Axogen, Inc 10-Q for FY2026 Q3
Axogen, Inc. (AXGN)
10-Q
2026-10-28
For: 2026-09-30
View Original
Added on
October 29, 2026
About this 10-Q
Axogen, Inc filed this 10-Q on October 28, 2026, covering the quarter ended September 30, 2026 (FY2026 Q3).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $75.83M
- up 26.2% from $60.08M a year earlier
- Net income
- $2.33M
- up 229.7% from net income of $708K a year earlier
- Diluted EPS
- $0.04
- up 300.0% from $0.01 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2026
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from ____________ to______________
Commission file number: 001-36046
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction of
incorporation or organization)
(Address of principal executive offices)
(I.R.S. Employer
Identification No.)
(Zip Code)
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☒ | Accelerated filer | ☐ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 26, 2026, the registrant had 59,730,715 shares of common stock outstanding.
Axogen, Inc.
| Table of Contents | ||||||||
| Page | ||||||||
i
Axogen, Inc.
Forward-Looking Statements
From time to time, in reports filed with the United States Securities and Exchange Commission (the “SEC”) (including this Quarterly Report on Form 10-Q), in press releases, and in other communications to shareholders or the investment community, Axogen, Inc. (including Axogen, Inc.’s wholly owned subsidiaries, Axogen Corporation, Axogen Processing Corporation, Axogen Germany GmbH and Axogen Europe GmbH, the “Company,” “Axogen,” “we,” “our,” or “us”) may provide forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, concerning possible or anticipated future results of operations or business developments. These statements are based on management’s current expectations or predictions of future conditions, events or results based on various assumptions and management’s estimates of trends and economic factors in the markets in which the Company is active, as well as its business plans. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” “continue,” “may,” “should,” “will,” “goals,” and variations of such words and similar expressions are intended to identify such forward-looking statements.
The forward-looking statements in this Form 10-Q include, but are not limited to, the following:
•Our belief that we will continue to drive growth through targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties;
•Our expectations around our targeted strategy relating to the expansion of nerve repair indications with a focus on deepening our presence in high-potential accounts;
•Our expectations of satisfying certain job creation milestones by December 31, 2026 pursuant to our cash grants related to certain economic development grants for our Axogen Processing Center in Vandalia, Ohio;
•Our expectations around the potential positive impact on our business of expanded coverage and reimbursement for peripheral nerve injuries using synthetic conduits or allografts; and
•Our belief that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products will allow us to fund our operations through at least the next twelve months.
The forward-looking statements are and will be subject to risks and uncertainties, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. Forward-looking statements contained in this Quarterly Report on Form 10-Q should be evaluated together with the many risks and uncertainties that affect the Company’s business and its market, particularly those discussed in the risk factors and cautionary statements set forth in the Company’s filings with the SEC, including as described in “Risk Factors” included in Item 1A and “Risk Factor Summary” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Forward-looking statements are not guarantees of future performance, and actual results may differ materially from those projected. The forward-looking statements are representative only as of the date they are made and, except as required by applicable law, the Company assumes no responsibility to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or otherwise.
1
PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
Axogen, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share amounts)
| September 30, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Investments | |||||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | |||||||||||
| Inventory | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Total current assets | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Intangible assets, net | |||||||||||
| Other assets, net | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities and shareholders’ equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable and accrued expenses | $ | $ | |||||||||
| Current maturities of long-term lease obligations | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, net of debt discount and financing fees | |||||||||||
| Long-term lease obligations | |||||||||||
| Debt derivative liabilities | |||||||||||
| Other long-term liabilities | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies - see Note 15 | |||||||||||
| Shareholders’ equity | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements.
2
Axogen, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | ||||||||||||||||||||
| Revenues | $ | $ | $ | $ | |||||||||||||||||||
| Cost of goods sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total costs and expenses | |||||||||||||||||||||||
| Income (loss) from operations | ( | ||||||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income | |||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | |||||||||||||||||||
| Loss on extinguishment of debt | ( | ||||||||||||||||||||||
| Change in fair value of debt derivative liabilities | |||||||||||||||||||||||
| Other (expense) income, net | ( | ( | |||||||||||||||||||||
| Total other income (expense), net | ( | ( | ( | ||||||||||||||||||||
| Net income (loss) | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Weighted average common shares outstanding - basic | |||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | |||||||||||||||||||||||
| Net income (loss) per common share - basic | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Net income (loss) per common share - diluted | $ | $ | $ | ( | $ | ( | |||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
3
Axogen, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||||||
| Depreciation | |||||||||||
| Amortization of right-of-use assets | |||||||||||
| Amortization of intangible assets | |||||||||||
| Amortization of debt discount and deferred financing fees | |||||||||||
| Provision for bad debts | |||||||||||
| Loss on disposal of equipment | |||||||||||
| Change in fair value of debt derivative liabilities | ( | ||||||||||
| Investment gains, net | ( | ( | |||||||||
| Loss on extinguishment of debt | |||||||||||
| Stock-based compensation expense | |||||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Inventory | ( | ( | |||||||||
| Prepaid expenses and other assets | ( | ||||||||||
| Other assets, net | ( | ||||||||||
| Accounts payable and accrued expenses | ( | ||||||||||
| Operating lease obligations | ( | ( | |||||||||
| Cash paid for interest portion of financing lease obligations | ( | ( | |||||||||
| Other long-term liabilities | ( | ||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Purchase of investments | ( | ( | |||||||||
| Proceeds from sale of investments | |||||||||||
| Purchases of equity investments held at cost | ( | ||||||||||
| Cash payments for intangible assets | ( | ( | |||||||||
| Net cash used in investing activities | $ | ( | $ | ( | |||||||
| (CONTINUED...) | |||||||||||
4
Axogen, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Nine Months Ended | |||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of common stock | $ | $ | |||||||||
| Payment of stock issuance costs | ( | ||||||||||
| Repayment of long-term debt | ( | ||||||||||
| Fees paid to lender related to debt extinguishment | ( | ||||||||||
| Fees paid to third parties related to debt extinguishment | ( | ||||||||||
| Payments of employee tax withholding on vested stock awards | ( | ||||||||||
| Cash paid for debt portion of financing lease obligations | ( | ( | |||||||||
| Proceeds from exercise of stock options and ESPP stock purchases | |||||||||||
| Net cash provided by financing activities | |||||||||||
| Net increase (decrease) in cash and cash equivalents, and restricted cash | ( | ||||||||||
| Cash and cash equivalents, and restricted cash, beginning of period | |||||||||||
| Cash and cash equivalents, and restricted cash, end of period | $ | $ | |||||||||
| Supplemental disclosures of cash flow activity: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Supplemental disclosure of non-cash investing and financing activities: | |||||||||||
| Acquisition of property and equipment change in accounts payable and accrued expenses | $ | ( | $ | ||||||||
| Acquisition of right-of-use asset in exchange for a lease liability | $ | $ | |||||||||
| Acquisition of intangible assets change in accounts payable and accrued expenses | $ | $ | ( | ||||||||
See Notes to Condensed Consolidated Financial Statements.
5
Axogen, Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity
(unaudited)
(in thousands, except share amounts)
| Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders’ Equity | ||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| Three Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
| Balance at June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Issuance of common shares | — | ||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||
| Issuance of restricted and performance stock units, net of shares withheld for withholding taxes | — | ( | — | ( | |||||||||||||||||||||||||
| Exercise of stock options | — | ||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Nine Months Ended September 30, 2026 | |||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
| Issuance of common shares | — | ||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||
| Issuance of restricted and performance stock units, net of shares withheld for withholding taxes | ( | — | ( | ||||||||||||||||||||||||||
| Exercise of stock options and employee stock purchases under the ESPP | — | ||||||||||||||||||||||||||||
| Balance at September 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||
| Issuance of restricted and performance stock units | ( | — | |||||||||||||||||||||||||||
| Exercise of stock options | — | ||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||
| Issuance of restricted and performance stock units | ( | — | |||||||||||||||||||||||||||
| Exercise of stock options and employee stock purchases under the ESPP | — | ||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
6
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(in thousands, except share and per share amounts)
1. Nature of Business
Axogen, Inc. (together with its wholly-owned subsidiaries, the “Company”) was incorporated in Minnesota. The Company’s business is focused on the science, development and commercialization of the technologies used for peripheral nerve regeneration and repair. The Company’s products include Avance® (acellular nerve allograft-arwx), Avance® Nerve Graft, Axoguard Nerve Connector®, Axoguard Nerve Protector®, Axoguard HA+ Nerve Protector™, Axoguard Nerve Cap® and Avive+ Soft Tissue Matrix®. The Company is headquartered in Florida. The Company has processing, warehousing and distribution facilities in Ohio and Texas.
2. Summary of Significant Accounting Policies
Please see Note 2 - Summary of Significant Accounting Policies to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report on Form 10-K”), filed with the SEC on February 24, 2026, for a description of all significant accounting policies.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of the Company as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025. The Company’s condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X and therefore do not include all information and footnotes necessary for a fair presentation of consolidated financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the U.S. (“U.S. GAAP”) and should be read in conjunction with the audited financial statements of the Company for the year ended December 31, 2025, which are included in the 2025 Annual Report on Form 10-K.
Cash and Cash Equivalents and Concentration
Restricted Cash
The following table provides a reconciliation of Cash and cash equivalents, and Restricted cash reported on the Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown on the Condensed Consolidated Statements of Cash Flows as of the periods presented:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
| Total Cash and cash equivalents, and Restricted cash shown on the Condensed Consolidated Statements of Cash Flows | $ | $ | |||||||||
7
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
Shares Withheld to Satisfy Employee Tax Obligations
Upon vesting or settlement of certain share‑based awards, the Company may withhold a portion of the shares otherwise issuable to employees in order to satisfy statutory income and payroll tax withholding requirements. The shares withheld are not issued and therefore are not considered shares repurchased by the Company or reported as treasury stock. The Company records a liability for the amount of taxes to be remitted to tax authorities, and such cash payments are classified as financing activities within the Condensed Consolidated Statements of Cash Flows.
Recent Accounting Pronouncements
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03 — Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) — Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB issued ASU 2025-01 — Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). ASU 2024-03 requires public business entities to provide additional disclosure about certain types of expenses included in the expense captions presented on the statement of operations, including purchases of inventory, employee compensation, depreciation, amortization and depletion. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. Retrospective application is permitted. Upon adoption, the Company expects to enhance expense disclosures based on the new requirements.
In September 2025, the FASB issued ASU 2025-06 — Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 was issued to modernize the accounting for software costs that are accounted for under Subtopic 350-40, including removing reference to “project stages” and introducing a “probable-to-complete recognition threshold.” ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting the new guidance.
In December 2025, the FASB issued ASU 2025-10 — Government Assistance (Topic 832): Accounting for Government Grants Received by Business Entities (“ASU 2025-10”). ASU 2025-10 establishes guidance for the recognition, measurement and presentation of government grants received by business entities, including grants related to assets and grants related to income. ASU 2025-10 is effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of adopting the new guidance.
In December 2025, the FASB issued ASU 2025-11 — Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”). ASU 2025-11 clarifies the interim reporting guidance in the Accounting Standards Codification (“ASC”), adding a comprehensive list of required interim disclosures and a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim periods within annual periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating these new disclosure requirements.
All other ASUs issued and not yet effective as of September 30, 2026 and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s current or future financial position or results of operations.
8
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
3. Inventory
Inventory consists of the following as of the periods presented:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Finished goods | $ | $ | |||||||||
| Work in process | |||||||||||
| Raw materials | |||||||||||
| Less: inventory reserve | ( | ( | |||||||||
| Inventory | $ | $ | |||||||||
4. Property and Equipment, Net
Property and equipment, net consists of the following as of the periods presented:
| (in thousands) | September 30, 2026 | December 31, 2025 | |||||||||
| Land | $ | $ | |||||||||
| Building | |||||||||||
| Leasehold improvements | |||||||||||
| Processing equipment | |||||||||||
| Furniture and equipment | |||||||||||
| Projects in process | |||||||||||
| Finance lease right-of-use assets | |||||||||||
| Property and equipment, at cost | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
| Property and equipment, net | $ | $ | |||||||||
Depreciation expense is as follows for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Depreciation expense | $ | $ | $ | $ | |||||||||||||||||||
9
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
5. Intangible Assets , Net
Intangible assets, net consist of the following as of the periods presented:
| September 30, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||
| (in thousands) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||
| Amortizable intangible assets: | |||||||||||||||||||||||||||||||||||
| Patents | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
| Unamortized intangible assets: | |||||||||||||||||||||||||||||||||||
| Trademarks | — | — | |||||||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Amortization expense is as follows for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Amortization expense | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026, future amortization of patents is as follows:
| (in thousands) | |||||
| 2026 (excluding the nine months ended September 30, 2026) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
6. Other Assets, Net
Other assets, net consists of the following as of the period presented:
| (in thousands) | September 30, 2026 | ||||||||||
| Equity investments held at cost | $ | ||||||||||
| Capitalized software implementation costs | |||||||||||
| Other assets, net | |||||||||||
| Other assets, net | $ | ||||||||||
Equity Investments Held at Cost
The Company may strategically invest in noncontrolling equity interests of privately-held companies.
During the three months ended September 30, 2026, the Company made a strategic investment of $7,000 in preferred stock of Trace Biosciences Inc. (“Trace”), a privately held biotechnology company, representing ownership of approximately 18.9 %. The investment does not have a readily determinable fair value and is accounted for under the measurement alternative under ASC 321, Investments — Equity Securities. Under the measurement alternative, the investment is measured at cost, less
10
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
impairment, if any, and adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. As of September 30, 2026, the carrying value of the Company’s investment in Trace was $7,008 , including capitalized transaction costs, and was included within Other assets, net on the Condensed Consolidated Balance Sheet. No adjustments for observable price changes or impairment were recognized during the three months ended September 30, 2026.
7. Fair Value Measurements
The following tables present the Company’s fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of the periods presented:
| Balance Sheet Classification | September 30, 2026 | ||||||||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Money market funds | Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||||
| U.S. Treasuries | Investments | ||||||||||||||||||||||||||||
| Corporate bonds | Investments | ||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||||||||
| Balance Sheet Classification | December 31, 2025 | ||||||||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Money market funds | Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||||
| U.S. Treasuries | Investments | ||||||||||||||||||||||||||||
| Total assets | $ | $ | $ | $ | |||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Debt derivative liabilities | $ | $ | $ | $ | |||||||||||||||||||||||||
The changes in Level 3 liabilities measured at fair value on a recurring basis for the periods presented were as follows:
| (in thousands) | Three Months Ended September 30, 2025 | ||||
| Balance at June 30, 2025 | $ | ||||
| Change in fair value included in net income | ( | ||||
| Balance at September 30, 2025 | $ | ||||
| Nine Months Ended | |||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | |||||||||
| Balance at December 31, 2025 and 2024 | $ | $ | |||||||||
| Change in fair value included in net loss | ( | ||||||||||
| Extinguishment of debt derivative included in net loss | ( | ||||||||||
| Balance at September 30, 2026 and 2025 | $ | $ | |||||||||
There were no changes in the levels or methodology of the measurement of financial assets or liabilities during the nine months ended September 30, 2026 and 2025.
The fair values of cash, restricted cash, accounts receivable, accounts payable and accrued expenses approximate the carrying values because of the short-term nature of these instruments.
11
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
8. Leases
The Company leases administrative, manufacturing, research, and distribution facilities through operating leases. Several leases include fixed payments, including rent and non-lease components such as common area or other maintenance costs.
The components of total operating lease expense and sublease income are as follows for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Operating lease costs | $ | $ | $ | $ | |||||||||||||||||||
| Short-term lease costs | |||||||||||||||||||||||
| Variable lease costs | |||||||||||||||||||||||
| Total operating lease expense | $ | $ | $ | $ | |||||||||||||||||||
| Sublease income | $ | $ | $ | $ | |||||||||||||||||||
Supplemental balance sheet information related to the operating and financing leases is as follows as of the periods presented:
| (in thousands, except lease term and discount rate) | September 30, 2026 | December 31, 2025 | |||||||||
| Operating Leases | |||||||||||
| Right-of-use operating assets | $ | $ | |||||||||
| $ | $ | ||||||||||
| $ | $ | ||||||||||
| Financing Leases | |||||||||||
Right-of-use financing assets, net of accumulated amortization (1) | $ | $ | |||||||||
| $ | $ | ||||||||||
| $ | $ | ||||||||||
| Weighted average operating lease term | |||||||||||
| Weighted average financing lease term | |||||||||||
Weighted average discount rate - operating leases | |||||||||||
Weighted average discount rate - financing leases | |||||||||||
__________
12
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
Future minimum lease payments under operating and financing leases as of September 30, 2026 are as follows:
| (in thousands) | |||||
| 2026 (excluding the nine months ended September 30, 2026) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | |||||
| Less: imputed interest | ( | ||||
| Total lease obligations | |||||
| Less: current maturities of long-term lease obligations | ( | ||||
| Long-term lease obligations | $ | ||||
Lease Modifications
The Company accounts for lease revisions as a lease modification in accordance with FASB ASC 842, Leases, when the modification effectively terminates the existing lease and creates a new lease.
The Company and Progress Park Buildings Alachua, LLC, a Florida limited liability company (as successor in interest to Alachua Copeland Park Investments, LLC, a Florida limited liability company, who was successor in interest to Ology Bioservices Holdings, LLC, a Delaware limited liability company, who was successor in interest to SNH Medical Office Properties Trust), are parties to a lease dated February 6, 2007, as amended (the “Primary Lease”). Pursuant to the Primary Lease, the Company leases an approximately 19,000 square foot corporate headquarters facility in Alachua, Florida. On February 24, 2026, the Company entered into a seventh amendment to the Primary Lease to extend the term of the Primary Lease to December 31, 2031. The Company recorded a right-of-use asset and lease liability of $1,967 and $2,053 , respectively, related to this extension.
9. Long-Term Debt, Net of Debt Discount and Financing Fees
Credit Facility
In June 2020, the Company entered into a credit facility (the “Credit Facility”) with Oberland Capital and its affiliates, TPC Investments II LP and Argo LLC (collectively, the “Lender”). The Company obtained the first tranche of the Credit Facility of $35,000 at closing on June 30, 2020. On June 30, 2021, the second tranche of the Credit Facility of $15,000 was drawn down by the Company. Each tranche of the Credit Facility had a term of seven years from the date of issuance.
The Company paid Credit Facility debt interest of $1,519 during the three months ended September 30, 2025, and $438 and $4,512 during the nine months ended September 30, 2026 and 2025, respectively, to the Lender.
In connection with the Credit Facility, the Company entered into a revenue participation agreement (the “Revenue Participation Agreement”) with the Lender, which provided a quarterly royalty payment as a percentage of the Company’s net revenues, up to $70,000 in any given year. The Company recorded $186 and $756 during the nine months ended September 30, 2026 and 2025, respectively, as interest expense for this Revenue Participation Agreement.
Upon repayment of the Credit Facility, the Company was required to repay the principal balance and provide a make-whole payment calculated to generate an internal rate of return to the Lender equal to 11.5 %, less the total of all quarterly interest and royalty payments previously paid to the Lender (the “Make-Whole Payment”).
On January 20, 2026, the Company entered into a payoff letter with the Lender (the “Payoff Letter”). Pursuant to the Payoff Letter, the final payoff amount was $69,707 (the “Payoff Amount”). Upon payment of the Payoff Amount on January 28, 2026 and satisfaction of the other conditions specified in the Payoff Letter, all obligations under the Credit Facility, including the Make-Whole Payment, were paid in full, all liens and security interests securing such obligations were released,
13
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
and the Credit Facility and related loan documents were terminated, subject to certain customary surviving provisions. Payment of the Payoff Amount was funded by proceeds from an underwritten public offering of an aggregate of 4,600,000 shares of the Company’s common stock, $0.01 par value per share, at a public offering price of $31.00 per share completed by the Company on January 23, 2026 (the “January 2026 Offering”). See Note 10 - Shareholders’ Equity for additional details regarding the January 2026 Offering.
In connection with the repayment of the Credit Facility, the Company recorded a loss on extinguishment of debt of $16,849 during the nine months ended September 30, 2026.
Other Credit Facilities
The Company had restricted cash of $2,000 and $4,000 at September 30, 2026 and December 31, 2025, respectively which represents collateral for an irrevocable standby letter of credit required to meet contractual terms of a lease agreement held by the Company.
10. Shareholders’ Equity
September 2026 Equity Offering
On September 10, 2026, the Company entered into an underwriting agreement (the “September Underwriting Agreement”) with BofA Securities, Inc., Jefferies LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters named therein (the “September Underwriters”). Pursuant to the terms and conditions of the September Underwriting Agreement, the Company agreed to sell 4,910,000 shares of its common stock, $0.01 par value per share, at a public offering price of $42.50 per share (the “Initial Offering”), plus an additional 736,500 shares pursuant to the September Underwriters’ option to purchase additional shares (the “Greenshoe Offering” and together with the Initial Offering, the “September 2026 Offering”). The Initial Offering closed on September 11, 2026 and the Greenshoe Offering closed on September 16, 2026 with an aggregate sale of 5,646,500 shares.
The Company received net proceeds from the September 2026 Offering of $225,029 , after deducting the underwriting discounts and commissions, and expenses in connection with the September 2026 Offering. Net proceeds from the September 2026 Offering were used to fund the BioCircuit Acquisition and related fees and expenses, with the remaining net proceeds to be used for general corporate purposes. See Note 16 - Subsequent Events for details regarding the BioCircuit Acquisition.
January 2026 Equity Offering
On January 21, 2026, the Company entered into an underwriting agreement (the “January Underwriting Agreement”) with Wells Fargo Securities, LLC and Mizuho Securities USA LLC, as representatives of the underwriters (the “January Underwriters”). Pursuant to the terms and conditions of the January Underwriting Agreement, the Company agreed to sell 4,000,000 shares of its common stock, $0.01 par value per share, at a public offering price of $31.00 per share, plus an additional 600,000 shares pursuant to the January Underwriters’ option to purchase additional shares. The January 2026 Offering closed on January 23, 2026 with a sale of 4,600,000 shares.
The Company received net proceeds from the January 2026 Offering of $133,252 , after deducting the underwriting discounts and commissions, and expenses in connection with the January 2026 Offering. Net proceeds from the January 2026 Offering were used for the early payoff and termination of the Credit Facility for a final repayment amount of $69,707 . The remaining net proceeds to be used for working capital, capital expenditures and other general corporate purposes. See Note 9 - Long-Term Debt, Net of Debt Discount and Financing Fees for details regarding the termination of the Credit Facility.
14
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
11. Stock-Based Compensation
The Company’s stock-based compensation plans are described in Note 11 - Stock-Based Compensation to its consolidated financial statements included in the 2025 Annual Report on Form 10-K.
During the nine months ended September 30, 2026, the following stock-based awards were granted to directors, executive officers and other employees. All awards were granted under the 2019 Amended and Restated Long-Term Incentive Plan.
| Type of Award | Quarter Awarded | Target Shares or Units | Weighted Average Grant Date Fair Value | |||||||||||||||||
Restricted Stock Units (1) | 1st Quarter | $ | ||||||||||||||||||
| 2nd Quarter | $ | |||||||||||||||||||
| 3rd Quarter | $ | |||||||||||||||||||
Performance Stock Units (2) | 1st Quarter | $ | ||||||||||||||||||
| 2nd Quarter | $ | |||||||||||||||||||
| 3rd Quarter | $ | |||||||||||||||||||
__________
(1)Restricted Stock Units (“RSUs”) awarded to certain officers and employees during the first, second and third quarters of 2026 vest 50 % after 24 months and an additional 25 31,931 units awarded to the Board of Directors for their annual fee, vesting one year from the date of the award. Upon vesting, the outstanding number of RSUs vested are converted into common stock.
(2)Performance Stock Units (“PSUs”) were awarded to certain executive officers and other employees during the first and third quarters of 2026 with a target of 392,556 0 200 three-year period upon determination of the results at the end of the performance period. PSUs were awarded to certain employees during the first and second quarters of 2026 with a target of 49,950 shares and performance metrics tied to the achievement of sales quota goals.
Non-cash stock-based compensation expense is included in the following line items on the Condensed Consolidated Statements of Operations as follows for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Costs of goods sold | $ | $ | $ | $ | |||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total non-cash stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
15
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
12. Basic and Diluted Net Income (Loss) Per Common Share
The following reflects the net income (loss) attributable to common shareholders and share data used in the basic and diluted net income (loss) per common share computations using the two-class method for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in thousands, except per share amounts) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares outstanding - basic | |||||||||||||||||||||||
| Weighted average shares outstanding - diluted | |||||||||||||||||||||||
| Net income (loss) per common share - basic | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Net income (loss) per common share - diluted | $ | $ | $ | ( | $ | ( | |||||||||||||||||
Anti-dilutive shares excluded from the calculation of diluted net income (loss) per common share (1) | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Restricted and performance stock units | |||||||||||||||||||||||
__________
(1)Common equivalent shares for the nine months ended September 30, 2026 and 2025 are not included in the diluted per share calculations as they would be dilutive if the Company was in a net income position.
13. Income Taxes
The Company has no
Deferred income taxes are accounted for using the balance sheet approach, which requires recognition of deferred tax assets and liabilities for the expected future consequences of temporary differences between the financial reporting basis and the tax basis of assets and liabilities as measured by enacted state and federal tax rates. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more-likely-than-not that a portion or none of the deferred tax assets will be realized. As of September 30, 2026 and December 31, 2025, management assessed the realizability of deferred tax assets. After consideration of all the evidence, including reversal of deferred tax liabilities, future taxable income and other factors, management determined that a full valuation allowance was necessary as of September 30, 2026 and December 31, 2025. A portion of the net operating loss carryforwards may expire due to limitations imposed by Section 382 of the Internal Revenue Code (“IRC”). In addition, future utilization of the available net operating loss carryforwards may be limited under IRC Section 382 as a result of changes in ownership.
In the normal course of business, the Company is subject to examination by taxing authorities throughout the U.S. The Company’s remaining open tax years subject to examination by federal tax authorities include the years ended December 31, 2022 through 2025. During the nine months ended September 30, 2026, the Internal Revenue Service (the “IRS”) completed examining the Company’s 2021 federal income tax return with no material findings. The Company’s remaining open tax years subject to examination by state and foreign tax authorities include the years ended December 31, 2021 through 2025. However, for tax years 2004 through 2021, federal and state taxing authorities may examine and adjust loss carryforwards in the years in which those loss carryforwards are ultimately utilized.
16
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
14. Segments
The Company determines its operating segments in accordance with FASB ASC 280, Segment Reporting (“ASC 280”). ASC 280 defines operating segments as components where discrete financial information is regularly reviewed by the chief operating decision maker (“CODM”), which for the Company is the Chief Executive Officer, to determine resource allocation and assess performance. As such, based on the way the CODM monitors and makes decisions affecting operations, the Company has concluded that it has one one operating segment and is managed on a consolidated basis, the measure of profit or loss is consolidated net income or loss. The metrics are used to review operating trends, to perform analytical comparisons between periods and to monitor budget to actual variances.
Geographic Areas
International revenues are defined as revenues generated from sales to customers outside of the U.S. The following table details total revenues by major geographic area for the periods presented:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | September 30, 2026 | September 30, 2025 | |||||||||||||||||||
| U.S. | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
As of September 30, 2026 and December 31, 2025, all of the Company’s long-lived assets were held within the U.S.
15. Commitments and Contingencies
Service Agreements
The Company pays a third party a facility fee for the use of cleanrooms, manufacturing, storage, and office space and for services in support of its tissue processing including for routine sterilization of daily supplies, providing disposable supplies and microbial services, and office support pursuant to a License and Services Agreement, as amended (the “License and Services Agreement”). Pursuant to the License and Services Agreement, the Company recorded expenses of $217 and $233 for the three months ended September 30, 2026 and 2025, respectively, and $614 and $686 for the nine months ended September 30, 2026 and 2025, respectively, within Cost of goods sold in the Company’s Condensed Consolidated Statements of Operations. The License and Services Agreement was amended on December 31, 2023 extending the term through December 31, 2026. The License and Services Agreement may be terminated by either party by providing an eighteen-month written notice. The Company utilizes the same third-party vendor for processing and packaging of Avive+ Soft Tissue Matrix®.
Distribution and Supply Agreements
In August 2008, the Company entered into an exclusive distribution agreement with a third party (the “Distributor”) to distribute the Axoguard Nerve Connector® and Axoguard Nerve Protector™ products worldwide and the parties subsequently amended the agreement on August 4, 2023. The distribution agreement expires on December 31, 2030. The distribution agreement establishes a formula for the transfer cost of the Axoguard Nerve Connector® and Axoguard Nerve Protector™ products and requires certain minimum purchases by the Company, although, through mutual agreement, the parties have not established such minimums; and, to date, have not enforced such provision. Under the distribution agreement, the Company provides purchase orders to the Distributor, and the Distributor fulfills the purchase orders. The distribution agreement allows for termination provisions for both parties.
17
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
In June 2017, the Company entered into the Nerve End Cap Supply Agreement (the “Supply Agreement”) with the Distributor whereby the Distributor is the exclusive contract manufacturer of the Axoguard Nerve Cap®, and the parties subsequently amended the agreement on August 4, 2023. The Supply Agreement expires on December 31, 2030. The Supply Agreement establishes the terms and conditions in which the Distributor will manufacture the product for the Company. Under the Supply Agreement, the Company provides purchase orders to the Distributor and the Distributor fulfills the purchase orders. The Supply Agreement allows for termination provisions for both parties.
In May 2023, the Company entered into the Supply and Manufacturing Agreement (the “HA+ Supply Agreement”) with the Distributor whereby the Distributor is the exclusive contract manufacturer of the Axoguard HA+ Nerve Protector™. The HA+ Supply Agreement expires on July 1, 2030. The HA+ Supply Agreement establishes the terms and conditions in which the Distributor will manufacture, package, label and deliver the product to the Company. Under the HA+ Supply Agreement, the Company provides purchase orders to the Distributor, and the Distributor fulfills the purchase orders. The HA+ Supply Agreement allows for termination provisions for both parties.
The loss of the Company’s ability to sell the Axoguard Nerve Connector®, Axoguard Nerve Protector™, Axoguard Nerve Cap® and Axoguard HA+ Nerve Protector™ products could have a material adverse effect on the Company’s business until other replacement products would become available.
Processing Facilities
The Company is highly dependent on the continued availability of its processing facilities at its Axogen Processing Center (the “APC Facility”) in Vandalia, Ohio and the facility it leases in Dayton, Ohio and could be harmed if the physical infrastructure of these facilities is unavailable for any prolonged period of time.
Certain Economic Development Grants
The Company obtained certain economic development grants from state and local authorities totaling up to $2,685 , including $1,250 of cash grants, to offset costs to acquire and develop the APC Facility. Certain of these economic development grants were subject to fixed asset investments and job creation milestones by December 31, 2024 and have clawback clauses if the Company does not meet the job creation milestones. In October 2025, the Company received notification from certain grant authorities that the Company is expected to satisfy its job creation milestone, assuming the Company continues to maintain its existing headcount and payroll amount thresholds through December 31, 2026. If the Company is unable to maintain minimum requirements under its grant agreements, the Company could be obligated to pay back up to approximately $950 as of September 30, 2026 related to these grants. As of September 30, 2026, the Company has received $1,250 in cash grants related to these economic development grants.
Other Commitments
Certain executive officers of the Company are parties to employment contracts. Such contracts have severance payments for certain conditions including change of control.
Legal Proceedings
The Company is and may be subject to various claims, lawsuits and proceedings in the ordinary course of the Company’s business. Such matters are subject to many uncertainties and outcomes are not predictable with assurance. While there can be no assurances as to the ultimate outcome of any legal proceeding or other loss contingency involving the Company, in the opinion of management, such claims are either adequately covered by insurance or otherwise indemnified, or are not expected individually or in the aggregate, to result in a material, adverse effect on the Company’s financial condition, results of operations or cash flows. However, it is possible that the Company’s results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies.
18
Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
16. Subsequent Events
On October 1, 2026, the Company completed its acquisition of BioCircuit Technologies, Inc. (“BioCircuit”), a Georgia corporation (the “BioCircuit Acquisition”). Pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), Omega Merger Sub, Inc., a Georgia corporation and wholly owned subsidiary of the Company merged with and into BioCircuit, with BioCircuit surviving as a wholly owned subsidiary of the Company (the “Merger”). The base purchase price was $200,000 in cash, subject to adjustments for cash, indebtedness, transaction expenses and net working capital. At closing, $1,000 was withheld to satisfy any post-closing purchase price adjustments. In connection with the BioCircuit Acquisition, the Company incurred transaction expenses of $1,883 during the three months ended September 30, 2026, recorded in General and administrative expense on its Condensed Consolidated Statements of Operations. The Company estimates approximately $5,000 of additional transaction expenses during the three months ended December 31, 2026.
The BioCircuit Acquisition and related fees and expenses were funded by net proceeds from the September 2026 Offering of an aggregate of 5,646,500 shares of the Company’s common stock, $0.01 par value per share, at a public offering price of $42.50 per share completed on September 16, 2026. See Note 10 - Shareholders’ Equity for additional details regarding the September 2026 Offering.
As of the date of issuance of these Condensed Consolidated Financial Statements, the initial accounting for the BioCircuit Acquisition has not been completed.
19
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(in thousands, except share and per share amounts)
ITEM 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and the related notes thereto appearing elsewhere in this report and our consolidated financial statements for the year ended December 31, 2025, included in our 2025 Annual Report on Form 10-K. All dollar amounts in the discussion and analysis, unless noted otherwise, are presented in thousands.
Unless the context otherwise requires, all references in this report to “Axogen,” the “Company,” “we,” “us” and “our” refer to Axogen, Inc., and its wholly owned subsidiaries Axogen Corporation, Axogen Processing Corporation, Axogen Europe GmbH and Axogen Germany GmbH.
Overview
We are the leading company focused specifically on the science, development and commercialization of technologies for peripheral nerve regeneration and repair. We are passionate about providing the opportunity to restore nerve function and quality of life for patients with peripheral nerve injuries. We provide innovative, clinically proven and economically effective repair solutions for surgeons and healthcare providers. Peripheral nerves provide the pathways for both motor and sensory signals throughout the body. Every day people suffer traumatic injuries or undergo surgical procedures that impact the function of their peripheral nerves. Physical damage to a peripheral nerve or the inability to properly reconnect peripheral nerves can result in the loss of muscle or organ function, the loss of sensory feeling, or the initiation of pain.
Product Portfolio
Our platform for peripheral nerve repair features a comprehensive portfolio of products, including:
•Avance® (acellular nerve allograft-arwx), an FDA-approved acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory, mixed, and motor peripheral nerve discontinuities (“Avance”);
•Avance® Nerve Graft, a biologically active off-the-shelf processed human nerve allograft for bridging severed peripheral nerves without the comorbidities associated with a second surgical site (“Avance Nerve Graft”);
•Axoguard Nerve Connector®, a porcine (pig) submucosa extracellular matrix (“ECM”) coaptation aid for tensionless repair of severed peripheral nerves (“Axoguard Nerve Connector”);
•Axoguard Nerve Protector®, a porcine submucosa ECM product used to wrap and protect damaged peripheral nerves and reinforce the nerve reconstruction while minimizing soft tissue attachments (“Axoguard Nerve Protector”);
•Axoguard HA+ Nerve Protector™, a porcine submucosa ECM base layer coated with a proprietary hyaluronate-alginate gel, a next-generation technology designed to enhance nerve gliding and provide short- and long-term protection for peripheral nerve injuries (“Axoguard HA+ Nerve Protector”);
•Axoguard Nerve Cap®, a porcine submucosa ECM product used to protect a peripheral nerve end and separate the nerve from the surrounding environment to reduce the development of symptomatic or painful neuroma (“Axoguard Nerve Cap”); and
•Avive+ Soft Tissue Matrix®, a multi-layer amniotic membrane allograft used to protect and separate tissues in the surgical bed during the critical phase of tissue healing (“Avive+ Soft Tissue Matrix”).
On December 3, 2025, the FDA approved the Biologics License Application for Avance. Continued approval depends on verification and description of clinical benefits in confirmatory studies.
While we offer nerve repair products in the U.S., Canada, Germany, the United Kingdom, Spain and several other countries, we derive substantially all of our revenues from sales of our nerve repair products to customers in the U.S.
Our strategy remains focused on deepening our presence in high-potential accounts, specifically Level 1 trauma centers and academic-affiliated hospitals with a high number of trained microsurgeons. We will drive growth in these accounts through
20
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
targeted expansion of nerve repair indications and driving deeper adoption of our nerve repair algorithm across multiple surgical specialties.
Business Outlook
We are subject to risks and exposures from the evolving macroeconomic environment, including financial market volatility, geopolitical tensions and escalating trade disputes with U.S. trading partners. While our direct exposure to current tariffs is limited, risk lies in the potential for these disputes to cause a broader trade war, resulting in general economic instability and uncertainty that could cause our net revenue to fluctuate. We are actively assessing steps to mitigate potential adverse effects; however, if these measures are not effective in addressing wider economic disruption, our business, financial condition, results of operations and liquidity could be materially adversely affected.
Summary of Operational and Business Highlights
•Revenues were $75,834 for the quarter ended September 30, 2026, an increase of $15,752 or 26.2% compared to the quarter ended September 30, 2025.
•Gross profit was $56,731 for the quarter ended September 30, 2026, an increase of $10,738 or 23.3% compared to the quarter ended September 30, 2025.
•Year-to-date revenue growth through the third quarter of 2026 was broad-based across Extremities, Oral Maxillofacial & Head and Neck, and Breast, driven by 20% plus year-over-year account productivity, expanding sales force coverage, and improving commercial insurance coverage and payment.
•Received positive coverage decisions from Elevance and Aetna; commercial payer coverage for Avance is now approximately 96% of covered lives in the United States.
•Closed an upsized public offering with the sale of 5,646,500 shares of common stock and receipt of $225,029 of net proceeds, with $200,000 of the net proceeds used to fund the BioCircuit Acquisition and $1,883 used to fund transaction related expenses, with the remaining funds available for general corporate purposes.
•On October 1, 2026 we completed the acquisition of BioCircuit, a privately held medical device company and developer of NerveTape®.
21
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Results of Operations
Comparison of the Three Months Ended September 30, 2026 and 2025
The following table sets forth, for the periods presented, our results of operations expressed as dollar amounts and percentage of total revenue:
| Three Months Ended | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (dollars in thousands) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||
| Revenues | $ | 75,834 | 100.0 | % | $ | 60,082 | 100.0 | % | |||||||||||||||
| Cost of goods sold | 19,103 | 25.2 | 14,089 | 23.4 | |||||||||||||||||||
| Gross profit | 56,731 | 74.8 | 45,993 | 76.6 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
| Sales and marketing | 30,361 | 40.0 | 25,680 | 42.7 | |||||||||||||||||||
| Research and development | 8,950 | 11.8 | 7,565 | 12.6 | |||||||||||||||||||
| General and administrative | 16,465 | 21.7 | 10,836 | 18.1 | |||||||||||||||||||
| Total costs and expenses | 55,776 | 73.5 | 44,081 | 73.4 | |||||||||||||||||||
| Income from operations | 955 | 1.3 | 1,912 | 3.2 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income | 1,431 | 1.9 | 319 | 0.5 | |||||||||||||||||||
| Interest expense | (1) | — | (1,757) | (2.9) | |||||||||||||||||||
| Change in fair value of debt derivative liabilities | — | — | 209 | 0.4 | |||||||||||||||||||
| Other (expense) income, net | (51) | (0.1) | 25 | — | |||||||||||||||||||
| Total other income (expense), net | 1,379 | 1.8 | (1,204) | (2.0) | |||||||||||||||||||
| Net income | $ | 2,334 | 3.1 | % | $ | 708 | 1.2 | % | |||||||||||||||
Revenues
Revenues for the three months ended September 30, 2026 increased $15,752, or 26.2%, to $75,834, as compared to $60,082 for the three months ended September 30, 2025. The increase in revenues was primarily driven by an increase in unit volume and the impact of changes in price.
Gross Profit
Gross profit for the three months ended September 30, 2026 increased $10,738, or 23.3%, to $56,731, as compared to $45,993 for the three months ended September 30, 2025. Gross margin as a percentage of revenues was 74.8% and 76.6% for the three months ended September 30, 2026 and 2025, respectively. Compared to the three months ended September 30, 2025, margins on products sold declined primarily due to higher product costs, partially offset by lower inventory write-offs.
22
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Costs and Expenses
Following is a summary of the change in costs and expenses for the three months ended September 30, 2026:
| (dollars in thousands) | Total costs and expenses | Sales and marketing | Research and development | General and administrative | |||||||||||||||||||
| For the three months ended September 30, 2025 | $ | 44,081 | $ | 25,680 | $ | 7,565 | $ | 10,836 | |||||||||||||||
| Change from: | |||||||||||||||||||||||
Compensation costs (1) | 4,662 | 2,290 | 173 | 2,199 | |||||||||||||||||||
Stock-based compensation expenses (2) | 3,381 | 652 | 779 | 1,950 | |||||||||||||||||||
| BioCircuit transaction and integration costs | 1,969 | — | — | 1,969 | |||||||||||||||||||
Research and development project costs (3) | 1,025 | — | 1,025 | — | |||||||||||||||||||
| Travel costs | 202 | 148 | 31 | 23 | |||||||||||||||||||
| Marketing program costs | 141 | 141 | — | — | |||||||||||||||||||
| Occupancy related costs | (161) | 20 | (76) | (105) | |||||||||||||||||||
| Professional services fees and expenses | (42) | 870 | (728) | (184) | |||||||||||||||||||
| Other costs and expenses | 518 | 560 | 181 | (223) | |||||||||||||||||||
| Total change | 11,695 | 4,681 | 1,385 | 5,629 | |||||||||||||||||||
| For the three months ended September 30, 2026 | $ | 55,776 | $ | 30,361 | $ | 8,950 | $ | 16,465 | |||||||||||||||
| Percentage change | 26.5 | % | 18.2 | % | 18.3 | % | 51.9 | % | |||||||||||||||
__________
(1)Primarily due to higher salaries, employee benefits, sales commissions, incentive compensation and payroll taxes, due to higher headcount and sales volumes.
(2)Primarily due to anticipated above target achievement for certain PSU awards due to sales growth.
(3)Clinical trial costs and expenses represented approximately 57% and 47% of total research and development costs and expenses for the three months ended September 30, 2026 and 2025, respectively. Product development costs and expenses represented approximately 43% and 53% of total research and development costs and expenses for the three months ended September 30, 2026 and 2025, respectively.
Other (Expense) Income, Net
Other income, net, for the three months ended September 30, 2026 increased $2,583, or 214.5%, to $1,379, as compared to Other expense, net, of $1,204 for the three months ended September 30, 2025. The increase in total other income, net, was primarily due to a decrease in interest expense of $1,756 and an increase in investment income of $1,112, partially offset by decreases from the change in fair value of the debt derivative liabilities of $209 and from other income of $76.
Income Taxes
We had no material income tax expense or benefit during the three months ended September 30, 2026 and 2025 due to the incurrence of fiscal year net operating losses in both periods, the benefits of which have a full valuation allowance.
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Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Comparison of the Nine Months Ended September 30, 2026 and 2025
The following table sets forth, for the periods presented, our results of operations expressed as dollar amounts and percentage of total revenue:
| Nine Months Ended | |||||||||||||||||||||||
| September 30, 2026 | September 30, 2025 | ||||||||||||||||||||||
| (dollars in thousands) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||
| Revenues | $ | 207,022 | 100.0 | % | $ | 165,304 | 100.0 | % | |||||||||||||||
| Cost of goods sold | 53,428 | 25.8 | 42,360 | 25.6 | |||||||||||||||||||
| Gross profit | 153,594 | 74.2 | 122,944 | 74.4 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
| Sales and marketing | 89,821 | 43.4 | 70,529 | 42.7 | |||||||||||||||||||
| Research and development | 25,056 | 12.1 | 20,509 | 12.4 | |||||||||||||||||||
| General and administrative | 42,750 | 20.6 | 29,983 | 18.1 | |||||||||||||||||||
| Total costs and expenses | 157,627 | 76.1 | 121,021 | 73.2 | |||||||||||||||||||
| (Loss) income from operations | (4,033) | (1.9) | 1,923 | 1.2 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income | 2,985 | 1.4 | 816 | 0.5 | |||||||||||||||||||
| Interest expense | (696) | (0.3) | (5,984) | (3.6) | |||||||||||||||||||
| Loss on extinguishment of debt | (16,849) | (8.2) | — | — | |||||||||||||||||||
| Change in fair value of debt derivative liabilities | — | — | 531 | 0.3 | |||||||||||||||||||
| Other (expense) income, net | (173) | (0.1) | 167 | 0.1 | |||||||||||||||||||
| Total other expense, net | (14,733) | (7.2) | (4,470) | (2.7) | |||||||||||||||||||
| Net loss | $ | (18,766) | (9.1) | % | $ | (2,547) | (1.5) | % | |||||||||||||||
Revenues
Revenues for the nine months ended September 30, 2026 increased $41,718, or 25.2%, to $207,022, as compared to $165,304 for the nine months ended September 30, 2025. The increase in revenues was primarily driven by an increase in unit volume and the impact of changes in price.
Gross Profit
Gross profit for the nine months ended September 30, 2026 increased $30,650, or 24.9%, to $153,594, as compared to $122,944 for the nine months ended September 30, 2025. Gross margin as a percentage of revenues was 74.2% and 74.4% for the nine months ended September 30, 2026 and 2025, respectively. Lower margins on products sold were driven by the impact of higher product costs partially offset by lower inventory write-offs.
24
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Costs and Expenses
Following is a summary of the change in costs and expenses for the nine months ended September 30, 2026:
| (dollars in thousands) | Total costs and expenses | Sales and marketing | Research and development | General and administrative | |||||||||||||||||||
| For the nine months ended September 30, 2025 | $ | 121,021 | $ | 70,529 | $ | 20,509 | $ | 29,983 | |||||||||||||||
| Change from: | |||||||||||||||||||||||
Compensation costs (1) | 19,184 | 11,174 | 1,222 | 6,788 | |||||||||||||||||||
Stock-based compensation expenses (2) | 9,484 | 2,315 | 2,244 | 4,925 | |||||||||||||||||||
Research and development project costs (3) | 2,968 | — | 2,968 | — | |||||||||||||||||||
| BioCircuit transaction and integration costs | 1,969 | — | — | 1,969 | |||||||||||||||||||
| Marketing program costs | 1,262 | 1,262 | — | — | |||||||||||||||||||
| Travel costs | 1,246 | 967 | 293 | (14) | |||||||||||||||||||
| Professional services fees and expenses | (2,145) | 1,129 | (2,502) | (772) | |||||||||||||||||||
| Occupancy related costs | (230) | 74 | (127) | (177) | |||||||||||||||||||
| Other costs and expenses | 2,868 | 2,371 | 449 | 48 | |||||||||||||||||||
| Total change | 36,606 | 19,292 | 4,547 | 12,767 | |||||||||||||||||||
| For the nine months ended September 30, 2026 | $ | 157,627 | $ | 89,821 | $ | 25,056 | $ | 42,750 | |||||||||||||||
| Percentage change | 30.2 | % | 27.4 | % | 22.2 | % | 42.6 | % | |||||||||||||||
__________
(1)Primarily due to higher salaries, employee benefits, sales commissions, incentive compensation and payroll taxes, due to higher headcount and sales volumes.
(2)Primarily due to anticipated above target achievement for certain PSU awards due to sales growth.
(3)Clinical trial costs and expenses represented approximately 56% and 46% of total research and development costs and expenses for the nine months ended September 30, 2026 and 2025, respectively. Product development costs and expenses represented approximately 44% and 54% of total research and development costs and expenses for the nine months ended September 30, 2026 and 2025, respectively.
Other Expense, Net
Other expense, net, for the nine months ended September 30, 2026 increased $10,263, or 229.6%, to $14,733, as compared to $4,470 for the nine months ended September 30, 2025. The increase in total other expense, net, was due to loss on the extinguishment of debt of $16,849, and decreases in the change in fair value of the debt derivative liabilities of $531 and other income of $340. These increases were partially offset by a decrease in interest expense of $5,288 and an increase in investment income of $2,169.
Income Taxes
We had no material income tax expense or benefit during the nine months ended September 30, 2026 and 2025 due to the incurrence of net operating losses in both periods, the benefits of which have a full valuation allowance. From time to time, we receive notices of examination of prior tax filings from federal and state authorities. During the nine months ended September 30, 2026, the IRS completed examining our 2021 federal income tax return with no material findings.
Critical Accounting Estimates
In preparing our financial statements in accordance with generally accepted accounting principles, there are certain accounting policies, which may require substantial judgment or estimation in their application. We believe our accounting policies for Inventories, Derivative Instruments and Stock-based Compensation, as well as the others set forth in Note 2 - Summary of Significant Accounting Policies in the Notes to the Consolidated Financial Statements in our 2025 Annual Report on Form 10-K, are critical to understanding our results of operations and financial condition. See Critical Accounting Estimates in our 2025 Annual Report on Form 10-K. Actual results could differ from our estimates and assumptions, and any such differences could be material to our results of operations and financial condition. During the quarter covered by this report, there have been no material changes to the accounting estimates and assumptions previously disclosed.
25
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Liquidity and Capital Resources
As of September 30, 2026, our principal sources of liquidity were our cash and cash equivalents and investments totaling $348,068. Our cash equivalents are comprised of money market mutual funds and our investments primarily consist of U.S. treasuries and corporate bonds. Our cash and cash equivalents and investments increased $306,540 to $348,068 from $41,528 at December 31, 2025. The increase was primarily as a result of net proceeds from: (i) the September 2026 Offering of $225,029, (ii) the January 2026 Offering of $133,252, (iii) the exercise of stock options and ESPP purchases and (iv) the release of $2,000 of restricted cash under the contractual terms of a lease agreement. These increases were partially offset by cash used for: (i) early payoff and termination of the Credit Facility of $69,707, (ii) payment of employee tax withholdings for shares withheld from vested stock awards, (iii) payment of annual bonuses during the first quarter of 2026 and (iv) the purchase of a noncontrolling ownership interest in Trace.
On September 30, 2026 and December 31, 2025, our current assets exceeded our current liabilities by $401,636 and $96,866, respectively, and we had current ratios of 12.0x and 5.1x, respectively. Following quarter-end, we used approximately $200,000 of cash to fund the BioCircuit Acquisition, which has been taken into account in our assessment of our liquidity needs for the next twelve months. Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products, will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements.
Cash Flow Information
The following table presents a summary of cash flows from operating, investing and financing activities for the periods presented:
| Nine Months Ended | |||||||||||
| (in thousands) | September 30, 2026 | September 30, 2025 | |||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | 25,322 | $ | (2,226) | |||||||
| Investing activities | (26,397) | (9,359) | |||||||||
| Financing activities | 292,415 | 5,933 | |||||||||
| Net increase (decrease) in cash and cash equivalents, and restricted cash | $ | 291,340 | $ | (5,652) | |||||||
Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities was $25,322 during the nine months ended September 30, 2026 as compared to net cash used in operating activities of $2,226 during the nine months ended September 30, 2025. The increase in net cash provided by operating activities of $27,548, or 1237.6%, was primarily due to a net favorable change in non-cash charges and working capital accounts of $28,282 and $16,266, respectively, offset by an increase in net loss of $16,219.
Net Cash Used in Investing Activities
Net cash used in investing activities was $26,397 and $9,359 for the nine months ended September 30, 2026 and 2025, respectively, an increase of $17,038 primarily as a result of an increase in the purchase of: (i) investments of $13,486, (ii) equity investments of $7,008 and (iii) property and equipment of $2,576. These increases were partially offset by decreases from the sale of $14,200 of investments during the nine months ended September 30, 2026, compared to the sale of $8,000 of investments during the nine months ended September 30, 2025.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $292,415 and $5,933 for the nine months ended September 30, 2026 and 2025, respectively, an increase of $286,482 primarily as a result of net proceeds from the September 2026 and January 2026 Offerings, the exercise of stock options and ESPP purchases. These increases were partially offset by cash used for early payoff and termination of the Credit Facility and payment of employee tax withholding on vested stock awards in exchange for shares withheld.
26
Axogen, Inc.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Sources of Capital
Our expected future capital requirements may depend on many factors including expanding our customer base and sales force and timing and extent of spending in obtaining regulatory approval and introduction of new products. Additional sources of liquidity available to us include issuance of additional equity securities through public or private equity offerings, debt financings or from other sources. The sale of additional equity may result in dilution to our shareholders. Should additional capital not become available to us as needed, we may be required to take certain actions, such as slowing sales and marketing expansion, delaying regulatory approvals, or reducing headcount.
Uses of Capital
In July 2026, we invested $7,000 in Trace, a privately held biotechnology company. We funded this investment with cash on hand.
On October 1, 2026, we completed the BioCircuit Acquisition. The base purchase price was $200,000 in cash, subject to adjustments for cash, indebtedness, transaction expenses and net working capital. At closing, $1,000 was withheld to satisfy any post-closing purchase price adjustments. In connection with the BioCircuit Acquisition, we incurred transaction costs of $1,883 during the three months ended September 30, 2026 and we estimate approximately $5,000 of additional transaction costs during the three months ended December 31, 2026.
Contractual Obligations and Commitments
| (in thousands) | 2026 | 2027-2028 | 2029-2030 | Thereafter | Total | ||||||||||||||||||||||||
Operating and finance lease obligations (1) | $ | 1,014 | $ | 7,156 | $ | 7,259 | $ | 12,793 | $ | 28,222 | |||||||||||||||||||
Purchase obligations (2) | — | 3,000 | 3,000 | 1,500 | 7,500 | ||||||||||||||||||||||||
Total | $ | 1,014 | $ | 10,156 | $ | 10,259 | $ | 14,293 | $ | 35,722 | |||||||||||||||||||
__________
(1)See Note 8 - Leases in the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
(2)Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.
27
Axogen, Inc.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For a discussion of our market risks, refer to Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” included in our 2025 Annual Report on Form 10-K.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission (the “SEC”)’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, and Board of Directors, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.
Our management, including our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2026, and concluded that our disclosure controls and procedures were effective.
Changes in Internal Controls Over Financial Reporting
There were no changes in our internal control over financial reporting during the three months ended September 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act).
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Axogen, Inc.
PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
As disclosed in Note 15 - Commitments and Contingencies in the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q, we are engaged in certain legal proceedings, and the disclosure set forth in Note 15 - Commitments and Contingencies relating to legal proceedings is incorporated herein by reference.
ITEM 1A - RISK FACTORS
There have been no material changes to the risk factors disclosed in our 2025 Annual Report on Form 10-K, except as set forth below. Any investment in our business involves a high degree of risk. Before making an investment decision, you should carefully consider the information we include in this Quarterly Report on Form 10-Q, including our unaudited interim condensed consolidated financial statements and accompanying notes, our Annual Report on Form 10-K for the year ended December 31, 2025, including our financial statements and related notes contained therein, and the additional information in the other reports we file with the SEC. These risks may result in material harm to our business and our financial condition and results of operations. In this event, the market price of our common stock may decline, and you could lose part or all of your investment. Additional risks that we currently believe are immaterial may also impair our business operations. Our business, financial condition and future prospects and the trading price of our common stock could be harmed as a result of any of these risks.
We may not realize the anticipated benefits of the Merger.
We may not realize the anticipated benefits of the Merger, or such benefits may take longer to realize than expected. The integration of BioCircuit’s business with our operations may be difficult, costly or time-consuming and may require a disproportionate amount of our resources and management’s attention. We may encounter difficulties in integrating BioCircuit’s operations, personnel, technologies, products and information systems, and the integration process may divert management’s attention from our existing business and result in unanticipated costs or disruptions. If we are unable to successfully integrate BioCircuit or realize the anticipated benefits of the Merger, our business, financial condition and results of operations could be adversely affected.
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 - MINE SAFETY DISCLOSURES
Not Applicable.
ITEM 5 - OTHER INFORMATION
Rule 10b5-1 Trading Plans
During the three months ended September 30, 2026, our Section 16 officers and directors adopted or terminated
| Name and Title | Action | Date | Trading Arrangement | Aggregate Number of Securities to be Sold | Expiration Date | |||||||||||||||||||||||||||||||||
| Rule 10b5-1 (1) | Non-Rule 10b5-1 (2) | |||||||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||||||||
__________
(1)Intended to satisfy the affirmative defense of Rule 10b5-1(c).
(2)Not intended to satisfy the affirmative defense of Rule 10b5-1(c).
29
Axogen, Inc.
ITEM 6 - EXHIBITS
| Exhibit Number | Description | Filings Referenced for Incorporation by Reference | ||||||||||||
| 2.1† | September 10, 2026, Form 8-K/A, Exhibit 2.1 | |||||||||||||
| 31.1 | Filed herewith | |||||||||||||
| 31.2 | Filed herewith | |||||||||||||
| 32 | Furnished herewith | |||||||||||||
| 101.INS | XBRL Instance Document – The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | Filed herewith | ||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | Filed herewith | ||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | Filed herewith | ||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | Filed herewith | ||||||||||||
| 101.LAB | Inline XBRL Extension Labels Linkbase. | Filed herewith | ||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | Filed herewith | ||||||||||||
| 104 | Cover Page Interactive Data File – The cover pages do not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | Filed herewith | ||||||||||||
† Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) and Item 601(b)(2) of Regulation S-K. | ||||||||||||||
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Axogen, Inc.
SIGNATURES
Pursuant to the requirements 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.
| AXOGEN, INC. | |||||
| Dated: October 28, 2026 | /s/ Michael Dale | ||||
| Michael Dale Chief Executive Officer and President (Principal Executive Officer) | |||||
| Dated: October 28, 2026 | /s/ Lindsey Hartley | ||||
| Lindsey Hartley Chief Financial Officer (Principal Accounting Officer) | |||||
31
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Michael Dale, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Axogen, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: October 28, 2026 | ||||||||
| /s/ Michael Dale | ||||||||
| Michael Dale Chief Executive Officer and President | ||||||||
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
I, Lindsey Hartley, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Axogen, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: October 28, 2026 | ||||||||
| /s/ Lindsey Hartley | ||||||||
| Lindsey Hartley Chief Financial Officer | ||||||||
EXHIBIT 32
CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (A) AND (B) OF SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)
In connection with the Quarterly Report on Form 10-Q (the “Report”) of Axogen, Inc. (the “Company”), Michael Dale, Chief Executive Officer and President of the Company, and Lindsey Hartley, Chief Financial Officer of the Company, each certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of such officer’s knowledge that:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| Dated: October 28, 2026 | ||||||||
| /s/ Michael Dale | ||||||||
| Michael Dale Chief Executive Officer and President (Principal Executive Officer) | ||||||||
| /s/ Lindsey Hartley | ||||||||
| Lindsey Hartley Chief Financial Officer (Principal Financial Officer) | ||||||||