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

OurWe marketed our products were marketed solely in countries outside of the United States from October 2010 until 510(k) clearance for the Motiva Flora SmoothSilk Tissue Expander in October 2023 and FDA approval of our Motiva Implants in September 2024, and as such, we have a limited operating history in the United States upon which to evaluate our business and forecast our future net sales and operating results.

Due to our limited operating history in the United States, we may not have the institutional knowledge or experience to be able to implement and execute our business strategy and effectively address the risks that we may face. In addition, we may not be ablefail to developidentify insightsor intorespond effectively to emerging trends that could emerge and negatively affect our business and may fail to respond effectively to those trends.business. As a result of this or other risks, we may not be able to execute key components of our business strategy, and our business, financial condition and operating results may suffer.

We may not be able to compete effectively with our competitors and ultimately satisfy the needs and preferences of our customers, unless we can continue to enhance existing products and develop or acquire new innovative products and services. Product development requires the investment of significant financial, technological and other resources. Product improvements and new product introductions also require significant planning, design, development and testing at the product and manufacturing process levels. We may not be able to timely or effectively develop product improvements or new products and services. Likewise, we may not be able to acquire new products on terms that are acceptable to us, or at all. Furthermore, in most countries, we need to obtain regulatory approval in order to market and sell our products, which may limit our ability to act quickly in scaling commercialization in those countries, including the United States.countries. Our competitors’ new products may beat our products to market, be more effective or safer or have new features, obtain better market acceptance or render our products and services obsolete. Any new or modified products and services that we develop may not receive regulatory clearance or approval, or achieve market acceptance or otherwise generate any meaningful sales or profits for us.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, the ability to hire and retain key personnel, the ability to accept the payment of user fees, statutory, regulatory and policy changes and other events that may otherwise affect the FDA’s ability to perform routine functions. The new Trump Administration has taken several executive actions, including the issuance of a number of Executive Orders, that could impose significant burdens on, or otherwise materially delay, the FDA’s ability to engage in routine regulatory and oversight activities, such as implementing statutes through rulemaking, issuance of guidance, and review and approval of applications. Further, government funding of the FDA and other government agencies on which our operations may rely, including those that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agenciesagencies, including staffing reductions, funding limitations, or policy changes under the current or future administrations, may also slow the time necessary for new drugs and devices to be reviewed and/or approved by necessary government agencies, which would adversely affect our business. Any reduction in FDA resources or changes in regulatory priorities could delay approval of our products or modifications to existing products, extend the timeline for compliance activities, or otherwise adversely affect our business. For example, during various times in the past, the U.S. government has shut down and certain regulatory agencies, such as the FDA and the SEC, had to furlough critical employees and stop critical activities. If aA prolonged government shutdown occurs, or if other events, including uncertainty regarding the FDA’s funding, operations or policy goals, preventthat prevents the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities in a timely manner, itmanner could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, in our operations as a public company, future federal government shutdowns, delays in annual appropriations or budget freezes could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.

Commercial success of Motiva Implants in the United States or elsewhere depends on our ability to accurately forecast customer demand anddemand, manufacture sufficient quantities of product in the implant sizes that patients and physicians request, and to manage inventory effectivelyeffectively, and the failure to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Manufacturing of silicone breast implants requires costly capital equipment and a highly skilled workforce. There is a significant lead time to build and certify a new manufacturing facility. Until 2017, we had one manufacturing facility in Costa Rica, causing occasional inventory shortages. In March 2017, our second Costa Rica facility became operational, received MDSAP certification, and began shipping products. Construction of a third facility started in 2021 and was completed in 2024. In August 2024, the smallest facility was shut down. Although we believe our current facilities give us adequate manufacturing capacity to meet current demand, we have, in the past, been unable to fill all incoming orders. If demand increases faster than we expect, or if we are unable to produce the quantity of goods that we expect with our current facilities, we may not be able to grow revenue at an optimal rate. There may be other negative effects from supply shortages, including loss of our reputation in the marketplace and a negative impact on our relationships with our distributors.

We expecthave incurred losses to incur losses for the foreseeable future,date, and our ability to achieve and maintain profitability depends on the commercial success of our Motiva Implants.

We have incurred losses to date and expect to continue to incur losses for the foreseeable future. Sales of our Motiva Implants accounted for approximately 96%99% and 95%96% of our revenues for each of the years ended December 31, 20242025 and 2023,2024, respectively, and we expect our revenues to continue to be driven primarily by sales of these products. We also continue to incur significant research and development and general and administrative expenses related to our operations. We do not expect to be profitable in 2025,2026, and in future years we expect to incur significant research and development expenses related to, among other things, the IDE and the post-approval clinical studystudies of Motiva Implants in the United States. Investment in medical device product development, particularly clinical studies, is highly speculative. It entails substantial upfront capital expenditures and significant risk that any potential planned product will fail to demonstrate adequate accuracy or clinical utility. We may not be profitable for some time. As of December 31, 2024,2025, we had an accumulated deficit of $444.7$495.8 million.

If we are unable to continue to commercialize Motiva Implants and our other products, or if we are unable to obtain a partner to commercialize them, we may not be able to produce any incremental revenues related to Motiva Implants and our other products. This would result in an adverse effect on our business, financial condition, results of operations and growth prospects. Even if we are able to reach profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to achieve sustained profitability would depress the value of our company and could impair our ability to raise capital, expand our business, diversify our planned products, market our current and planned products, or continue our operations.

Our results of operations have been in the past, and could be in the future, adversely affected by general conditions in the global economy and in the global financial markets, such as trade wars, slower growth or recession, adverse impacts on currency exchange rates, continued inflation or decreases in consumer spending or confidence, as well as changing political conditions. A severe or prolonged economic downturn could result in a variety of risks to our business, including general economic pressure on our customers’ patients. Elective aesthetic procedures, including breast augmentation, are typically not covered by insurance and are less of a priority than other items for those patients that have lost their jobs, are furloughed, have reduced work hours or have to allocate their cash to other priorities. As a result, adverse changes in the global economy, including as a result of inflationary pressures, elevated interest rates, geopolitical conflicts, including the Russia-Ukraine war and the Hamas-Israel conflict, political instability or macroeconomic fallout from significant U.S. policy changes and government spending cuts, may cause consumers to reassess their spending choices and reduce demand for elective aesthetic procedures, as well as may disrupt global supply chains, increase costs for raw materials and logistics, and create broader macroeconomic instability, which could have an adverse effect on our net sales and profitability. Additionally,In there is significant uncertainty aboutaddition, the futuregrowing relationship between the United Statesavailability and otheradoption countriesof withglucagon-like respectpeptide-1 to(GLP-1) trade policies, taxes, government regulations,drugs and tariffs.related Thepharmaceutical Trumptherapies administrationfor has imposed additional tariffs on imported productsobesity and indicated it will continue to do so. The ultimate impact of tariffs will depend on various factors, including the scope, timing, amount, nature and implementation, but tariffs would likely have a negative impact on the global macroeconomy and on our business. In response to U.S. trade actions, certain countries may impose retaliatory actions against the U.S. These policies may lead to supply chain constraints and additional inflation, further increasing operational costs. A weak or declining global economy or disruptions caused by geopolitical uncertainty or regional political stability could also strain our manufacturers or suppliers, possibly resulting in supply disruption, or cause our customers or distributors to delay making payments for our products. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the economic climate and financial marketmetabolic conditions could adverselyreduce affectdiscretionary consumer spending on elective aesthetic procedures and/or reduce underlying demand for certain procedures if these therapies directly or indirectly address patient concerns that might otherwise by treated with our business.products.

If we raise additional funds through collaborations, strategic collaborations or partnership,partnerships, or marketing, distribution or licensing arrangements with third parties, we may be required to do so at an earlier stage than would otherwise be ideal and/or may have to limit valuable rights to our intellectual property, technologies, products, or future revenue streams, or grant licenses or other rights on terms that are not favorable to us. Furthermore, any additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our products.

Our leading competitors are large, multi-national companies with significant resources and capabilities. Sientra, Inc. (recently acquired by Tiger Aesthetics Medical), Mentor Worldwide LLC (a division of Johnson & Johnson) and Allergan plc ( acquired by AbbVie Inc.) have conducted large prospective clinical studies that started in the United States in 2002, 2000 and 1998, respectively, and they use this data extensively to promote their products. This can put us at a disadvantage when promoting our products to physicians and patients, even outside of the United States. In addition, the significant financial and staff resources and brand recognition that our competitors possess mean they may be able to compete with us regardless of the differentiating features of our products. If we are not successful in capturing market share, even outside the United States, or if physicians or patients do not perceive our products to be safer or more favorable, our revenues and/or our operating margins may be significantly impaired.

We have established a direct sales force for our business in Brazil and the United States, and we have implemented a direct sales strategy in several European countries. We have hired and will need to retain and motivate a significant number of sales and marketing personnel in order to support our anticipated growth in these countries. There is significant competition for quality personnel experienced in such activities, including from companies with greater financial resources than ours. If we are not successful in our efforts to continue recruiting, retaining, and motivating such personnel, we may not be able to increase our revenues, or we may increase our expenses in greater measure than our revenues, negatively impacting our operating results.

We face an inherent risk of product liability exposure related to the sale of Motiva Implants and our other products in clinical studies.products. The marketing, sale and use of Motiva Implants and our other products could lead to the filing of product liability claims against us if someone alleges that our products failed to perform as designed or caused significant adverse events in patients. We may also be subject to liability for a misunderstanding of, or inappropriate reliance upon, the information we provide. In addition, the off-label use of our products may increase the risk of product liability claims. Product liability claims are expensive to defend and could divert our management’s attention, result in substantial damage awards against us, and harm our reputation. Regardless of merit or eventual outcome, liability claims may result in:

Negative publicity concerning our products or our competitors’ products, including due to product defects,defects or recalls and any resulting litigation, or long-term safety impacts, could harm our reputation and reduce demand for silicone breast implants, either of which could adversely impact our financial results and/or share price.

News coverage in recent years has called into question the long-term safety of breast implantsimplants, andincluding through reports of breast implant-associated anaplastic large cell lymphoma linked to our competitors’ products which have led to regulatory actions regarding macrotextured devices in several countries and the worldwide recall of one of our competitor’s macrotextured implants and tissue expanders. These events and reports of other forms of cancer, including squamous cell carcinoma and various lymphomas, from breast implant products may lead to a reduction in the demand for silicone breast implants and could adversely affect our business.

In August 2017, the FDA updated its advisory on BIA-ALCL and subsequently requested all breast implant manufacturers to revise their physician and patient labeling with the most current information. The August 2017 update described BIA-ALCL as “rare” and stated “we have strengthened our understanding of this condition and concur with the World Health Organization designation of BIA-ALCL as a rare T-cell lymphoma that can develop following breast implants.implants”. The exact number of cases remains difficult to determine due to significant limitations in world-wide reporting and the lack of global implant sales data. At this time, most data suggest that BIA-ALCL occurs more frequently following implantation of breast implants with textured surfaces rather than those with smooth surfaces. The FDA noted it does not recommend prophylactic breast implant removal in a patient without symptoms or other abnormalities.

In March 2018, the FDA further updated its advisory on BIA-ALCL stating “we are reporting that we are aware of 414 total cases of BIA-ALCL. Additionally, studies reported in medical literature estimate that the lifetime risk of developing BIA-ALCL for patients with textured breast implants ranges from 1 in 3,817 to 1 in 30,000.” The FDA noted that the update did not change the agency’s recommendation and that choosing to obtain a breast implant is a personal decision that patients and providers should make with the most complete information available. In the fourth quarter of 2018, following the non-renewal of its textured breast implant CE MarkCertificates licensesof Conformity in Europe, Allergan plc suspended sales of textured breast implants in Europe and withdrew its remaining textured breast implants on the market within Europe.

In September 2020, the FDA released finalized guidance on breast implant labeling recommendations, including the addition of a boxed warning, a patient decision checklist, material and device descriptions, implant rupture screening recommendations and a patient device card. In October 2021, the FDA took several additional actions to strengthen breast implant risk communication, including restricting the sale and distribution of breast implants to only health carehealthcare providers and facilities that provide information to patients using the patient decision checklist. The FDA also approved new labeling for all legally marketed breast implants that includes a boxed warning, a patient decision checklist, updated silicone gel-filled breast implant rupture screening recommendations, a device description with a list of specific materials, and a patient device card.

In September 2022, the FDA informed the public about reports of cancers, including squamous cell carcinoma, or SCC, and various lymphomas, in the scar tissue (capsule) that forms around breast implants different from the lymphomas described in previous FDA communications as BIA-ALCL. In March 2023, the FDA provided updated information about SCC, noting it has received 24 reports of SCC related to breast implants, but that this this does not necessarily represent cancer incidence because of potential underreporting or duplicated reports. The FDA noted that, while the agency believes the occurrences of SCC or various lymphomas in the capsule around the breast implant to be rare, health carehealthcare providers and people who have or are considering breast implants should be aware that cases have been reported to the FDA and in the literature.

We do not produce the types of rough textured implants that have been involved in these reports. To date, no cases of BIA-ALCL or SCC have been reported in patients withwho have only had Motiva Implants. Furthermore, there have been no reported cases of BIA-ALCL in patients with smooth implants with no history of previously having a textured device. Future clinical studies or clinical experience may indicate that breast implants expose potentially genetically predisposed patients to greater risks of BIA-ALCL, which may reduce demand for silicone implants generally,generally and expose us to product liability claims, as well as to class actions and other lawsuits. These impacts may occur ineven the absence ofwithout any specific linkage with our products. Moreover, if cases of BIA-ALCL, SCC, or other complications are discovered in the future and/or are reported in patients with Motiva Implants, we could be subject to mandatory product recalls, suspension or withdrawal of our regulatory licensure for sale in one or more countries, and significant legal liability. Any of these may have an adverse effect on our business or operating results, or a negative impact on our share price.

Our success in implementing our business strategy depends largely on the skills, experience and performance of members of our executive management team and other key employees, including Juan José Chacón Quirós, our Chief Executive Officer who is set to retire in March 2025, Peter Caldini, our President and upcoming Interim Chief Executive Officer, Roberto de Mezerville, our Chief Technology Officer, Rajbir Denhoy, our Chief Financial Officer, and Ross Mansbach, our General Counsel and Chief Human Resources Officer.employees. The collective efforts of each of these persons, andthe othersmajority workingof withwhom themreside asin athe team,United States, are critical as we continue to develop our tests and technologies and pursue our research and development and sales programs. In addition, we have experienced significant changes in our executive leadership in recent years, including in our Chief Executive Officer, Chief Operating Officer and General Counsel positions. As a result of the difficulty in locating qualified new management and other key employees, the loss or incapacity of existing members of our executive management team could adversely affect our operations. If we were to lose one or more key employees, we could experience difficulties in finding qualified successors, competing effectively, developing our technologies and implementing our business strategy. In addition, changes to strategic or operating goals, which can often times occur with the appointment of new executives and directors, can create uncertainty, may negatively impact our ability to execute quickly and effectively, and may ultimately be unsuccessful. Executive leadership transition periods are often difficult as the new executives gain detailed knowledge of our operations, and friction can result from changes in strategy and management style. Management turnover inherently causes some loss of institutional knowledge, which can negatively affect strategy and execution. We do not have “key person” life insurance on our senior executives, and the loss of any of the key team members would have a negative impact to our business and financial results. In addition, the job market in Costa Rica and other locations in which we operate has recently become more competitive and we are competing for talent with major multinational corporations which have significantly more resources than us, and we may find new difficulties in retaining our most talented employees.

We have significant exposure to the economic and political situations in emerging market countries, and developments in these countries could materially impact our financial results,results or our business more generally.

Bank failures, events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation, or FDIC, as receiver. Similarly, on March 12, 2023, Signature Bank Corp. and Silvergate Capital Corp. were each swept into receivership. We do not maintain balances with and are not a borrower under or party to any credit agreement, material letter of credit or any other such instruments, with any financial institution currently in receivership. However, we regularly maintain cash balances at third-party financial institutions in excess of the FDIC standard insurance limit, with balances concentrated at a small number of financial institutions. The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, or which we do business with, could adversely impact our liquidity and financial performance. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the U.S.United States or any applicable foreign government in the future or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a future failure or liquidity crisis. In addition, if any of our partners or parties with whom we conduct business are unable to access funds due to the status of their financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

We present our results of operations in U.S. dollars, which is our reporting currency. However, as of December 31, 2024,2025, the majority of our revenues are denominated in currencies other than the U.S. dollar - primarily the euro, the Brazilian real, and the British pound. As of December 31, 2024,2025, the majority of our expenses are denominated in U.S. dollars or in Costa Rican colones, the latter of which areis closely linked to the U.S. dollar. In the future, we expect to have significant revenues and expenses denominated in these non-U.S. currencies. As such, unfavorable fluctuations in currency exchange rates have had, and in the future could continue to have, an adverse effect on our results of operations.

Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues, expenses and income, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. Therefore, changes in the value of the U.S. dollar in relation to the British pound, the euro, the Brazilian real and, to a lesser degree, the Costa Rican colones and the Brazilian real will affect our revenue, cost of goods, and operating expenses as well as the value of balance sheet items originally denominated in other currencies. These changes wouldin exchange rates may cause our growth in consolidated earnings stated in U.S. dollars to be higher or lower than our growth in local currency when compared against other periods. For example, the weakening of the euro for the majority of fiscal 2022 and of the Brazilian real in 2024 had a negative effect on our revenue in those respective years. We do not currently engage in currency hedging arrangements to protect us from fluctuations in the exchange rates of the euro and other currencies in relation to the U.S. dollar (and/or from inflation of such currencies), and we are exposed to material adverse effects from such movements. We cannot predict any future trends in rates of inflation or exchange rates of other currencies against the U.S. dollar, and there can be no assurance that any contractual provisions will offset their impact, or that any future currency hedging activities will be successful.

Continued international expansion of our business will expose us to business, regulatory, political, operational, financialfinancial, economic and economicenvironmental risks associated with doing business internationally.

Our products are commercially available in 86over 100 countries, and we operate subsidiaries in the United States, Costa Rica, Brazil, and several European countries. Our business strategy contemplates continued international expansion, including partnering with medical device distributors, and introducing Motiva Implants and other planned products outside of the United States. The sale and shipment of our products internationally, as well as the purchase of components from international sources, subjects us to potential trade, import and export, and customs regulations and laws.

In addition, several of the countries in which we sell our products or conduct our operations are, to some degree, subject to political, economiceconomic, social or socialenvironmental instability. Doing business in Costa Rica and other countries outside the United States involves a number of other risks, including:

Our manufacturing headquarters are located in Costa Rica, and all of our main manufacturing activities are conducted in the ISO-13485 and GMP compliant manufacturing facilities in Costa Rica through Establishment Labs, S.A. The newest facility in Costa Rica was completed in June 2024 and commenced manufacturing in the second half of fiscal 2024. Despite our efforts to maintain and safeguard our manufacturing facilities, including acquiring insurance and adopting maintenance and health and safety protocols, vandalism, terrorism or a natural or other climate-related disaster, such as earthquake, volcanic activity, fire or flood, could damage or destroy our inventory of finished goods, cause substantial delays in our operations and manufacturing, result in the loss of key information and cause us to incur additional expenses. Our insurance may not cover our losses in any particular case. In addition, regardless of the level of insurance coverage, damage to our facilities may have an adverse effect on our business, financial condition and results of operations.

Fluctuations in insurance costscosts, and availability,availability and future insurance requirements could adversely affect our profitability or our risk management profile.

We rely on a single-source, third-party supplier for medical-grade long-term implantable silicone, which is the primary raw material used in our Motiva Implants. As has occurred in the past, if this supplier were to increase prices for this raw material over time or experience interruptions in its ability to supply us with this raw material, our business, financial condition and results of operations could be adversely affected.

•it may not be able, or willing, to manufacture our needed raw materials in compliance with regulatory requirements, or our its manufacturing facilities may not be able to maintain compliance with regulatory requirements;

We currently manufacture Motiva Implants at our facilities in the Coyol Free Zone, Alajuela, Costa Rica, under the multi-country MDSAP protocol. Our Qid Safety Technology microtransponders are manufactured by contract manufacturers with final testing and packaging at a manufacturing supplier facility in Regensburg, Germany, with additional inspection of the units at our facilities in Costa Rica, prior to approval for inclusion in Motiva Implants. If demand for our current products and our planned products increases more rapidly than we anticipate, or if we secure regulatory approval to commercialize our products in additional geographies, we will need to either expand our manufacturing capabilities or outsource to other manufacturers. The manufacture of these products in compliance with ISO standards and the FDA’s regulations requiresrequire significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls. Manufacturers of medical device products often encounter difficulties in production, including difficulties with production costs and yields, quality control, quality assurance testing, shortages of qualified personnel, as well as compliance with strictly enforced FDA requirements, other federal and state regulatory requirements, and foreign regulations. Further, any prolonged disruption in a supplier’s operations could have a significant negative impact on our ability to manufacture and deliver products in a timely manner and as a result, our business, financial condition and results of operations could be adversely affected.

We currently purchase components for the Qid Safety Technology microtransponders under purchase orders and do not have long-term contracts with most of the suppliers of the materials included in these products. We rely on Avantor as the sole supplier of medical-grade silicone used in our Motiva Implants as well as other products that we manufacture under contract to other customers. See the risk factor above titled “We rely on a single-source, third-party supplier for medical-grade long-term implantable silicone, which is the primary raw material used in our Motiva Implants. As has occurred in the past, if this supplier were to increase prices for this raw material over time or experience interruptions in its ability to supply us with this raw material, our business, financial condition and results of operations could be adversely affected.” In addition, the suppliers of certain packaging components and the surgical tools that we sell with Motiva Implants, including the cannulas, retractors, and insertion sleeves, are all purchased by us from single-source suppliers.

If our single-source and other suppliers were to delay or stop producing our components, or if the prices they charge us were to increase significantly, or if they elected not to sell to us at all or on commercially reasonable terms, we would need to identify and initiate relationships with alternative suppliers, if possible. We could experience delays in manufacturing our products or the interruption of the availability of Motiva Implants or our other products for sale, while finding another acceptable supplier, which would impact our business, financial condition and results of operations.

Even if such alternative suppliers are available on commercially reasonable terms, the inclusion of substitute components or products must meet our specifications and could require us to qualifyobtain regulatory qualification for the new supplier with the appropriate regulatory authorities. The added time and cost to arrange for alternative suppliers could have a material adverse effect on our business. New manufacturers of any current or planned product would be required to qualify under applicable regulatory requirements and would need to have sufficient rights under applicable intellectual property laws to the design and method of manufacturing the planned product. Obtaining the necessary FDA or international approvals or other qualifications under applicable regulatory requirements and ensuring non-infringement of third-party intellectual property rights could result in a significant interruption of supply and could require the new manufacturer to bear significant additional costs that may be passed on to us.

Historically, our sales model has been to sell primarily through distributors rather than through our own sales force, with the notable exception of BrazilBrazil, the United States and several European countries where we are selling directly, but, in the future, we may utilize a hybrid sales model that includes both distributors and a direct sales effort. We believe that our reliance on distributors improves the economics of our business, as we do not carry the high fixed costs of a direct sales force in many of the countries in which our Motiva Implants are sold. If we are unable to maintain or enter into such distribution arrangements on acceptable terms, or at all, we may not be able to successfully commercialize our products in certain countries. Furthermore, distributors can choose the level of effort that they apply to selling our products relative to others in their portfolio. The selection, training, and compensation of a distributors’ sales personnel are within their control rather than our own and may vary significantly in quality from distributor to distributor.

Pandemics, epidemics, or other public health crises may adversely affect our business and financial results in the future, as was the case with the COVID-19 pandemic in recent years.future.

Our success depends in large partsignificantly on our ability to obtain and maintain patent and other intellectual property protection in the United States and in other countries with respect to our proprietary technology and products.countries.

The patent position of medical device and diagnostic companies generally is highly uncertain and involves complex legal and factual questions forwith whichunresolved legal principles remain unresolved.principles. The issuance, scope, validity, enforceability and commercial value of the patent rights we rely on are highly uncertain. Pending and future patent applications may not result in patents being issued which protect our technology or products or which effectively prevent others from commercializing competitive technologies and products. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all. Therefore, we cannot be certain that we were the first to make the inventions claimed in our patents or pending patent applications, or that we or were the first to file for patent protection of such inventions.

In addition, changes in either the patent laws or interpretation of the patent laws in the United States and other countries may diminish the value of the patents we rely on or narrow the scope of our patent protection. The laws of other countries may not protect our rights to the same extent as the laws of the U.S.United States. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our efforts and attention from other aspects of our business.

There are a number of state, federal and international laws protecting the privacy and security of health information and personal data. For example, HIPAA imposes limitations on the use and disclosure of an individual’s protected health information by certain health carehealthcare providers, health carehealthcare clearinghouses, and health insurance plans, collectively referred to as coveredCovered entities,Entities, and their business associates, persons or entities that perform a function or provide specified services on behalf of a Covered Entity that involve the creation, use, maintenance or transmission of protected health information. HIPAA also imposes breach notification obligations for breaches of protected health information, including notification requirements to federal regulators and in some cases, notification to relevant media outlets. Most states also have breach notification requirements to affected individuals and in some cases to state regulators in the event of a breach of personal information, which is a broader class of information than the protected health information protected by HIPAA. Although we are not directly subject to HIPAA, we could potentially be subject to criminal penalties if we, our affiliates, or our agents knowingly receive individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA, and subject to other civil and/or criminal penalties if we obtain, use, or disclose information in a manner not permitted by other privacy and data security consumer protection laws In addition, even when HIPAA does not apply, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTCA, 15 U.S.C § 45(a). The FTC sets expectations for taking appropriate steps to safeguard consumers’ personal information and providing a level of privacy or security commensurate to promises made to individuals. The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities. Failure to meet these standards may constitute unfair or deceptive acts or practices in violation of Section 5 of the FTC Act. Health information is considered sensitive data that merits stronger safeguards. The FTC also has the power to enforce the Health Breach Notification Rule, which imposes notification obligations on companies for breaches of certain health information contained in personal health records. Enforcement by the FTC under the FTC Act and Health Breach Notification Rule can result in civil penalties or enforcement actions.

Our line of silicone gel-filled breast implants, branded as Motiva Implants, is the centerpiece of our medical technology platform. Our post-market5-year surveillanceresults datafrom (whichour wasMotiva notU.S. generated in connection with a United States Food and Drug Administration, or FDA, pre-market approval, or PMA,IDE study collectedas atwell definedas follow-ups, but wasour patient orand practitioner reported) andpost-market published third-party registries andsurveillance data indicate that Motiva Implants have low rates of adverse events (including rupture, capsular contracture, and safety relatedimplant-related reoperations) that we believe compare favorably with those of our competitors. We believe thethese proprietary technologies that differentiate our Motiva Implants enableresult in improved safety and aesthetic outcomes and thus drive our revenue growth. We have developed other complementary products and services, which are aimed at further enhancing patient outcomes.

InOn JanuaryMay 7, 2025, we announced the appointment of Peter Caldini as Chief Executive Officer following the retirement of Juan José Chacón-Quirós as CEO, effective March 1, 2025. PeterMr. Caldini,Caldini our current President, will serveserved as Interim CEO effectivefrom theMarch same1, day.2025 Followinguntil hisMay departure7, as Chief Executive Officer,2025. Mr. Chacón-Quirós will continuecontinued as a member of the Board and as an advisor with the Company.

We recognize revenue related to the sales of products at the time of shipment, except for a portion of our direct sales revenue that is generated from the sale of consigned inventory maintained at physician, hospital, and clinic locations. For consignment sales, revenue is recognized at the time we are notified by the consignee that the product has been implanted. Our contracts with distributors do not typically contain right of return or price protection and have no post-delivery obligations.

Our implants are manufactured at our two facilities in Costa Rica. Construction of our third facility in Costa Rica was completed in June 2024. Subsequently, the smallest manufacturing facility ceased production in August 2024. Cost of revenue is primarily the cost of silicone but also includes other raw materials, packaging, components, quality assurance, labor costs, as well as manufacturing and overhead expenses. Cost of revenue also includes depreciation expense for production equipment and amortization of certain intangible assets.

We expect our SG&A expenses to remain significant in absolute dollars as our business grows and we continue to invest in our sales, marketing, medical education, training and general administration resourcesresources. to build our corporate infrastructure. However, weWe expect our SG&A expenses to decrease as a percentage of our revenue; over the long term, althoughhowever, our SG&A expenses may fluctuate from period to period due to the timing of expenses related to our sales and marketing campaigns, as well as expansion into new markets and geographies.

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 in March 2018 to initiate a clinical trial and enrolled the first patient in April 2018. The IDE clinical trial is expected to cost between $30.0 million and $40.0 million over the duration of the clinical trial period of ten years. As of December 31, 2024, approximately $32.2 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.

Income Tax ExpenseBenefit

Income tax expense consistsbenefit primarily ofreflects income taxes incurred in the foreign jurisdictions in which we conductoperate. business.In Due to its history of losses,2025, Motiva USA LLC, our U.S. subsidiary, maintainsreleased a fullits valuation allowance foron deferred tax assetsassets, including net operating loss carry-forwards,carryforwards, R&Dresearch and development tax credits, capitalized R&Dresearch and development costs, and other book versus ‑to‑tax differences.

•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 stronggood performance, as explained above, the demandoutlook remains inconsistent,dynamic. withFollowing Latinthe America,commercial especiallylaunch Brazil,of underperforming.Motiva WeImplants expectin significantthe demandUnited States in October 2024, we have been able to achieve higher selling prices for our productsMotiva asImplants we further developin the U.S.United market.States Despitecompared to other geographies. This dynamic has had a positive impact on our continuedgross emphasismargins onin managing2025. operating costs, ourOur commercial and operational effortsactivities haveincreased intensifiedfollowing post-FDAthe FDA approval of Motiva Implants. Therefore,As a result, we expect an uptick in overall operating expenses into fiscalincrease 2025as relativecompared to fiscal2025, 2024.although we remain focused on managing operating expenses.

Revenue increased $0.8$45.1 million, or 0.5%,27.2%, to $211.1 million for the year ended December 31, 2025, as compared to $166.0 million for the year ended December 31, 2024, as compared to $165.2 million for the year ended December 31, 2023.2024. The increase was primarily due to a 43% revenue increase in the Asia Pacific region andsignificantly higher revenuesales in North America after FDA approval of Motiva Implants in September 2024, a 16.4% increase in revenue in the EMEA market and a 14.1% increase in revenue in Latin America partially offset by a 28% revenue28.6% decrease in LatinAsia-Pacific, Americadue comparedprimarily to the sametiming periodof indistributor fiscalpurchases 2023.and Revenue from our EMEA market remained relatively stable.sales.

Cost of revenue decreasedincreased $1.7$8.3 million, or 2.9%,14.7%, to $64.8 million for the year ended December 31, 2025, compared to $56.5 million for the year ended December 31, 2024, compared to $58.2 million for the year ended December 31, 2023.2024. The decreaseincrease in cost of revenue is primarilyin dueline to improved manufacturing efficiencies achieved atwith the newincrease facilityin and the closure of the smallest manufacturing location.revenue.

Gross margin increased to 69.3% for the year ended December 31, 2025, compared to 66.0% for the year ended December 31, 2024, comparedprimarily due to 64.8% for the year ended December 31, 2023 driven by a lower cost of revenue, as noted above, along with the favorable margin impact from sales within the United States due to higher selling prices.prices in that region.

R&D expense decreasedincreased $6.7$0.5 million, or 25.4%,2.5%, to $20.2 million for the year ended December 31, 2025, compared to $19.7 million for the year ended December 31, 2024, compared to $26.4 million for the year ended December 31, 2023.2024. The decreaseincrease in R&D expense was primarily due to a $6.0$1.6 million decreaseincrease in personnel cost and a $1.0$0.2 million increase in regulatory affairs costs, partially offset by a $0.8 million decrease in stock compensation costs and a $0.5 million decrease in expenditures related to our IDE clinical trial in the United States, partially offset by a $0.2 million increase in regulatory affairs costs.States.

BenefitIncome fortax incomebenefit taxesincreased to $7.0 million for the year ended December 31, 20242025 ofas $32.0 thousand stayed comparablecompared to thea tax benefit of $81.0$32.0 thousand for the year ended December 31, 2023.2024. The increase in the tax benefit was primarily due to the release of the valuation allowance for one of our U.S. subsidiaries.

Other income (expense), net, decreased $15.6$20.0 million to an income of $6.2 million for the year ended December 31, 2025, compared to an expense of $13.8 million for the year ended December 31, 2024, compared to an income of $1.8 million for the year ended December 31, 2023.2024. The decreaseincrease was primarily due to $6.0 million in contract termination costs incurred in the fourth quarter of fiscal 2024 and to the foreign currency fluctuations of the Brazilian real and the euro as compared to the U.S. dollar, resulting in a foreign currency transaction lossgain of $8.8$6.4 million, for the year ended December 31, 2024,2025, compared to a gainloss of $1.8$8.8 million for the year ended December 31, 2023. Interest income amounted to $1.5 million or the year ended December 31, 2024, as compared to $1.0 million for the year ended December 31, 2023.2024.

The discussion related to our results of operations and changes in financial condition for 20232024 compared to 20222023 is incorporated by reference to Part II, Item 7. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023,2024, which was filed with the SEC on MarchFebruary 4,28, 2024.2025.

Our short-term liquidity requirements consist primarily of operating expenses and interest payments on the Credit Agreement.Agreement and other short-term borrowings described above. We believe that our available cash and cash from operations will be sufficient to satisfy our liquidity requirements for at least the next 12 months, including our contractual and other obligations summarized below under “Material Cash Requirements” section. Our long-term liquidity needs consist primarily of operating expenses, including expected increases in SG&A and R&D expenses related to our IDE clinical trial,trials, regulatory compliance and product development and funds necessary to pay for the interest and principal payment on our Term Loans (as defined below). Our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect.

The discussion related to our cash flows for 20232024 is incorporated by reference to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023,2024, which was filed with the SEC on MarchFebruary 4,28, 2024.2025.

Net cash used in operating activities of $88.5$50.9 million for the year ended December 31, 20232025 was primarily comprised of a net loss of $78.5$51.1 million, changes in operating assets and liabilities of $34.1$13.2 million, $4.2$10.0 million of unrealized foreign currency gaingain, and $3.6a $9.1 million ofchange interestin capitalizedprovision for constructiondeferred inincome progress,taxes, partially offset by $14.4$11.4 million of share-based compensation expense, $13.3$9.6 million of non-cash depreciation and amortization expense, a $3.4 million change in allowance for credit losses, $3.4 million of non-cash interest expense due to accretion of debt discounts, $4.2 million of non-cash depreciation and amortization expense, a $1.4$2.6 million change in provision for inventory obsolescence, a $1.2 million change in allowance for doubtful accounts and $0.7$0.9 million of non-cash amortization expense of right-to-use assets.assets, $0.5 million of non-cash loss on contract termination, $0.4 million of stock compensation in lieu of cash fees and a $0.2 million loss from disposal of property and equipment.

Net cash used in investing activities of $15.6 million for the year ended December 31, 2024 primarily consisted of $7.0 million in purchases of intangibles, $6.1 million in purchases of property and equipment related to the new manufacturing facility and $2.4 million of cash paid for capital expenditures on construction in progress related to our new manufacturing facility in the Coyol Free Zone in Costa Rica Net cash used in investing activities of $24.5 million for the year ended December 31, 2023 primarily consisted of $15.3 million of cash paid for capital expenditures on construction in progress related to our new manufacturing facility in the Coyol Free Zone in Costa Rica, $7.9 million in purchases of property and equipment related to the new manufacturing facility and $1.3 million in purchases of intangibles.Rica.

On April 26, 2022, or the Closing Date, we entered into the new Credit Agreement, pursuant to which the lenders agreed to make term loans in an aggregate principal amount of up to $225 million, which we collectively refer to as the Term Loans, with the first tranche of $150 million advanced on the Closing Date. Part of the first tranche was used to repay the outstanding principal and interest under our previous credit agreement with Madryn Health Partners, LP in full, including the early repayment penalty of $6.5 million. In December 2022, $25 million was advanced under the second tranche. In October 2024, $25 million was advanced under the third tranche. In September 2025, $25 million was advanced under the fourth tranche. The Term Loans will mature on the 5-year anniversary of the Closing Date and accrue interest at a rate equal to 9% per annum for the first two tranches and 10% for the third and fourth tranches. As of December 31, 2024,2025, $221.4$246.4 million was outstanding under the Credit Agreement representing the initial principal of $150 million for the Tranche A Term Loan, $25 million for the Tranche B Term Loan, $25 million for the Tranche C Term Loan, $25 million for the Tranche D Term Loan and $17.6$21.4 million of interest accrued into the principal balance. See Note 6 “Debt” for additional information.

We recognize revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of us or any written matters requiring customer acceptance. We allow for the return of product from direct customers in certain regions in limited instances within fifteen15 to 60 days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. As of December 31, 20242025 and 2023,2024, an allowance of $0.4$1.9 million and $0.3$0.4 million was recorded for product returns, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales.

Deferred revenue primarily consists of payments received in advance of meeting revenue recognition criteria. We have received payments from distributors to provide distribution exclusivity within a geographic area and recognizesrecognize deferred revenue on a ratable basis over the term of such contractual distribution relationship. Additionally, we have received payments from customers in direct markets prior to surgical implantation and recognizesrecognize deferred revenue at the time we are notified by the customer that the product has been implanted. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue and included in “Other liabilities, long-term” on the consolidated balance sheets (see Note 3 “Balance Sheet Accounts”).

Costs related to research and development, or R&D, activities are expensed as incurred. R&D costs primarily include personnel costs, materials, clinical expenses, regulatory expenses, product development, consulting services, and outside research activities, all of which are directly related to research and developmentR&D activities.

Accounts receivable is stated at invoice value less estimated allowances for returns and credit losses. We continually monitor customer payments and maintainsmaintain an allowance for estimated losses resulting from customers’ inability to make required payments. In evaluating our ability to collect outstanding receivable balances, we consider various factors including the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, an allowance is recorded against amounts due, which reduces the net recognized receivable to the amount reasonably believed to be collectible.

We recordaccount for income taxes using the asset and liability method,method. which requires the recognition of deferredDeferred tax assets and liabilities are recognized for the expected future tax consequences of eventsdifferences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax balances are measured using enacted tax laws and rates expected to apply when the related temporary differences reverse. We establish a valuation allowance when it is more likely than not that havesome been recognized in our consolidated financial statementsportion or incomeall taxof returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reducea deferred tax assetsasset towill the amount expected tonot be realized.

We recordoperate in multiple tax jurisdictions and are subject to examination by various tax authorities. We recognize uncertain tax positions based onusing a two-steptwo‑step process wherebyapproach: (1) a determinationtax position is maderecognized asonly to whetherif it is more likely than not that the tax positions willto be sustained based on theits technical merits of the positionmerits, and (2) for those tax positions that meet the more-likely-than-notamount recognitionrecognized threshold we recognizeis the largest amount of tax benefit that is greatermore than 50% likely to be realized upon ultimatesettlement. settlement with the related tax authority. Our policy is to recognize interestInterest and penalties accruedrelated onto any unrecognizeduncertain tax benefitspositions asare arecorded component ofin income tax expense. SignificantThere judgmentwere isno required in the identification ofmaterial uncertain tax positions and in the estimationas of penaltiesDecember 31, 2025 and interest on uncertain tax positions.2024.

The financial statements of our foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, shareholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net” in the consolidated statement of operations. For the year ended December 31, 2024,2025, foreign currency transaction lossgain amounted to $8.8$6.4 million as compared to a foreign currency transaction gainloss of $1.8$8.8 million for the year ended December 31, 2023.2024.

On February 24, 2026, the Company announced a strategic leadership transition of Raj Denhoy, the then-current Chief Financial Officer, to Senior Vice President, Global Strategy, and the appointment of Cassandra “Sandra” Harris to Senior Vice President and Chief Financial Officer, effective March 9, 2026.2026, to succeed Raj Denhoy, the then-current Chief Financial Officer.

On April 30, 2026, wethe Company entered into an Amended and Restated Credit Agreement and Guaranty, or the Amended Credit Agreement, together with certain of our subsidiaries as guarantors, the lenders from time to time party thereto, or the Lenders, and Oaktree Fund Administration, LLC, as administrative agent for the Lenders, pursuant to which the Lenders agreed to make term loans to the Company in an aggregate principal amount of up to $300 million. The first tranche was advanced in the amount of $265 million on April 30, 2026. Approximately $259 million of the proceeds from the Tranche E Term Loan was used to repay in full the obligations under the Credit Agreement and transaction costs in connection with the New Term Loans. See Note 164 “Subsequent EventsDebt” for additional information.

Our revenue for the threesix months ended MarchJune 31,30, 2026 and 2025 was $59.9$127.4 million and $41.4$92.7 million, respectively, an increase of $18.5$34.7 million, or 44.7%.37.5%. Net losses were $13.4$25.1 million for the threesix months ended MarchJune 31,30, 2026 as compared to $20.7$37.3 million for the threesix months ended MarchJune 31,30, 2025. As of MarchJune 31,30, 20262026, we had an accumulated deficit of $509.1$520.9 million.

Our cash balance as of MarchJune 31,30, 2026 was $68.1$71.2 million.

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, 2025 included in our Annual Report on Form 10-K filed with the SEC on February 27, 2026, 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 theour Form 10-K.10-K filed with the SEC on February 27, 2026.

Comparison of the Three Months Ended MarchJune 31,30, 2026 and 2025

Revenue increased $18.5$16.2 million, or 44.7%,31.7%, to $59.9$67.5 million for the three months ended MarchJune 31,30, 2026 as compared to $41.4$51.3 million for the three months ended MarchJune 31,30, 2025. The increase was primarily due to a $13.5$14.4 million increase in sales in the United States.States Outsideand a $1.8 million increase in sales outside of the United States, sales increased by $5.0 million primarily in the Asia-Pacific region and Latin America while sales in EMEA remained relatively stable.States.

Cost of revenue increased $3.9$3.8 million, or 28.7%, to $17.5 million23.7%, for the three months ended MarchJune 31,30, 2026 compared to $13.6 million for the three months ended MarchJune 31,30, 2025. The increase in cost of revenue iswas ingenerally lineconsistent with the increase in revenue.revenue, except as described below.

Gross margin increased to 70.7%70.6% for the three months ended MarchJune 31,30, 2026 as compared to 67.2%68.8% for the three months ended MarchJune 31,30, 2025,2025. The increase was primarily dueattributable to a more favorable impactgeographic fromsales mix, driven by higher selling prices on sales within the United States, direct market expansion outside the United States dueand toincreased higherrevenue sellingfrom pricesour inminimally thatinvasive regionproduct portfolio partially offset by an increase in inventory obsolescence reserve.

Sales, general and administrative, or SG&AA, expense increased $3.9$2.7 million, or 9.8%,6.2%, to $43.6$46.9 million for the three months ended MarchJune 31,30, 2026, compared to $39.7$44.2 million for the three months ended MarchJune 31,30, 2025. The increase in SG&A was primarily due to ana $1.9 million increase in personnelprofessional fees associated with the Amended Credit Agreement, a $0.9 million increase in consulting fees and consultinga costs$0.9 andmillion freightincrease in sales commissions associated with higher salesrevenue partially offset by a $2.0 million decrease in bad debt expense and sales and marketing expenses.expense.

Interest expense for the three months ended June 30, 2026 was $7.1$7.0 million as compared to $6.0 million for the three months ended MarchJune 31, 2026, compared to $5.9 million for the three months ended March 31,30, 2025. The increase was primarily due to an increase in debt principal.associated with the Amended Credit Agreement.

Provision for income taxes decreased $0.6$1.0 million, or 66.7%,99.4%, to $0.3$6 thousand for the three months ended June 30, 2026, compared to $1.0 million for the three months ended MarchJune 31, 2026, compared to $0.9 million for the three months ended March 31,30, 2025. The change in the provision for income taxes is primarily due to athe decrease in pre-tax income in certain U.S. and foreign jurisdictions.

Other Income,(Income) Expense, Net

Other income,(income) netexpense, decreasednet, $2.3changed $4.9 million to a gainloss of $0.5$0.4 million for the three months ended MarchJune 31,30, 2026, compared to aan gainincome of $2.8$4.5 million for the three months ended MarchJune 31,30, 2025. The decreasechange was primarily due to the foreign currency fluctuations of the euro and the Brazilian real and euro as compared to the U.S. dollar in fiscalthe second quarter of 2026 andcompared to the second quarter of 2025, resulting in a foreign currency transaction loss of $0.3$0.7 million,million for the three months ended June 30, 2026, the majority of which remains unrealized, for the three months ended March 31, 2026, compared to a $2.8$5.0 million gainof income for the three months ended MarchJune 31,30, 2025. Interest income decreased $0.1 million.

As of MarchJune 31,30, 2026, we had an accumulated deficit of $509.1$520.9 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 andsales, marketing and distributor infrastructure, most recently in the United States, investing in inventory, R&D activities, asset acquisitions, capital improvements, including the expansion of our new manufacturing facility,facilities, and other working capital needs. As of MarchJune 31,30, 2026 and December 31, 2025, we had cash of $68.1$71.2 million and $75.6 million, respectively.

As described above under “Recent Developments - Financing Activities,” inIn April 2026, we entered into the Amended Credit Agreement, which provided for new term loans in an aggregate principal amount of up to $300 million. The first tranche was advanced in the amount of $265 million on April 30, 2026. Approximately $259 million of the proceeds from the Tranche E Term Loan was used to repay in full outstanding obligations under the Credit Agreement and transaction costs in connection with the New Term Loans. See Note 164 “Subsequent EventsDebt” for additional information regarding the Amended Credit Agreement.

Our short-term liquidity requirements consist primarily of operating expenses and interest payments on the Amended Credit Agreement and other short-term borrowings described above. We believe that our available cash and cash from operations will be sufficient to satisfy our liquidity requirements for at least the next 12 months, including our contractual and other obligations summarized in our Annual Report on Form 10-K for the year ended December 31, 2025 under “Material Cash Requirements.” Our long-term liquidity needs consist primarily of operating expenses, including expected increases in SG&A and R&D expenses related to our clinical trials, regulatory compliance and product development and funds necessary to pay for the interest and principal payment on our New Term Loans (as defined above). Our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect.

Net cash used in operating activities of $20.7$20.9 million for the threesix months ended MarchJune 31,30, 20252026 was primarily comprised of a net loss of $20.7$25.1 million,million $5.2and a $15.7 million change in operating assets and liabilities, and $3.5 million of unrealized foreign currency gain, partially offset by $2.4$6.2 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$5.7 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$4.9 million of right-to-usenon-cash depreciation and amortization expense, $2.7 million of unrealized foreign currency loss, and $0.5 million of right-of-use asset amortization and $0.1 million in stock compensation in lieu of cash fees.amortization.

Net cash used in investing activities of $2.0$5.6 million for the threesix months ended MarchJune 31,30, 2026 primarily reflected $1.9$5.5 million in purchases of property and equipment primarilyat drivenour byCosta the development of an enterprise resource planning system for the U.S. legalRican entity.

Net cash used in investing activities of $1.3$3.4 million for the threesix months ended MarchJune 31,30, 2025 primarily consisted $0.8of $2.4 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$0.7 million in costs incurred for intangible assets primarily driven by the development of an enterprise resource planning system for the U.S.U.S launchand $0.3 million in cash paid related to business acquisitions of Motiva Implants.Benelux B.V. and Motiva NL B.V..

Net Cash Used in/Provided by Financing Activities

Net cash usedprovided inby financing activities of $0.9$22.6 million for the threesix months ended MarchJune 31,30, 2026 primarily reflected a $1.2$265.0 million in borrowings under the Amended Credit Agreement and $16.9 million in proceeds received for stock option exercises, partially offset by $246.4 million used to repay borrowings under the previous Credit Agreement, $10.0 million used for debt discount and debt issuance costs, a $2.0 million repayment of short-term notes payable for insurance premium financing and $0.7$1.0 million paid to satisfy tax withholding obligations upon the vesting of restricted stock, partially offset by $1.0 million in proceeds received for stock option exercises.stock.

Net cash provided by financing activities of $0.2$4.9 million for the threesix months ended MarchJune 31,30, 2025 primarily reflected $0.3$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, partially offset by $0.1 million in proceeds received for stock option exercisesstock.

Please refer to Note 2 “Summary of Significant Accounting Policies” in the notes to the unaudited condensed consolidated financial statements included in this Form 10-Q for information on recent accounting pronouncements and the expected impact on our unaudited condensed consolidated financial statements.