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Informational only - not investment advice.

Axogen, Inc. (AXGN)

CIK: 0000805928. SIC: 3845 Electromedical & Electrotherapeutic Apparatus. Latest 10-K as of: 2026-02-24.

SIC breadcrumb: Manufacturing > SIC Major Group 38 > SIC 3845 Electromedical & Electrotherapeutic Apparatus

SEC company page: https://www.sec.gov/edgar/browse/?CIK=805928. Latest filing source: 0000805928-26-000031.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue225,208,000USD20252026-02-24
Net income-15,703,000USD20252026-02-24
Assets221,687,000USD20252026-02-24

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000805928.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric2016201720182019202020212022202320242025
Revenue41,108,00060,426,00083,937,000106,712,000112,300,000127,358,000138,584,000159,012,000187,338,000225,208,000
Net income-14,411,000-10,445,000-22,397,000-29,135,000-23,786,000-26,985,000-28,948,000-21,716,000-9,964,000-15,703,000
Operating income-8,130,000-7,951,000-20,500,000-31,406,000-23,182,000-25,416,000-29,707,000-21,462,000-3,287,000-7,849,000
Gross profit34,641,00051,115,00071,014,00089,363,00090,719,000104,427,000108,809,000121,869,000141,977,000167,353,000
Diluted EPS-0.74-0.60-0.65-0.69-0.51-0.23-0.34
Operating cash flow-11,237,000-9,238,000-17,862,000-19,872,000-9,626,000-13,405,000-16,066,000-5,716,0004,535,000812,000
Capital expenditures931,0001,105,0006,282,0004,664,00021,905,00027,811,00020,078,00013,872,0003,101,0003,745,000
Assets46,360,47858,875,000160,173,000154,643,000201,381,000208,024,000195,387,000196,827,000203,728,000221,687,000
Liabilities31,439,32933,693,00013,191,00022,490,00078,232,00095,474,00094,388,000101,162,00099,821,00092,840,000
Stockholders' equity14,921,00025,182,000146,982,000132,153,000123,149,000112,550,000100,999,00095,665,000103,907,000128,847,000
Cash and cash equivalents30,014,40536,507,00024,294,00035,724,00048,767,00032,756,00015,284,00031,024,00027,554,00035,548,000
Free cash flow-12,168,000-10,343,000-24,144,000-24,536,000-31,531,000-41,216,000-36,144,000-19,588,0001,434,000-2,933,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric2016201720182019202020212022202320242025
Net margin-35.06%-17.29%-26.68%-27.30%-21.18%-21.19%-20.89%-13.66%-5.32%-6.97%
Operating margin-19.78%-13.16%-24.42%-29.43%-20.64%-19.96%-21.44%-13.50%-1.75%-3.49%
Return on equity-96.58%-41.48%-15.24%-22.05%-19.31%-23.98%-28.66%-22.70%-9.59%-12.19%
Return on assets-31.08%-17.74%-13.98%-18.84%-11.81%-12.97%-14.82%-11.03%-4.89%-7.08%
Liabilities / equity2.111.340.090.170.640.850.931.060.960.72
Current ratio3.974.0611.576.476.365.234.132.893.245.11

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000805928.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2022-Q22022-06-30-0.18reported discrete quarter
2022-Q32022-09-30-0.10reported discrete quarter
2023-Q12023-03-31-0.17reported discrete quarter
2023-Q22023-06-3038,155,000-6,660,000-0.16reported discrete quarter
2023-Q32023-09-3041,271,000-4,089,000-0.10reported discrete quarter
2023-Q42023-12-3142,922,000-3,893,000derived Q4 = FY annual - nine-month YTD
2024-Q12024-03-3141,378,000-6,635,000-0.15reported discrete quarter
2024-Q22024-06-3047,912,000-1,921,000-0.04reported discrete quarter
2024-Q32024-09-3048,644,000-1,858,000-0.04reported discrete quarter
2024-Q42024-12-3149,405,000450,000derived Q4 = FY annual - nine-month YTD
2025-Q12025-03-3148,560,000-3,834,000-0.08reported discrete quarter
2025-Q22025-06-3056,662,000579,0000.01reported discrete quarter
2025-Q32025-09-3060,082,000708,0000.01reported discrete quarter
2025-Q42025-12-3159,904,000-13,156,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-3161,457,000-19,584,000-0.38reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0000805928-26-000053.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-04-28. Report date: 2026-03-31.

ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report and our consolidated financial statements for the year ended December 31, 2025, included in our 2025 Annual Report on Form 10-K. All dollar amounts in the discussion and analysis, unless noted otherwise, are presented in thousands.

Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation, Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH.

Overview

We are the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about providing the opportunity to restore nerve function and quality of life for patients with peripheral nerve injuries. We provide innovative, clinically proven and economically effective repair solutions for surgeons and healthcare providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Physical damage to a peripheral nerve or the inability to properly reconnect peripheral nerves can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain.

Product Portfolio

Our platform for peripheral nerve repair features a comprehensive portfolio of products, including:

•Avance® (acellular nerve allograft-arwx), an FDA-approved acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory, mixed, and motor peripheral nerve discontinuities (“Avance”);

•Avance® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site (“Avance Nerve Graft”);

•Axoguard Nerve Connector®, a porcine (pig) submucosa extracellular matrix (“ECM”) coaptation aid for tensionless repair of severed peripheral nerves (“Axoguard Nerve Connector”);

•Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while minimizing soft tissue attachments (“Axoguard Nerve Protector”);

•Axoguard HA+ Nerve Protector™, a porcine submucosa ECM base layer coated with a proprietary hyaluronate-alginate gel, a next-generation technology designed to enhance nerve gliding and provide short- and long-term protection for peripheral nerve injuries (“Axoguard HA+ Nerve Protector”);

•Axoguard Nerve Cap®, a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma (“Axoguard Nerve Cap”); and

•Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue healing (“Avive+ Soft Tissue Matrix”).

On December 3, 2025, the FDA approved the BLA for Avance. Continued approval depends on verification and description of clinical benefits in confirmatory studies.

While we offer nerve repair products in the U.S., Canada, Germany, the United Kingdom, Spain and several other countries, we derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S.

Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons. We will drive growth in these accounts through

16

Table of Contents

Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties.

Business Outlook

We are subject to risks and exposures from the evolving macroeconomic environment, including financial market volatility, geopolitical tensions and escalating trade disputes with U.S. trading partners. While our direct exposure to current tariffs is limited, risk lies in the potential for these disputes to cause a broader trade war, resulting in general economic instability and uncertainty that could cause our net revenue to fluctuate. We are actively assessing steps to mitigate potential adverse effects; however, if these measures are not effective in addressing wider economic disruption, our business, financial condition, results of operations and liquidity could be materially adversely affected.

Summary of Operational and Business Highlights

•Revenues were $61,457 for the quarter ended March 31, 2026, an increase of $12,897 or 26.6% compared to the quarter ended March 31, 2025.

•Gross profit was $46,189 for the quarter ended March 31, 2026, an increase of $11,256 or 32.2% compared to the quarter ended March 31, 2025.

•Received positive coverage decisions from Cigna and Elevance Health, two of the nation’s largest commercial insurers.

•Effective January 1, 2026, CMS created a new Level 3 Nerve Procedure Code, increasing Avance facility reimbursement 40% year-over-year to $9 for hospital outpatient and 35% to $6 for ASC-based procedures.

•On January 23, 2026, Axogen closed an upsized public offering with the sale of 4,600,000 shares of common stock, yielding net proceeds of $133,252. From these net proceeds, $69,707 were used to fully repay and terminate our Credit Facility on January 28, 2026. Remaining funds are available for working capital, capital expenditures, and other general corporate purposes.

17

Table of Contents

Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Results of Operations

Comparison of the Three Months Ended March 31, 2026 and 2025

The following table sets forth, for the periods indicated, our results of operations expressed as dollar amounts and percentage of total revenue:

Three Months Ended March 31,

2026

2025

(dollars in thousands)

Amount

% of Revenue

Amount

% of Revenue

Revenues

$

61,457 

100.0 

%

$

48,560 

100.0 

%

Cost of goods sold

15,268 

24.8 

13,627 

28.1 

Gross profit

46,189 

75.2 

34,933 

71.9 

Costs and expenses:

Sales and marketing

28,633 

46.6 

21,045 

43.3 

Research and development

7,517 

12.2 

6,091 

12.5 

General and administrative

12,871 

20.9 

9,458 

19.5 

Total costs and expenses

49,021 

79.8 

36,594 

75.3 

Loss from operations

(2,832)

(4.6)

(1,661)

(3.4)

Other income (expense):

Investment income

768 

1.2 

272 

0.5 

Interest expense

(694)

(1.1)

(2,250)

(4.6)

Loss on extinguishment of debt

(16,849)

(27.4)

— 

— 

Change in fair value of debt derivative liabilities

— 

— 

(158)

(0.3)

Other income (expense), net

23 

— 

(37)

(0.1)

Total other expense, net

(16,752)

(27.3)

(2,173)

(4.5)

Net loss

$

(19,584)

(31.9)

%

$

(3,834)

(7.9)

%

Revenues

Revenues for the three months ended March 31, 2026 increased $12,897, or 26.6%, to $61,457, as compared to $48,560 for the three months ended March 31, 2025. The increase in revenues was primarily driven by an increase in unit volume and the impact of changes in price.

Gross Profit

Gross profit for the three months ended March 31, 2026 increased $11,256, or 32.2%, to $46,189, as compared to $34,933 for the three months ended March 31, 2025. Gross margin as a percentage of revenues was 75.2% and 71.9% for the three months ended March 31, 2026 and 2025, respectively. Higher margins on products sold were driven by lower inventory write-offs and lower shipping costs on products sold, partially offset by higher product costs.

18

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Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Costs and Expenses

Following is a summary of the change in costs and expenses for the three months ended March 31, 2026:

(dollars in thousands)

Total costs and expenses

Sales and marketing

Research and development

General and administrative

For the three months ended March 31, 2025

$

36,594 

$

21,045 

$

6,091 

$

9,458 

Change from:

Compensation costs (1)

8,076 

5,214 

622 

2,240 

Stock-based compensation (2)

3,005 

974 

699 

1,332 

Research and development project costs (3)

835 

— 

835 

— 

Marketing program costs

632 

632 

— 

— 

Travel costs

587 

402 

165 

20 

Professional services fees and expenses

(1,397)

(15)

(892)

(490)

Occupancy related costs

(24)

79 

(56)

(47)

Other

713 

302 

53 

358 

Total change

12,427 

7,588 

1,426 

3,413 

For the three months ended March 31, 2026

$

49,021 

$

28,633 

$

7,517 

$

12,871 

Percentage change

34.0 

%

36.1 

%

23.4 

%

36.1 

%

__________

(1)Primarily due to higher salaries, employee benefits, sales commissions, incentive compensation and payroll taxes, due to higher headcount and sales volumes.

(2)Primarily due to anticipated above target achievement for certain PSU awards due to sales growth.

(3)Clinical trial costs and expenses represented approximately 59% and 43% of total research and development costs and expenses for the three months ended March 31, 2026 and 2025, respectively. Product development costs and expenses represented approximately 41% and 57% of total research and development costs and expenses for the three months ended March 31, 2026 and 2025, respectively.

Other Expense, Net

Other expense, net for the three months ended March 31, 2026 increased $14,579, or 670.9%, to $16,752, as compared to $2,173 for the three months ended March 31, 2025. The increase in total other expense, net was primarily due to loss on the extinguishment of debt of $16,849, partially offset by a decrease of $1,556 in interest expense and an increase of $496 in investment income.

Income Taxes

We had no material income tax expense or benefit during the three months ended March 31, 2026 and 2025 due to the incurrence of net operating losses in both periods, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. During the three months ended March 31, 2026, the IRS completed examining our 2021 federal income tax return with no material findings. We do not believe that there are any material additional tax expenses or benefits.

Critical Accounting Estimates

In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application. We believe our accounting policies for Inventories, Derivative Instruments and Stock-based Compensation, as well as the others set forth in Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K, are critical to understanding our results of operations and financial condition. See Critical Accounting Estimates in our 2025 Annual Report on Form 10-K. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition. During the quarter covered by this report, there have been no material changes

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-24. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following information should be read in conjunction with our consolidated financial statements and the notes thereto contained in Item 8 of Part II in this Form 10-K, “Forward-Looking Statements” contained in Part I of this Form 10-K, “Risk Factors” contained in Item 1A of this Form 10-K, and the other information appearing elsewhere in, or incorporated by reference into, this Form 10-K. Dollar amounts referenced in this Item 7 are in thousands, except per share amounts.

Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation (“AC”), Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH.

Overview

We are the leading company focused specifically on the science, development, and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about providing the opportunity to restore nerve function and quality of life for patients with peripheral nerve injuries. We provide innovative, clinically proven, and economically effective repair solutions for surgeons and healthcare providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day, people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Physical damage to a peripheral nerve or the inability to properly reconnect peripheral nerves can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain.

Product Portfolio

Our platform for peripheral nerve repair features a comprehensive portfolio of products, including:

•Avance® (acellular nerve allograft-arwx) an FDA-approved acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory, mixed, and motor peripheral nerve discontinuities (“Avance”).

•Avance® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site (“Avance Nerve Graft” and together with Avance, the “Avance Products”).

•Axoguard Nerve Connector®, a porcine (pig) submucosa extracellular matrix (“ECM”) coaptation aid for tensionless repair of severed peripheral nerves.

•Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while minimizing soft tissue attachments.

•Axoguard HA+ Nerve Protector™, a porcine submucosa ECM base layer coated with a proprietary hyaluronate-alginate gel, a next-generation technology designed to enhance nerve gliding and provide short- and long-term protection for peripheral nerve injuries.

•Axoguard Nerve Cap®, a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma.

•Avive+ Soft Tissue Matrix™, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue healing.

Our portfolio of products is currently available in the United States (“U.S.”), Canada, Germany, the United Kingdom, Spain and several other countries.

We derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S.

On December 3, 2025, the FDA approved the Biologics License Application (“BLA”) for Avance (acellular nerve allograft-arwx). Continued approval depends on verification and description of clinical benefits in confirmatory studies.

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Table of Contents

Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons. We will drive growth in these accounts through targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties.

Summary of Operational and Business Highlights

•Revenue was $225,208 for the year ended December 31, 2025, an increase of $37,870, or 20.2%, compared to the year ended December 31, 2024.

•Gross profit was $167,353 for the year ended December 31, 2025, an increase of $25,376, or 17.9%, compared to the year ended December 31, 2024.

•Gross margin reflects one-time costs of approximately $1.9 million, or 1% for full-year 2025, respectively, related to the FDA BLA approval of Avance®. 67% of the one-time costs are non-cash and relate to the vesting of certain stock compensation awards containing FDA BLA approval of Avance® milestones.

•Net loss for the full-year 2025 was $15.7 million, or $0.34 per share, compared to $10.0 million, or $0.23 per share for 2024.

•As of December 31, 2025, cash and cash equivalents, restricted cash, and investments was $45.5 million, as compared to $39.5 million as of December 31, 2024, an increase of $6.0 million.

•Expanded coverage and reimbursement for nerve repair for peripheral nerve injuries using synthetic conduits or allografts, increasing the total number of new lives covered in 2025 to approximately 19.8 million and bringing coverage amongst commercial payers to more than 65%.

•Effective January 1, 2026, CMS created a new Level 3 Nerve Procedure Code, increasing Avance facility reimbursement 40% year-over-year to $9 for hospital outpatient and 35% to $6 for ASC-based procedures.

•On January 23, 2026, we closed an upsized public offering with the sale of 4,600,000 shares of common stock and receipt of $133,338 of net proceeds. $69,707 of the net proceeds were used to fully repay and terminate our term loan facility on January 28, 2026 with the remaining funds available for working capital, capital expenditures, and other general corporate purposes.

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Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Results of Operations

Comparison of the Years Ended December 31, 2025 and 2024

The following table sets forth our results of operations expressed as dollar amounts and as percentages of total revenue for the periods presented:

Years Ended December 31,

2025

2024

(dollars in thousands)

Amount

% of Revenue

Amount

% of Revenue

Revenues

$

225,208 

100.0 

%

$

187,338 

100.0 

%

Cost of goods sold

57,855 

25.7 

45,361 

24.2 

Gross profit

167,353 

74.3 

141,977 

75.8 

Cost and expenses

Sales and marketing

97,740 

43.4 

78,461 

41.9 

Research and development

32,885 

14.6 

27,767 

14.8 

General and administrative

44,577 

19.8 

39,036 

20.8 

Total costs and expenses

175,202 

77.8 

145,264 

77.5 

Loss from operations

(7,849)

(3.5)

(3,287)

(1.8)

Other income (expense):

Investment income

1,168 

0.5 

1,141 

0.6 

Interest expense

(7,702)

(3.4)

(8,206)

(4.4)

Change in fair value of derivatives

(1,487)

(0.7)

587 

0.3 

Other expense

167 

0.1 

(199)

(0.1)

Total other expense, net

(7,854)

(3.5)

(6,677)

(3.7)

Net loss

$

(15,703)

(7.0)

%

$

(9,964)

(5.3)

%

Revenues

Revenues for the year ended December 31, 2025 increased $37,870, or 20.2%, to $225,208, as compared to $187,338 for the year ended December 31, 2024. Revenue growth was driven by an increase in unit volume, as well as the impact of changes in price and product mix.

Gross Profit

Gross profit for the year ended December 31, 2025 increased $25,376, or 17.9%, to $167,353, as compared to $141,977 for the year ended December 31, 2024. Gross margin as a percentage of revenue decreased to 74.3% for the year ended December 31, 2025, as compared to 75.8% for the year ended December 31, 2024. Gross margin reflects one-time costs of approximately $1,900, or 1%, related to the FDA BLA approval of Avance, with approximately 67% of such costs related to the vesting of stock compensation awards containing FDA BLA approval of Avance milestones. The decrease in gross margin was due to higher product costs and BLA-related stock-based compensation costs, partially offset by lower inventory write-offs.

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Table of Contents

Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Costs and Expenses

Following is a summary of the change in costs and expenses for the year ended December 31, 2025:

(dollars in thousands)

Total costs and expenses

Sales and marketing

Research and development

General and administrative

For the year ended December 31, 2024

$

145,264 

$

78,461 

$

27,767 

$

39,036 

Change from:

Compensation costs (1)

22,230 

13,312 

5,481 

3,437 

Marketing program costs

3,676 

3,676 

— 

— 

Travel costs

2,446 

2,063 

213 

170 

Occupancy related costs

(1,145)

(269)

(316)

(560)

Research and development project costs (2)

(69)

— 

(69)

— 

Professional services fees and expenses

(12)

209 

(207)

(14)

Other

2,812 

288 

16 

2,508 

Total change

29,938 

19,279 

5,118 

5,541 

For the year ended December 31, 2025

$

175,202 

$

97,740 

$

32,885 

$

44,577 

Percentage change

20.6 

%

24.6 

%

18.4 

%

14.2 

%

__________

(1)The increase in compensation costs is primarily due to higher: (i) stock-based compensation, primarily due to $7,236 from PSU awards vesting in connection with Avance BLA approval by the FDA, and (ii) salaries and sales commissions, due to higher headcount and sales volume. BLA approval-related stock compensation expenses included $749 in sales and marketing, $4,600 in research and development, and $1,887 in general and administrative.

(2)The decrease in research and development costs and expenses was primarily due to product development and clinical expenses. Product development costs include spending for a number of specific programs, including the non-clinical expenses related to the BLA for Avance. Product development costs and expenses represented approximately 50% and 53% of total research and development costs and expenses for the years ended December 31, 2025 and 2024, respectively. Clinical trial costs and expenses represented approximately 50% and 47% of total research and development costs and expenses for the years ended December 31, 2025 and 2024, respectively.

Other Expense

Total other expense, net increased $1,177, or 17.6%, to $7,854 for the year ended December 31, 2025, as compared to $6,677 for the year ended December 31, 2024. The increase was primarily due to the change in the fair value of debt derivative liabilities. See Note 6 - Fair Value Measurement in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K for details regarding the valuation of the debt derivative liabilities.

Income Taxes

We had no federal income tax expense or benefit for the years ended December 31, 2025 and 2024 due to the incurrence of net operating losses in both years, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. The Internal Revenue Service is currently examining the Company’s 2021 federal income tax return.

Liquidity and Capital Resources

As of December 31, 2025, our principal sources of liquidity were our cash and cash equivalents and investments totaling $41,528. Our cash equivalent is comprised of a money market mutual fund and our investments are comprised of U.S. Treasuries. Our cash and cash equivalents and investments increased $8,046 to $41,528 from $33,482 at December 31, 2024, primarily due to proceeds from the exercise of stock options and an increase in proceeds from the sale of investments, net of investment purchases, partially offset by a reduction in cash generated from general operating activities. On December 31, 2025 and 2024, our current assets exceeded our current liabilities by $96,866 and $68,607, respectively. Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Cash Flow Information

The following table presents a summary of our cash flows from operating, investing and financing activities for the periods presented:

Years Ended December 31,

(in thousands)

2025

2024

Net cash provided (used in) by:

Operating activities

$

812 

$

4,535 

Investing activities

(5,317)

(10,297)

Financing activities

10,499 

2,290 

Net increase (decrease) in cash and cash equivalents

$

5,994 

$

(3,472)

Net Cash Provided By Operating Activities

Net cash provided by operating activities was $812 compared to $4,535 for the years ended December 31, 2025 and 2024, respectively. The unfavorable change in net cash provided by operating activities of $3,723 was due to an unfavorable change in working capital of $13,855 and the increase in net loss of $5,739, partially offset by the favorable change in noncash accounts of $16,589.

Net Cash Used In Investing Activities

Net cash used in investing activities was $5,317 compared to $10,297 for the year ended December 31, 2024. The favorable change in net cash used in investing activities of $4,980 was primarily due to the increase in proceeds from the sale of investments, net of investment purchases, totaling $6,050, partially offset by a net increase in capital expenditures of $644.

Net Cash Provided by Financing Activities

Net cash provided by financing activities was $10,499 as compared to $2,290 for the year ended December 31, 2024, an increase of $8,209, or 358%. The increase in net cash provided by financing activities was primarily due to an increase of $8,231 in proceeds from the exercise of stock options and Employee Stock Purchase Plan (“ESPP”) purchases year-over-year.

Sources of Capital

Our expected future capital requirements may depend on many factors including expanding our customer base and sales force, the timing and extent of spending in obtaining regulatory approval, strategic opportunities and introduction of new products. Additional sources of liquidity available to us include issuance of additional equity securities through public or private equity offerings, debt financings or from other sources. The sale of additional equity may result in dilution to our shareholders. There is no assurance that we will be able to secure funding on terms acceptable to us, or at all. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount.

Credit Facilities

As of December 31, 2025, we had $50,000 outstanding in indebtedness under the Term Loan Agreement, dated June 30, 2020, with Oberland Capital and its affiliates, TPC Investments II LP and Argo LLC (as amended, the “Credit Facility”); $35,000 maturing on June 30, 2027 and $15,000 maturing on June 30, 2028. Quarterly interest only and revenue participation payments are due through each of the maturity dates. Interest is calculated as 7.5% plus the greater of the forward-looking term rate based on the secured overnight financing rate as set by the Federal Reserve Bank of New York plus 0.10% (“Adjusted SOFR”) or 2.0% (11.59% as of December 31, 2025). Revenue participation payments are calculated as a percentage of our net revenues, up to $70,000 in any given year, adding approximately 1.5% per year of additional interest payments on the outstanding indebtedness. Upon such date early repayment occurs, we are required repay the principal balance and provide a make-whole payment calculated to generate an internal rate of return to the lender equal to 11.5%, less the total of all quarterly interest and revenue participation payments previously paid (the “Make-Whole Payment”). See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 15 - Commitments and Contingencies in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K.

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Axogen, Inc.

Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Contractual Obligations and Commitments

The following table presents current and long-term material cash requirements as of December 31, 2025:

(in thousands)

2026

2027-2028

2029-2030

Thereafter

Total

Credit Facility principal (1)

$

— 

$

50,000 

$

— 

$

— 

$

50,000 

Credit Facility interest (1)(2)

5,793 

4,634 

— 

— 

10,427 

Credit Facility revenue participation payments (1)

756 

987 

— 

— 

1,743 

Operating and finance lease obligations (3)

4,294 

6,252 

6,287 

12,285 

29,118 

$

10,843 

$

61,873 

$

6,287 

$

12,285 

$

91,288 

__________

(1)On January 28, 2026, all obligations under the Credit Facility, including the Make-Whole Payment, were paid in full with net proceeds from the Offering. See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees, Note 15 - Commitments and Contingencies and Note 16 - Subsequent Events in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

(2)Calculated at 11.59%; the interest rate as of December 31, 2025.

(3)See Note 8 - Leases in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Critical Accounting Estimates

In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application. We believe these accounting policies and the others set forth in Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K are critical to understanding our results of operations and financial condition. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition.

Inventories

Description

Inventories consist of purchased materials, direct labor and manufacturing overhead, and are stated at the lower of cost or net realizable value, as determined by the first-in, first-out method.

Judgments and Uncertainties

We maintain reserves for excess and obsolete inventory resulting from the potential inability to sell certain products in excess of current carrying cost. We make estimates regarding the future recoverability of the costs of these products and record provisions based on historical experience, expiration dates and expected future trends.

Sensitivity of Estimate to Change

As of December 31, 2025, we have reserved $2,202 for potential losses relating to inventory. If our actual product life cycles, product demand or acceptance of new product introductions are less favorable than projected by management, additional inventory write downs may be required, which could unfavorably affect future operating results.

Derivative Instruments

Description

We review debt instruments to determine whether there are embedded derivative instruments, which are required to be bifurcated and accounted for separately as a derivative financial instrument. Embedded derivatives that are not clearly and closely related to the debt host are bifurcated and recognized at fair value on the Consolidated Balance Sheets with changes in fair value recognized as either a gain or loss on the Consolidated Statements of Operations for each reporting period.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

Judgments and Uncertainties

The fair value of embedded derivatives is measured based on equity markets and interest rates, as well as an estimate of our nonperformance risk adjustment. This estimate includes an option adjusted spread and an estimate of our discount rate.

Sensitivity of Estimate to Change

As of December 31, 2025, we recorded a derivative liability of $3,886. However, if the discount rate were to change by 1%, it would have an approximately $600 effect on our derivative liability fair value.

On January 28, 2026, all obligations under the Credit Facility were paid in full. See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K for details regarding the termination of the Credit Facility.

Stock-Based Compensation

Description

Stock-based compensation is in the form of stock options, restricted stock units (“RSU”) and performance stock units (“PSU”) granted to employees and directors. Stock-based compensation expense is based on the fair value of the stock options, RSUs and PSUs.

Judgments and Uncertainties

We estimate the grant date fair value of each stock option award on the date of grant using a multiple-point Black-Scholes option-pricing model. In addition, we estimate the grant date fair value of stock options granted to employees at a premium price based on market conditions, such as the trading price of our common stock, using a Monte Carlo simulation option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods.

The fair value of the PSU grants tied to revenue goals (the “Revenue PSUs”) is determined based on the fair value of our common stock on the date of grant and our estimate of achieving the applicable revenue goals. Compensation expense for the Revenue PSUs is recorded ratably over the performance period. The number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on the actual performance metrics as set forth in the applicable Revenue PSU award agreement. The amount actually awarded will be based upon achievement of the performance measures. Expectations related to the achievement of the revenue goals associated with the Revenue PSU grants is assessed at each reporting period and is used to determine whether any of the Revenue PSU grants are expected to vest. If the performance-based milestones related to the Revenue PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants is reversed.

The grant date fair value of the Total Shareholder Return (“TSR”) PSUs (“TSR PSUs”) is calculated using a Monte Carlo simulation. The number of TSR PSUs that will be earned is based upon the achievement of stock price targets (“Price Targets”) over the measurement period. Compensation expense is recognized regardless if the Price Targets are satisfied. Compensation expense will be reversed if an employee’s employment is terminated prior to satisfying the requisite service period.

The fair value of the PSU grants tied to revenue compounded annual growth rate (“CAGR”) goals, subject to modification based on our TSR relative to the TSR of companies within our industry (“Relative TSR”) over the performance period (the “CAGR TSR PSUs”) is determined based on the fair value of our common stock on the date of grant and our estimate of achieving the applicable revenue CAGR goals. The estimated grant date fair value of the CAGR TSR PSUs is calculated using a Monte Carlo simulation. Compensation expense for the CAGR TSR PSUs is recorded ratably over the performance period. The number of shares delivered to recipients and the related compensation cost recognized as an expense will be based on the actual performance metrics as set forth in the applicable CAGR TSR PSU award agreement. The amount actually awarded will be based upon achievement of the performance measures. Expectations related to the achievement of the revenue CAGR goals associated with the CAGR TSR PSU grants is assessed at each reporting period and is used to determine whether any of the CAGR TSR PSU grants are expected to vest. If the performance-based milestones related to the CAGR TSR PSU grants are not met or not expected to be met, any compensation expense recognized associated with such grants is reversed.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued

(in thousands, except share and per share amounts)

We recognize compensation expense related to the ESPP based on the estimated fair value of the options on the date of grant. We estimate the grant date fair value using a Black-Scholes option pricing model for each purchase period. The grant date fair value is expensed on a straight-line basis over the offering period.

The determination of fair value using option-pricing models, as indicated above, is affected by our stock price, as well as assumptions regarding several subjective variables. These variables include, but are not limited to, our expected stock price volatility over the expected term of the awards. We determine the expected term of each award giving consideration to the contractual terms, vesting schedules, and post-vesting forfeitures. We use the risk-free interest rate on the implied yield available on U.S. Treasury issues with an equivalent remaining term approximately equal to the expected term of the award. The fair value of the Revenue PSUs and CAGR TSR PSUs also includes our estimates of achieving the applicable revenue and revenue CAGR goals. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in our Consolidated Statements of Operations. If factors change and different assumptions are used, stock-based compensation expense could be materially different in the future.

Sensitivity of Estimate to Change

If we determine that the pay-out range of unvested PSUs outstanding were to change by 50 basis points from expected payout as of December 31, 2025, our stock-based compensation expense would change by $541 for the fiscal year ended December 31, 2025.

Recent Accounting Pronouncements

See Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements, Part II Item 8 of this Form 10-K for further information.

Subsequent Events

On January 20, 2026, we entered into a payoff letter (the “Payoff Letter”) with Oberland Capital and its affiliates, TPC Investments II LP and Argo LLC (collectively, the “Lender”). Pursuant to the Payoff Letter, the final payoff amount was approximately $69,707 (the “Payoff Amount”), so long as the payoff date was on or before February 15, 2026. Upon payment of the Payoff Amount on January 28, 2026 and satisfaction of the other conditions specified in the Payoff Letter, all obligations under the Credit Facility, including the Make-Whole Payment, were paid in full, all liens and security interests securing such obligations were released, and the Credit Facility and related loan documents were terminated, subject to certain customary surviving provisions. Payment of the Payoff Amount was funded by proceeds from an equity offering completed by the Company on January 23, 2026. See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees and Note 16 - Subsequent Events in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K.

On January 21, 2026, we entered into an underwriting agreement (the “Underwriting Agreement”) with Wells Fargo Securities, LLC and Mizuho Securities USA LLC, as representatives of the underwriters (the “Underwriters”). Pursuant to the terms and conditions of the Underwriting Agreement, we agreed to sell 4,000,000 shares of our common stock, $0.01 par value per share, at a public offering price of $31.00 per share, plus an additional 600,000 shares sold pursuant to the Underwriters’ option to purchase additional shares (the “Offering”). The Offering closed on January 23, 2026, with a sale of 4,600,000 shares.

We received net proceeds from the Offering of $133,338, after deducting the underwriting discounts and commissions and expenses in connection with the Offering. Net proceeds from the Offering were used for the early payoff and termination of the Credit Facility, as discussed above. The remaining net proceeds will be used for working capital, capital expenditures and other general corporate purposes. See Note 16 - Subsequent Events in the Notes to the Consolidated Financial Statements Part II, Item 8 of this Form 10-K for additional details regarding the Offering.

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