BVS 10-K & 10-Q changes, risk factors and insider trading

Described below are certain risks that we believe apply to our business and the industry in which we operate. You should carefully consider each of the following risk factors in conjunction with other information provided in this Annual Report on Form 10-K (“Annual Report”) and in our other public disclosures. The risks described below highlight potential events, trends or other circumstances that could adversely affect our business, financial condition, results of operations, cash flows, liquidity or access to sources of financing, and consequently, the market value of our Class A common stock. These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance. The risks described below are those that we have identified as material and are not an exhaustive list of all the risks we face. There may be others that we have not identified or that we have deemed to be immaterial. All forward-looking statements made by us or on our behalf are qualified by the risks described below.

Our Amended 20192025 Credit Agreement contains financial and operating restrictions that maycould limit our access to credit. If we fail to comply with its financial or other covenants, we maymight be required to repay the indebtedness, which maycould harm our liquidity.

We are subject to certain covenants under the Amended 20192025 Credit Agreement, including, but not limited to:

•a minimum interest coverage ratio and a maximum debtconsolidated total net leverage ratio requirement as defined in the Amended 20192025 Credit Agreement;

•restrictions on the declaration or payment of certain distributions on or in respect ofto our equity interests;

•limitations on making any material change in any of our business objectives that could reasonably be expected to have a material adverse effect on our ability to repay amounts borrowed under the repaymentterm ofloan ouror Amendedrevolver 2019under the 2025 Credit Agreement.

In the absence of a waiver from our lenders, any failure by us to comply with these covenants in the future might result in the declaration of an event of default, which could adversely affect our business, results of operations and financial position.

•exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under ourthe term loan,loan under the 2025 Credit Agreement, are at variable rates, making it more difficult for us to make payments on our indebtedness;

•limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements andor general corporate or other purposes.

We are required to comply with the SEC’s rules implementing Sections 302, 404 and 906 of the Sarbanes-Oxley Act of 2002, which require management to certify financial and other information in our quarterly and annual reports, provide quarterly and annual management reports on the effectiveness of disclosure controls and procedures, and provide annual management reports on the effectiveness of internal controls over financial reporting. Though we are required to disclose changes made in our internal controls and procedures on a quarterly basis and assess internal controls over financial reporting on an annual basis, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal controls over financial reporting pursuant to Section 404 until we are no longer an emerging growth company pursuant to the provisions of the JOBS Act. AtWe suchexpect that we will cease to be an emerging growth company, and thus be subject to all Section 404 reporting requirements, no later than December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of the date of our initial public offering. After that time, our independent registered public accounting firm may issue aan attestation report that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating.

We have undertaken various actions to comply with the requirements of being a public company.company and are undertaking further steps to satisfy the additional requirements related to the loss of emerging growth company status. However, we cannot assureprovide youassurance that the measures we have taken to date, and actions we may take in the future, will be sufficient to prevent or avoid financial misstatements due to error or material weaknesses. If we identify any material weaknesses in the future that we cannot fully remediate, the accuracy and timing of our financial reporting may be adversely affected. Testing and maintaining financial controls can also divert our management’s attention from other matters that are important to the operation of our business. Ineffective disclosure controls and procedures or internal control over financial reporting could cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Class A common stock.

Additionally, when evaluating our financial controls, we may identify material weaknesses in our internal controls that we may not be able to remediate in timeprior to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal controls over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner, or if our independent registered public accounting firm is unable to expressissue an opinion as to the effectiveness of our internal controls over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could be adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

We maintain the majority of our cash and cash equivalents in accounts at a banking institution in the United States that we believe is of high quality. Cash held in these accounts exceed the FDIC insurance limits. If such banking institution were to failfail, we could lose all or a portion of the amounts held in excess of such insurance limitations. In the event of failure of the financial institution where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all. Any inability to access or any delay in accessing these funds could adversely affect our business and financial position.

We are currently subject to derivative shareholder lawsuits and have been defendants in securities class action litigation and may be subject to similar or other litigationfuture in the future,litigation, which will require significant management time and attention, result in significant legal expenses and may result in unfavorable outcomes, any or all of which may have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business. In particular, we are a party to derivative shareholder litigation described under the below heading “Legal Proceedings.Proceedings” below.

Our HA products accounted for 46%,49%, 43%46% and 42%43% of our total revenue for the years ended December 31, 2024,2025, 20232024 and 2022,2023, respectively. We expect that sales of such products will continue to account for a substantial portion of our revenue, and therefore, our ability to execute our growth strategy and maintain profitability will depend upon the continued demand for these products in each of our current product areas. If the supply and distribution agreements for any of our HA products were terminated, or if our efforts to commercialize these products prove unsuccessful, our revenue would be impaired. If our HA products fail to maintain their market acceptance for any reason, our business, results of operations and financial condition may be adversely affected. Recent actions by the Centers for Medicare and Medicaid Services to change longstanding average sales price (“ASP”) calculation methodologies by, among other things, adding new requirements for supporting the fair market value of bona fide service fees or reclassifying other device-like biologicals such as skin substitutes as supplies may signal a broader policy shift that could eventually target our HA portfolio, potentially reducing ASP, which could materially impact our HA business and financial condition. Refer to Part I, Item 1A. Risk Factors—Risks Related to Government Regulation— Various governmental reimbursement reform and other healthcare cost containment proposals may affect our ability to sell our products profitably and could adversely affect our business results and operations and financial conditions.

We may, inIn the future, we may experience periods of rapid growth and expansion, which could place a significant additional strain on our limited personnel, information technology systems and other resources. In particular, our supply chain, inventory management, product services, sales processes and distributor network require significant management, training, financial and other supporting resources. System limitations may result in increased cost, delayed execution, and errors. AnyFor failureexample, bywe usrely on the effective operation of our information technology systems, including our enterprise resource planning (“ERP”) systems, to managesupport key business processes, maintain financial records, safeguard data, and enable efficient operations. In addition, system implementations and upgrades involve inherent risks, including system integration challenges, data migration errors, and increased dependence on third‑party implementation partners and technology vendors. If we are unable to adequately maintain our growthsystems effectivelyand scale them appropriately, we could adverselyexperience affectdisruptions or delays to our abilityoperations, tosupply achievechain, ourorder developmentmanagement, andmanufacturing, commercializationor goals.financial reporting processes.

We cannot be certain that our existing products and any new products, such as our newly launched PNS and PRP products, or any line extensions or expanded indications that we develop will achieve or maintain market acceptance. Third-party payers may be reluctant to continue to cover our products at their current prices. Further, new injectable therapies or oral medications may become available that help manage OA pain in a more convenient and/or cost effective manner than our HA viscosupplementation therapies. With respect to our Surgical Solutions, new allograft, DBMs, synthetics, growth factors, or other enhancements to our existing implants may never achieve broad market acceptance, which can be affected by a lack of clinical acceptance of Surgical Solutions products and technologies, introduction of competitive treatment options which render Surgical Solutions products and technologies too expensive or obsolete and difficulty training surgeons in the use of Surgical Solutions products and technologies. Media reports or other negative publicity concerning both methods of tissue recovery from donors and actual or potential disease transmission from donated tissue may limit widespread acceptance by the medical community of our allografts, growth factor and DBMs, whether directed at these products generally or our products specifically. Unfavorable reports of improper or illegal tissue recovery practices by any participant in the industry, both in the United States and internationally, as well as incidents of improperly processed tissue leading to transmission of disease, may broadly affect the rate of future tissue donation and market acceptance of allograft based technologies by the medical community.

Third-party manufacturers generally manufacture our HA products, EXOGEN components, certain Surgical Solutions products, PNS and our rehabilitationPRP devices. We have developed in-house assembly capabilities for certain of our products, such as our EXOGEN system.Bone Stimulation System. We and our third-party manufacturers are required to comply with the Quality System Regulation (“QSR”), which is a set of FDA regulations that establishes cGMP requirements for medical devices and covers the methods and documentation of the design, testing, production, control, quality assurance and complaint handling, labeling, packaging, sterilization, storage and shipping of such devices. Moreover, certain of our products may be re-classifiedreclassified as drugs, and we are planning to seek approval of a product pursuant to the BLA pathway.drugs. In each case, such products would be required to comply with the cGMP requirements that apply to drugs and biologics, respectively.

There are a limited number of suppliers and third-party manufacturers that operate under the FDA’s QSR requirements and that have the necessary expertise and capacity to manufacture our products or components for our products. As a result, it may be difficult for us to locate manufacturers for our anticipated future needs, and our anticipated growth could strain the ability of our current suppliers and third-party manufacturers to deliver products, materials and components to us. Upon expiration of our existing agreements with these third-party manufacturers, we may not be able to renegotiate the terms of our agreements with these third-party manufacturers on a commercially reasonable basis, or at all.

Our products are purchased by healthcare providers and customers who typically bill third-party payers or private insurance plans and healthcare networks,networks to cover all or a portion of the costs and fees associated with our products. These third-party payers and insurers may deny reimbursement if they determine that a device or product provided to a patient or used in a procedure is not deemed medically necessary or otherwise does not meet applicable payment criteria or if the policyholder’s healthcare insurance benefits are limited. Further, limits put on reimbursement by third-party payers, whether foreign or domestic, governmental or commercial, could make it more difficult to buy our products and substantially reduce, or possibly eliminate, patient access to our products. TheFor example, our TalisMann product is currently only covered under the Medicare program and our PRP product is not reimbursed by any third-party payer. In addition, the healthcare industry in the United States has experienced a trend toward cost containment as government and private insurers seek to control rising healthcare costs by imposing lower payment rates and negotiating reduced contract rates with providers and suppliers.

Further, legislative or other regulatory reforms that have been adopted or may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies or other downward pressure on the pricing or reimbursement we or our customers receive for our products. For example, the Consolidated Appropriations Act, 2021 (“CAA”) was signed into law on December 27, 2020, and pursuant to implementing regulations promulgated by CMS, expanded price reporting obligations for manufacturers of certain products reimbursed under Medicare Part B beginning January 1, 2022, including all of our HA viscosupplements. In July 2022, CMS began utilizing the new pricing information we reported to it pursuant to these newly adopted reporting obligations to adjust the Medicare payment to healthcare providers using our Durolane and GELSYN-3 products. As a result, the rates available for those products beginning in July 2022 were reduced from those previously available and are subject to future reporting and adjustment, which may affect the demand for those products or our ability to sell them profitably. In addition, due to the manner in which rebates are calculated and paid under certain of our contracts with private payers, any such changes in the ASP for our HA viscosupplements may result in larger than expected rebate payments for the sale of these products. We cannot predict the extent to which this law, or other reimbursement reform proposals or other healthcare cost containment measures that might be enacted in the future, may impact the demand or commercial success of our HA viscosupplements and other products we sell or plan to commercialize in the future. Refer to Part I, Item 1A. Risk Factors—Risks Related to Government Regulation— Various governmental reimbursement reform and other healthcare cost containment proposals may affect our ability to sell our products profitably and could adversely affect our business results and operations and financial conditions.

Our business may be adversely affected if consolidation in the healthcare industry leads to demand for price concessions or if a Group Purchasing Organization (“GPO”),GPO, third-party payerspayer or other similar entities exclude us from being a supplier.

Healthcare costs have risen significantly over the past decade, which has resulted in or led to numerous cost reform initiatives by legislators, regulators and third-party payers. Cost reform has triggered a consolidation trend in the healthcare industry to aggregate purchasing power, which may increase requests for pricing concessions or risk vendor exclusion. For example, non-clinical staff at hospitals are increasingly involved in the evaluation of products and product purchasing decisions. In order for us to sell our products, we must convince such staff as well as physicians and hospitals that our products are attractive alternatives to competing products for use in surgical procedures. Additionally, GPOs, IDNs and large single accounts may continue to use their market power to consolidate purchasing decisions for physicians. Third-party payers may also continue to use their market power to reduce the reimbursement for our products by increasing the rebates we are required to pay them when our products are covered, which may negatively impact our results. We expect that market demand, government regulation, third-party coverage and reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our customers, which may exert further downward pressure on the prices of our products.products and negatively impact our business, results of operations, financial condition and cash flows.

We compete with other companies for these opportunities, and we may be unable to consummate such acquisitions or joint ventures on commercially reasonable terms, or at all. In addition, acquired businesses may have ongoing or potential liabilities, legal claims (including tort and/or personal injury claims) or adverse operating issues that we fail to discover through due diligence prior to the acquisition. Even if we are aware of such liabilities, claims or issues, we may not be able to accurately estimate the magnitude of the related liabilities and damages. In particular, to the extent that prior owners of any acquired businesses or properties failed to comply with or otherwise violated applicable laws or regulations, failed to fulfill their contractual obligations to their customers, or failed to satisfy legal obligations to employees or third parties, we, as the successor, may be financially responsible for these violations and failures and may suffer reputational harm or otherwise be adversely affected. Acquisitions also frequently result in the recording of goodwill and other intangible assets which are subject to potential impairment in the future that could harm our financial results. IfThe weissuance were to issueof additional equity in connection with such acquisitions, thisacquisitions may dilute our stockholders.

We have in the past divested of certain of our businesses, including most recently our Advanced Rehabilitation business,Business and Wound Business, to help improve our focus on our core businesses and improve our liquidity. However, we may be unable to achieve some or all of the anticipated strategic and financial benefits following our business divestitures, as their anticipated benefits are based on a number of assumptions, some of which may prove incorrect. Any divestiture we undertake is subject to a variety of known and unknown risks and uncertainties. In addition, the anticipated benefits related to any divestiture may take longer to realize than expected,expected or may not materialize, and a failure to achieve the anticipated financial and strategic benefits of a divestiture could be disruptive to our operations and could have a material adverse impact on our business, results of operations, financial condition and cash flows. For instance, we sold our Wound Business in May 2023, with earn-out payments expected in 2024, 2025, and 2026 contingent on certain post-closing financial targets. A final rule issued by the Centers for Medicare and Medicaid Services in late 2025 and effective January 1, 2026 changed the methodology for skin substitute payments from ASP-based reimbursement to a standardized flat rate. This change in payment methodology is expected to substantially decrease the reimbursement for skin substitute products, and may have a material adverse effect on the buyer’s revenue model and obligation to pay earn-outs under the sale. Further, even if we do realize some or all of the anticipated strategic and financial benefits following our divestitures, we may face indemnity and other liability claims by the acquirer or other parties.

Governments outside the United States may not provide coverage or reimbursement of our products, which may adversely affect our international expansion plans and harm our business, results of operations and financial condition.

If the reclassification of HA products were to occur, the FDA may not allow us to continue to market our HA products without submitting additional clinical trial data, obtaining approval of aan NDA for these products, or without otherwise complying with new conditions or limitations on how those products are marketed. Clinical testing can take years to complete, can be expensive and carries uncertain outcomes, and there is no guarantee that would be able to successfully obtain and maintain any required regulatory approvals. These new regulatory obligations could result in increased regulation and would subject our HA products to a new set of regulatory requirements to which they have not been previously subject. These changes could ultimately increase our costs, change levels of coverage and/or reimbursement for our HA products and adversely impact our business, results of operations and financial condition if they were to be implemented. See Part I, Item 1A. Risk Factors—Risks relatedRelated to ourOur businessBusiness—If we are unable to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize, the commercial success of these products may be severely hindered. Recent actions by the Centers for Medicare and Medicaid Services reclassifying other device-like biologicals such as skin substitutes as supplies may signal a broader policy shift that could eventually target our HA portfolio, materially reducing average selling price. If that happens it could materially impact our HA business and financial condition.

Our ability to maintain our competitive position and to execute our strategic plans,plans depends on our ability to attract, retain and motivate our senior management team and other highly qualified personnel, and our failure to do so could adversely affect our business, results of operations and financial condition.

Our business exposes us to the risk of product liability claims that are inherent in the testing, manufacturing and marketing of our products. This risk exists even if a product is cleared, approved or certified for commercial sale by the FDA, foreign regulatory authorities or notified bodies and manufactured in facilities regulated by the FDA or an applicable foreign regulatory authority. Our products are designed to affect, and any future products will be designed to affect,affect important bodily functions and processes. Any side effects, manufacturing defects, misuse or abuse associated with our products or our products in development could result in patient injury or death. The medical device industry has historically been subject to extensive litigation over product liability claims, and we cannot assure you that we will not face product liability claims. We may be subject to product liability claims if our products or products in development cause, or merely appear to have caused, patient injury or death, even if such injury or death was as a result of supplies or components that are produced by third-party suppliers. Product liability claims may be brought against us by consumers, healthcare providers or others selling or otherwise coming into contact with our products, among others. If we cannot successfully defend ourselves against product liability claims, we will incur substantial liabilities and reputational harm. In addition, regardless of merit or eventual outcome, product liability claims may result in:

The success of certain of our bone graft substitute products depends on our suppliers continuing to have access to donated human cadaveric tissue, as well as the maintenance of high standards in their processing methodology. The supply of such donors can fluctuate over time. We cannot be certain that our current supplierssuppliers, who rely on allograft bone, plus any additional sources that our suppliers identify in the future, will be sufficient to meet our product needs. Our dependence on a limited number of third-party suppliers and the challenges that they may face in obtaining adequate supplies of allograft bone tissue involve several risks, including limited control over pricing, availability, quality and delivery schedules. We may be unable to find an alternative supplier in a reasonable time period or on commercially reasonable terms, if at all, which would adversely affect our business, results of operations and financial condition.

We receive, collect, process, use and store directly and through third-party vendors and service providers a large amount of information, including personally identifiable information, protected health information and other sensitive and confidential information. This data is often accessed by us through transmissions over public and private networks, including the internet. The secure transmission of such information over the internet and other mechanisms is essential to maintain confidence in our information technology systems. Despite the privacy and security measures we have in place to comply with applicable laws, regulations and contractual requirements, our facilities and systems, and those of our third-party vendors and service providers, are vulnerable to privacy and security incidents including, but not limited to, computer hacking, breaches, acts of vandalism or theft, computer viruses and other malware, including ransomware and other forms of cyberattacks, misplaced or lost data, programming and/or human errors, and other similar events. A party, whether internal or external, that is able to circumvent our security measures or those of our third-party vendors and service providers could, among other things, misappropriate or misuse sensitive or confidential information, misappropriate user information or other proprietary information, or cause significant interruptions in our operations. Internal or external parties have and will continue to attempt to circumvent our security systems and those of our vendors and service providers, and we expect that we may in the future continue to experience, among other things, external attacks on our network,network and attempts to gain unauthorized access to sensitive and confidential information, such as reconnaissance probes, denial of service attempts, malware attacks, malicious software attacks and phishing attacks,attacks. suchFor asexample, in January 2023, an external phishing incident that occurred in January 2023, targetingtargeted an employee with plausible-sounding prompts to send information to Company leadership. This security incident did not expose protected health information, or affect any of the company’s systems, and was reported to authorities in the relevant regions. BecauseCyberthreats theand techniques used to circumvent security systems can be highly sophisticated and change frequently, andincluding oftencyberthreats areposed notby recognizedemerging untiltechnologies launchedsuch againstas aartificial targetintelligence and mayquantum originatecomputing. from less regulated and remote areas around the world, weWe may be unable to proactively address all possible cyberthreats and techniques or implement adequate preventive measures for all situations. Attacks upon information technology systems are also increasing in their frequency, level of persistence, and sophistication, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise. We may also face increased cybersecurity risks due to our reliance on internet technology andtechnology, the number of our employees who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures. We may also experience security breaches that may remain undetected for an extended period. Recent, well-publicized cyberattacks on companies have resulted in the unauthorized access to and acquisition of significant amounts of sensitive and confidential information and the disruption of important systems and services. These incidents demonstrate the sophistication of the threat actors and magnitude of the threat posed to companies across the nation, including the health care industry. For example, in 2024, a vendor informed us that Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our EXOGEN device to commercial payers, experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems. As a result of the Change Healthcare incident, certain of our patient billing and collections processes were disrupted. We have identified an alternative claim processing intermediary and resumed claims submissions, but this incident caused delays without material effect in a portion of our claims submissions to some commercial payers thereby delaying the related cash remittances to us. As of the date of this Annual Report, UnitedHealth Group is still investigating this incident, including any potential impact on claims and patient data. We do not presently believe that the Change Healthcare incident has materially affected, or is reasonably likely to materially affect the Company, including with respect to our claims collection and cash flows. We continue to evaluate the impact of the Change Healthcare incident on our Company.

We cannot assure you that our vendors or service providers with access to our or our customers’, suppliers’, trial patients’, and employees’ personally identifiable and other sensitive or confidential information in relation tofor which we are responsible will not breach contractual obligations imposed by us, or that they will not experience data security breaches, cyberattacks or other incidents negatively impacting the privacy or security of sensitive or confidential information or our vendors’ or service providers’ ability to provide services to us, which could have a corresponding effect on our business including putting us in breach of our obligations under privacy laws and regulations and/or which could in turn adversely affect our business, results of operations and financial condition. Nor can we provide assurance that our vendors may not incorporate artificial intelligence tools that fail to meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security. While we attempt to address the associated risks by performing security assessments and detailed due diligence, we cannot assure you that these contractual measures and our own privacy and security-related due diligence safeguards will protect us from the risks associated with the processing, storage and transmission of such information by vendors, service providers and others acting on our behalf.

We rely extensively on information technology and communication systems and software and hardware products, including those of external providers, to conduct business. These systemssystems, and softwaresoftware, and hardware impact, among other things, ordering and managing components of our products from suppliers, shipping products to customers on a timely basis, processing transactions, coordinating our sales activities across all of our products, summarizing and reporting results of operations, complying with regulatory, legal or tax requirements, data security and other processes necessary to manage our business.

•unexpected changes in tariffs, trade barriers andimport/export regulatoryrestrictions, requirements,foreign investment reviews, export licensing requirementsrequirements, or other requirements or restrictive actions by the United States or foreign governments;

•foreign currency fluctuations,fluctuations or currency controls, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

•exposure of our foreign operations to liability under U.S. laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”), regulations of the U.S. Officetrade, ofsanctions Foreignand Assetsanti-boycott Controls,regulations and U.S. anti-money laundering regulations, as well as disadvantages of competing against companies from countries that are not subject to these regulatory regimes;

•business interruptions resulting from geopolitical actions, including wararmed andconflict, terrorismterrorism, (includingtrade therestrictions, currentor conflictsdisruptions, betweenpublic Russiahealth and Ukraine and between Israel and Hamas), global pandemicsemergencies, or natural disasters including earthquakes, hurricanes, floods and fires. IfAny development, escalation, expansion, or protracted continuation of geopolitical conflict, including in Eastern Europe, the currentMiddle conflicts between RussiaEast, and UkraineSouth and between Israel and Hamas escalate or spill over to or otherwise impacts additional regions, itAmerica, could heighten many of the other risk factors included in our SEC filings.

International tariffs, including tariffs applied to goods traded between the United States and countries such as Mexico, Canada, China, and, other countriescountries, and restrictions on goods imported from certain such regions of China may adversely affect our business, results of operations and financial condition.

InternationalWe tariffs,are subject to risks associated with evolving international trade policies and relations, including changes in trade agreements and the imposition of new or increased tariffs applied to goods traded betweenby the United States and countries such as Mexico, Canada, China,government and other countries, may adversely affect our business, results of operations and financial condition. Since the beginning of 2018, there has been increasing discussion, in some cases coupled with legislative or executive action, from several U.S. and foreign leaders regarding the possibility of institutingretaliatory tariffs againstby foreignother importsnations. Various members of certain materials. In 2025, the new political administration in the United States hasgovernment indicatedhave stated that it intends to impose tariffs in pursuing government policy and has already imposedimposed, or announced, several new or increased tariffs, including tariffs on goods and materials from various countries including member countries of the European Union, Switzerland, Canada, Mexico, CanadaJapan and China. When unilateral changes are made to United States import tariffs, other countries may reciprocate, and in many cases have reciprocated, with tariffs imposed or announced, against the United States. WhetherIn some instances, new tariff policies have resulted in the United States entering into international trade agreements with other countries. The impact of the new and evolving tariff policies and trade agreements, including whether and to what extent thesethe new and increased tariffs will remain in place or additional tariffs will be imposed remains uncertain,uncertain. but ifIf tariffs are imposed or increased by either the United States or other countries, it may impact theour cost of goods, and the price of our productsof, and demand forfor, our products, particularlyproducts in countries impacted by such tariffs. For example, our Durolane and Gelsyn products are manufactured in Sweden and Switzerland, respectively. The enactment of new tariffs, or increases in existing tariffs, or other such charges, may increase the cost of importing these products into the United States. This may have an adverse effect on our business or our results of operations. The institution of trade tariffs globally also carries the risk of adversely affecting overall global economic or political conditions, which could have a negative impact on us.

In addition, the U.S. has previously enacted, and it or other countries may in the future enactenact, legislation that limits or prohibits the use of foreign manufactured equipment or supplies from China, such as the Uyghur Forced Labor Prevention Act, which imposes a ban on virtually all imports from the Xinjiang region of China unless companies are able to prove that the products were not made with forced labor, which is expected tocould have an adverse effect on our ability to conduct our business and our results of operations.

•post marketpost-market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury;

•post marketpost-market studies; and

Moreover, governmental authorities outside the United States have become increasingly stringent in their regulation of medical devices, and our products may become subject to more rigorous regulation by non-U.S. governmental authorities in the future. U.S. or non-U.S. government regulations may be imposed in the future that adversely affect our business, results of operations and financial condition. The European Commission has harmonized national regulations for the control of medical devices through European Medical Device Regulations with which manufacturers must comply. Under these new regulations, manufacturing plants must have received a full Quality Assurance Certification from a “Notified Body” in order to be able to sell products within the member states of the EU. This certification allows manufacturers to stamp the products of certified plants with a “CE” mark. Products covered by European Commission regulations that do not bear the CE mark cannot be sold or distributed within the EU. Refer to Part I, Item 1A. Risk Factors—Risks relatedRelated to governmentGovernment regulationRegulation—Regulatory reforms, such as the EU Medical Devices Regulation, could limit our ability to market and distribute our products after clearance, approval or certification is obtained and make it more difficult or costly for us to obtain regulatory clearance, approval or certification of any future products, which could adversely affect our competitive position and materially affect our business and financial results.

In connection with our EXOGEN system,Bone Stimulation System, we submit claims directly to, and receive payments directly from, the Medicare and Medicaid programs and private payers. Therefore, we are subject to extensive government regulation, including detailed requirements for submitting claims under appropriate codes and maintaining certain documentation, including evidence that all medical necessity requirements are met to support our claims. Billing for our EXOGEN systemBone Stimulation System is complex, time-consuming and expensive, particularly for items and services provided to government healthcare program beneficiaries, such as Medicare and Medicaid. Reimbursement claims may be adversely affected by improper completion of the Certificates of Medical Necessity (“CMN”) or other documentation required in connection with Medicare claims for the EXOGEN systemBone Stimulation System and we may be subject to investigations by governmental authorities or third-party payers and required to prove the validity of the claims or the authenticity of the signatures on the CMNs under investigation. Reimbursement claims may also be adversely affected by the promotion of our devices for unapproved or off-label uses or assistance with the reimbursement process that could result in false or fraudulent claims for reimbursement being submitted to government or private payers. Depending on the billing arrangement and applicable law, we bill various payers, all of which may have different prior authorization, patient qualification and medical necessity requirements, as well as patients for any applicable co-payments or co-insurance amounts. In addition, we may also face increased risk in our collection efforts, including potential write-offs of doubtful accounts and long collection cycles, any of which could adversely affect our business, results of operations and financial condition.

We are also required to implement compliance procedures and to oversee, train and monitor our employees’ compliance with those procedures, appeal coverage and payment denials, and perform internal audits periodically to assess compliance with applicable laws and regulations as well as internal compliance policies and procedures. We are required to report and return any overpayments received from government payers within 60 days of identification and exercise of reasonable diligence to investigate credible information regarding potential overpayments. Failure to identify and return such overpayments exposes the provider or supplier to liability under federal false claims laws. For example, in February 2021 we entered into a settlement agreement with the United States Attorney’s Office for the Middle District of North Carolina and the Office of Inspector General of the U.S. Department of Health and Human Services to resolve potential liabilities associated with a self-disclosure we made to the OIG in November 2018 regarding violations of certain Medicare claim submission requirements. See Part I, Item 1A. Risk Factors—Risks relatedRelated to governmentGovernment regulationRegulation—We are subject to federal, state and foreign laws and regulations relating to our healthcare business, and could face substantial penalties if we are determined not to have fully complied with such laws, which would adversely affect our business, results of operations and financial condition. Moreover, Medicare contractors and state Medicaid agencies periodically conduct pre- and post-payment reviews and other audits of claims and are under increasing pressure to more closely scrutinize healthcare claims and supporting documentation. We may be subject to prepayment and post-payment reviews, as well as audits of claims in the future. For instance, the Department of Health and Human Services Office of Inspector General is evaluating skin substitute billing from prior years. Although we divested our Wound Business in 2023, continuing indemnification obligations mean that the Department of Health and Human Services’ focus on past billing for skin substitute products may impact our Company. Private payers may from time to time conduct similar reviews and audits. Any third-party payer reviews and audits of our claims could result in material delays in payment, material recoupments, overpayments, claim denials, fines, revocations of billing privileges, bars on re-enrollment in federal or state healthcare programs, cancellation of our agreements or damage to our reputation, any of which would reduce our net sales and profitability.

We are a global medical device company focused on helping patients recover and live life to the fullest by relieving pain and addressing musculoskeletal challenges through a diverse portfolio of high-quality, innovative, and clinically-provenclinically proven solutions. We operate our business through two reporting segments, U.S. and International, and our portfolio of products is comprised of five patient-focused areas, grouped into three businesses based on clinical use: (i) Pain Treatments,Treatments & PRP (“Pain Treatments”), (ii) Surgical Solutions and (iii) Restorative Therapies.

•Pain Treatments, comprisedconsisting of:

◦Knee Osteoarthritis (“KOA”) area: Our product portfolio includes a range of intra-articular, hyaluronic acid (“HA”) injections that help relieve patient discomfort and improve quality of life. In the U.S., we also distribute the XCELL Platelet-Rich Plasma (“PRP”) system, a technology that is synergistic with our existing physician call points, as many surgeons who use HA also use PRP.

◦Peripheral Nerve Stimulation (“PNS”) area: We are focused on developing a full portfolio of peripheral nerve stimulation products with solutions for acute, temporary and chronic pain.

•Surgical Solutions, comprisedconsisting of:

◦Bone Graft Substitutes (“BGS”): Our BGS product portfolio includes a range of products that facilitate optimal bone fusion following a surgical procedure.

•Restorative Therapies, comprisedconsisting of:

◦Fracture Care: We provide low-intensity pulse ultrasound to help patients who suffer from bone fractures that do not heal through traditional methods. We plan to expand our United StatesU.S. clinical fracture care indications to address the healing of fresh fractures, especially for high-risk patients.

The following table sets forth total net sales, net income (loss) and Adjusted EBITDA for the periods presented:

(1a)See below under Results of Operations-Adjusted EBITDA for a reconciliation of net income (loss) to Adjusted EBITDA.

On SeptemberDecember 30,31, 2024, we enteredcompleted into a Purchase and Sale Agreement (the “Purchasesale Agreement”) with a third-party purchaser to sellof certain products within our advancedAdvanced rehabilitationRehabilitation business,Business, including the L100, L300 Go, L360, H200, Vector Gait & Safety System and Bioness Integrated Therapy System (BITS) (collectively, the “Advanced Rehabilitation Business”). OnThis Decemberdivestiture 31,reflects 2024,our westrategic closeddecision theto salefocus ofon thecore business areas and streamline operations. The Advanced Rehabilitation Business was considered non-core and required additional research and development investment to achieve its next stage of growth. We received $24.7 million of cash proceeds at closing, net of transactional fees, which were subject to a post-closing adjustment for net working capital. We paid $0.7 million in the second quarter of 2025 to settle the adjustment for net working capital. The net proceeds were used to pay $20.0 million in long-term debt obligations on December 31, 2024. We may also receive an aggregate of $20.0 million in potential earn-out payments, which arepayments based on the achievement of certain revenue and financial metricperformance thresholds in respectrelated to sales of products from the Advanced Rehabilitation Business during the fiscal years ending December 31, 2025 and 20262026. The revenue and specified financial performance criteria for the fiscal years.year Weended haveDecember incurred31, $2.5 million in transactional fees resulting from the divestiture of the Advanced Rehabilitation Business. The sale of the Advanced Rehabilitation Business is expected to enhance our strategic focus on our remaining businesses and improve liquidity, as the proceeds, net of transactional fees,2025 were usednot to pay $20.0 million in long-term debt obligations.achieved.

We have restructured portions of our operations and future restructuring activities are possible. Identifying and calculating the cost to exit operations requires certain assumptions to be made,assumptions, the most significant of which are anticipated future liabilities. Although our estimates have been reasonably accurate in the past, significant judgment is required, and these estimates and assumptions may change as additional information becomes available and facts or circumstances change. Restructuring costs are recorded at estimated fair value. Key assumptions in determining the restructuring costs include negotiated terms and payments to terminate contractual obligations. In 2025, restructuring costs primarily related to severance costs associated with the elimination of several positions in order to optimize our organizational structure.

Interest expense primarily consists of interest on our indebtedness, which currently consists of our term loan and revolving credit facility, which was incurred pursuant to the Amended 20192025 Credit Agreement. We have previously entered into interest rate swaps to limit our exposure to changes in the variable interest rate on our term2025 loan.Term Loan. Interest expense includes any fair value gain or losses on these swaps.

Other (income) expenseExpense

Other (income) expense primarily consists of foreign currency transaction and remeasurement gains and losses on transactions denominated in currencies other than our functional currency. Our foreign currency transaction and remeasurement gains and losses are primarily related to foreign currency denominated cash, liabilities and intercompany receivables and payables.payables denominated in foreign currency. Other (income) expense may also include certain nonrecurring items.

The Company’s subsidiary, Bioventus LLC (“BV LLC”), is a partnership for U.S. federal tax purposes. Accordingly, the members include the profits and losses of BV LLC in their income tax returns. Certain wholly-owned subsidiaries of BV LLC are taxable entities for U.S. or foreign tax purposes and file tax returns in their local jurisdictions. Bioventus Inc. is subject to U.S. federal, state and local income taxes at the prevailing corporate tax rates with respect to our taxable income. In addition to tax expenses, we are obligated to make payments under the tax receivable agreement (“TRA”), which could be significant. The TRA obligates us to pay to Smith & Nephew, Inc. (“Continuing LLC Owner”) 85% of the amount of any realized tax benefits (or in some circumstances are deemed to realize) resulting from (i) increases in the tax basis of assets of BV LLC as a result of (a) any future redemptions or exchanges of LLC Interests and (b) certain distributions (or deemed distributions) by BV LLC and (ii) certain other tax benefits arising from ourpayments makingwe paymentsmake under the TRA. For more information, see Item 8. Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note 11. Income taxesTaxes for additional information.

Income tax expense includes U.S. federal, state and international income taxes, including certain taxes applicable to BV LLC. Certain income and expense items in income tax returns are not reported in the same year as financial statements. We report the income tax effects of these differences as deferred income taxes. Valuation allowances recognized reduce the related deferred tax assets to an amount which will,are more likely than not,not to be realized. We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense.

We present Adjusted EBITDA, a non-GAAP financial measure, because we believe it is a useful indicator that management uses to measure operating performance and for planning purposes, including the preparation of our annual operating budget and financial projections. We believe that Adjusted EBITDA is useful to our investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We define Adjusted EBITDA as net income (loss from continuing operations) before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include acquisition and divestiture related costs, certain shareholder litigation costs, impairmentsimpairment of assets, restructuring and succession charges,costs, equity-based compensation expense, financialdebt restructuringrefinancing, costsloss on extinguishment of debt, and other items. Adjusted EBITDA by segment is comprisedconsists of net sales and costs directly attributable to a segment, as well as an allocation of corporate overhead costs primarily based on a ratio of net sales by segment to total consolidated net sales.

Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for, or as superior to, the financial information prepared and presented in accordance with U.S. GAAP. These measures might exclude certain normal recurring expenses. Therefore, these measures might not provide a complete understanding of the Company's performance and should be reviewed in conjunction with the U.S. GAAP financial measures. Additionally, other companies might define their non-GAAP financial measures differently than we do. Investors are encouraged to review the reconciliation of the non-GAAP measure provided in this Annual Report on Form 10-K, including all tables referencing Adjusted EBITDA to its most directly comparable U.S. GAAP measure.

Results of Continuing Operations

The following table presents a reconciliation of net income (loss from continuing operations) to Adjusted EBITDA for the periods presented:

(a)Includes for the years ended December 31, 20242025 and 2023,2024, respectively, depreciation and amortization of $41.9$41.3 million and $48.5$41.9 million in cost of sales and $7.7$5.7 million and $8.9$7.7 million in operating expenses presented in the consolidated statements of operations and comprehensive loss.income (loss).

(gh)Activity in 2024 includes: (i)Includes a non-cash impairment charge of $33.9 million for intangible assets solely attributable to our Advanced Rehabilitation BusinessBusiness, duedriven toby the decision to divest the business and (ii)a a$2.5 million non-cash impairment charge of $2.5 million for rented right-of-use assets involvingassociated with exited office and warehouse spaces. Activity in 2023 relates to the non-cash impairment charge attributable to our divested Wound Business.

(hi)Represents the loss on the disposal of the Advanced Rehabilitation and Wound Businesses for the years ended December 31, 2024 and 2023, respectively.Business.

DuringOther items during the year ended December 31, 2023,2024 other items mainlyprimarily consisted of the following: (i) strategic transaction costs totaling $4.8$4.7 million, including divestiture costsnet of $1.1transactional millionfees, of expenses related to the divestiture of the Advanced Rehabilitation; (ii)Business and transformative project costs of $4.5$1.7 million; (iii) transition and severance costs of $2.8 million; and (iv) $1.0 million in costs related to the discontinuance of MOTYS.million.

Net sales increaseddecreased $56.9$4.7 million, or 12.7%,0.9%, compared to the prior year. ChangesNet bysales major product groups were: (i)from Pain Treatments—$37.0 increased $13.3 million, driven by volume growth in Durolane. Net sales from Surgical Solutions increased $12.7 million increase due to volume growth primarilyin drivenBGS byand Durolane;Ultrasonics. (ii)The Surgical Solutions—$25.8$30.7 million decrease in net sales increase due to volume growth; and (iii)from Restorative Therapies—$5.9 millionwas netdriven sales decrease due primarily toby the divestiture of our Wound Business ($11.1 million of revenue in 2023) and lower volume from the Advanced Rehabilitation Business, partlywhich contributed $38.2 million in net sales during the prior year. This decrease was partially offset by increaseda volumes$6.5 andmillion higherincrease averagein sellingour pricenet relatedsales tofor our EXOGEN Bone Stimulation System in 2024.System.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the risk factors and other cautionary statements described under the heading Risk Factors included in our 2025 10-K, which could materially affect our businesses, financial condition, or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may adversely affect our business, financial condition, or future results. ThereExcept for such additional information and the risk factors set forth below, there have been no material changes in our risk factors from those described in our 2025 10-K.

The following table sets forth total net sales, net income (loss) and Adjusted EBITDA for the periods presented:

(a)See below under Results of Operations-Adjusted EBITDA for a reconciliation of net income (loss) to Adjusted EBITDA.

Other Significant Developments

OnDuring Marchthe 27,first and second quarters of 2026, the Company made a discretionary principal prepaymentprepayments of $22.0 million and $20.0 million, respectively, on the 2025 Term LoanLoan, to reduce the amount ofreducing its outstanding long-term debt,debt. drivenThese prepayments were funded by strong operating cash flows.flows Theand reductionresulted in long-term debt loweredlower interest paymentsexpense and borrowing costscosts, while also improving the Company's leverage and improved the Company’sother financial metrics.

The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the periods presented:

(a)Includes for the three and six months ended MarchJune 28,27, 2026 and MarchJune 29,28, 2025, respectively, depreciation and amortization of $10.1$9.9 millionmillion, and$10.6 $10.3million, $20.0 million, $20.9 million in cost of sales and $1.1 millionmillion, and$1.4 $1.6million, $2.2 million, $3.0 million in operating expenses presented in the consolidated condensed statements of operations and comprehensive income (loss).income.

(b)Restructuring costs primarily resulted from severance associated with the elimination of severalcertain positions and the consolidation of certain administrative functions and roles.roles, as well as reversals resulting from severance contract cancellations.

(de)Costs incurred as a result of certain shareholder litigation unrelated to our ongoing operations.

(ef)Represents the loss on the disposal of the Advanced Rehabilitation Business.

(fg)Other items during the three and six months ended MarchJune 28,27, 2026 primarily consisted of individuallystrategic immaterialtransaction items that are not indicative of the Company’s ongoing operating performance.costs.

Other items during the three months ended MarchJune 29,28, 2025 consisted of individually immaterial items that are not indicative of the Company’s ongoing operating performance. Other items during the six months ended June 28, 2025 primarily consisted of $0.5 million of expenses related to the divestiture of the Advanced Rehabilitation Business, which was completed on December 31, 2024.

We present Adjusted EBITDA, a non-GAAP financial measure, because we believe it is a useful indicator for management to measure operating performance and for planning purposes, including the preparation of our annual operating budget and financial projections. We believe that Adjusted EBITDA is useful to our investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. We define Adjusted EBITDA as net income (loss) before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include strategic transaction costs, such as acquisition and divestiture related costs, certain shareholder litigation costs, impairment of assets, restructuring costs, equity-based compensation expense, debt refinancing, loss on extinguishment of debt, and other items. Adjusted EBITDA by segment consists of net sales and costs directly attributable to a segment, as well as an allocation of corporate overhead costs primarily based on a ratio of net sales by segment to total consolidated net sales.

Net sales for the period increased $5.9$11.6 million, or 5.4%,4.9%, compared to the prior year period. Net sales from Pain Treatments increased $3.5by million$11.7 drivenmillion, reflecting a 5.1% volume growth led by favorableDurolane. rebatesPrice increased 4.9% compared to the prior yearyear, period.largely driven by the $4.2 million rebate change in estimate recorded in the first quarter of 2026 that resulted from the impact of third-party billing process changes. As previously disclosed, during the third quarter of 2025, a large private insurance payer informed us that it had implemented changes to its claims data management and billing systems, which the Company estimated could result in significantly higher rebate volumesclaims for our HA viscosupplement products than previously estimated or experienced. During the first quarter of 2026, we received the first deferred rebate billings processed under the payer’s updated billing methodology.methodology which were favorable compared to our prior estimates. The rebateremainder claims reflected in these billings were atof the lowprice endgrowth ofwas ourdriven estimatedprimarily rangeby offavorable possiblecustomer outcomes.mix Based on this information, we reduced accrued rebatesrelative to this contract by $4.2 million during the firstprior quarteryear of 2026. This increase was partially offset by a 1.7% decline in HA volume.period.

Net sales from Surgical Solutions increaseddecreased $1.7$0.5 million, driven by a $2.0 million duedecline toin volumeUltrasonics, partially offset by $1.5 million of growth in BGS. The $0.8 million increase in Restorative Therapies was attributable to a higher net averagesales sellingwere priceconsistent (“ASP”)with forthe ourprior EXOGENyear Bone Stimulation System.period.

Net sales increased $2.3$2.1 million, or 17.1%,6.7%, compared to the prior year period, primarily duedriven to volumeby growth in Ultrasonics and Pain Treatments, drivenincluding byincreased Durolane.demand in Durolane, as well as higher volumes within Ultrasonics.

Gross profit increased $1.2$0.2 million, orand 16.0%gross margin increased 1.3% compared to the prior year period, primarily duedriven toby revenuelower growthamortization expense recognized in allcost businesses.of Gross margin decreased slightly by 0.6% due to one-time costs for servicingsales and repairs.royalty income.

Selling, general and administrative expenses increased by $4.8$3.6 million, or 6.6%,4.6%, compared to the prior year period, primarily due to: (i) a $3.1$1.7 million increase in compensation-relatedprofessional costsservice drivencosts, byincluding higherlegal-related wages, bonuses and commissionsexpenses; and (ii) a $0.8$1.3 million increase in stock-based compensation.compensation Theexpense; remainderand of(iii) thea $0.7 million increase wasin attributablesales tocommissions variousand miscellaneousselling items.expenses.

Research and development expense decreased by $0.5 million, or 18.1%,8.8%, compared to the prior year period, primarily due to a reduction inlower consulting expenses resulting fromfollowing the completion of certain projects.projects, partially offset with an increase in compensation-related costs.

Restructuring costs incurred during the first quarter of 2026 primarily related to severance costs associated with a restructuring plan initiated in 2025 that focused on the elimination of several positions to optimize our organizational structure. During the three months ended June 27, 2026, we recorded a net restructuring benefit of $0.4 million related to a canceled severance contract associated with the 2025 Restructuring Plan.

Depreciation and amortization decreased during the three and six months ended MarchJune 28,27, 2026 compared to the prior year period, primarily due to certain information technology assets being fully depreciated in 2025.

The loss on disposals during the three and six months ended MarchJune 29,28, 2025 related to the sale of the Advanced Rehabilitation Business.

Interest expense, net decreased by$3.4 $3.2 millionmillion, during the three months ended MarchJune 28,27, 2026 compared to the prior year period,period primarily due to lower debt outstanding and reduced interest rates and applicable margins following the completion of our debt refinancing in the third quarter of 2025. Other income,(income) expense, net during the three months ended MarchJune 28,27, 2026 was driven by foreign currency gains, compared to foreign currency losses in the prior year period.

Subsequent to the IPO and related transactions, we became the sole managing member of BV LLC, holding ownership interests of 81.1%81.2% and 81.0% as of MarchJune 28,27, 2026 and December 31, 2025, respectively. We consolidate BV LLC’s financial statements as we have both a majority economic interest and sole voting control over BV LLC. The portion of BV LLC not owned by us—18.9%18.8% as of MarchJune 28,27, 2026—is reflected as a noncontrolling interest, representing the share of BV LLC owned by the Continuing LLC Owner. Period-over-period changes in noncontrolling interest reflect the allocation of net income or loss attributable to the Continuing LLC Owner.

Adjusted EBITDA increased $4.1$2.0 million, or 24.0%,7.1%, compared to the prior year period,period. This increase was primarily dueattributable to higher gross profit driven by increased sales, favorable rebates, and favorable movements in foreign currency movements.currency. These improvements were partially offset by higher compensation-relatedprofessional costs.service costs and commission and selling expenses.

Adjusted EBITDA increaseddecreased $0.6$0.5 million, or 28.6%,9.5%, compared to the prior year period, primarily due to higher grosssegment profitadjusted drivengeneral byand increasedadministrative sales, partially offset with higher compensation-related costs.expenses.

On August 1, 2025, we entered into two interest rate swaps to mitigate the interest rate risk associated with our floating-rate SOFR-based borrowings under the 2025 Credit Agreement. Under the terms of the swaps, we pay a fixed interest rate in exchange for SOFR-based variable interest throughout the life of the instruments. The interest rate swaps have a weighted average fixed interest rate of 3.60% and an aggregate notional value of $150.0 million, or 50.0% of the 2025 Term Loan.

On each of March 31, 2026 and June 30, 2026, we made our $3.8 million scheduled principal paymentpayments of $3.8 million on the 2025 Term Loan. In addition, onduring Marchthe 27, 2026first and Aprilsecond 30,quarters of 2026, we elected to makemade discretionary prepayments of $22.0 million and $10.0$20.0 million, respectively, on the 2025 Term Loan. These prepayments were made to reduce future interest expense, and we believe the prepayments align with our capital optimization strategy and liquidity objectives. As of March 28, 2026, we had $98.4 million available on the 2025 Revolver, net of $1.6 million in outstanding LOCs. This availability, combined with our existing cash balances and expected cash flows from operations, provides us with sufficient liquidity to meet our near-term obligations and supports ongoing operations for the next twelve months.

We anticipate that, toTo the extent additional capital is required, we anticipate that we will seek funding through a combination of equity financings, the incurrence of additional indebtedness, or other strategic sources of capital. Our ability to access these sources will depend on market conditions, our financial performance, and other factors.

The following table summarizes material changes to our estimated future cash requirements associated with debt and related obligations as of June 27, 2026:

The 2025 Credit Agreement also contains financial covenants including a maximum consolidated total net leverage ratio of 3.50 to 1.00. We may elect to increase such ratio level by 0.50 to 1.00 following certain permitted acquisitions. A minimum interest coverage ratio of 2.50 to 1.00 must also be maintained. The 2025 Revolver also includes standard provisions related to conditions of borrowing and customary events of default. We were in compliance with the financial covenants under the 2025 Credit Agreement as of MarchJune 28,27, 2026. We do not expect any of these covenants or restrictions to affect or limit our ability to conduct business in the ordinary course.

OnDuring Marchthe six months ended June 27, 2026, we made atotal discretionaryprincipal prepaymentpayments of $22.0$45.8 million on the 2025 Term Loan.Loan, consisting of a scheduled quarterly payment of $3.8 million and two discretionary payments totaling $42.0 million. As of MarchJune 28,27, 2026, we had an outstanding balance of $272.1$248.5 million under the 2025 Term Loan, net of original issue discount and deferred financing costs.

Refer to Item 1. Financial Information—Notes to the Unaudited Consolidated Condensed Financial Statements—Note 4. Financial Instruments for further details on the Company’s indebtedness.

Cash and cash equivalents as of MarchJune 28,27, 2026 totaled $35.8$29.5 million, compared to $51.2 million as of December 31, 2025. The change in cash was primarily due to the following:

Net cash inflows from operating activities increased by $28.3$22.2 million compared to the prior year period, primarily due to higher cash collections on net sales,reflecting lower interest payments resultingdue fromto reduced debt levels and favorable interest rates, favorableas timingwell ofas payments,decreases in inventory purchases and a decrease in bonus payments, partially offset bywith higher compensation‑relatedcompensation-related costs.

Net cash outflows from investing activities decreasedincreased by $0.3$0.8 million compared to the prior year period, dueprimarily toas a result of purchases of investments, partially offset by lower capital expenditures. Capital expenditures in both periods primarily relatedconsisted toof information technologytechnology-related investments.

Net cash outflows from financing activities totaledwas $23.1$46.6 million for the threesix months ended MarchJune 28,27, 2026, primarily duereflecting to a $22.0$42.0 million of discretionary prepaymentprepayments of long‑termlong-term debt. Net cash inflowsoutflows from financing activities totaledwas $0.9$13.7 million for the threesix months ended MarchJune 29,28, 2025, drivenprimarily by $10.0 million of net borrowings under our previous revolving credit facility, largely offset byreflecting a $9.0$19.8 million payment of contingent consideration related to a prior acquisition.acquisition, partially offset by $5.0 million of net borrowings under our former revolving credit facility.