What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2022-03-23 compared with 2021-03-25 · 146 added, 221 removed, 646 unchanged (36% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, refers to controls and procedures that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

4 unchanged sentences

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our

receipts and expenditures are being made only in accordance with authorizations of our management and directors;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

17 unchanged sentences

OTHER INFORMATION

The disclosure set forth below is provided in lieu of a separate Form 8-K filing pursuant to Item 5.02 of Form 8-K.

On March 22, 2022, the Board approved a reduced work schedule for E.

Skott Greenhalgh, Ph.D., the Chief Technology Officer of the Company, effective immediately.

Greenhalgh’s annual base salary was reduced from $360,500 to $90,125.

Subject to the conditions and provisions of the Company’s equity incentive plans, equity awards held by Dr.

Greenhalgh will continue to vest and become exercisable according to their respective terms.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

6 unchanged sentences

The information required by Item 13 of Form 10-K is incorporated by reference to the information contained in our definitive proxy statement for the 2022 annual meeting of stockholders.

PRINCIPAL ACCOUNTING FEES AND SERVICES

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Our independent registered public accounting firm is KPMG LLP , Philadelphia, PA , Auditor Firm ID:

The information required by Item 14 of Form 10-K is incorporated by reference to the information contained in our definitive proxy statement for the 2022 annual meeting of stockholders.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements

42 unchanged sentences

Cash and cash equivalents

Short-term investments

Accounts receivable, net

11 unchanged sentences

Total liabilities

Contingencies and commitments (Note 11)

Commitments and contingencies (Note 11)

Stockholders’ equity:

6 unchanged sentences

200,000,000 shares authorized;

14,437,289 and 11,406,976 shares issued and 14,437,107 and 11,406,221 shares outstanding at December 31, 2020 and 2019, respectively

14,529,606 and 14,437,289 shares issued and 14,529,577 and 14,437,107 shares outstanding at December 31, 2021 and December 31, 2020, respectively

Additional paid-in capital

14 unchanged sentences

Research and development

Gain on litigation settlement

Total operating expenses

2 unchanged sentences

Interest expense

Loss on extinguishment of debt

Change in fair value of preferred stock warrant liability

Other (expense) income

Total other expense

14 unchanged sentences

comprehensive

income (loss)

Balance at January 1, 2019

2 unchanged sentences

Sale of Series B redeemable convertible preferred stock, net of stock issue costs of $ 165

Stock ‑ based compensation expense

Accretion of redeemable convertible preferred stock to redemption value

Balance at December 31, 2018

Vesting of common stock previously subject to repurchase

Exercise of stock options

Sale of Series B redeemable convertible preferred stock, net of stock issue costs of $165

Unrealized loss on short-term investments

3 unchanged sentences

Conversion of convertible preferred stock to common stock in connection with the initial public offering

( 22,501,174 )

( 75,560,456 )

Issuance of common stock upon initial public offering, net of underwriting discounts, commissions and offering costs

8 unchanged sentences

Balance at December 31, 2020

Vesting of common stock previously subject to repurchase

Exercise of stock options

Issuance of common stock under the employee stock purchase plan

Foreign currency translation adjustment

Stock ‑ based compensation expense

Reclassification of liability-classified stock-based compensation awards

Balance at December 31, 2021

See accompanying notes to consolidated financial statements.

7 unchanged sentences

Noncash interest expense

Noncash loss on extinguishment of debt

Amortization of intangible assets

2 unchanged sentences

Stock ‑ based compensation expense

Gain on sale of equipment

Loss on disposal of fixed assets

Change in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses and other assets

Restricted cash

Accounts payable

Accrued expenses and other current liabilities

Foreign currency remeasurement gain

Accrued expenses and other current and long-term liabilities

Foreign currency remeasurement loss

Net cash used in operating activities

4 unchanged sentences

Purchase of property and equipment

Proceeds from the sale of property and equipment

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

Cash flows from financing activities:

1 unchanged sentence

Proceeds from initial public offering, net of underwriting discounts, commissions and offering costs

Proceeds from issuance of long ‑ term debt with related party

Proceeds from issuance of long ‑ term debt and preferred stock warrants

Repayment of long ‑ term debt

Borrowings under revolving credit facility

Repayments of revolving credit facility

Proceeds from issuance of Series B redeemable convertible preferred stock, net of offering costs

Payment of initial public offering costs

Payment of deferred financing costs

Proceeds from exercise of stock options

1 unchanged sentence

Net cash provided by financing activities

Effect of exchange rate on cash

Net increase in cash and cash equivalents

Effect of exchange rate on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of year

2 unchanged sentences

Cash paid during the period for interest

Cash paid on loss on extinguishment of debt

Supplemental disclosures of noncash investing and financing activities:

Fair value of warrants issued in connection with equity and debt financing

Accretion of redeemable convertible preferred stock

3 unchanged sentences

Property and equipment in accounts payable

Intangible assets in accrued expenses and other current liabilities

Recognition of exit fee for debt discount

Issuance of common stock for early exercised stock options

1 unchanged sentence

Liability-classified stock-based compensation in accrued expenses and other current liabilities

Reclassification of liability-classified stock-based compensation awards to equity-classified

See accompanying notes to consolidated financial statements.

4 unchanged sentences

(the “Company”) was incorporated in the state of Delaware on April 17, 2012 and wholly owns TELA Bio Limited, a company incorporated in the United Kingdom.

The Company is focused on the commercialization and sale of OviTex Reinforced Tissue Matrix (“OviTex”), which utilizes surgical reconstruction medical device technology licensed from a strategic partner, Aroa Biosurgery Ltd.

(“Aroa”), as described in Note 11, and on the research and development of additional medical devices with Aroa and on other internally developed technologies.

In April 2019, the Company received 510(k) clearance from the U.S.

Food and Drug Administration (“FDA”) for OviTex PRS Reinforced Tissue Matrix (“OviTex PRS”), which addresses unmet needs in plastic reconstruction surgery.

The Company is commercial-stage medical technology company focused on providing innovation soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s own anatomy.

OviTex Reinforced Tissue Matrix (“OviTex”), the Company’s first portfolio of products, addresses unmet needs in hernia repair and abdominal wall reconstruction by combining the benefits of biologic matrices and polymer materials while minimizing their shortcomings, at a cost-effective price.

OviTex PRS Reinforced Tissue Matrix (“OviTex PRS”), the Company’s second portfolio of products, addresses unmet needs in plastic and reconstructive surgery.

The Company’s principal corporate office and research facility is located in Malvern, Pennsylvania.

The Company has been impacted by the pandemic resulting from the novel coronavirus and the disease it causes, including variants thereof (“COVID-19”).

To date, among other impacts on its business related to the pandemic, physicians and their patients are required by state mandates, or are choosing to defer elective surgery procedures in which its products otherwise would be used.

There remains uncertainty and lack of visibility regarding the Company’s near-term revenue growth prospects and product development plans due to the rapidly evolving environment and continued uncertainties resulting from the ongoing COVID-19 pandemic.

While certain regions are experiencing a reduction in COVID-19 cases and a relaxing of governmental restrictions, at this time, the full extent of the impact of the ongoing COVID-19 pandemic on its business, results of operations and financial condition, including revenue, expenses, manufacturing capability, supply chain integrity, research and development costs and employee-related compensation, will depend on future developments that are highly uncertain, including new information that may emerge concerning COVID-19 and the actions taken to mitigate the spread of or treat COVID-19, the emergence of new variants of COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

(2) Risks and Liquidity

2 unchanged sentences

The Company anticipates incurring additional losses until such time, if ever, it can generate sufficient revenue from its products to cover its expenses.

In November 2019, the Company closed its initial public offering (“IPO”) in which the Company issued and sold 4,398,700 shares of its common stock at a public offering price of $13.00 per share, including 398,700 shares of the Company’s common stock sold pursuant to the underwriters’ option to purchase additional shares.

The Company received net proceeds of $50.6 million after deducting underwriting discounts, commissions and other offering expenses.

In June 2020, the Company completed a follow-on public offering in which the Company issued and sold 3,000,000 shares of its common stock at a public offering price of $16.00 per share.

The Company received net proceeds of $44.7 million after deducting underwriting discounts, commissions and other offering expenses.

The operations of the Company are subject to certain risks and uncertainties including, among others, uncertainty of product development, the impact of COVID-19 on the business, ongoing economic uncertainty, technological uncertainty, commercial acceptance of any developed products, alternative competing technologies, dependence on collaborative partners, uncertainty regarding patents and proprietary rights, comprehensive government regulations, and dependence on key personnel.

The operations of the Company are subject to certain risks and uncertainties including, among others, uncertainty of product development, the impact of COVID-19 and the development of any variants, on the business, ongoing economic uncertainty, including as a result of geopolitical factors such as hostilities and the conflict between Russia and Ukraine, technological uncertainty, commercial acceptance of any developed products, alternative competing technologies, dependence on collaborative partners, uncertainty regarding patents and proprietary rights, comprehensive government regulations, and dependence on key personnel.

(3) Summary of Significant Accounting Policies

5 unchanged sentences

All intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the consolidated financial statements and the reported amounts of revenue and

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

expenses during the reporting period.

The most significant judgments are employed in estimates used to determine the fair value of redeemable convertible preferred stock, preferred stock warrant liability and stock-based awards issued, and recoverability of the carrying value of the Company’s inventory.

Use of Estimates

The most significant judgments are employed in estimates used to determine stock-based awards issued and recoverability of the carrying value of the Company’s inventory.

As future events and their effects cannot be determined with precision, actual results may differ significantly from these estimates.

The full extent to which the COVID-19 pandemic will directly or indirectly impact the Company’s business, results of operations and financial condition, including revenue, expenses, manufacturing, research and development costs and employee-related compensation, will depend on future developments that are highly uncertain, including new information that may emerge concerning COVID-19 and the actions taken to mitigate the spread of or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

Management has made estimates of the impact of COVID-19 within the Company’s consolidated financial statements and there may be changes to those estimates in future periods.

Actual results may differ from these estimates.

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

1 unchanged sentence

Concentration of Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and short-term investments.

The Company places its cash with high-credit-quality financial institutions and invests in money market funds, government agency securities and corporate debt securities.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents.

The Company places its cash with high-credit-quality financial institutions and primarily invests in money market funds.

The Company has established guidelines relative to credit ratings and maturities that seek to maintain safety and liquidity.

As described in Note 11, the Company has licensed patents and other intellectual property from Aroa.

As described in Note 11, the Company has licensed patents and other intellectual property from Aroa Biosurgery Ltd.

As part of this agreement, Aroa is also the sole manufacturer of the Company’s products.

4 unchanged sentences

Cash equivalents consist of investments in a money market fund.

The Company’s cash and cash equivalents are carried at the fair value of the investment based on quoted market prices.

Short-Term Investments

Short-term investments consisted of investments in corporate debt securities with a maturity of greater than three months when acquired.

The Company classified these investments as available-for-sale securities.

These investments were reported at fair value with the related unrealized gains and losses included in accumulated other comprehensive loss, a component of stockholders’ equity.

The Company had no short-term investments as of December 31, 2020.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

Short-term investments consisted of the following at December 31, 2019 (in thousands):

Amortization/

Gains/(Losses)

Corporate debt securities

The Company’s cash and cash equivalents are carried at the fair value based on quoted market prices.

Inventory consists of finished goods and is identified and tracked by lot and stated at the lower of cost or net realizable value, with cost being determined on a first-in, first-out basis.

5 unchanged sentences

Depreciation is provided over the estimated useful lives of the assets using the straight-line method.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

Intangible Assets

1 unchanged sentence

Milestone payments due related to licenses or commercialization rights after future economic benefit is established are recorded as intangible assets.

In 2018, the Company recorded $4.0 million in intangible assets as it became probable that the Company would make these payments.

In 2020, 2019 and 2018, the Company recorded $0.3 million, $0.3 million and $0.8 million, respectively, of amortization expense related to intangible assets.

In 2021, 2020 and 2019, the Company recorded $ 0.3 million of amortization expense in each year related to intangible assets.

At December 31, 2021, the remaining life of intangible assets was 7.6 years.

9 unchanged sentences

Debt issuance costs, net of related amortization are deducted from the carrying value of the related debt.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

Revenue Recognition

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers , which was adopted on January 1, 2019, using the modified retrospective method.

The adoption of this guidance had no cumulative adjustment to the Company’s consolidated financial statements as of the adoption date.

Under ASC Topic 606, an entity recognizes revenue when its customer obtains control of the promised good, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods.

Under ASC Topic 606, Revenue from Contracts with Customers , an entity recognizes revenue when its customer obtains control of the promised good, in an amount that reflects the consideration that the entity expects to be entitled in exchange for those goods.

The Company performs the following five steps to recognize revenue under ASC Topic 606:

9 unchanged sentences

The Company estimates these rebates and records in the same period the related revenue is recognized, resulting in a reduction of product revenue.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

Payment terms with customers do not exceed one year and, therefore, the Company does not account for a financing component in its arrangements.

5 unchanged sentences

Total revenue

Sales of OviTex accounted for all of the Company’s revenue for the year ended December 31, 2018.

Sales outside of the U.S.

are immaterial for the years ended December 31, 2020, 2019 and 2018.

were immaterial for the years ended December 31, 2021, 2020 and 2019.

Research and Development

Research and development costs are charged to expense as incurred and consist primarily of salaries, benefits, and other related costs, including stock-based compensation for personnel serving in the research and development functions as well as costs incurred with Aroa under development agreements related to technology transfer, laboratory materials and

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives.

11 unchanged sentences

Under ASC 740, a valuation allowance is required when it is more likely than not all or some portion of the deferred tax assets will not be realized through generating sufficient future taxable income.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

ASC Subtopic 740-10 (“ASC 740-10”), Accounting for Uncertainty of Income Taxes , defines the criterion an individual tax position must meet for any part of the benefit of the tax position to be recognized in consolidated financial statements prepared in conformity with GAAP.

10 unchanged sentences

Items measured at fair value on a recurring basis included the Company’s preferred stock warrants.

The warrants were carried at their estimated fair

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

The warrants were carried at their estimated fair value.

All outstanding warrants to purchase shares of preferred stock were converted into warrants to purchase shares of common stock after our IPO.

4 unchanged sentences

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

The following fair value hierarchy table presents information about each major category of the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and 2020 (in thousands):

8 unchanged sentences

Cash equivalents – money market fund

Cash equivalents – corporate debt securities

Cash equivalents – government agency securities

Short-term investments – corporate debt securities

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

A rollforward of the warrant liability (Level 3 measurement) was as follows (in thousands):

January 1, 2019

Fair value of warrants issued – MidCap Credit Facility

Change in fair value of warrants

December 31, 2018

Change in fair value of warrants

Conversion into common stock warrants

7 unchanged sentences

Remaining contractual term in years

The fair value of the warrants at December 31, 2018 was determined using the Black-Scholes option pricing model with the following assumptions:

MidCap Credit

Notes payable

Expected dividend yield

Expected volatility

Risk‑free interest rate

Remaining contractual term in years

Net loss per share

7 unchanged sentences

Year ended December 31,

Series A redeemable convertible preferred stock

Series B redeemable convertible preferred stock

Stock options (including shares subject to repurchase)

Series B redeemable convertible preferred stock warrants

Unvested restricted stock units

Common stock warrants

Amounts in the above table reflect the common stock equivalents of the noted instrument.

Recently Issued Accounting Pronouncements

9 unchanged sentences

The standard is effective for the Company beginning January 1, 2022, with early adoption permitted.

The Company plans to adopt this standard on January 1, 2022 and is currently evaluating the expected impact that the standard could have on its consolidated financial statements and related disclosures.

In June 2018, the FASB issued ASU No.

2018-07, Improvements to Nonemployee Share-Based Payment Accounting .

The amendments in this update expand the scope of Topic 718 to include stock-based payment transactions for acquiring goods and services from nonemployees.

Under this ASU, an entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of costs (i.e., the period of time over which stock-based payment awards vest and the pattern of cost recognition over that period).

The guidance was effective for the Company beginning January 1, 2020, with early adoption permitted.

The adoption of this guidance did not have any impact on the Company’s consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No.

2018-13, Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurements, which changes the fair value measurement disclosure requirements of ASC Topic 820.

The goal of the ASU is to improve the effectiveness of ASC Topic 820’s disclosure requirements.

The standard was effective for the Company beginning January 1, 2020.

The adoption of this guidance did not have any impact on the Company’s consolidated financial statements and related disclosures.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

The Company plans to adopt this standard on January 1, 2022 and anticipates the recognition of a right-of-use asset of approximately $ 1.2 million to $ 1.6 million and a lease liability of approximately $ 1.5 million to $ 1.9 million.

The Company is continuing its assessment of potential changes to its disclosures under the standard.

In December 2019, the FASB issued ASU No.

2 unchanged sentences

This guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein.

Early adoption is permitted for any annual periods for which financial statements have not been issued and interim periods therein.

The adoption of this guidance is not expected to be material to the Company’s consolidated financial statements and related disclosures.

The adoption of this guidance did not have any impact on the Company’s consolidated financial statements and related disclosures.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

(4) Property and Equipment

15 unchanged sentences

Third-party and professional fees

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

Long-term debt consisted of the following at December 31, 2020 and 2019 (in thousands):

Amounts due to Aroa

Research and development expenses

Total accrued expenses and other current liabilities

Long-term debt consisted of the following (in thousands):

OrbiMed Term Loan (related party)

4 unchanged sentences

In November 2018, the Company entered into a senior secured term loan facility (“OrbiMed Credit Facility”) with OrbiMed Royalty Opportunities II, LP (“OrbiMed”), a related party as the lender is affiliated with a stockholder of the Company, which consists of up to $ 35.0 million in term loans (“OrbiMed Term Loans”).

The OrbiMed Term Loans consist of two tranches, a $30.0 million Tranche 1 (“Tranche 1”) and a $5.0 million Tranche 2 (“Tranche 2”).

In November 2018, the Company borrowed $30.0 million of Tranche 1 and used a portion of the proceeds to repay the MidCap Credit Facility (described below).

The OrbiMed Term Loans

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

consist of two tranches, a $ 30.0 million Tranche 1 (“Tranche 1”) and a $ 5.0 million Tranche 2 (“Tranche 2”).

In November 2018, the Company borrowed $ 30.0 million of Tranche 1.

The Company elected not to borrow Tranche 2 prior to its expiration on December 31, 2019.

1 unchanged sentence

The OrbiMed Credit Facility contains a negative pledge on intellectual property owned by the Company.

The OrbiMed Credit Facility also contains customary indemnification obligations and customary events of default, including, among other things, (i) nonpayment, (ii) breach of warranty, (iii) nonperformance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (iv) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) key person event, (xi) regulatory matters, (xii) and key contracts.

The OrbiMed Credit Facility also contains customary indemnification obligations and customary events of default, including, among other things, (i) nonpayment, (ii) breach of warranty, (iii) nonperformance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (iv) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (ix) key permit events, (x) key person events, (xi) regulatory matters, (xii) and key contracts.

In addition, the Company must maintain a minimum cash balance of $ 2.0 million.

If an event of default occurs under the OrbiMed Credit Facility, the Company may become obligated to immediately pay all outstanding principal and interest and all other due and unpaid obligations at the current rate in effect plus 3 %.

The OrbiMed Term Loan matures on November 16, 2023 and bear interest at a rate equal to 7.75% plus the greater of one-month LIBOR or 2.0%.

The OrbiMed Term Loan matures on November 16, 2023 and bears interest at a rate equal to 7.75 % plus the greater of one-month LIBOR or 2.0 %.

At December 31, 2021, the interest rate was 9.75 %.

3 unchanged sentences

In conjunction with the closing of the OrbiMed Term Loans, the Company incurred $ 0.3 million of third party and lender fees, which along with the End of Term Charge of $ 3.0 million were recorded as debt issuance costs, and are being recognized as interest expense over the term of the loan using the effective-interest method.

Interest expense associated with the OrbiMed Credit Facility recorded during 2020, 2019 and 2018 was $3.6 million, $3.6 million and $0.6 million, respectively.

MidCap Credit Facility

In April 2018, the Company entered into a $14.0 million debt financing transaction (“MidCap Credit Facility”) with MidCap Financial (“MidCap”), which consisted of a $3.5 million revolving credit facility (“Revolver”) and

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

$10.5 million in term loans (“MidCap Term Loans”).

The Term Loans consisted of two tranches, an $8.0 million Tranche 1 (“MidCap Tranche 1”) and a $2.5 million Tranche 2 (“MidCap Tranche 2”).

In April 2018, the Company borrowed $8.0 million of MidCap Tranche 1 and used the majority of the proceeds to repay the note payable outstanding.

The MidCap Term Loans and the Revolver bore interest at a rate equal to one-month LIBOR plus 7.0% and one-month LIBOR plus 3.75%, respectively, until the aggregate principal, interest, and End of Term Charge totaling $0.4 million were paid with part of the proceeds received from the OrbiMed Credit Facility.

As a result of these payments, a $1.2 million loss on extinguishment was recorded during the year ended December 31, 2018.

Interest expense associated with the Midcap Credit Facility recorded during 2018 was $0.6 million.

In March 2017, the Company entered into a Loan and Security Agreement (“Loan Agreement”) and borrowed $5.0 million (“Note A”).

Note A bore interest at 9.45% until the aggregate principal, interest, and other termination fees were paid with part of the proceeds received from the MidCap Credit Facility.

As a result of these payments, a $0.6 million loss on extinguishment was recorded during the year ended December 31, 2018.

Interest expense associated with Note A recorded during the year ended December 31, 2018 was $0.4 million.

Interest expense associated with the OrbiMed Credit Facility recorded during each of 2021, 2020 and 2019 was $ 3.6 million.

(7) Redeemable Convertible Preferred Stock and Stockholders’ Equity (Deficit)

Public Stock Offerings

In November 2019, the Company closed its IPO in which the Company issued and sold 4,398,700 shares of its common stock at a public offering price of $13.00 per share, including 398,700 shares of the Company’s common stock sold pursuant to the underwriters’ option to purchase additional shares.

In November 2019, the Company closed its initial public offering (“IPO”) in which the Company issued and sold 4,398,700 shares of its common stock at a public offering price of $ 13.00 per share, including 398,700 shares of the Company’s common stock sold pursuant to the underwriters’ option to purchase additional shares.

The Company received net proceeds of $ 50.6 million after deducting underwriting discounts, commissions and other offering expenses.

3 unchanged sentences

In December 2020, the Company entered into an Equity Distribution Agreement (the “Equity Agreement”) with Piper Sandler & Co (the “Agent”) in connection with the establishment of an at-the-market offering program under which it may sell up to an aggregate of $ 50.0 million of shares of the Company’s common stock, from time to time through the Agent as sales agent.

No sales were made under the Equity Agreement during the year ended December 31, 2020.

No sales were made under the Equity Agreement during the years ended December 31, 2021 or 2020.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

Preferred Stock

1 unchanged sentence

At the time of issuance, the redeemable convertible preferred stock was recorded at its issuance price, less issuance costs.

Throughout 2019, the Company entered into various stock purchase agreements with new and existing investors pursuant to which the Company sold an aggregate 12,527,956 shares of the Company’s Series B at $1.16 per share for

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

aggregate gross proceeds of $14.5 million.

Transaction fees of $0.2 million were recorded as a reduction of the carrying value of the Series B.

Throughout 2018, the Company entered into various stock purchase agreements with new and existing investors pursuant to which the Company sold an aggregate 3,607,069 shares of the Company’s Series B at $1.16 per share for aggregate gross proceeds of $4.2 million.

Transaction fees of $0.2 million were recorded as a reduction of the carrying value of the Series B.

The Company had the following warrants outstanding to purchase common stock at December 31, 2020:

Common stock warrants issued to MidCap

Common stock warrants issued to note payable holders

Common stock warrants issued to convertible promissory note holders

Transaction fees of $ 0.2 million were recorded as a reduction of the carrying value of the Series B preferred stock.

The Company had the following warrants outstanding at December 31, 2021:

Common stock warrants

(8) Stock-Based Compensation

2 unchanged sentences

New awards can only be granted under the Amended and Restated 2019 Equity Incentive Plan (the “Plan”).

At December 31, 2020, 1,199,997 shares were available for future issuances.

At December 31, 2021, 1,299,218 shares were available for future issuances under the Plan.

The Plan is subject to an annual increase, subject to prior approval by the Company’s board of directors, equal to the lesser of (i) 432,442 shares, (ii) 4 % of the shares outstanding on the last day of the immediately preceding fiscal year and (iii) such smaller number of shares as determined by the board of directors.

2 unchanged sentences

The Company estimates forfeitures that it expects will occur and adjusts expense for actual forfeitures in the periods they occur.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense ratably over the vesting period of the award.

5 unchanged sentences

Total stock‑based compensation

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

The following table summarizes stock option activity for the Plan:

6 unchanged sentences

Outstanding at December 31, 2019

Early exercised

Canceled/forfeited

4 unchanged sentences

Exercisable at December 31, 2021

The 2012 Stock Incentive Plan and the Amended and Restated 2019 Equity Incentive Plan provide the holders of stock options an election to early exercise prior to vesting.

At December 31, 2021, the aggregate intrinsic value of outstanding options and exercisable options was $ 3.0 million and $ 2.8 million, respectively.

The 2012 Stock Incentive Plan provided the holders of stock options an election to early exercise prior to vesting.

The Company had the right, but not the obligation, to repurchase early exercised options without transferring any appreciation to the employee if the employee terminates employment before the end of the original vesting period.

The repurchase price is the lesser of the original exercise price or the then fair value of the common stock.

At December 31, 2020, $1,000 of proceeds from early exercised options are recognized as a current liability in other current liabilities in the accompanying consolidated balance sheet.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

At December 31, 2021, an immaterial amount of proceeds from early exercised options are recognized as a current liability in accrued expenses and other current liabilities in the accompanying consolidated balance sheet.

The following table summarizes activity relating to early exercise of stock options:

2 unchanged sentences

Unvested balance at December 31, 2019

Early exercised

Unvested balance at December 31, 2020

Unvested balance at December 31, 2021

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

The weighted average grant-date fair value per share of options granted was $ 8.66 , $ 8.13 and $ 6.81 for the years ended December 31, 2021, 2020 and 2019, respectively.

The aggregate intrinsic value of options exercised was $0.2 million for the year ended December 31, 2020 and nominal for the years ended December 31, 2019 and 2018, respectively.

The aggregate intrinsic value of options exercised was $ 0.4 million and $ 0.2 million for the years ended December 31, 2021 and 2020, respectively, and nominal for the year ended December 31, 2019.

As of December 31, 2021, the total unrecognized compensation expense related to unvested employee and nonemployee stock option awards was $ 5.1 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.5 years.

15 unchanged sentences

Expected term (in years)

Restricted Stock Units

The Company’s restricted stock units (“RSUs”) vest based on the terms in each award agreement and generally vest over four years .

The following table summarizes restricted stock units for the Plan:

Outstanding at January 1, 2021

Canceled/forfeited

Outstanding at December 31, 2021

The weighted average grant-date fair value per RSU granted was $ 16.57 during the year ended December 31, 2021.

The aggregate intrinsic value of RSUs outstanding was $ 2.1 million at December 31, 2021.

The total unrecognized

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

compensation expense at December 31, 2021 related to RSUs was $ 1.6 million, which is expected to be recognized in expense over a weighted-average period of approximately 3.2 years.

(9) Employee Benefit Plans

2 unchanged sentences

Participants are permitted to contribute up to 100 % of their eligible annual pretax compensation up to an established federal limit on aggregate participant contributions.

Discretionary profit-sharing contributions made by the Company, if any, are determined annually by the board of directors.

Discretionary contributions made by the Company, if any, are determined annually by the board of directors.

Effective January 1, 2020, the Company matched 50 % of employees’ contributions up to 6 %, subject to a maximum annual amount.

The Company’s contributions were $ 0.3 million and $ 0.2 million for the years ended December 31, 2021 and 2020, respectively.

The match was suspended from April to August 2020 due to COVID-19.

The Company’s contributions were $0.2 million in 2020.

Participants are immediately vested in their own contributions to the plan and are fully vested in discretionary profit sharing made by the Company after three years of service.

1 unchanged sentence

In November 2019, the Company adopted the 2019 Employee Stock Purchase Plan (the “ESPP”).

At December 31, 2020, 212,977 shares were available for future issuance.

At December 31, 2021, 317,701 shares were available for future issuance under the ESPP.

The ESPP is subject to an annual increase, subject to prior approval by the Company’s board of directors, equal to the least of (i) 107,887 shares of common stock, (ii) 1 % of the shares outstanding on the final day of the immediately preceding calendar year, and (iii) such smaller number of shares as determined by the board of directors.

The ESPP provides the opportunity to purchase the Company’s common stock at a 5 % discount to the market price through payroll deductions.

As of December 31, 2020, 2,797 shares have been issued under the ESPP.

As of December 31, 2021 and 2020, 3,163 and 2,797 shares, respectively, have been issued under the ESPP.

No shares were issued under the ESPP as of December 31, 2019.

2 unchanged sentences

Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which differences are expected to reverse.

Significant components of the Company’s deferred tax assets for federal income taxes as of December 31, 2020 and 2019 consisted of the following (in thousands):

Significant components of the Company’s deferred tax assets for federal income taxes consisted of the following (in thousands):

Deferred tax assets

7 unchanged sentences

Net deferred tax asset

The Company does not have unrecognized tax benefits as of December 31, 2020 and 2019.

The Company does no t have unrecognized tax benefits as of December 31, 2021 and 2020.

The Company recognizes interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

21 unchanged sentences

The Company files income tax returns in the U.S.

federal jurisdiction and various state jurisdictions.

federal jurisdiction, various state jurisdictions and the United Kingdom.

Tax years 2017 and forward remain open for examination for federal tax purposes and tax years 2017 and forward remain open for examination for the Company’s more significant state tax jurisdictions.

Carryforward attributes from prior years may be adjusted upon examination by taxing authorities if used in an open period.

Many governments have enacted or are currently contemplating economic stimulus and financial aid measures.

2 unchanged sentences

The CARES Act includes corporate income tax, payroll tax, and other provisions.

While the Company may receive financial, tax, or other benefits under the bill, this legislation did not impact the Company during the year ended December 31, 2020.

While the Company may receive financial, tax, or other benefits under the bill, this

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

(11) Contingencies and Commitments

legislation did not impact the Company during the year ended December 31, 2020.

During the year ended December 31, 2021, the Company claimed an employee retention payroll tax credit of $ 0.5 million for certain employment taxes.

(11) Commitments and Contingencies

Legal Proceedings

On November 18, 2016, the Company and LifeCell Corporation (“LifeCell”) agreed to settle litigation initiated by LifeCell in March 2015 related to LifeCell’s complaints alleging (i) that the Company misappropriated LifeCell’s trade secrets and proprietary information and hired various former LifeCell employees allegedly in violation of their noncompetition covenants and nonsolicitation agreements and (ii) that the Company infringed U.S.

6,143,293, (the 293 patent), which LifeCell had recently purchased from Carnegie Mellon University.

Both cases have been dismissed with prejudice.

As part of this settlement, LifeCell agreed not to sue the Company, either directly or through a person acting at its request or with its involvement for patent infringement, trade secret misappropriation, breach of an assignment obligation, unfair competition, unjust enrichment, tortious interference with contract and prospective economic advantage, civil conspiracy, or like causes of action with respect to OviTex.

Also, as part of this settlement agreement, among other provisions, the Company agreed to pay LifeCell $1.0 million within 30 days of the execution of the settlement agreement and up to an additional $3.0 million based upon the Company achieving set revenue milestones for its OviTex product family.

As of December 31, 2019, all amounts were paid.

Noncash interest expense of $20,000 and $0.2 million was recorded during 2019 and 2018, respectively, for the change in estimated present value of the future revenue milestone payments.

On February 12, 2016, the Company filed suit against National Union Fire Insurance Company of Pittsburgh, Pennsylvania (“National Union”), the former carrier for the Company’s Directors & Officers and Employment Practices Liability Insurance.

The complaint charged National Union with breach of contract and failure to reimburse the Company for defense costs it incurred in the LifeCell litigation discussed above that the Company believes are covered under the insurance policy sold by National Union.

The complaint sought reimbursement of $5.0 million, the full limit of the policy, as well as reimbursement of the Company’s costs pursuing the action against National Union.

In 2018, the Company settled the suit and received $2.4 million and paid its broker $0.2 million and recognized the net amount of $2.2 million as a gain on litigation settlement in the Company’s consolidated statement of operations during the year ended December 31, 2018.

From time to time, the Company may be a party to various other lawsuits, claims, and other legal proceedings that arise in the ordinary course of its business.

2 unchanged sentences

In August 2012, the Company entered into a License, Product Development, and Supply Umbrella Agreement (“Aroa Agreement”) with Aroa.

The Aroa Agreement provides the Company a license to patent rights and other intellectual property related to Aroa’s products and technologies for use in certain indications and expires on the later of August 3, 2022 or expiration of the last patent covering the products (currently April 19, 2031).

The Aroa Agreement provides the Company a license to patent rights and other intellectual property related to Aroa’s products and technologies for use in certain indications and expires on the expiration of the last patent covering the products (currently April 19, 2031).

The Company has the right to extend the term of the agreement by an additional 10 years following the expiration of the last patent covering the products on commercially reasonable terms to be negotiated by the parties.

3 unchanged sentences

and European cumulative product sales targets.

In 2018, it became probable that the Company would be issued CE Mark approval to sell OviTex in Europe by the European Medical Agency, and the Company recognized a $1.0 million liability and a corresponding developed right intangible asset related to this milestone payment owed to Aroa.

Of this amount, $0.5 million was paid in 2018 and the remaining $0.5 million was paid in 2019.

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

With respect to the sales milestone payments in the North American territory, a payment of $1.0 million and $2.0 million are due when cumulative product sales in the North American territory reach certain amounts.

In 2018, it became probable that the Company would achieve the sales milestones in the North American territory, and, as such, the Company recorded a liability of $3.0 million and a corresponding developed technology right intangible asset.

The Company paid $ 1.0 million to Aroa in 2018 related to one of the cumulative product sales targets and the remaining $ 2.0 million in 2019.

1 unchanged sentence

Other key terms of the amended Aroa agreement in addition to those disclosed above are as follows:

● The transfer price for product produced by Aroa was increased from 150% of Aroa’s cost of goods sold to 200% of the cost of goods sold.

● The transfer price for product produced by Aroa is 200 % of Aroa’s cost of goods sold.

The transfer price and the quarterly true-up amount continued to equal 27 % of Company’s net sales of licensed products.

The purchase commitments aggregate to $11.0 million for the North American territory over a five-year period, consisting of $2.0 million in total in years one and two, $2.0 million in year three, $3.0 million in year four, and $4.0 million in year five.

The purchase commitments aggregate to $2.8 million for the European territory over a five-year period, consisting of $0.5 million in total in years one and two, $0.5 million in year three, $0.8 million in year four, and $1.0 million in year five.

In addition, the Company continues to be required to pay a make whole payment if the required minimum purchase commitments for each territory for the corresponding contract years are not made.

As of December 31, 2020, the Company met its purchase commitments and no make whole payments are required for those periods.

The period for the purchase commitments for the North American territory for year five end in June 2021.

Upon a change in control of the Company (as defined in the amended agreement), the annual minimum amounts will be extended for a sixth year with a $ 5.0 million minimum amount for the North American territory and $ 1.0 million minimum amount for the European territory.

1 unchanged sentence

If the make whole payments, if any, are not made by the Company after a notice and cure period, then the license will convert to a nonexclusive basis in the territory for which the payment was required but not made.

● Separate product development/launch goals and extension rights exist for a breast reconstruction product, as well as other products in specified indications for use.

With respect to the breast reconstruction product, the goal was to file an investigational device exemption with the FDA for the North American territory by December 28, 2017, 18 months after the commercial launch of OviTex in the North American territory.

The Company met this deadline with the filing of an investigational device exemption (IDE) application with the FDA on November 22, 2017.

The Company extended the European deadline and paid $0.5 million.

Concurrent with the extension payment, the Company agreed to assume responsibility in obtaining regulatory approval in Europe with a new regulatory filing deadline of June 30, 2020.

The Company met the filing deadline and no further extension payments are required.

● Provisions exist for the Company to step in and operate Aroa’s plant if a supply failure occurs and is not cured within a set timeframe.

1 unchanged sentence

During the period that the Company steps in and assumes manufacturing responsibility, it shall not be required to purchase product from or pay transfer prices to Aroa, the annual minimums shall be proportionately reduced to reflect the lack of supply responsibility by Aroa and the Company shall pay a royalty of 6 % of net sales in lieu of 27 % of net sales of the licensed products.

● The Company is responsible for the payment of 50% of the capital costs of any manufacturing expansion plan agreed upon by the parties, provided that any such payments made by the Company will be offset

TELA BIO, INC.

Notes to Consolidated Financial Statements (continued)

against future revenue sharing amounts payable (revenue share of 27% of the Company’s net sales of the licensed product).

The Company expects to enter into similar milestone-based agreements with its strategic partner for both product territories and new products in order to expand and extend its product portfolio.

As of December 31, 2020, the Company had $4.3 million in purchase commitments with Aroa.

As of December 31, 2021, the Company had $ 1.8 million in purchase commitments with Aroa and certain other suppliers to maintain exclusivity rights.

Other Commitments

In November 2021, the Company entered into an exclusive distribution agreement with Next Science, a medical technology company, granting the Company exclusive rights to sell and market Next Science’s proprietary antimicrobial surgical wash in the U.S.

plastic reconstructive surgery market.

To maintain exclusivity, the Company has $ 10.8 million in purchase commitments and annual license fees over a ten-year period.

Employment Agreements

4 unchanged sentences

The Company is recognizing the rent expense on a straight-line basis over the lease term.

The Company recognized rent expense of $0.3 million for each of the years ended December 31, 2020, 2019 and 2018.

The Company recognized rent expense of $ 0.4 million, $ 0.3 million and $ 0.3 million for the years ended December 31, 2021, 2020 and 2019, respectively.

The future minimum lease payments under the facility operating lease agreement as of December 31, 2021 are as follows (in thousands):

36 unchanged sentences

Form of TELA Bio, Inc.

Amended and Restated 2019 Equity Incentive Plan Stock Option Grant Notice and Stock Option Agreement (filed herewith).

Amended and Restated 2019 Equity Incentive Plan Stock Option Grant Notice and Stock Option Agreement (incorporated by reference to exhibit 10.11 to the Company’s Report on Form 10-K, filed on March 25, 2021) .

Form of TELA Bio, Inc.

Amended and Restated 2019 Equity Incentive Plan Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (filed herewith).

Amended and Restated 2019 Equity Incentive Plan Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (incorporated by reference to exhibit 10.12 to the Company’s Report on Form 10-K, filed on March 25, 2021) .

TELA Bio, Inc.

2 unchanged sentences

TELA Bio, Inc.

Non-Employee Director Compensation Policy (incorporated by reference to exhibit 10.13 to the Company’s Registration Statement on Form S-1 (File No.

333-234217), dated November 7, 2019).

Amended and Restated Non-Employee Director Compensation Policy (filed herewith).

Amended and Restated Employment Agreement, dated October 25, 2019, by and between the Company and Antony Koblish (incorporated by reference to exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No.

333-234217), dated November 7, 2019).

Amended and Restated Employment Agreement, dated October 25, 2019, by and between the Company and Maarten Persenaire, M.D.

(incorporated by reference to exhibit 10.19 to the Company’s Registration Statement on Form S-1 (File No.

333-234217), dated November 7, 2019).

Amended and Restated Employment Agreement, dated October 25, 2019, by and between the Company and Skott Greenhalgh (incorporated by reference to exhibit 10.21 to the Company’s Registration Statement on Form S-1 (File No.

333-234217), dated November 7, 2019).

Amended and Restated Employment Agreement, dated October 25, 2019, by and between the Company and Nora Brennan (incorporated by reference to exhibit 10.31 to the Company’s Registration Statement on Form S-1 (File No.

333-234217), dated November 7, 2019).

Employment Agreement, dated January 17, 2020, by and between the Company and Peter Murphy (incorporated by reference to exhibit 10.26 to the Company’s Report on Form 10-K, filed on March 30, 2020).

Employment Agreement, dated August 27, 2021, by and between the Company and Roberto Cuca (incorporated by reference to exhibit 10.1 to the Company’s Report on Form 8-K, filed on September 27, 2021) .

Employment Agreement, dated September 15, 2020, by and between the Company and Paul Talmo (filed herewith).

Credit Agreement, dated November 16, 2018, by and between the Company and OrbiMed Royalty Opportunities II, LP (incorporated by reference to exhibit 10.22 to the Company’s Registration Statement on Form S-1 (File No.

19 unchanged sentences

333-234217), dated November 7, 2019).

Third Amendment to Lease between the Company and WPT Land 2 LP (as successor in interest to Liberty Property Limited Partnership), dated December 22, 2020 (filed herewith).

Third Amendment to Lease between the Company and WPT Land 2 LP (as successor in interest to Liberty Property Limited Partnership), dated December 22, 2020 (incorporated by reference to exhibit 10.29 to the Company’s Report on Form 10-K, filed on March 25, 2021) .

Equity Distribution Agreement, dated December 18, 2020 (incorporated by reference to Exhibit 1.2 of the Company’s Registration Statement on Form S-3 (File No.

14 unchanged sentences

XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith).

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

Certain confidential portions (indicated by brackets and asterisks) have been omitted from this exhibit.

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the Borough of Malvern, Commonwealth of Pennsylvania, on the 25th day of March, 2021.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

TELA BIO, INC.

2 unchanged sentences

President, Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ ANTONY KOBLISH

2 unchanged sentences

Antony Koblish

/s/ NORA BRENNAN

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

/s/ ROBERTO CUCA

Chief Operating Officer and Chief Financial Officer

(Principal Financial Officer)

March 23, 2022

/s/ MEGAN SMEYKAL

Chief Accounting Officer and Controller (Principal Accounting Officer)

March 23, 2022

Megan Smeykal

/s/ DOUG EVANS

10 unchanged sentences

Lisa Colleran

/s/ JOHN NOSENZO

March 23, 2022

/s/ FEDERICA O’BRIEN

1 unchanged sentence

Federica O’Brien

/s/ ADELE OLIVA

March 25, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures