TELA Bio (TELA) risk factors, FY2025 10-K

Risks Related to Achieving or Sustaining Profitability, Financial Position and Capital Requirements

1. 01We have incurred significant operating losses since inception, we expect to incur operating losses in the future, and we may not be able to achieve or sustain profitability24% rewritten
2. 02As of December 31, 2025, we had $60.0 million of indebtedness outstanding under our credit facility with Perceptive Credit Holdings V, LP (“Perceptive”) that matures in November 2030
3. 03We may require substantial additional capital to finance our planned operations, which may not be available to us on acceptable terms or at all
4. 04If we are unable to expand, manage and maintain our direct sales and marketing organizations, we may not be able to generate anticipated revenue
5. 05Macroeconomic conditions, including those placing financial strain on hospital systems and their ability to perform the procedures in which our products are used, may negatively impact certain aspects of our business, our prospects, results of operations and financial condition
6. 06experience additional reductions in procedural volumes that lead to lower sales volume for our products or could have lasting impact resulting in slower rates of adoption for our products in these accounts
7. 07Information pertaining to the impact of these macroeconomic pressures on our operations to date can be found in “Management’s Discussion and Analysis of Financial Position and Results of Operations” in this Annual Report on Form 10-K

Risks Related to the Commercialization of our Products

1. 08To date, the vast majority of our revenue has been generated from sales of our OviTex products, and we therefore are highly dependent on the commercial success of the OviTex product line22% rewritten
2. 09The commercial success of our products will largely depend upon attaining significant market acceptance
3. 10Even if we are able to attain significant market acceptance of our products, the commercial success of our products is not guaranteed
4. 11The misuse or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of our products for these uses
5. 12If we are unable to achieve and maintain adequate levels of coverage or reimbursement for our OviTex, OviTex PRS or other products we may commercialize in the future, our commercial success may be hindered
6. 13If competitors enter into supply contracts with our customers that disfavor our products or discourage their use, our commercial success could be adversely affectedNew
7. 14Our long-term growth may depend on our ability to enhance our product offerings
8. 15In the future our products may become obsolete, which would negatively affect operations and financial condition
9. 16To successfully market and sell our products in markets outside of the U.S., we must address many international business risks with which we have limited experience

Risks Related to Our Reliance on Third Parties

1. 17We are highly dependent upon Aroa, as the exclusive manufacturer and supplier of our OviTex and OviTex PRS products
2. 18We, or our partners, may experience development or manufacturing problems, capacity constraints, disruptions or delays in the production of our products that could limit the potential growth of our revenue or increase our losses
3. 19Our products contain materials derived from animal sources and may become subject to additional regulation
4. 20Our supply of ovine rumen for use in manufacturing our products may be vulnerable to disruption due to natural disaster, disease or other events
5. 21Performance issues, service interruptions or price increases by our shipping carriers could adversely affect our business and harm our reputation and ability to provide our products on a timely basis

Risks Related to Intellectual Property Matters

1. 22We may need to license intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms
2. 23If we fail to comply with our obligations under any license, collaboration or other agreements, we could lose intellectual property rights that are necessary for developing and protecting our products
3. 24If we are unable to adequately protect our intellectual property rights, or if we are accused of infringing on the intellectual property rights of others, our competitive position could be harmed or we could be required to incur significant expenses to enforce or defend our rights
4. 25Patents covering our products could be found invalid or unenforceable if challenged in court or before administrative bodies in the U.S. or abroad
5. 26Third parties may assert ownership or commercial rights to inventions we develop
6. 27Litigation or other proceedings or third-party claims of intellectual property infringement could require us to spend significant time and money, enter into license agreements for disputed intellectual property and could prevent us from selling our products
7. 28We also rely upon copyright and trade secret protection, as well as non-disclosure agreements and invention assignment agreements with our employees, consultants and third parties, to protect our confidential and proprietary information
8. 29If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest
9. 30We may be unable to enforce our intellectual property rights throughout the world23% rewritten
10. 31marketing new brands. Our competitors may infringe our trademarks, and we may not have adequate resources to enforce our trademarksNew
11. 32Third parties may assert that our employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets
12. 33Recent changes in U.S. patent laws may limit our ability to obtain, defend and/or enforce our patents
13. 34Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
14. 35Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time
15. 36We may be unable to obtain a patent term extension in the U.S. under the Hatch-Waxman Act and in foreign countries under similar legislation
16. 37Intellectual property rights do not necessarily address all potential threats

Risks Related to Government Regulation

1. 38Our products and operations are subject to extensive government regulation and oversight both in the U.S. and internationally
2. 39In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, or take other actions which may prevent or delay approval or clearance of our future products under development
3. 40We believe that any of these sanctions could result in higher than anticipated costs or lower than anticipated sales and harm our reputation, business, financial condition and results of operations
4. 41Although we have obtained regulatory clearance for our products, they will remain subject to extensive regulatory scrutiny
5. 42Our products must be manufactured in accordance with federal and state regulations, and we could be forced to recall our products or terminate production if we fail to comply with these regulations21% rewritten
6. 43If guidelines for soft-tissue reconstruction surgery change or the standard of care evolves, we may need to redesign and seek new marketing authorization from the FDA for our OviTex, OviTex PRS products or other products we may commercialize in the future52% rewritten
7. 44Legislative or regulatory reforms may make it more difficult and costly for us to obtain regulatory clearances or approvals for our products or to manufacture, market or distribute our products after clearance or approval is obtained
8. 45Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates
9. 46Changes in funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, or otherwise prevent new products and services from being developed or commercialized in a timely manner24% rewritten
10. 47The U.S. Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax, and other federal policies that may adversely affect our business31% rewritten
11. 48Our relationships with surgeons, patients and payors in the U.S. are subject to applicable anti-kickback, fraud and abuse laws and regulations
12. 49We are subject to anti-bribery, anti-corruption, and anti-money laundering laws, including the U.S. Foreign Corrupt Practices Act, in which violations of these laws could result in substantial penalties and prosecution69% rewritten
13. 50specific and potentially burdensome and costly ethical, accountability, and administrative requirements, with the potential for significant enforcement or litigation in the event of any perceived non-complianceNew
14. 51We face risks related to our collection and use of data, which could result in investigations, inquiries, litigation, fines, legislative and regulatory action and negative press about our privacy and data protection practices30% rewritten
15. 52The Affordable Care Act and any changes in healthcare law may increase the difficulty and cost for us to successfully commercialize our products and affect the prices we may obtain39% rewritten
16. 53and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasingNew
17. 54Our business involves the use of hazardous materials and we and Aroa must comply with environmental laws and regulations, which may be expensive and restrict how we do business
18. 55Our business may be impacted by political, trade or regulatory developments in the jurisdictions in which we sell our products75% rewritten

Risks Related to Our Business and Products

1. 56Our financial results may fluctuate significantly and may not fully reflect the underlying performance of our business
2. 57We may be unable to compete successfully with larger competitors in our highly competitive industry
3. 58We may be unable to renew existing contracts with GPOs or obtain additional contract positions with major GPOs and IDNs, for our products, and even if we are able to do so, such contracts may not generate sufficient sales of our products
4. 59Supply chain disruptions could adversely impact our operations and financial condition
5. 60We face the risk of product liability claims that could be expensive, divert management’s attention and harm our reputation and business
6. 61The continuing development of our products depends upon our maintaining strong working relationships with surgeons
7. 62We have limited data and experience regarding the safety and efficacy of certain of our products. Results of earlier studies may not be predictive of future clinical trial results, or the safety or efficacy profile for such products
8. 63Interim “top-line” or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data
9. 64The sizes of the markets for our current and future products have not been established with precision, and may be smaller than we estimate
10. 65Our results of operations could be materially harmed if we are unable to accurately forecast customer demand for our products and manage our inventory
11. 66We rely on our own direct sales force for our products, which may result in higher fixed costs than our competitors and may slow our ability to reduce costs21% rewritten
12. 67Our employees, independent contractors, consultants, commercial partners, distributors and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements
13. 68We could be adversely affected by any interruption to our ability to conduct business at our current location
14. 69If we or our vendors experience a cybersecurity incident, significant disruption or a compromise of our information technology systems, our business could be adversely affected
15. 70If we become profitable, our ability to use our net operating loss carryforwards and other tax attributes to offset future taxable income or taxes may be subject to limitations

Risks Related to Our Securities

1. 71The trading price of the shares of our common stock has been and could in the future be highly volatile29% rewritten
2. 72macroeconomic factors such as geopolitical tensions, tariffs, or the outbreak or escalation of hostilities or warNew
3. 73If we fail to comply or regain compliance with the continued listing standards of Nasdaq we may be delisted and the price of our common stock, or ability to access the capital markets and our financial condition could be negatively impactedNew
4. 74We do not intend to pay cash dividends on our common stock for the foreseeable future
5. 75Our directors, officers and principal stockholders have significant voting power and may take actions that may not be in the best interests of our other stockholders
6. 76We are at risk of securities class action litigation
7. 77If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline
8. 78Provisions in our corporate charter documents and under Delaware law could discourage another company from acquiring us and may prevent attempts by our stockholders to replace or remove our current management
9. 79Our ability to maintain our competitive position depends on our ability to attract and retain senior management and other highly qualified personnel
10. 80Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud