Gross margin increased to 67.2% for the three months ended March 31, 2025 compared to 65.6% for the three months ended March 31, 2024, primarily due to improved manufacturing efficiencies and favorable impact from sales within the United States due to higher selling prices in that region.

Current wording

Gross margin increased to 68.8% for the three months ended June 30, 2025 as compared to 65.6% for the three months ended June 30, 2024, primarily attributable to the favorable impact from sales within the United States due to higher selling prices in that region.

Previous wording

R&D expense increased $0.8 million, or 18.6%, to $5.1 million for the three months ended March 31, 2025, compared to $4.3 million for the three months ended March 31, 2024. The increase in R&D expense was primarily due to a $0.6 million increase in personnel cost and a $0.2 million increase in expenditures related to our IDE clinical trial in the United States.

Current wording

R&D expense decreased $0.3 million, or 5.5%, to $5.2 million for the three months ended June 30, 2025, compared to $5.5 million for the three months ended June 30, 2024 primarily due to a $0.9 million decrease in expenditures related to our IDE clinical trial in the United States and a $0.2 million decrease in stock compensation costs, partially offset by a $0.5 million increase in personnel costs and a $0.3 million increase in regulatory affairs costs.

Previous wording

Interest expense was $5.9 million for the three months ended March 31, 2025, compared to $4.4 million for the three months ended March 31, 2024. The increase was primarily due to an increase in debt principal.

Current wording

Interest expense for the three months ended June 30, 2025 was $6.0 million as compared to $5.2 million for the three months ended June 30, 2024. The increase was primarily due to an increase in debt principal.

Previous wording

Revenue increased $4.2 million, or 11.3%, to $41.4 million for the three months ended March 31, 2025 as compared to $37.2 million for the three months ended March 31, 2024. The increase was primarily due to significantly higher sales in North America after FDA approval of Motiva Implants in September 2024 and a 4% increase in revenue in the EMEA market, partially offset by decreases in overall demand in Latin America and Asia-Pacific, resulting in an approximately 17% decrease in revenue in Latin-America as compared to the same period in fiscal 2024 and an approximately 14% decrease in revenue in the Asia-Pacific region as compared to the same period in fiscal 2024.

Current wording

Revenue increased $11.4 million, or 14.0%, to $92.7 million for the six months ended June 30, 2025 as compared to $81.3 million for the six months ended June 30, 2024. The increase was primarily due to significantly higher sales in North America after FDA approval of Motiva Implants in September 2024 and a 9.2% increase in revenue in the EMEA market, partially offset by decreases in overall demand in Latin America and Asia-Pacific, resulting in an approximately 5.0% decrease in revenue in Latin-America as compared to the same period in fiscal 2024 and an approximately 35.0% decrease in revenue in the Asia-Pacific region as compared to the same period in fiscal 2024.

Previous wording

SG&A expense increased $10.8 million, or 37.4%, to $39.7 million for the three months ended March 31, 2025, compared to $28.9 million for the three months ended March 31, 2024. The increase in SG&A was primarily due to a $2.9 million increase in personnel and related costs, a $1.8 million increase in commissions, a $1.6 million increase in sales and marketing expenses, a $1.5 million increase in bad debt expense, a $1.0 million increase in facilities costs, a $0.9 million increase in depreciation and amortization expenses, a $0.8 million increase in freight associated with higher sales and a $0.4 million increase in insurance expenses, partially offset by a $0.9 million decrease in consulting fees.

Current wording

SG&A expense increased $22.2 million, or 36.0%, to $83.9 million for the six months ended June 30, 2025, compared to $61.7 million for the six months ended June 30, 2024. The increase in SG&A was primarily due to a $6.9 million increase in personnel and related costs, a $3.7 million in shipping & handling associated with higher sales, a $3.3 million increase in commissions, a $3.0 million increase in sales and marketing expenses, a $1.6 million increase in depreciation and amortization expenses, a $1.4 million increase in bad debt expense, a $0.9 million increase in software implementation costs, and a $0.7 million increase in facilities costs, partially offset by a $0.4 million decrease in consulting fees.

Previous wording

Provision for income taxes increased $0.5 million, or 125.0%, to $0.9 million for the three months ended March 31, 2025, compared to $0.4 million for the three months ended March 31, 2024. The change in the provision for income taxes is primarily due to an increase in pre-tax income in certain US and foreign jurisdictions.

Current wording

Provision for income taxes increased $1.0 million to $1.9 million for the six months ended June 30, 2025, compared to $0.9 million for the six months ended June 30, 2024. The change in the provision for income taxes is primarily due to an increase in pre-tax income in certain US and foreign jurisdictions.

Previous wording

Other income (expense), net increased $5.8 million to a gain of $2.8 million for the three months ended March 31, 2025, compared to a loss of $3.0 million for the three months ended March 31, 2024. The increase was primarily due to the foreign currency fluctuations of the Brazilian real and euro as compared to the U.S. dollar in fiscal 2025 and 2024, resulting in a foreign currency transaction gain of $2.8 million, the majority of which remains unrealized, for the three months ended March 31, 2025, compared to a $3.0 million loss for the three months ended March 31, 2024.

Current wording

Other income (expense), net increased $12.9 million to a gain of $7.1 million for the six months ended June 30, 2025, compared to a loss of $5.8 million for the six months ended June 30, 2024. The increase was primarily due to the foreign currency fluctuations of the Brazilian real and euro as compared to the U.S. dollar in fiscal 2025 and 2024, resulting in a foreign currency transaction gain of $7.8 million, the majority of which remains unrealized, for the six months ended June 30, 2025, compared to a $5.8 million loss for the six months ended June 30, 2024.

Previous wording

As of March 31, 2025, we had an accumulated deficit of $465.4 million. Since our inception, we have generated losses and expect to continue to generate losses in the near term. We have financed our operations through a combination of equity financings and debt financings, and from cash generated from operations, primarily from the collection of accounts receivable resulting from sales. Our historical cash outflows have primarily been associated with cash used for operating activities such as expansion of our sales and marketing and distributor infrastructure, investing in inventory, R&D activities, asset acquisitions, capital improvements, including our new manufacturing facility, and other working capital needs. As of March 31, 2025 and December 31, 2024, we had cash of $69.2 million and $90.3 million, respectively.

Current wording

As of June 30, 2025, we had an accumulated deficit of $482.0 million. Since our inception, we have generated losses and expect to continue to generate losses in the near term. We have financed our operations through a combination of equity financings and debt financings, and from cash generated from operations, primarily from the collection of accounts receivable resulting from sales. Our historical cash outflows have primarily been associated with cash used for operating activities such as expansion of our sales and marketing and distributor infrastructure, investing in inventory, R&D activities, asset acquisitions, capital improvements, including our new manufacturing facility, and other working capital needs. As of June 30, 2025 and December 31, 2024, we had cash of $54.6 million and $90.3 million, respectively.

Previous wording

As described above under “Recent Developments - Financing Activities,” in February 2024 and November 2024, we entered into amendments to the Credit Agreement, which, among other changes, extended the termination date for commitments for Tranche C and Tranche D Term Loans and modified the milestones triggering the availability of those loans. The Tranche C Term Loan of $25 million was advanced in October 2024. See Note 6 “Debt” for additional information.

Current wording

As described above under “Recent Developments - Financing Activities,” in May, 2025, we entered into an Inventory Funding Agreement which allows us to finance purchases of up to $10.0 million of silicone raw material, in a given funding period, for an initial four-month term. Also, in February 2024 and November 2024, we entered into amendments to the Credit Agreement, which, among other changes, extended the termination date for commitments for Tranche C and Tranche D Term Loans and modified the milestones triggering the availability of those loans. The Tranche C Term Loan of $25 million was advanced in October 2024. See Note 6 “Debt” for additional information.

Previous wording

Net cash used in operating activities of $20.7 million for the three months ended March 31, 2025 was primarily comprised of a net loss of $20.7 million, changes in operating assets and liabilities of $5.2 million and $3.5 million of unrealized foreign currency gain, partially offset by $2.4 million of share-based compensation expense, $2.3 million of non-cash depreciation and amortization expense, a $1.7 million change in allowance for credit losses, $0.8 million of non-cash interest expense due to accretion of debt discounts, $0.7 million change in provision for inventory obsolescence, a $0.4 million loss from disposal of property and equipment, $0.2 million of right-to-use asset amortization and $0.1 million in stock compensation in lieu of cash fees.

Current wording

Net cash used in operating activities of $39.5 million for the six months ended June 30, 2025 was primarily comprised of a net loss of $37.3 million, changes in operating assets and liabilities of $9.2 million and $9.5 million of unrealized foreign currency gain, partially offset by $5.6 million of share-based compensation expense, $4.7 million of non-cash depreciation and amortization expense, a $2.0 million change in allowance for credit losses, $1.6 million of non-cash interest expense due to accretion of debt discounts, $1.5 million change in provision for inventory obsolescence, a $0.5 million loss on contract termination, $0.5 million of right-to-use asset amortization and $0.2 million in stock compensation in lieu of cash fees.

Previous wording

Net cash used in operating activities of $11.2 million for the three months ended March 31, 2024 was primarily comprised of a net loss of $16.2 million, changes in operating assets and liabilities of $5.7 million, and $0.5 million of interest capitalized for construction in progress, partially offset by $3.4 million of non-cash interest expense due to accretion of debt discounts, $3.4 million of share-based compensation expense, $2.0 million of unrealized foreign currency loss, $1.3 million of non-cash depreciation and amortization expense, a $0.6 million change in provision for inventory obsolescence, and a $0.3 million change in allowance for credit losses.

Current wording

Net cash used in operating activities of $25.3 million for the six months ended June 30, 2024 was primarily comprised of a net loss of $33.4 million, changes in operating assets and liabilities of $12.1 million and $0.6 million of interest capitalized for construction in progress, partially offset by $7.2 million of share-based compensation expense, $5.0 million of non-cash interest expense due to accretion of debt discounts, $4.4 million of unrealized foreign currency loss, $2.7 million of non-cash depreciation and amortization expense, a $0.5 million change in provision for inventory obsolescence, a $0.4 million change in allowance for credit losses and $0.3 million of right-to-use asset amortization.

Previous wording

Net cash used in investing activities of $1.3 million for the three months ended March 31, 2025 primarily reflected $0.8 million in purchases of property and equipment, $0.3 million in cash paid related to business acquisitions of Motiva Benelux BV and Motiva NL BV and $0.3 million in costs incurred for intangible assets primarily driven by the development of an enterprise resource planning system for the U.S. launch of Motiva Implants.

Current wording

Net cash used in investing activities of $3.4 million for the six months ended June 30, 2025 primarily reflected $2.4 million in purchases of property and equipment, $0.7 million in costs incurred for intangible assets primarily driven by the development of an enterprise resource planning system for the U.S and $0.3 million in cash paid related to business acquisitions of Motiva Benelux BV and Motiva NL BV.

Previous wording

Net cash used in investing activities of $6.6 million for the three months ended March 31, 2024 primarily consisted $3.3 million in purchases of property and equipment primarily related to the new manufacturing facility, $1.9 million in purchases of intangibles primarily driven by the development of an enterprise resource planning system for our U.S. launch, and $1.4 million of cash paid for capital expenditures on construction in progress related to our new manufacturing facility in the CFZ in Costa Rica.

Current wording

Net cash used in investing activities of $11.0 million for the six months ended June 30, 2024 primarily consisted of $4.8 million in costs incurred for intangible assets primarily driven by the development of an enterprise resource planning system for the anticipated U.S. launch of Motiva Implants, $4.1 million in purchases of property and equipment primarily related to the new manufacturing facility, and $2.2 million of cash paid for capital expenditures on construction in progress related to our new manufacturing facility in the CFZ in Costa Rica.

Previous wording

Net cash used in financing activities of $0.2 million for the three months ended March 31, 2025 primarily reflected $0.3 million paid to satisfy tax withholding obligations upon the vesting of restricted stock, partially offset by $0.1 million in proceeds received for stock option exercises

Current wording

Net cash provided by financing activities of $4.9 million for the six months ended June 30, 2025 primarily reflected $5.0 million in proceeds received from borrowings under short term notes payable and $0.4 million in proceeds received for stock option exercises, partially offset by $0.4 million paid to satisfy tax withholding obligations upon the vesting of restricted stock.

Previous wording

Net cash provided by financing activities of $51.0 million for the three months ended March 31, 2024 primarily reflected $49.7 million of proceeds received for the issuance of common shares and pre-funded warrants, net of offering expenses, from our private placement offering in January 2024 and $1.4 million in proceeds received for stock option exercises partially offset by $0.1 million paid to satisfy tax withholding obligations upon the vesting of restricted stock.

Current wording

Net cash provided by financing activities of $51.4 million for the six months ended June 30, 2024 primarily reflected $49.7 million of proceeds received for the issuance of common shares and pre-funded warrants, net of offering expenses, from our private placement offering in January 2024 and $2.0 million in proceeds received for stock option exercises partially offset by $0.3 million paid to satisfy tax withholding obligations upon the vesting of restricted stock.

Previous wording

We identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the SEC on February 28, 2025, which we disclosed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations―Critical Accounting Policies, Significant Judgments and Use of Estimates in the Annual Report on Form 10-K. We have not made any material changes to these policies as previously disclosed in the Form 10-K.

Current wording

We identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements for the year ended December 31, 2024 included in our Annual Report on Form 10-K filed with the SEC on February 28, 2025, which we disclosed in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations―Critical