What changed in this filing

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Item 9A. Controls and Procedures

2025-03-21 compared with 2024-03-22 · 261 added, 155 removed, 678 unchanged (38% of the section changed)

19 unchanged sentences

Accordingly, given the inherent limitations in a cost-effective system of internal control, financial statement misstatements due to error or fraud may occur and may not be detected.

disclosure controls and procedures are designed to provide reasonable, not absolute, assurance of achieving their objectives.

Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance of achieving their objectives.

We conduct periodic evaluations of our systems of controls to enhance, where necessary, our control policies and procedures.

12 unchanged sentences

The information concerning directors and compliance with Section 16(a) of the Exchange Act and our Code of Conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or controller called for by Item 10 of Form 10-K will be set forth in our definitive proxy statement for the 2025 annual meeting of stockholders, to be filed within 120 days after the end of the fiscal year covered by this annual report on Form 10-K, and is incorporated herein by reference.

We have adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors, officers, and employees that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable Nasdaq listing standards.

Our insider trading policy states, among other things, that our directors, officers, and employees are prohibited from trading in such securities while in possession of material, nonpublic information.

The foregoing summary of our insider trading policies and procedures does not purport to be complete and is qualified by reference to our Insider Trading Policy filed as an exhibit to this Annual Report on Form 10-K.

In addition, with regard to the Company’s trading in its own securities, it is our policy to comply with the federal securities laws and the applicable exchange listing requirements.

EXECUTIVE COMPENSATION

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

To the Stockholders and the Board of Directors

TELA Bio, Inc.:

1 unchanged sentence

We have audited the accompanying consolidated balance sheets of TELA Bio, Inc.

and subsidiary (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements).

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company has changed its method of accounting for leases as of January 1, 2022 due to the adoption of Accounting Standards Update 2016-02, Leases .

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Sufficiency of audit evidence over the existence of inventory

As discussed in Note 3 to the consolidated financial statements, the value of inventory was $12.8 million as of December 31, 2024.

To facilitate the delivery of its products to customers, the Company maintains inventory at its headquarters and several field locations throughout the country, which includes finished goods inventory consigned to others and held by sales representatives.

As of December 31, 2024, the Company had $3.2 million in finished goods consigned to others.

We identified the assessment of the sufficiency of audit evidence over the existence of inventory as a critical audit matter.

The geographical dispersion of inventory required subjective auditor judgment in determining the nature and extent of procedures performed over the existence of inventory, including the determination of physical locations to observe physical inventory counts.

The following are the primary procedures we performed to address this critical audit matter.

We obtained an understanding over the Company’s inventory process by inquiring with management and observing inventory counts for certain locations and determined where we would perform procedures.

We applied auditor judgment to determine the nature and extent of procedures to be performed over the existence of inventory by evaluating:

• homogeneity of the locations

• historical inventory locations we have visited and results of prior physical counts

• amounts of inventory on-hand by location.

We evaluated the existence of inventory by performing independent test counts for all items at a certain location and comparing our counts to the Company’s records.

We evaluated the sufficiency of audit evidence obtained by assessing the results of the procedures performed.

We have served as the Company’s auditor since 2013.

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Accounts receivable, net of allowances of $ 275 and $ 416

Prepaid expenses and other assets

Prepaid expenses and other current assets

Total current assets

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Right-of-use assets

Other long-term assets

Deferred tax asset, net

Restricted cash

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Total operating expenses

Other operating income:

Gain on sale of product line

Loss from operations

Other expense:

Other (expense) income:

Interest expense

Loss on extinguishment of debt

Other income (expense)

Total other expense

Total other expense, net

Loss before income tax benefit

Income tax benefit

Net loss per common share, basic and diluted

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Vesting of common stock previously subject to repurchase

Vesting of share-based awards and exercise of stock options

Vesting of restricted stock units and exercise of stock options

Issuance of common stock under the employee stock purchase plan

Shares withheld for employee taxes

Foreign currency translation adjustment

Stock‑based compensation expense

Reclassification of liability-classified stock-based compensation awards

Sale of common stock, net of underwriting discounts, commissions and offering costs

Balance at December 31, 2022

Vesting of common stock previously subject to repurchase

Vesting of share-based awards and exercise of stock options

Vesting of restricted stock units and exercise of stock options

Issuance of common stock under the employee stock purchase plan

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Balance at December 31, 2023

Vesting of share-based awards and exercise of stock options

Vesting of restricted stock units and exercise of stock options

Issuance of common stock under the employee stock purchase plan

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Stock‑based compensation expense

Sale of common stock, net of underwriting discounts, commissions and offering costs

Sale of common stock and pre-funded warrants, net of underwriting discounts, commissions and offering costs

Balance at December 31, 2024

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Stock ‑ based compensation expense

(Gain) loss on disposal of fixed assets

Deferred income tax benefit

Gain on disposal of fixed assets

Gain on sale of product line

Change in operating assets and liabilities:

3 unchanged sentences

Accrued expenses and other current and long-term liabilities

Foreign currency translation (gain) loss

Foreign currency transaction (gain) loss

Net cash used in operating activities

2 unchanged sentences

Purchase of property and equipment

Proceeds from the sale property and equipment

Net cash used in investing activities

Proceeds from the sale of product line

Proceeds from the sale of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities:

Proceeds from sale of common stock, net of underwriting discounts, commissions and offering costs

Proceeds from sale of common stock and pre-funded warrants, net

Proceeds from issuance of long-term debt

13 unchanged sentences

Property and equipment in accounts payable and accrued expenses and other current liabilities

Issuance of common stock for early exercised stock options

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

Operating lease ROU asset exchanged for operating lease liabilities

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TELA Bio, Inc.

(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”) was incorporated in the state of Delaware on April 17, 2012 and wholly owns TELA Bio Limited, a company incorporated in the United Kingdom and is the ultimate parent of TELA Bio GmbH, a company incorporated in Germany through TELA Bio Limited.

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

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

The Company has been directly impacted by the COVID-19 pandemic since the onset of the pandemic in 2020.

To date, among other impacts on the Company’s business related to the pandemic, physicians and their patients have been required by state mandates, or have chosen to, defer elective surgery procedures in which the Company’s products otherwise would be used.

There remains some uncertainty regarding the lingering effects of the COVID-19 pandemic on the Company’s near-term revenue growth prospects and product development plans due to the volatility in the frequency of surgical procedures using the Company’s products, including through labor and hospital staffing shortages and the allocation of hospital resources due to financial strain experienced during the COVID-19 pandemic.

While the Company believes that surgical procedures have started to normalize to pre-pandemic levels and that hospital systems have begun to address any remaining backlog of procedures previously delayed due to the COVID-19 pandemic, the full extent of the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition, including revenue, expenses, manufacturing capability, supply chain integrity, staffing availability, research and development costs and employee-related compensation, will depend on future developments that remain uncertain.

(2) Risks and Liquidity

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In March 2024, the Company sold its distribution rights for NIVIS Fibrillar Collagen Pack to MiMedx Group, Inc.

in exchange for an initial $ 5.0 million payment and additional future payments aggregating between a minimum of $ 3.0 million and a maximum of $ 7.0 million based on net sales of NIVIS over the next two years .

On April 21, 2023, the Company completed an underwritten public offering in which the Company sold 5,219,190 shares of its common stock (including 469,190 shares sold pursuant to the underwriters’ overallotment option on May 5, 2023) at a public offering price of $ 9.50 per share, receiving net proceeds of approximately $ 46.3 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, the uncertainty of product development, the impact of macroeconomic conditions, including the lingering effects of the COVID-19 pandemic or other public health crises, general economic uncertainty, including as a result of inflationary pressures and the measures undertaken by various governments to address them, banking instability, geopolitical factors such as the ongoing Russia-Ukraine conflict and the current conflict in Israel and Gaza (including any escalation or expansion), 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.

On October 24, 2024, the Company completed an underwritten public offering of 14,670,000 shares of its common stock, including the exercise in full of the underwriters’ overallotment option to purchase additional shares of common stock, at a price to the public of $ 2.25 per share and, in lieu of common stock to investors who so chose, pre-funded warrants to purchase 5,800,000 shares of common stock at a public offering price of $ 2.2499 per pre-funded warrant, which represents the per share public offering price for the shares of common stock less the $ 0.0001 per share exercise price for each pre-funded warrant.

The offering resulted in net proceeds of $ 42.9 million, after deducting underwriting discounts and commissions and other estimated offering expenses and assuming no subsequent exercise of the pre-funded warrants.

The exercise of the pre-funded warrants, if any, is not expected to provide significant additional funding to the Company.

The operations of the Company are subject to certain risks and uncertainties including, among others, the uncertainty of product development, the impact of macroeconomic conditions, including, general economic uncertainty, inflationary pressures and the measures undertaken by various governments to address them, banking instability, monetary policy changes (including tariffs that have been or may in the future be imposed by the U.S.

or other countries), geopolitical factors such as the ongoing Russia-Ukraine conflict, the current conflicts in the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan, cybersecurity events affecting or disrupting normal hospital operations, constraints on the supply of critical surgical and hospital supplies necessary to facilitate the surgical procedures in which our products are utilized, 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.

TELA Bio, Inc.

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The consolidated financial statements include the accounts of TELA Bio, Inc.

and its wholly owned subsidiary TELA Bio Limited.

and its wholly owned subsidiaries TELA Bio Limited and TELA Bio GmbH.

All intercompany accounts and transactions have been eliminated in consolidation.

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As future events and their effects cannot be determined with precision, actual results may differ significantly 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 (“CODM”), or decision- making group, in deciding how to allocate resources and in assessing performance.

The CODM, who is the Chief Executive Officer, views the Company’s operations and manages its business in one segment.

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 in assessing performance.

The Company has one reportable segment which is focused on providing innovative soft-tissue reconstruction solutions that optimize clinical outcomes by prioritizing the preservation and restoration of the patient’s own anatomy.

The Company’s chief operating decision maker (“CODM”) is the chief executive officer.

The accounting policies of its segment are the same as those described in the summary of significant accounting policies.

The CODM uses budget to actual forecasts and net income in assessing entity-wide operating results and deciding how to invest in the Company.

The CODM is regularly provided with net loss and consolidated assets, which are reported on the consolidated statement of operations and comprehensive loss and consolidated balance sheet, respectively.

The tables below summarizes the items included within net loss regularly provided to the CODM for the years ended December 31, 2024, 2023 and 2022:

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Year ended December 31,

Cost of revenue (excluding amortization of intangible assets)

Amortization of intangible assets

Sales and marketing:

Sales and sales management

International

Other sales and marketing (a)

Total sales and marketing

General and Administrative:

Finance and Legal

Other General and administrative (b)

Total general and administrative

Research and Development:

Regulatory and quality

Other research and development (c)

Total research and development

Gain on sale of product line

Other segment items (d)

(a) Other sales and marketing includes strategy, analytics and allocated facility expenses.

(b) Other general and administrative includes executive, human resources, information technology and allocated facility expenses.

(d) Other segment items include other operating income and other expenses as disclosed in the consolidated statements of operations and comprehensive loss;

interest expense, loss on extinguishment of debt, other income and income tax benefit.

Concentration of Risk

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

Following the events relating to Silicon Valley Bank in 2023, the Company has established additional redundant accounts with another high-credit-quality financial institution to mitigate liquidity risk to our cash and cash equivalents from any further instability in the financial industry.

Following the events relating to Silicon Valley Bank in 2023, the Company established an additional redundant account with another high-credit-quality financial institution to mitigate liquidity risk to our cash and cash equivalents from any further instability in the financial industry.

As described in Note 12, the Company has licensed patents and other intellectual property from Aroa Biosurgery Ltd.

2 unchanged sentences

A change in the relationship with Aroa, or an adverse change in their business, could materially impact future operating results.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Cash and Cash Equivalents

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The Company’s cash and cash equivalents are carried at fair value.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Restricted Cash

Restricted cash represents an amount held in an escrow deposit account, securing a letter of credit for the Company’s office lease.

The following table presents a reconciliation of all captions of cash, cash equivalents and restricted cash reported on the balance sheets that sum to the total of those same amounts shown in the statements of cash flows.

Cash and cash equivalents

Restricted cash

Total cash and cash equivalents and restricted cash shown in Statement of cash flows

Inventory consists of purchased materials, primarily 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.

4 unchanged sentences

The Company periodically analyzes its inventory levels and writes down inventory that has become obsolete or that has a cost basis in excess of its expected net realizable value based on expected customer demand.

As of December 31, 2024 and 2023, the Company had $ 3.2 million and $ 3.0 million, respectively, in finished goods consigned to others.

6 unchanged sentences

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

In 2023, 2022 and 2021, the Company recorded $ 0.4 million, $ 0.8 million and $ 0.3 million of amortization expense, respectively, related to intangible assets.

In 2024, 2023

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

and 2022, the Company recorded $ 0.4 million, $ 0.4 million and $ 0.8 million of amortization expense, respectively, related to intangible assets.

At December 31, 2024, the remaining life of intangible assets was 4.6 years.

The Company anticipates recognizing amortization expense of $ 0.4 million in each of the next five years and $ 0.1 million thereafter.

The Company adopted ASU 2016-02, Leases , (“ASU 2016-02”) on January 1, 2022 using the modified retrospective transition method and elected the transition practical expedients to not reassess lease identification, lease classification and initial indirect costs related to those leases entered into prior to the date of application.

ASU 2016-02 required a lessee to record a right-of-use (“ROU”) asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months.

The Company anticipates recognizing amortization expense of $ 0.4 million in each of the next four years and $ 0.2 million thereafter.

The Company determines if an arrangement is a lease at contract inception.

A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration.

The definition of a lease embodies two conditions:

(1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment), and (2) the customer has the right to control the use of the identified asset.

Operating leases are included as a right-of-use (“ROU”) asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months.

Long-Lived Assets

Long-lived assets, such as property and equipment and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable.

If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

expected to be generated by such asset or asset group to its carrying value.

If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by such asset or asset group to its carrying value.

If the carrying value of the long-lived asset or asset group exceeds the undiscounted cash flows, an impairment is recognized to the extent the carrying value exceeds its fair value.

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The Company only recognizes revenue when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that will be transferred to the customer.

A significant portion of the Company’s revenue is generated from product shipped to a customer or from consigned inventory maintained at hospitals.

A significant portion of the Company’s revenue is generated from product shipped to a customer or from consigned inventory maintained at hospitals or other surgical facilities.

Revenue from the sale of consigned products is recognized when control is transferred to the customer, which occurs at the time the product is used in a surgical procedure.

1 unchanged sentence

For all of the Company’s customer contracts, the only identified performance obligation is providing the product to the customer.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Revenue is recognized at the estimated net sales price, which includes estimates of variable consideration.

1 unchanged sentence

These rebates are based on contractual percentages.

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

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

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

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

There are no incremental costs of obtaining a contract that would rise to or enhance an asset other than product costs, which are a component of inventory.

4 unchanged sentences

Total revenue

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Sales outside of the U.S.

were $ 6.1 million or 10 % of total revenue for the year ended December 31, 2023, $ 3.2 million or 8 % of total revenue for the year ended December 31, 2022 and immaterial for the year ended December 31, 2021.

were $ 10.3 million, or 15 %, of total revenue for the year ended December 31, 2024, $ 6.1 million or 10 % of total revenue for the year ended December 31, 2023 and $ 3.2 million or 8 % of total revenue for the year ended December 31, 2022.

Research and Development

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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 accounts for issued warrants either as a liability or equity in accordance with ASC Topic 480-10, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity (“ASC 480-10”) or ASC Topic 815-40, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock (“ASC 815-40”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company’s own stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the company’s control, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

Warrants that are equity-classified instruments and recorded in additional paid-in capital at issuance are not subject to remeasurement.

The Company periodically evaluates changes in facts and circumstances that could impact the classification of warrants.

Income taxes are accounted for under the asset-and-liability method as required by ASC Topic 740, Income Taxes (“ASC 740”).

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In accordance with the disclosure requirements of ASC 740-10, the Company’s policy on income statement classification of interest and penalties related to income tax obligations is to include such items as part of income tax expense.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Fair value of financial instruments

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Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value.

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other assets, and accounts payable are shown at cost, which approximates fair value due to the short-term nature of these instruments.

The carrying amount of the Company’s Credit and Security Agreement approximates fair value due to its variable interest rate.

The carrying amounts of certain of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, other assets, and accounts payable are shown at cost, which

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

approximates fair value due to the short-term nature of these instruments.

The carrying amounts of the Company’s Credit and Security Agreement approximates fair value due to its variable interest rate.

The Company follows the provisions of ASC Topic 820, Fair Value Measurement , for financial assets and liabilities measured on a recurring basis.

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Year ended December 31, 2024

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Net loss per share

2 unchanged sentences

Therefore, the weighted-average shares used to calculate both basic and diluted loss per share are the same.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares outstanding, as they would be antidilutive.

Stock options (including shares subject to repurchase)

Year ended December 31,

Stock options

Unvested restricted stock units

Common stock warrants

Due to their nominal exercise price of $ 0.0001 per share, the outstanding pre-funded warrants are considered common stock equivalents and are included in the calculation of weighted-average shares of common stock outstanding from the October 24, 2024 closing date.

Recently Issued Accounting Pronouncements

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act.

As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

In June 2016, the FASB issued ASU No.

2016-13, Measurement of Credit Losses on Financial Instruments , which provides guidance for recognizing credit losses on financial instruments based on an estimate of current expected credit losses model.

The standard was effective for the Company beginning January 1, 2023, and the adoption of this guidance did not have a significant impact on the consolidated financial statements and related disclosures.

In August 2020, the FASB issued ASU No.

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In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , which expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets.

This guidance is effective for annual periods beginning after December 15, 2023, and interim periods within annual periods beginning after December 15, 2024, with early adoption permitted, including adoption in any

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

interim period.

The Company is currently evaluating the expected impact that the standard could have on its consolidated financial statements and related disclosures.

See note 3 for additional disclosures related to the adoption of this ASU.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , requiring entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid.

3 unchanged sentences

The Company is currently evaluating the expected impact that the standard could have on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses .

ASU 2024-03 requires additional disclosure of specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

The requirements will

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

be applied prospectively with the option for retrospective application.

The Company is currently evaluating the impact that the adoption of ASU 2024-03 will have on its consolidated financial statements and disclosures.

(4) Property and Equipment

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MidCap term loan

End of term charge

Unamortized end of term charge and issuance costs

Unamortized exit fee and issuance costs

Long-term debt

MidCap Term Loan

On May 26, 2022, the Company entered into the Credit and Security Agreement (the “MidCap Credit Agreement”) with MidCap Financial Trust, as agent (the “Agent”), and certain lender parties thereto.

The MidCap Credit Agreement provides for up to $ 50.0 million in term loans (the “MidCap Term Loans”), consisting of a $ 40.0 million Tranche 1 (“Tranche 1”) and a $ 10.0 million Tranche 2 (“Tranche 2”).

Upon closing, the Company borrowed $ 40.0 million of Tranche 1 and used a portion of the proceeds to repay borrowings under the OrbiMed Credit Facility (described below) and intends to use the remaining proceeds to fund operations and other general corporate purposes.

As of December 31, 2023, no additional borrowings were made and the Company’s ability to draw from Tranche 2 has since expired.

On May 26, 2022, the Company entered into the Credit and Security Agreement (the “MidCap Credit Agreement”) with MidCap Financial Trust, as agent, and certain lender parties thereto.

The MidCap Credit Agreement consists of $ 40.0 million in a term loan.

Upon closing, the Company used a portion of the proceeds to repay borrowings under a previous credit facility.

Pursuant to the MidCap Credit Agreement, the Company provided a first priority security interest in all existing and future acquired assets, including intellectual property, owned by the Company.

3 unchanged sentences

In the event of default under the MidCap Credit Agreement, the Company would be required to pay interest on principal and all other due and unpaid obligations at the current rate in effect plus 2 %.

The MidCap Term Loans mature on May 1, 2027 and bear interest at a rate equal to 6.25 % plus the greater of one-month Term SOFR (as defined in the MidCap Credit Agreement) or 1.0 %.

The MidCap term loan matures on May 1, 2027 and bears interest at a rate equal to 6.25 % plus the greater of one-month Term SOFR (as defined in the MidCap Credit Agreement) or 1.0 %.

The Company is required to make 36 monthly interest payments beginning on June 1, 2022 (the “Interest-Only Period”).

1 unchanged sentence

If the Company is not in covenant compliance at the end of the Interest-Only Period, the Company is required to make 24 months of straight-line amortization payments, with the entire principal amount due at maturity.

Subject to certain limitations, the MidCap Term Loans have a prepayment fee equal to 3.0 % of the prepaid principal amount for the first year following the closing date of the MidCap Term Loans, 2.0 % of the prepaid principal amount for the second year following the closing date and 1.0 % of the prepaid principal amount for the third year following the closing date and thereafter.

The Company is also required to pay an exit fee at the time of maturity or prepayment event equal to 5 % of all principal borrowings (the “End of Term Charge”) (or in the event of a prepayment event, the amount

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

of principal being prepaid).

Subject to certain limitations, the MidCap term loan has a prepayment fee equal to 1.0 % of the prepaid principal amount.

The exit fee has been accounted for as an additional debt issuance cost and is being amortized to interest expense over the term of the MidCap term loan.

Interest expense associated with the MidCap Credit Facility recorded for the year ended December 31, 2024 was $ 5.3 million, of which $ 0.6 million was related to the amortization of debt issuance costs.

Interest expense associated with the MidCap Credit Facility recorded for the year ended December 31, 2023 was $ 5.2 million, of which $ 0.6 million was related to the amortization of debt issuance costs.

Interest expense associated with the

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

MidCap Credit Facility recorded for the year ended December 31, 2022 was $ 2.6 million, of which $ 0.4 million was related to the amortization of debt issuance costs.

OrbiMed Term Loan

7 unchanged sentences

Interest expense associated with the OrbiMed Credit Facility recorded for the year ended December 31, 2022 was $ 1.5 million, of which $ 0.3 million was related to the amortization of debt issuance costs.

Interest expense associated with the OrbiMed Credit Facility recorded for the year ended December 31, 2021 was $ 3.6 million, of which $ 0.7 million was related to the amortization of debt issuance costs.

(7) Stockholders’ Equity

3 unchanged sentences

No sales were made under the 2023 Equity Agreement or the 2020 Equity Agreement during the years ended December 31, 2023, 2022 or 2021.

The exercise of the pre-funded warrants, if any, is not expected to provide significant additional funding to the Company.

In April 2023, the Company completed an underwritten public offering in which the Company issued and sold 5,219,190 shares of its common stock (including 469,190 shares sold pursuant to the underwriters’ overallotment option in May 2023) at a public offering price of $ 9.50 per share.

4 unchanged sentences

Notes to Consolidated Financial Statements (continued)

There have been no exercises or cancellations of warrants during the year ended December 31, 2024.

The Company had the following warrants outstanding at December 31, 2024:

1 unchanged sentence

Common stock warrants

Pre-funded common stock warrants

On October 24, 2024, in connection with the underwritten public offering, the Company granted pre-funded warrants to purchase 5,800,000 shares of common stock at a public offering price of $ 2.2499 per pre-funded warrant, which represents the per share public offering price for the shares of common stock less the $ 0.0001 per share exercise price for each pre-funded warrant.

The common stock and pre-funded warrants each met the criteria for equity classification.

Accordingly, the amount allocated to the pre-funded warrants was recorded as a component of stockholders’ equity within additional paid-in capital.

(8) Sale of Product Line

In March 2024, the Company entered into an Asset Purchase Agreement (“APA”) with MiMedx Group, Inc.

(“MDXG”) to sell certain assets (the “Transaction”) related to NIVIS Fibrillar Collagen Pack Device (“NIVIS”).

These assets mainly included the Company’s existing inventory of NIVIS, with a net carrying value of $ 0.8 million, and certain intellectual property rights to sell NIVIS, with no carrying value.

MDXG assumed the Company’s existing supply agreements, including the minimum obligations for NIVIS that the Company entered into in 2022 ahead of the initial sales of NIVIS.

In exchange for entering into the Transaction, the Company received an initial $ 5.0 million upfront payment and is entitled to receive future revenue-sharing payments based on the net sales of NIVIS (now marketed as HELIOGEN) during the first two years following its launch by MDXG, which revenue-sharing payments would range from a minimum of $ 3.0 million to a maximum of $ 7.0 million in the aggregate.

In addition, $ 0.4 million of consideration was received for existing NIVIS inventory on-hand.

Any consideration in excess of $ 3.0 million up to $ 7.0 million is considered variable consideration that is fully constrained.

The Company accounted for the Transaction as a sale of a nonfinancial asset group in accordance with ASC 610-20 and followed the principals of ASC 606 to determine the consideration of $ 8.4 million related to the Transaction which includes the consideration for the existing inventory.

The Company transferred control of the nonfinancial asset group in March 2024 and recognized a gain of $ 7.6 million in the consolidated statement of operations and comprehensive loss during the year ended December 31, 2024.

The $ 8.4 million transaction price included the minimum revenue-share payment of $ 3.0 million, which was recorded as a receivable when the deal closed.

Revenue-share payments commenced after the third quarter of 2024.

At December 31, 2024, $ 0.1 million of this amount had been collected.

The remaining receivable included $ 0.6 million recorded as the current portion in prepaid expenses and other assets in the consolidated balance sheet and $ 2.3 million recorded as the long-term portion in other long-term assets in the consolidated balance sheet.

At each reporting date, the Company assesses the constraint of variable consideration and records increases in the transaction price in the period that the estimate of variable consideration changes.

For the year ended December 31, 2024, no changes were made to the variable consideration.

(9) Stock-Based Compensation

3 unchanged sentences

At December 31, 2024, 1,345,582 shares of common stock were available for future issuances under the Plan.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

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.

9 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:

13 unchanged sentences

These grants were made pursuant to the Nasdaq inducement grant exception in accordance with Nasdaq listing rule 5635(c)(4).

At December 31, 2023, the aggregate intrinsic value of both outstanding options and exercisable options was $ 0.3 million.

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, 2022, all early exercised options had vested.

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

Unvested balance at January 1, 2021

Unvested balance at December 31, 2021

Unvested balance at December 31, 2022

The weighted average grant-date fair value per share of options granted was $ 7.19 , $ 6.55 and $ 8.66 for the years ended December 31, 2023, 2022 and 2021, respectively.

The aggregate intrinsic value of options exercised was $ 0.1 million, $ 16,000 and $ 0.4 million for the years ended December 31, 2023, 2022 and 2021, respectively.

As of December 31, 2023, the total unrecognized compensation expense related to unvested employee and nonemployee stock option awards was $ 3.5 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.2 years.

At December 31, 2024, the aggregate intrinsic value of both outstanding options and exercisable options was $ 0 .

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

The weighted average grant-date fair value per share of options granted was $ 4.67 , $ 7.19 and $ 6.55 for the years ended December 31, 2024, 2023 and 2022, respectively.

The aggregate intrinsic value of options exercised was $ 41,000 , $ 0.1 million and $ 16,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, the total unrecognized compensation expense related to unvested employee and nonemployee stock option awards was $ 2.3 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.0 years.

Estimating Fair Value of Stock Options

16 unchanged sentences

The Company has issued service-based and performance-based restricted stock units (“RSUs”).

During the year ended December 31, 2023, the Company granted 479,585 service-based awards at a weighted average grant-date fair value of $ 9.89 per RSU.

Vesting of the service-based RSUs is based on the terms in each award agreement and is generally over four years .

During the year ended December 31, 2023, the Company granted 250,149 performance-based RSUs at a weighted average grant-date fair value of $ 10.95 per RSU.

Vesting of these performance-based RSUs is subject to continued service through 2026 and the achievement of certain performance milestones for fiscal year 2026.

The amount of RSUs that will vest can range from 0 % to 110 % of the original number of RSUs granted.

Vesting of the performance-based RSUs is subject to continued service through 2026 and the achievement of certain performance milestones for fiscal year 2026.

The amount of performance-based RSUs that will vest can range from 0 % to 110 % of the original number of RSUs granted.

Expense for the performance-based RSUs is not recognized until the performance conditions are deemed probable of achievement.

The Company did not record any expense related to the performance-based RSUs during the year ended December 31, 2023.

The Company has not recorded any expense related to the performance-based RSUs as the performance conditions are not deemed to be probable of achievement.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

The following table summarizes restricted stock units for the Plan:

The following table summarizes the service-based RSUs for the Plan:

Outstanding at January 1, 2022

5 unchanged sentences

Outstanding at December 31, 2024

The following table summarizes the performance-based RSUs for the Plan:

Outstanding at January 1, 2023

Canceled/forfeited

Outstanding at December 31, 2023

Canceled/forfeited

Outstanding at December 31, 2024

Included in outstanding RSUs at December 31, 2024, were 97,409 RSUs granted outside of the Plan.

1 unchanged sentence

The weighted average grant-date fair value per RSU granted was $ 6.54 , $ 10.25 and $ 11.21 during the years ended December 31, 2024, 2023 and 2022, respectively.

The aggregate intrinsic value of RSUs outstanding was $ 6.0 million and $ 3.6 million at December 31, 2023 and 2022, respectively.

The aggregate intrinsic value of RSUs outstanding was $ 2.9 million, $ 6.0 million and $ 3.6 million at December 31, 2024, 2023 and 2022, respectively.

The total unrecognized compensation expense at December 31, 2024 related to RSUs was $ 4.0 million, which is expected to be recognized in expense over a weighted-average period of approximately 2.4 years.

4 unchanged sentences

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 $ 0.5 million, $ 0.4 million and $ 0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company matches 50 % of employees’ contributions up to 6 %, subject to a maximum annual amount.

The Company’s contributions were $ 0.6 million, $ 0.5 million and $ 0.4 million for the years ended December

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

31, 2024, 2023 and 2022, respectively.

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.

4 unchanged sentences

The ESPP provides the opportunity to purchase the Company’s common stock at a 15 % discount to the market price through payroll deductions.

As of December 31, 2023, 2022 and 2021, 10,602 , 4,523 and 3,163 shares, respectively, have been issued under the ESPP.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

As of December 31, 2024, 2023 and 2022, 58,994 , 10,602 and 4,523 shares, respectively, were issued under the ESPP.

(11) Income Taxes

1 unchanged sentence

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.

Components of the Company’s current and deferred income tax expense or benefit for the period consisted of a tax

benefit of $ 0.1 million recorded related to its foreign jurisdiction recognized in the year ended December 31, 2024.

benefit or expense was recognized during the years ended December 31, 2023 or 2022.

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

1 unchanged sentence

Net operating loss carryforwards

Interest expense carryforward

Research and development credits

Lease liability

Capitalized research and development expenses

Stock-based compensation

Accrued expenses and other

Lease liability

Research and development credits

Inventory reserve

Gross deferred tax asset

Interest expense carryforward

Gross deferred tax asset before valuation allowance

valuation allowance

Total deferred tax asset

Deferred tax liabilities

2 unchanged sentences

Gross deferred tax liability

Net deferred tax asset before valuation allowance

Valuation allowance

Net deferred tax asset

1 unchanged sentence

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

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

The Company’s net operating loss (“NOL”) carryforwards for federal and state income tax purposes consisted of the following (in thousands):

1 unchanged sentence

The NOL carryforwards begin expiring in 2032 for federal purposes and in 2026 for state income tax purposes yet $ 187.3 million of the federal NOL carryforwards have no expiration.

The Company recorded a valuation allowance on the deferred tax assets as of December 31, 2023 and 2022 because of the uncertainty of their realization.

The Company recorded a valuation allowance on the majority of its deferred tax assets as of December 31, 2024 and 2023 because of the uncertainty of their realization.

The valuation allowance increased by $ 5.7 million and $ 10.9 million for the years ended December 31, 2024 and 2023, respectively, mainly due to losses incurred.

1 unchanged sentence

Ownership changes may limit the amount of net operating losses and general business tax credits carryforwards that can be utilized annually to offset future taxable income and tax, respectively.

In general, an ownership change, as defined by Section 382, results from transactions increasing the

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

ownership of 5% shareholders in the stock of a corporation by more than 50 percentage points over a three-year period.

In general, an ownership change, as defined by Section 382, results from transactions increasing the ownership of 5% shareholders in the stock of a corporation by more than 50 percentage points over a three-year period.

If the Company experiences a Section 382 ownership change, the tax benefits related to the NOL carryforwards may be further limited or lost.

8 unchanged sentences

Change in valuation allowance

Stock compensation true-up

Total tax provision

3 unchanged sentences

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

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

(12) Commitments and Contingencies

10 unchanged sentences

and European cumulative product sales targets.

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.

The Company paid $ 1.0 million in 2022 related to the sales milestone payments in the European territory.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

All amounts have been paid.

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 is 200 % of Aroa’s cost of goods sold, or 150 % of Aroa’s cost of goods sold for the Company’s recent products dedicated for use in inguinal hernia repair (“IHR”).

● We purchase product from Aroa at a fixed transfer cost as a percentage of Aroa’s cost of goods, which, subject to a true-up adjustment, results in an amount equal to 27 % of our net sales of our OviTex and OviTex PRS products, with the exception of OviTex inguinal hernia repair (“IHR”) product configurations, for which we pay the greater of the initial fixed transfer cost or 27 % of our net sales of OviTex IHR.

● The transfer price and the quarterly true-up amount continued to equal 27 % of Company’s net sales of licensed products, with the exception of the IHR products, where the total amount payable to Aroa will at least equal the aggregate transfer pricing paid to Aroa for such products during the applicable calendar year.

1 unchanged sentence

Under the amended agreement, the criteria for a supply failure was modified to mean a failure by Aroa to timely supply, during any consecutive 60-day period, at least 75 % of the products ordered by the Company under binding purchase orders.

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 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, 2023, the Company had $ 7.1 million in commitments with one supplier to maintain exclusivity rights over time and $ 1.8 million in milestone payments related to certain research and development arrangements which are currently deemed not probable as the timing and likelihood of such payments are not known with certainty.

During the period that the Company steps in and assumes manufacturing responsibility, the Company shall pay a royalty of 6 % of net sales in lieu of 27 % of net sales of the licensed products.

Research and Development Agreements

As of December 31, 2024, the Company had $ 1.8 million in milestone payments related to certain research and development arrangements which are currently deemed not probable as the timing and likelihood of such payments are not known with certainty.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Employment Agreements

10 unchanged sentences

As the Company is not reasonably certain to exercise the renewal option, the additional 60-month term has been excluded.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

Operating lease leasehold improvements are depreciated over the lesser of the useful lives of the leasehold improvements or the lease term.

2 unchanged sentences

The Company used an incremental borrowing rate of 11.66 % to discount the Malvern Lease payments included in the operating lease liabilities recognized.

The Company recognized $ 0.3 million of lease cost during both the years ended December 31, 2023 and 2022.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 0.4 million and $ 0.3 million for the years ended December 31, 2023 and 2022, respectively, and these amounts are included in operating activities in the consolidated statements of cash flows.

The Company recognized $ 0.5 million of lease cost during the year ended December 31, 2024 and $ 0.3 million of lease cost during both of the years ended December 31, 2023 and 2022.

Cash paid for amounts included in the measurement of operating lease liabilities was $ 0.6 million, $ 0.4 million and $ 0.3 million for the years ended December 31, 2024, 2023 and 2022, respectively, and these amounts are included in operating activities in the consolidated statements of cash flows.

As of December 31, 2024, the remaining lease term for the Malvern Lease is 5.4 years.

TELA Bio, Inc.

Notes to Consolidated Financial Statements (continued)

The following table reconciles the undiscounted future minimum lease payments (displayed in aggregate by year) under non-cancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on the consolidated balance sheets as of December 31, 2024 (in thousands):

3 unchanged sentences

As of December 31, 2024, $ 0.5 million representing the current portion of operating lease liabilities is included in accrued expenses and other current liabilities in the consolidated balance sheets and $ 1.4 million representing the long-term portion of operating lease liabilities is included in other long-term liabilities in the consolidated balance sheets.

(12) Subsequent Event

In March 2024, the Company sold its distribution rights for NIVIS Fibrillar Collagen Pack to MiMedx Group, Inc.

The following exhibits are being filed herewith:

1 unchanged sentence

Fourth Amended and Restated Certificate of Incorporation (incorporated by reference to exhibit 3.1 of the Company’s Current Report on Form 8-K filed on November 19, 2019).

Third Amended and Restated Bylaws (incorporated by reference to exhibit 3.1 of the Company’s Report on Form 10-Q filed on November 13, 2023).

Third Amended and Restated Bylaws (incorporated by reference to exhibit 3.1 of the Company’s Quarterly Report on Form 10-Q filed on November 13, 2023).

Specimen Common Stock Certificate of the Company (incorporated by reference to exhibit 4.1 to the Company’s Registration Statement on Form S-1 (File No.

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

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to exhibit 4.2 to the Company’s Report on Form 10-K, filed on March 30, 2020) .

Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to exhibit 4.2 to the Company’s Annual Report on Form 10-K, filed on March 30, 2020) .

Amended and Restated Investors’ Rights Agreement (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 (File No.

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

First Amendment and Joinder to Amended and Restated Investor Rights Agreement (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 (File No.

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

Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 23, 2024).

Form of Indemnification Agreement by and between the Company and its individual directors and officers (incorporated by reference to exhibit 10.1 to the Company’s Registration Statement on Form S-1 (File No.

25 unchanged sentences

Form of TELA Bio, Inc.

Amended and Restated 2019 Equity Incentive Plan Stock Option Grant Notice and Stock Option Agreement (incorporated by reference to exhibit 10.1 to the Company’s Report on Form 10-Q, filed on May 11, 2022).

Amended and Restated 2019 Equity Incentive Plan Stock Option Grant Notice and Stock Option Agreement (incorporated by reference to exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on May 11, 2022).

Form of TELA Bio, Inc.

Amended and Restated 2019 Equity Incentive Plan Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (time-based vesting) (incorporated by reference to exhibit 10.2 to the Company’s Report on Form 10-Q, filed on May 11, 2022).

Form of TELA Bio, Inc.

Amended and Restated 2019 Equity Incentive Plan Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (performance-based vesting) (incorporated by reference to exhibit 10.13 to the Company’s Report on Form 10-K, filed on March 23, 2023).

TELA Bio, Inc.

3 unchanged sentences

1 to TELA Bio, Inc.

2019 Employee Stock Purchase Plan (incorporated by reference to exhibit 10.15 to the Company’s Report on Form 10-K, filed on March 23, 2023) .

2019 Employee Stock Purchase Plan (incorporated by reference to exhibit 10.15 to the Company’s Annual Report on Form 10-K, filed on March 23, 2023) .

Form of TELA Bio, Inc.

Inducement Award Agreement for Non-Qualified Stock Option (incorporated by reference to exhibit 10.16 to the Company’s Report on Form 10-K, filed on March 23, 2023 ).

Inducement Award Agreement for Non-Qualified Stock Option (incorporated by reference to exhibit 10.16 to the Company’s Annual Report on Form 10-K, filed on March 23, 2023 ).

Form of TELA Bio, Inc.

Inducement Award Agreement for Restricted Stock Unit (incorporated by reference to exhibit 10.17 to the Company’s Report on Form 10-K, filed on March 23, 2023 ).

Inducement Award Agreement for Restricted Stock Unit (incorporated by reference to exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed on March 23, 2023 ) .

TELA Bio, Inc.

2 unchanged sentences

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 (incorporated by reference to exhibit 10.19 to the Company’s Report on Form 10-K, filed on March 23, 2022).

Employment Agreement, dated August 3, 2023, by and between the Company and Gregory Firestone (incorporated by reference to exhibit 10.1 to the Company’s Report on Form 10-Q, filed on August 10, 2023).

Credit and Security Agreement, dated as of May 26, 2022, by and among TELA Bio, Inc., MidCap Financial Trust and the lenders from time to time party thereto (incorporated by reference to exhibit 10.1 to the Company’s Report on Form 8-K, filed on May 31, 2022 ).

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 A nnual 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 Current Report on Form 8-K, filed on September 27, 2021) .

Employment Agreement, dated September 15, 2020, by and between the Company and Paul Talmo (incorporated by reference to exhibit 10.19 to the Company’s A nnual Report on Form 10-K, filed on March 23, 2022 ).

Employment Agreement, dated August 3, 2023, by and between the Company and Gregory Firestone (incorporated by reference to exhibit 10.1 to the Company’s Q uarterly Report on Form 10-Q, filed on August 10, 2023).

Letter Agreement, dated May 20, 2024, by and between the Company and Gregory Firestone (incorporated by reference to exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on August 13, 2024).

Amendment No.

1 to Credit and Security Agreement, dated as of October 18, 2023, by and among TELA Bio, Inc., MidCap Financial Trust and the lenders from time to time party thereto (filed herewith).

1 to Credit and Security Agreement, dated as of October 18, 2023, by and among TELA Bio, Inc., MidCap Financial Trust and the lenders from time to time party thereto ( incorporated by reference to exhibit 10.25 to the Company’s Annual Report on Form 10-K, filed on March 22, 2024 ).

Second Amended and Restated License, Product Development and Supply Umbrella Agreement, dated July 16, 2015, by and between the Company and Aroa Biosurgery Ltd.

8 unchanged sentences

Addendum to the Second Amended and Restated License, Product Development and Supply Umbrella Agreement, dated August 27, 2019, by and between the Company and Aroa Biosurgery Ltd.

(incorporated by reference to exhibit 10.22 on the Company’s Report on Form 10-K filed on March 30, 2020).

(incorporated by reference to exhibit 10.22 on the Company’s Annual Report on Form 10-K filed on March 30, 2020).

Addendum to the Second Amended and Restated License, Product Development and Supply Umbrella Agreement, dated February 15, 2020, by and between the Company and Aroa Biosurgery Ltd.

(incorporated by reference to exhibit 10.2 on the Company’s Report on Form 10-Q filed on May 15, 2020).

(incorporated by reference to exhibit 10.2 on the Company’s Quarterly Report on Form 10-Q filed on May 15, 2020).

Addendum to the Second Amended and Restated License, Product Development and Supply Umbrella Agreement, dated August 13, 2020, by and between the Company and Aroa Biosurgery Ltd.

(f iled herewith ).

(incorporated by reference to exhibit 10.31 to the Company’s Annual Report on Form 10-K, filed on March 22, 2024).

Addendum to the Second Amended and Restated License, Product Development and Supply Umbrella Agreement, dated August 1, 2024, by and between the Company and Aroa Biosurgery Ltd.

(incorporated by reference to exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed on November 8, 2024).

Lease between the Company and Liberty Property Limited Partnership, dated January 31, 2013 (incorporated by reference to exhibit 10.26 to the Company’s Registration Statement on Form S-1 (File No.

4 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 (incorporated by reference to exhibit 10.29 to the Company’s Report on Form 10-K, filed on March 25 , 202 1 ) .

Fourth Amendment to Lease between the Company and WPT Land 2 LP (as successor in interest to Liberty Property Limited Partnership), dated October 18, 2023 (filed herewith).

Equity Distribution Agreement, dated November 13, 2023 (incorporated by reference to Exhibit 10.2 of the Company’s Report on Form 10-Q filed on November 13, 2023) .

Fourth Amendment to Lease between the Company and WPT Land 2 LP (as successor in interest to Liberty Property Limited Partnership), dated October 18, 2023 ( incorporated by reference to exhibit 10.36 to the Company’s Annual Report on Form 10-K, filed on March 22, 2024 ).

Equity Distribution Agreement, dated November 13, 2023 (incorporated by reference to Exhibit 10.2 of the Company’s Quarterly Report on Form 10-Q filed on November 13, 2023) .

TELA Bio, Inc.

Insider Trading Policy (filed herewith).

Subsidiaries of the Registrant (filed herewith).

7 unchanged sentences

TELA Bio, Inc.

Compensation Recovery Policy (filed herewith).

Compensation Recovery Policy (incorporated by reference to exhibit 97.1 to the Company’s Annual Report on Form 10-K, filed on March 22 , 2024).

Inline XBRL Instance Document (filed herewith).

31 unchanged sentences

Kurt Azarbarzin

/s/ JEFFREY BLIZARD

March 21, 2025

Jeffrey Blizard

/s/ VINCE BURGESS

8 unchanged sentences

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