Axogen, Inc. (NASDAQ: AXGN) grows revenue 24.7% and retires debt
Rhea-AI Filing Summary
Axogen, Inc. reported strong top-line growth but a GAAP loss for the period. Revenue was $69,731 (in thousands) for the quarter ended June 30, 2026, up 23.1% year over year, and $131,188 (in thousands) for the first six months, up 24.7%. Quarterly gross margin was 72.7%, slightly below 74.2% a year earlier as higher-cost biologic Avance products and longer grafts increased product costs.
The company posted a quarterly net loss of $1,516 (in thousands) and a six‑month net loss of $21,100 (in thousands), largely driven by a $16,849 (in thousands) loss on extinguishment of debt tied to the January 2026 payoff of its Oberland credit facility. Net proceeds of $133,252 (in thousands) from a 4.6 million‑share equity offering at $31.00 per share were used to pay a $69,707 (in thousands) payoff amount and terminate the facility, eliminating $48,387 (in thousands) of long‑term debt and related derivatives.
Cash, cash equivalents and investments rose to $111,412 (in thousands) at June 30, 2026, from $41,528 (in thousands) at year‑end, and the current ratio improved to 6.6x. Operating cash flow turned positive at $8,786 (in thousands). Operating expenses increased 32.4% year to date to support sales expansion, higher stock‑based compensation of $15,609 (in thousands), and clinical programs such as Nerve‑RESTORE. Subsequent to quarter‑end, Axogen invested $7,000 (in thousands) in Trace Biosciences, gaining a minority stake and limited right of first refusal on nerve‑specific imaging technology.
Positive
- Revenue grew 24.7% year over year to $131,188 (in thousands) for the first half of 2026, with 23.1% quarterly growth driven by higher unit volume, pricing, and broad-based strength across core surgical markets.
- Balance sheet strengthened by using equity proceeds to fully repay the Oberland credit facility, eliminating $48,387 (in thousands) of long-term debt and related derivatives while increasing cash and investments to $111,412 (in thousands).
- Operating cash flow improved to $8,786 (in thousands) for the first half of 2026 from a use of $5,449 (in thousands) a year earlier, reflecting better cash generation from the growing revenue base.
Negative
- Net loss widened to $21,100 (in thousands) for the first half of 2026 from $3,255 (in thousands), driven by a $16,849 (in thousands) loss on extinguishment of debt and higher operating expenses.
- Operating expenses rose 32.4% year to date to $101,851 (in thousands), including a near-doubling of stock-based compensation to $15,609 (in thousands), increasing ongoing cost pressure despite strong revenue growth.
Filing Explained
Three directors disclosed future Rule 10b5-1 sale arrangements; the filing reports plan adoption and terms, not completed sales.
Axogen reports three directors adopted Rule 10b5-1 arrangements to sell specified securities; the disclosed event is plan adoption, not a reported completed sale.
Form 10-Q is the company’s unaudited quarterly report. A Rule 10b5-1 arrangement is a written trading plan that executes sales on a schedule or formula; the filing lists Kathy Weiler’s plan for
Key Figures
Quarterly Revenue: 69,731
Six-Month Revenue: 131,188
Six-Month Net Loss: 21,100
+5 more
8 metrics
Quarterly Revenue
69,731
Revenue for the quarter ended June 30, 2026 (in thousands of dollars)
Six-Month Revenue
131,188
Revenue for the six months ended June 30, 2026 (in thousands of dollars)
Six-Month Net Loss
21,100
Net loss for the six months ended June 30, 2026 (in thousands of dollars)
Loss on Extinguishment of Debt
16,849
Loss recorded on early payoff of Oberland credit facility in first half 2026 (in thousands of dollars)
Cash, Cash Equivalents and Investments
111,412
Combined balance at June 30, 2026 (in thousands of dollars)
Stock-Based Compensation
15,609
Total non-cash stock-based compensation expense for six months ended June 30, 2026 (in thousands of dollars)
Gross Margin Q2 2026
72.7%
Gross profit as a percentage of revenue for the quarter ended June 30, 2026
Operating Cash Flow
8,786
Net cash provided by operating activities for six months ended June 30, 2026 (in thousands of dollars)
Key Terms
loss on extinguishment of debt, valuation allowance, Biologics License Application, Section 382 of the Internal Revenue Code, +2 more
6 terms
loss on extinguishment of debt financial
"In connection with the repayment of the Credit Facility, the Company recorded a loss on extinguishment of debt"
Loss on extinguishment of debt is the accounting hit a company records when it retires or restructures a loan or bond for an amount that exceeds the debt’s recorded value—like paying more than the remaining balance to settle a loan early. It matters to investors because it reduces reported profit and can use cash, but may also cut future interest costs or signal financial stress; understanding it helps assess earnings quality and balance-sheet strength.
valuation allowance financial
"A valuation allowance is provided to reduce the deferred tax assets reported if it is more-likely-than-not"
A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.
Biologics License Application regulatory
"On December 3, 2025, the FDA approved the Biologics License Application for Avance"
A biologics license application is a formal request submitted to regulatory authorities seeking approval to market a new biological medicine, such as vaccines or treatments made from living organisms. It is a comprehensive review process that evaluates the safety, effectiveness, and manufacturing quality of the product. For investors, receiving approval signals that a biological therapy can be sold to the public, potentially leading to revenue growth and market success.
Section 382 of the Internal Revenue Code regulatory
"A portion of the net operating loss carryforwards may expire due to limitations imposed by Section 382 of the Internal Revenue Code"
Level 3 liabilities financial
"The changes in Level 3 liabilities measured at fair value on a recurring basis for the periods presented were as follows"
revenue participation agreement financial
"In connection with the Credit Facility, the Company entered into a revenue participation agreement with the Lender"
A revenue participation agreement is a contract where an investor or partner provides money upfront in exchange for a fixed percentage of a company’s future sales until a set amount or time is reached. For investors it works like buying a share of future cash flow instead of equity — they get paid from revenue rather than owning stock — and it matters because it affects a company’s ongoing cash available for operations and its financial obligations without necessarily diluting ownership.
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Axogen (AXGN) revenue perform in the quarter ended June 30, 2026?
Axogen generated $69,731 (in thousands) of revenue in the quarter ended June 30, 2026, a 23.1% increase from $56,662 (in thousands) a year earlier, driven mainly by higher unit volumes and pricing across its peripheral nerve repair portfolio.
Why did Axogen (AXGN) report a larger net loss for the first half of 2026?
Axogen reported a first-half net loss of $21,100 (in thousands), compared with $3,255 (in thousands) a year earlier, primarily due to a $16,849 (in thousands) loss on extinguishment of debt from the early payoff of its Oberland credit facility and higher operating expenses.
What is Axogen’s (AXGN) cash and debt position as of June 30, 2026?
As of June 30, 2026, Axogen held $111,412 (in thousands) in cash, cash equivalents and investments and had no long-term debt, after repaying a $69,707 (in thousands) payoff amount to terminate its Oberland credit facility earlier in the year.
How did Axogen’s operating expenses change in the first half of 2026?
Operating expenses rose to $101,851 (in thousands) for the first half of 2026, up 32.4% year over year. The increase was driven by higher compensation, $15,609 (in thousands) of stock-based compensation, increased clinical trial spending, and expanded sales and marketing activities.
What were Axogen’s gross margins in 2026, and what affected them?
Gross margin was 72.7% for the quarter and 73.8% for the first half of 2026. Margins were influenced by higher product costs from increased sales of biologic Avance products and long grafts, partially offset by lower inventory write-offs compared with the prior year.
What strategic and clinical milestones did Axogen (AXGN) highlight in 2026?
Axogen highlighted publication of the REPOSE study on Axoguard Nerve Cap, initiation of the Nerve‑RESTORE trial comparing Avance Nerve Graft to autograft, and a $7,000 (in thousands) minority investment in Trace Biosciences’ nerve-specific imaging technology.
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 June 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 July 27, 2026, the registrant had 53,761,513 shares of common stock outstanding.
Table of Contents
Axogen, Inc.
| Table of Contents | ||||||||
| Page | ||||||||
Part I - Financial Information | ||||||||
Item 1. | Financial Statements | 2 | ||||||
Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 (Unaudited) | 2 | |||||||
Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2026 and 2025 (Unaudited) | 3 | |||||||
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 (Unaudited) | 4 | |||||||
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and six months ended June 30, 2026 and 2025 (Unaudited) | 5 | |||||||
Notes to Unaudited Condensed Consolidated Financial Statements | 6 | |||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17 | ||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 25 | ||||||
Item 4. | Controls and Procedures | 25 | ||||||
Part II - Other Information | ||||||||
Item 1. | Legal Proceedings | 26 | ||||||
Item 1A. | Risk Factors | 26 | ||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 26 | ||||||
Item 3. | Defaults Upon Senior Securities | 26 | ||||||
Item 4. | Mine Safety Disclosures | 26 | ||||||
Item 5. | Other Information | 26 | ||||||
Item 6. | Exhibits | 27 | ||||||
Signatures | 28 | |||||||
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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.
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PART I — FINANCIAL INFORMATION
ITEM 1 — FINANCIAL STATEMENTS
Axogen, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
(in thousands, except share and per share amounts)
| June 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 | |||||||||||
| 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 14 | |||||||||||
| 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.
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Axogen, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(in thousands, except share and per share amounts)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | June 30, 2026 | June 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 | |||||||||||||||||||||||
| (Loss) income 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 (loss) income | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Weighted average common shares outstanding - basic | |||||||||||||||||||||||
| Weighted average common shares outstanding - diluted | |||||||||||||||||||||||
| Net (loss) income per common share - basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Net (loss) income per common share - diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
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Axogen, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
| Six Months Ended | |||||||||||
| June 30, 2026 | June 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 | |||||||||||
| (Recovery of) 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 | ( | ||||||||||
| 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 | |||||||||||
| Cash payments for intangible assets | ( | ( | |||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| 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.
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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 June 30, 2026 | |||||||||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | ||||||||||||||||||||||||
| 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 June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Six Months Ended June 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 June 30, 2026 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Three Months Ended June 30, 2025 | |||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||
| Issuance of restricted and performance stock units | ( | — | |||||||||||||||||||||||||||
| Exercise of stock options and employee stock purchases under the ESPP | — | ||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
| Six Months Ended June 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 June 30, 2025 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
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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 June 30, 2026 and December 31, 2025 and for the three and six months ended June 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) | June 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 | $ | $ | |||||||||
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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 additional disclosure of the nature of expenses included in the statement of operations as well as disclosures about specific types of expenses included in the expense captions presented in the statement of operations. 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. Both early adoption and retrospective application are 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 adding the “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 these new requirements.
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 June 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.
3. Inventory
Inventory consists of the following as of the periods presented:
| (in thousands) | June 30, 2026 | December 31, 2025 | |||||||||
| Finished goods | $ | $ | |||||||||
| Work in process | |||||||||||
| Raw materials | |||||||||||
| Less: inventory reserve | ( | ( | |||||||||
| Inventory | $ | $ | |||||||||
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
4. Property and Equipment, Net
Property and equipment, net consists of the following as of the periods presented:
| (in thousands) | June 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 | Six Months Ended | ||||||||||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Depreciation expense | $ | $ | $ | $ | |||||||||||||||||||
5. Intangible Assets , Net
Intangible assets, net consist of the following as of the periods presented:
| June 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 | Six Months Ended | ||||||||||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Amortization expense | $ | $ | $ | $ | |||||||||||||||||||
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
As of June 30, 2026, future amortization of patents is as follows:
| (in thousands) | |||||
| 2026 (excluding the six months ended June 30, 2026) | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
6. 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 | June 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 June 30, 2025 | ||||
| Balance at March 31, 2025 | $ | ||||
| Change in fair value included in net loss | ( | ||||
| Balance at June 30, 2025 | $ | ||||
| Six Months Ended | |||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | |||||||||
| Balance at December 31, 2025 and 2024 | $ | $ | |||||||||
| Change in fair value included in net loss | ( | ||||||||||
| Extinguishment of debt derivative | ( | ||||||||||
| Balance at June 30, 2026 and 2025 | $ | $ | |||||||||
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
There were no changes in the levels or methodology of the measurement of financial assets or liabilities during the six months ended June 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.
7. 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 | Six Months Ended | ||||||||||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 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) | June 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 | |||||||||||
__________
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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 June 30, 2026 are as follows:
| (in thousands) | |||||
| 2026 (excluding the six months ended June 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
8. 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 $1,504 during the three months ended June 30, 2025, and $438 and $2,993 during the six months ended June 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 $232 for the three months ended June 30, 2025 and, $186 and $756 during the six months ended June 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,
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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 (the “Offering”) completed by the Company on January 23, 2026. See Note 9 - Shareholders’ Equity for additional details regarding the Offering.
In connection with the repayment of the Credit Facility, the Company recorded a loss on extinguishment of debt of $16,849 during the six months ended June 30, 2026.
Other Credit Facilities
The Company had restricted cash of $2,000 and $4,000 at June 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.
9. Shareholders’ Equity
On January 21, 2026, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Wells Fargo Securities, LLC and Mizuho Securities USA LLC, as representatives of the underwriters (the “Underwriters”). Pursuant to the terms and conditions of the Underwriting Agreement, 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 Underwriters’ option to purchase additional shares. The Offering closed on January 23, 2026 with a sale of 4,600,000 shares.
The Company received net proceeds from the Offering of $133,252 , after deducting the underwriting discounts and commissions, and expenses in connection with the Offering. Net proceeds from the Offering were used for the early payoff and termination of the Credit Facility for a final repayment amount of $69,707 . The remaining net proceeds will be used for working capital, capital expenditures and other general corporate purposes. See Note 8 - Long-Term Debt, Net of Debt Discount and Financing Fees for details regarding the termination of the Credit Facility.
10. 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 six months ended June 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 | $ | |||||||||||||||||||
Performance Stock Units (2) | 1st Quarter | $ | ||||||||||||||||||
| 2nd Quarter | $ | |||||||||||||||||||
__________
(1)Restricted Stock Units (“RSUs”) awarded to certain officers and employees during the first and second 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 quarter of 2026 with a target of 381,000 shares and performance metrics tied to the Company’s revenue compounded annual growth rate (“CAGR”) from 2026 through 2028 and total shareholder return (“TSR”) relative to its peers (“Relative TSR”) with a payout ranging from 0 % to 200 % upon achievement of specific revenue CAGR and relative TSR goals (the “2026 CAGR TSR PSUs”). The 2026 CAGR TSR PSUs vest at the end of the 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.
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
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 | Six Months Ended | ||||||||||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Costs of goods sold | $ | $ | $ | $ | |||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total non-cash stock-based compensation expense | $ | $ | $ | $ | |||||||||||||||||||
11. Basic and Diluted Net (Loss) Income Per Common Share
The following reflects the net (loss) income attributable to common shareholders and share data used in the basic and diluted net (loss) income per common share computations using the two-class method for the periods presented:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in thousands, except per share amounts) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net (loss) income | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares outstanding - basic | |||||||||||||||||||||||
| Weighted average shares outstanding - diluted | |||||||||||||||||||||||
| Net (loss) income per common share - basic | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Net (loss) income per common share - diluted | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Anti-dilutive shares excluded from the calculation of diluted net (loss) income per common share (1) | |||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||
| Restricted and performance stock units | |||||||||||||||||||||||
__________
(1)Common equivalent shares for the three months ended June 30, 2026 and six months ended June 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.
12. 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 June 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 June 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.
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
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 six months ended June 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.
13. 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 | Six Months Ended | ||||||||||||||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | June 30, 2026 | June 30, 2025 | |||||||||||||||||||
| U.S. | $ | $ | $ | $ | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | |||||||||||||||||||
As of June 30, 2026 and December 31, 2025, all of the Company’s long-lived assets were held within the U.S.
14. 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 $215 and $213 for the three months ended June 30, 2026 and 2025, respectively, and $397 and $453 for the six months ended June 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
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
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.
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 June 30, 2026 related to these grants. As of June 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.
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Axogen, Inc.
Notes to Condensed Consolidated Financial Statements - Continued
(unaudited)
(in thousands, except share and per share amounts)
15. Subsequent Events
On July 28, 2026, the Company invested $7,000 in Trace Biosciences, a privately held biotechnology company. The Company funded this investment with cash on hand.
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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
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
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 $69,731 for the quarter ended June 30, 2026, an increase of $13,069 or 23.1% compared to the quarter ended June 30, 2025.
•Gross profit was $50,674 for the quarter ended June 30, 2026, an increase of $8,656 or 20.6% compared to the quarter ended June 30, 2025.
•Year-to-date revenue growth through the second quarter of 2026 was broad-based, across all markets, which includes 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.
•Publication of REPOSE, a prospective, randomized clinical study evaluating Axoguard Nerve Cap for symptomatic neuroma management, providing Level 1 evidence supporting nerve end protection and demonstrating favorable outcomes in pain burden, medication utilization, and recovery-related measures.
•Initiation of Nerve-RESTORE, a prospective, randomized, assessor-blinded study comparing Avance Nerve Graft to sural nerve autograft in mixed and motor nerve reconstruction, designed to generate Level 1 evidence in support of broader adoption of nerve repair globally.
•Acquired a minority ownership stake in Trace Biosciences, including a limited right of first refusal, to support development of its nerve-specific imaging technology.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Results of Operations
Comparison of the Three Months Ended June 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 | |||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||
| (dollars in thousands) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||
| Revenues | $ | 69,731 | 100.0 | % | $ | 56,662 | 100.0 | % | |||||||||||||||
| Cost of goods sold | 19,057 | 27.3 | 14,644 | 25.8 | |||||||||||||||||||
| Gross profit | 50,674 | 72.7 | 42,018 | 74.2 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
| Sales and marketing | 30,827 | 44.2 | 23,804 | 42.0 | |||||||||||||||||||
| Research and development | 8,589 | 12.3 | 6,853 | 12.1 | |||||||||||||||||||
| General and administrative | 13,414 | 19.3 | 9,689 | 17.1 | |||||||||||||||||||
| Total costs and expenses | 52,830 | 75.8 | 40,346 | 71.2 | |||||||||||||||||||
| (Loss) income from operations | (2,156) | (3.1) | 1,672 | 3.0 | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income | 786 | 1.1 | 225 | 0.4 | |||||||||||||||||||
| Interest expense | (1) | — | (1,977) | (3.5) | |||||||||||||||||||
| Change in fair value of debt derivative liabilities | — | — | 480 | 0.9 | |||||||||||||||||||
| Other (expense) income, net | (145) | (0.2) | 179 | 0.3 | |||||||||||||||||||
| Total other income (expense), net | 640 | 0.9 | (1,093) | (1.9) | |||||||||||||||||||
| Net (loss) income | $ | (1,516) | (2.2) | % | $ | 579 | 1.0 | % | |||||||||||||||
Revenues
Revenues for the three months ended June 30, 2026 increased $13,069, or 23.1%, to $69,731, as compared to $56,662 for the three months ended June 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 June 30, 2026 increased $8,656, or 20.6%, to $50,674, as compared to $42,018 for the three months ended June 30, 2025. Gross margin as a percentage of revenues was 72.7% and 74.2% for the three months ended June 30, 2026 and 2025, respectively. Compared to the three months ended June 30, 2025, margins on products sold declined primarily due to higher product costs, partially offset by lower inventory write-offs. Elevated product costs were largely attributable to increased sales of higher-cost biologic Avance product commencing in April 2026 and increased demand of long Avance products, primarily driven by growth in breast Resensation® procedures.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Costs and Expenses
Following is a summary of the change in costs and expenses for the three months ended June 30, 2026:
| (dollars in thousands) | Total costs and expenses | Sales and marketing | Research and development | General and administrative | |||||||||||||||||||
| For the three months ended June 30, 2025 | $ | 40,346 | $ | 23,804 | $ | 6,853 | $ | 9,689 | |||||||||||||||
| Change from: | |||||||||||||||||||||||
Compensation costs (1) | 6,446 | 3,670 | 427 | 2,349 | |||||||||||||||||||
Stock-based compensation expenses (2) | 3,098 | 689 | 766 | 1,643 | |||||||||||||||||||
Research and development project costs (3) | 1,108 | — | 1,108 | — | |||||||||||||||||||
| Marketing program costs | 489 | 489 | — | — | |||||||||||||||||||
| Travel costs | 457 | 417 | 97 | (57) | |||||||||||||||||||
| Professional services fees and expenses | (706) | 274 | (882) | (98) | |||||||||||||||||||
| Occupancy related costs | (45) | (25) | 5 | (25) | |||||||||||||||||||
| Other costs and expenses | 1,637 | 1,509 | 215 | (87) | |||||||||||||||||||
| Total change | 12,484 | 7,023 | 1,736 | 3,725 | |||||||||||||||||||
| For the three months ended June 30, 2026 | $ | 52,830 | $ | 30,827 | $ | 8,589 | $ | 13,414 | |||||||||||||||
| Percentage change | 30.9 | % | 29.5 | % | 25.3 | % | 38.4 | % | |||||||||||||||
__________
(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 53% and 47% of total research and development costs and expenses for the three months ended June 30, 2026 and 2025, respectively. Product development costs and expenses represented approximately 47% and 53% of total research and development costs and expenses for the three months ended June 30, 2026 and 2025, respectively.
Other Income (Expense), Net
Other income, net, for the three months ended June 30, 2026 increased $1,733, or 158.6%, to $640, as compared to Other expense, net, of $1,093 for the three months ended June 30, 2025. The increase in total other income, net, was primarily due to a decrease of $1,976 in interest expense and an increase of investment income of $561, partially offset by decreases of $480 from the change in fair value of the debt derivative liabilities and $324 from other income.
Income Taxes
We had no material income tax expense or benefit during the three months ended June 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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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Comparison of the Six Months Ended June 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:
| Six Months Ended | |||||||||||||||||||||||
| June 30, 2026 | June 30, 2025 | ||||||||||||||||||||||
| (dollars in thousands) | Amount | % of Revenue | Amount | % of Revenue | |||||||||||||||||||
| Revenues | $ | 131,188 | 100.0 | % | $ | 105,222 | 100.0 | % | |||||||||||||||
| Cost of goods sold | 34,325 | 26.2 | 28,271 | 26.9 | |||||||||||||||||||
| Gross profit | 96,863 | 73.8 | 76,951 | 73.1 | |||||||||||||||||||
| Costs and expenses | |||||||||||||||||||||||
| Sales and marketing | 59,460 | 45.3 | 44,849 | 42.6 | |||||||||||||||||||
| Research and development | 16,106 | 12.3 | 12,944 | 12.3 | |||||||||||||||||||
| General and administrative | 26,285 | 20.0 | 19,147 | 18.2 | |||||||||||||||||||
| Total costs and expenses | 101,851 | 77.6 | 76,940 | 73.1 | |||||||||||||||||||
| (Loss) income from operations | (4,988) | (3.8) | 11 | — | |||||||||||||||||||
| Other income (expense) | |||||||||||||||||||||||
| Investment income | 1,554 | 1.1 | 497 | 0.5 | |||||||||||||||||||
| Interest expense | (695) | (0.5) | (4,227) | (4.0) | |||||||||||||||||||
| Loss on extinguishment of debt | (16,849) | (12.8) | — | — | |||||||||||||||||||
| Change in fair value of debt derivative liabilities | — | — | 322 | 0.3 | |||||||||||||||||||
| Other (expense) income, net | (122) | (0.1) | 142 | 0.1 | |||||||||||||||||||
| Total other expense, net | (16,112) | (12.3) | (3,266) | (3.1) | |||||||||||||||||||
| Net loss | $ | (21,100) | (16.1) | % | $ | (3,255) | (3.1) | % | |||||||||||||||
Revenues
Revenues for the six months ended June 30, 2026 increased $25,966, or 24.7%, to $131,188, as compared to $105,222 for the six months ended June 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 six months ended June 30, 2026 increased $19,912, or 25.9%, to $96,863, as compared to $76,951 for the six months ended June 30, 2025. Gross margin as a percentage of revenues was 73.8% and 73.1% for the six months ended June 30, 2026 and 2025, respectively. Higher margins on products sold were driven by lower inventory write-offs partially offset by the impact of higher product costs.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Costs and Expenses
Following is a summary of the change in costs and expenses for the six months ended June 30, 2026:
| (dollars in thousands) | Total costs and expenses | Sales and marketing | Research and development | General and administrative | |||||||||||||||||||
| For the six months ended June 30, 2025 | $ | 76,940 | $ | 44,849 | $ | 12,944 | $ | 19,147 | |||||||||||||||
| Change from: | |||||||||||||||||||||||
Compensation costs (1) | 14,522 | 8,884 | 1,049 | 4,589 | |||||||||||||||||||
Stock-based compensation expenses (2) | 6,103 | 1,663 | 1,465 | 2,975 | |||||||||||||||||||
Research and development project costs (3) | 1,943 | — | 1,943 | — | |||||||||||||||||||
| Marketing program costs | 1,121 | 1,121 | — | — | |||||||||||||||||||
| Travel costs | 1,044 | 819 | 262 | (37) | |||||||||||||||||||
| Professional services fees and expenses | (2,103) | 259 | (1,774) | (588) | |||||||||||||||||||
| Occupancy related costs | (69) | 54 | (51) | (72) | |||||||||||||||||||
| Other costs and expenses | 2,350 | 1,811 | 268 | 271 | |||||||||||||||||||
| Total change | 24,911 | 14,611 | 3,162 | 7,138 | |||||||||||||||||||
| For the six months ended June 30, 2026 | $ | 101,851 | $ | 59,460 | $ | 16,106 | $ | 26,285 | |||||||||||||||
| Percentage change | 32.4 | % | 32.6 | % | 24.4 | % | 37.3 | % | |||||||||||||||
__________
(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 55% and 44% of total research and development costs and expenses for the six months ended June 30, 2026 and 2025, respectively. Product development costs and expenses represented approximately 45% and 56% of total research and development costs and expenses for the six months ended June 30, 2026 and 2025, respectively.
Other Expense, Net
Other expense, net, for the six months ended June 30, 2026 increased $12,846, or 393.3%, to $16,112, as compared to $3,266 for the six months ended June 30, 2025. The increase in total other expense, net, was due to loss on the extinguishment of debt of $16,849, and decreases of $322 from the change in fair value of the debt derivative liabilities and $264 from other income. These increases were partially offset by a decrease of $3,532 in interest expense and an increase of $1,057 in investment income.
Income Taxes
We had no material income tax expense or benefit during the six months ended June 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 six months ended June 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.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Liquidity and Capital Resources
As of June 30, 2026, our principal sources of liquidity were our cash and cash equivalents and investments totaling $111,412. 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 $69,884 to $111,412 from $41,528 at December 31, 2025. The increase was primarily as a result of net proceeds from the Offering of $133,252 and 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 early payoff and termination of the Credit Facility of $69,707, payment of employee tax withholdings for shares withheld from vested stock awards and payment of annual bonuses during the first quarter of 2026.
On June 30, 2026 and December 31, 2025, our current assets exceeded our current liabilities by $170,002 and $96,866, respectively, and we had a current ratios of 6.6x and 5.1x, respectively. Based on current estimates, we believe that our existing cash and cash equivalents and investments, as well as cash provided by sales of our products, will allow us to fund our operations through at least the next twelve months from the date of issuance of the accompanying financial statements.
Cash Flow Information
The following table presents a summary of cash flows from operating, investing and financing activities for the periods presented:
| Six Months Ended | |||||||||||
| (in thousands) | June 30, 2026 | June 30, 2025 | |||||||||
| Net cash provided by (used in): | |||||||||||
| Operating activities | $ | 8,786 | $ | (5,449) | |||||||
| Investing activities | (15,464) | (5,608) | |||||||||
| Financing activities | 63,702 | 3,539 | |||||||||
| Net increase (decrease) in cash and cash equivalents, and restricted cash | $ | 57,024 | $ | (7,518) | |||||||
Net Cash Provided by (Used in) Operating Activities
Net cash provided by operating activities was $8,786 during the six months ended June 30, 2026 as compared to net cash used in operating activities of $5,449 during the six months ended June 30, 2025. The increase in net cash provided by operating activities of $14,235, or 261.2%, was primarily due to a net favorable change in non-cash charges and working capital accounts of $24,484 and $8,108, respectively, offset by an increase in net loss of $17,845.
Net Cash Used in Investing Activities
Net cash used in investing activities was $15,464 and $5,608 for the six months ended June 30, 2026 and 2025, respectively, an increase of $9,856 primarily as a result of an increase in the purchase of investments of $10,913 and an increase in the purchase of property and equipment of $2,704, partially offset by the sale of $8,000 of investments during the six months ended June 30, 2026, compared to the sale of $4,000 of investments during the six months ended June 30, 2025.
Net Cash Provided by Financing Activities
Net cash provided by financing activities was $63,702 and $3,539 for the six months ended June 30, 2026 and 2025, respectively, an increase of $60,163 primarily as a result of net proceeds from the Offering, the exercise of stock options and ESPP purchases, 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.
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.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Continued
(in thousands, except share and per share amounts)
Uses of Capital
On July 28, 2026, we invested $7,000 in Trace Biosciences, a privately held biotechnology company. We funded this investment with cash on hand.
Contractual Obligations and Commitments
| (in thousands) | 2026 | 2027-2028 | 2029-2030 | Thereafter | Total | ||||||||||||||||||||||||
Operating and finance lease obligations (1) | $ | 2,112 | $ | 7,156 | $ | 7,258 | $ | 12,793 | $ | 29,319 | |||||||||||||||||||
Purchase obligations (2) | — | 3,000 | 3,000 | 1,500 | 7,500 | ||||||||||||||||||||||||
Total | $ | 2,112 | $ | 10,156 | $ | 10,258 | $ | 14,293 | $ | 36,819 | |||||||||||||||||||
__________
(1)See Note 7 - 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.
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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 June 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 June 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(d) or 15d-15(f) of the Exchange Act).
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PART II – OTHER INFORMATION
ITEM 1 – LEGAL PROCEEDINGS
As disclosed in Note 14 - 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 14 - 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. 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.
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 June 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 | ||||||||||||||||||||||||||||||||||||||
X | ||||||||||||||||||||||||||||||||||||||
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).
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ITEM 6 - EXHIBITS
| Exhibit Number | Description | Filings Referenced for Incorporation by Reference | ||||||||||||
| 31.1 | Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith | ||||||||||||
| 31.2 | Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | Filed herewith | ||||||||||||
| 32 | Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | 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 | ||||||||||||
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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: July 29, 2026 | /s/ Michael Dale | ||||
| Michael Dale Chief Executive Officer and President (Principal Executive Officer) | |||||
| Dated: July 29, 2026 | /s/ Lindsey Hartley | ||||
| Lindsey Hartley Chief Financial Officer (Principal Accounting Officer) | |||||
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