NASDAQ: AXGN

•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 June 24, 2024, we announced the launch of Avive+ Soft Tissue Matrix. Avive+ Soft Tissue Matrix is processed and distributed in accordance with FDA requirements for Human Cellular and Tissue-based Products (“HCT/P”) under the Code of Federal Regulations (“CFR”) Title 21 (“21 CFR”) Part 1271 regulations and U.S. Public Health Service regulations as a Section 361 human tissue product. Products regulated solely under Section 361 of the PHS Act are a product category under close scrutiny by the FDA for compliance with the regulatory requirements and are potentially subject to regulatory change in the future.

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

Revenue from the distribution of our Avance Nerve Graft, Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, Axoguard Nerve Cap and Avive+ Soft Tissue Matrix in the U.S. is the main contributor to our total reported sales and have been the key component of our growth to date.

Nerves can be damaged in several ways. When a nerve is cut due to a traumatic injury or inadvertently during a surgical procedure, functionality of the nerve may be compromised, causing the nerve to no longer carry the signals to and from the brain to the muscles and skin, thereby reducing or eliminating functionality. The loss of function can impact a person’s ability

to work and perform daily tasks, to properly be aware and respond to their environment (e.g., heat, cold or other dangers), and could negatively impact their ability to experience and enjoy life.

Nerve damage or transection of the type described above generally requires a surgical repair. Traditionally, the standard has been to either suture the nerve ends together directly without tension or to bridge the gap between the nerve ends with a less important nerve surgically removed from elsewhere in the patient’s own body, referred to as a nerve autograft. More recently, synthetic or collagen conduits have been used for the repair of short gaps. Nerves that are not repaired or heal abnormally may result in a permanent loss of motor and/or sensory function. Additionally, abnormal healing can form a neuroma that may send altered signals to the brain resulting in the sensation of pain. This abnormal section of the nerve can, under certain circumstances, be surgically removed and the nerve can be managed by capping, burying, or surgically repairing the nerve.

In addition, compression on a nerve, blunt force trauma or other physical irritations to a nerve can cause nerve damage that may alter the signal conduction of the nerve, resulting in pain, and may, in some instances, require surgical intervention to address the resulting nerve compression. Finally, when a patient undergoes a mastectomy due to breast cancer or prophylactically due to a genetic predisposition for breast cancer, the nerves are cut to allow the removal of the breast tissue. This can result in a loss of sensation, the potential risk of a symptomatic neuroma, and could negatively impact the patient’s quality of life. When a patient chooses a breast reconstruction after a mastectomy, sensation and quality of life can, in certain cases, be returned through surgical nerve repair.

To improve the options available for the surgical repair and regeneration of peripheral nerves, we have developed and licensed regenerative medicine technologies. Our innovative approach to regenerative medicine has resulted in first-in-class products that we believe are redefining the peripheral nerve repair market. Our products are used by surgeons during surgical interventions to repair a wide variety of physical nerve damage throughout the body, which can range from a simple laceration of a finger to a complex brachial plexus injury (an injury to the network of nerves that control the movement and sensation of the shoulder, arm, and hand) as well as nerve injuries caused by dental, orthopedic, and other surgical procedures.

Peripheral Nerve Regeneration Market Overview

Peripheral nerve injury (“PNI”) through damage or transection is a major source of physical disability impairing the ability to move muscles or to feel normal sensations. Patients suffer traumatic bodily injuries every day that may result in damage or transection to peripheral nerves severe enough to require surgical treatment. We break our total addressable market into four categories: (i) extremities, (ii) oral maxillofacial and head and neck, (iii) breast reconstruction neurotization, and (iv) urology, which we refer to collectively as the total addressable market (“TAM”).

We previously estimated that U.S. PNI has a potential TAM for our current product portfolio and believe it is presently at least $5.6 billion. Estimating the TAM for nerve repair is challenging as there is not a simple data source for the incidence of peripheral nerve issues. This is further complicated by the fact that nerves can be injured through a variety of traumatic and surgical injuries and can impact a patient from head to toe. In addition, we believe nerves are often one of many structures injured in a trauma (e.g., amputation) or in surgery and the incidence of these nerve injuries are often not coded or tracked. Quantifying the procedures involving nerve repair may also be challenging. While selected trauma and surgical procedures are dedicated to the repair of nerves, most of the incidence of nerve repair is a step in a larger trauma or surgical procedure. Current Procedural Terminology (“CPT”) codes exist for surgeons to code for nerve repair; however, we believe the data substantially underestimates the total number of nerves repaired. Physicians are encouraged to document all steps of procedures, but open trauma often involves many surgical steps, and CPT codes may be inclusive of each other or may not be documented or reported in billing records. As a result, we believe CPT coding underrepresents the total number of nerve repairs performed in trauma. Because we believe CPT claims are not fully representative of the true volumes of nerve repair surgery, we follow an “empirical” methodology to estimate the TAM, using published clinical literature and procedure databases to make what we believe are the most objective assumptions.

Extremities

The extremities business is comprised of traumatic nerve injuries and chronic nerve injuries. The traumatic nerve injuries portion of the TAM encompasses traumatic PNI throughout the body, with approximately 95% of injuries affecting upper and lower extremity nerves. We previously estimated the trauma portion of the TAM and presently believe it is at least $2.9 billion annually based upon epidemiological studies regarding the general number of trauma patients, clinical literature review reporting PNI incidence, and physician interviews. We have estimated the portion of these nerve repair procedures due to trauma that would require gap repair, primary repair and/or nerve protection and applied, as we believed was appropriate in each procedure segment, the number of units and average sales price of Avance Products and the average market price for nerve connectors and nerve protectors to determine the probable TAM.

Oral Maxillofacial and Head and Neck

We previously estimated the oral maxillofacial portion of the TAM and presently believe it is at least $1.2 billion annually, based upon research indicating that approximately 54,000 PNI occur in the U.S. each year related to third molar surgeries, anesthetic injections, dental implants, orthognathic surgery, and mandibular resection procedures. We have applied the average sales price of the Avance Products, Axoguard Nerve Connector, and Axoguard Nerve Protector that address such PNI to derive the OMF portion of the estimated TAM.

In head and neck, we are focused on addressing nerve injuries in parotidectomy, thyroidectomy and radical neck dissections, which we believe presently represent a significant opportunity with more than 200,000 procedures performed annually, highly concentrated in large academic hospital centers.

Breast

We previously estimated the breast portion of the TAM based on autologous flap reconstructions (i.e. DIEP flaps) and presently believe it is at least $417 million annually. In 2023, we launched Resensation® to implant-based procedures with neurotization of the nipple area complex. We estimate that there is an additional 10 - 15% of the breast reconstructions done with implants that can also be neurotized which adds at least $260 million to increase the estimated TAM to at least $677 million annually. Currently, when a patient undergoes autologous or implant-based breast reconstruction after a mastectomy, the patient receives the shape of a natural breast, but often times experiences little to no return of sensory feeling. In certain cases, sensation can be returned to the breast area with the use of our products through an innovative surgical technique called Resensation. We believe that the ideal breast reconstruction should restore breast size, shape, symmetry, and softness, as well as sensation, without the potential risks and comorbidity associated with autograft. We believe the Resensation technique incorporates a patient’s desire for the opportunity to return sensation to their breasts with a reproducible and efficient surgical approach for reconstructive plastic surgery.

Urology

Prostate cancer is the second most common cancer for men in the U.S. with 1 in 8 men diagnosed over their lifetime. Robotic assisted radical prostatectomy, which involves the surgical removal of the prostate gland, is the most common surgical treatment. Despite its efficacy in cancer control and development of nerve sparing techniques, the procedure often leads to problematic side effects, such as incontinence and erectile dysfunction, due to nerve injury to the cavernous nerve. Our nerve repair portfolio can be used to reconstruct the transected cavernous nerve as well as provide nerve protection in nerve sparing radical prostatectomies. We currently estimate the TAM is at least $754.0 million or 110,000 procedures. To derive the estimated TAM we multiplied the average market sales price of our portfolio products used in the procedure by the number of estimated procedures.

Although distribution and sales of products in the extremities, oral maxillofacial and head and neck, breast and urology portions of the TAM constitute our primary revenue sources today, multiple market expansion opportunities in other clinical applications could offer us expanded revenue opportunities.

Biologics License Application Approval

On December 3, 2025, the FDA approved the BLA for Avance as an acellular nerve scaffold for the treatment of adult and pediatric patients aged one month or older with sensory nerve discontinuity (≤25mm). The FDA granted accelerated approval to Avance for the treatment of sensory nerve discontinuity (>25mm) and mixed and motor nerve discontinuity based on extrapolation of the sensory results from our completed RECON study entitled “A Multicenter, Prospective, Randomized, Patient and Evaluator Blinded Comparative Study of Nerve Cuffs and Avance Nerve Graft Evaluating Recovery Outcomes for the Repair of Nerve Discontinuities.” Continued approval for indications of sensory nerve discontinuities (>25mm) and for mixed and motor nerve discontinuities depends on verification and description of clinical benefit in confirmatory studies. The FDA requires a post-marketing requirement study with a final protocol due February 5, 2026, study completion by December 5, 2030, and a final report due June 5, 2031, as well as progress reports every 180 days, beginning on May 31, 2026. Under this post-marketing requirement, we will conduct a study comparing Avance to nerve autograft.

Commercial availability of Avance is expected early in the second quarter of 2026. In alignment with prior agreements with the FDA, we will transition Avance Products from a human tissue product under Section 361 of the PHS Act (“361 HCT/P”) to a licensed biologic product under Section 351 of the PHS Act. Products that began manufacturing prior to the BLA approval will continue to be distributed as a 361 HCT/P under 21 CFR Part 1271 requirements. Per our agreed upon transition plan with the FDA, this product may remain in the supply chain until its labeled expiration date. Production of Avance under BLA standards began following BLA approval. In the meantime, Avance remains available under the current tissue framework.

Our Product Portfolio

Avance Nerve Graft

Avance Nerve Graft is a biologically active nerve implant with more than 17 years of comprehensive clinical evidence and more than 120,000 implants since launch. Avance Nerve Graft is processed nerve allograft intended for the surgical repair of peripheral nerve discontinuities to support regeneration across the defect. It is intended to act as a structural bridge in order to guide and support axonal regeneration across a peripheral nerve gap caused by traumatic injury or surgical intervention. Avance Nerve Graft is decellularized and sterile processed human peripheral nerve tissue. We developed Avance Nerve Graft by following the guiding principle that the human body created the optimal peripheral nerve structure. We, through our licensing efforts and research, developed our Avance Method®, a proprietary method for processing recovered human peripheral nerve tissue in a manner that preserves the essential structure of the ECM while cleansing away cellular and noncellular debris. Avance Nerve Graft provides the natural peripheral nerve structure of a nerve, including the native laminin, to guide the regenerating nerve fibers. The nerve ECM is additionally processed to remove a natural inhibitor to regeneration called chondroitin sulphate proteoglycan.

We believe that Avance Nerve Graft is the first off-the-shelf nerve allograft for bridging nerve transections. Avance Nerve Graft is comprised of bundles of small diameter endoneurial tubes that are held together by an outer sheath called the epineurium. Avance Nerve Graft has been processed to remove cellular and noncellular factors such as cells, fat, blood, and axonal debris, while preserving the three-dimensional laminin lined tubular bioscaffold (i.e., microarchitecture), epineurium, and microvasculature of the peripheral nerve. After processing, Avance Nerve Graft is flexible and pliable, and its epineurium can be sutured in place allowing for a tension-free approximation of the proximal and distal peripheral nerve stumps. During the healing process, the body revascularizes and gradually remodels the graft into the patient’s own tissue while allowing the processed peripheral nerve allograft to physically support axonal regeneration across the peripheral nerve discontinuities. Avance Nerve Graft does not require immunosuppression for use.

With lengths up to 70mm and diameters up to 5mm, Avance Nerve Graft allows surgeons to choose and trim the implant to the correct length for reconstructing the relevant peripheral nerve gap, as well as to match the diameter to the proximal and distal end of the severed peripheral nerve. Avance Nerve Graft is stored frozen and utilizes packaging that maintains the implant in a sterile condition. The packaging is typical for medical products, so the surgical staff is familiar with opening the package for transfer of Avance Nerve Graft into the sterile surgical field. The packaging also provides protection during shipment and storage and a reservoir for the addition of sterile fluid to aid in thawing the product. Avance Nerve Graft thaws in less than ten minutes, and once thawed, it is ready for implantation.

Avance Nerve Graft provides the following key advantages:

•A three-dimensional bioscaffold for bridging a peripheral nerve gap;

•A biologically active nerve therapy with more than 17 years of comprehensive clinical evidence;

•No patient donor-nerve surgery, therefore no comorbidities associated with a secondary surgical site;

•Available in a variety of diameters up to 5mm to meet a range of anatomical needs;

•Available in a variety of lengths up to 70mm to meet a range of gap lengths;

•Decellularized and cleansed ECM;

•Implanted without the need for immunosuppression, remodels into patient’s own tissue;

•Structurally supports the body’s own regeneration process;

•Handles similar to an autograft, and is flexible and pliable;

•Alleviates tension at the repair site;

•Three-year shelf life; and

•Supplied sterile.

Axoguard Nerve Connector

Axoguard Nerve Connector is a coaptation aid used to align and connect severed peripheral nerve ends in a tensionless repair. The product is in a tubular shape with an open lumen on each end where the severed peripheral nerve ends are inserted. It is typically used when the gap between the peripheral nerve ends is 5mm or less in length. Axoguard Nerve Connector is made from a processed porcine ECM that allows the body’s natural healing process to repair the peripheral nerve while its tube shape isolates and protects the transected nerves during the healing process. During healing, the patient’s own cells incorporate into the ECM product to remodel and form a tissue similar to the outermost layer of the peripheral nerve (nerve epineurium). Axoguard Nerve Connector is provided sterile, for single use only, and in a variety of sizes to meet the surgeon’s needs.

Axoguard Nerve Connector can be used:

•As an alternative to direct suture repair;

•As a peripheral nerve coaptation; Connector-Assisted Repair®;

•To aid coaptation in direct repair, grafting, or cable grafting repairs; and

•To reinforce the coaptation site.

Axoguard Nerve Connector has the following advantages:

•Processed intact porcine ECM with an open, porous structure that allows for cell infiltration and remodeling;

•Designed as a coaptation aid for tensionless repair of transected or severed peripheral nerves;

•Alleviates tension at the repair site;

•Remodels into the patient’s own tissue;

•Reduces the number of required sutures (versus direct repair with suture);

•Allows surgeon to move sutures away from the repair site which may minimize inflammation and aid nerve regeneration;

•Reduces potential for fascicular mismatch;

•Allows visualization of underlying peripheral nerve ends;

•Available in seven different diameters and two different lengths to address a variety of nerve repair situations;

•Strong and flexible, easy to suture; and

•Stored at room temperature with a minimum of 18-month shelf life for the sizes with six-layers and 24-month shelf life for those with four-layers.

Axoguard Nerve Protector

Axoguard Nerve Protector is a product used to protect and wrap damaged peripheral nerves and reinforce reconstructed nerve gaps while minimizing soft tissue attachments. It is designed to protect and isolate the peripheral nerve during the healing process after surgery by creating a barrier between the nerve tissue and the surrounding tissue bed. The product is delivered in a slit tube format allowing it to be wrapped around peripheral nerve structures. Axoguard Nerve Protector is made from a processed porcine ECM. During healing, the ECM remodels allowing the protector to separate the peripheral nerve from the surrounding tissue. Axoguard Nerve Protector competes against off-the-shelf biomaterials such as reconstituted bovine collagen as well as the use of the patient’s own tissue such as vein and hypothenar fat pad wrapping. Axoguard Nerve Protector is provided sterile, for single use only, and in a variety of sizes to meet the surgeon’s needs.

Axoguard Nerve Protector can be used to:

•Separate and protect the nerve from the surrounding tissue during the healing process;

•Minimize risk of soft tissue attachments and entrapment in compressed peripheral nerves;

•Protect peripheral nerves in a traumatized wound bed; and

•Reinforce a coaptation site.

Axoguard Nerve Protector has the following advantages:

•Processed porcine submucosa ECM used to reinforce a coaptation site, wrap a partially severed peripheral nerve or protect peripheral nerve tissue;

•Creates a protective layer that isolates and protects the peripheral nerve in a traumatized wound bed;

•Remodels to form a new soft tissue layer;

•Easily conforms and provides 360-degree wrapping of damaged peripheral nerve tissue;

•Allows the body’s natural healing process to repair the nerve;

•Minimizes the potential for soft tissue attachments and peripheral nerve entrapment by physically isolating the nerve during the healing process;

•Allows peripheral nerve gliding;

•Strong and flexible, plus easy to suture;

•Is available in five different widths and two different lengths to address a variety of peripheral nerve repair situations; and

•Stored at room temperature with a minimum of 24-month shelf life.

Axoguard HA+ Nerve Protector

Axoguard HA+ Nerve Protector is a surgical implant that provides non-constricting protection for peripheral nerves. It is designed to be an interface between the nerve and the surrounding tissue. Axoguard HA+ Nerve Protector is comprised of an ECM and is fully remodeled during the healing process. The lubricant coating on Axoguard HA+ Nerve Protector is composed of sodium hyaluronate and sodium alginate. When hydrated, the lubricant coating reduces friction between the nerve and the surrounding tissue. Axoguard HA+ Nerve Protector is flexible to accommodate movement of the joint and associated tendons and has sufficient mechanical strength to hold sutures. Axoguard HA+ Nerve Protector is provided sterile, for single use only, and in a variety of sizes to meet surgeons’ needs.

Axoguard HA+ Nerve Protector can be used to:

•Separate and protect the nerve from the surrounding tissue during the healing process;

•Minimize risk of soft tissue attachments and entrapment in compressed peripheral nerves;

•Protect peripheral nerves in a traumatized wound bed; and

•Provide tension relief when used in aiding a coaptation.

Axoguard HA+ Nerve Protector has the following advantages:

•Processed porcine submucosa ECM layer is vascularized and remodeled by the patient into new site-specific tissue;

•Double-sided HA+ gel coating to reduce friction and enhance nerve gliding through traumatic tissue beds;

•Formulated for optimized handling and flexibility of surgical application—quick hydration, flat sheet configuration and is easy to suture if needed;

•Allows the body’s natural healing process to repair the nerve;

•Minimizes the potential for soft tissue attachments and peripheral nerve entrapment by physically isolating the nerve during the healing process;

•Allows peripheral nerve gliding;

•Is available in five different sizes up to 4cm x 8cm to address a variety of peripheral nerve repair situations; and

•Stored at room temperature with a minimum of 24-month shelf life.

Axoguard Nerve Cap

Axoguard Nerve Cap is a proprietary 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.

Nerves are often cut in a variety of surgeries and a nerve that is cut and not reconstructed may form an entangled mass of disorganized nerve and fibrous tissue that could cause debilitating pain called a symptomatic neuroma. Neuromas are a potential cause of pain for those patients who complain of chronic post-surgical pain, including in amputees, which may lead to an inability to use their prosthesis. Despite more than 30 different treatment methods, it is our belief that neuromas continue to be an unresolved problem in microsurgery. We believe the Axoguard Nerve Cap can address these painful neuromas and address nerve pain without the complications of traditional methods, including pharmacotherapy and chemical injections, among others. Axoguard Nerve Cap can be used to reduce the development of symptomatic or painful neuroma formation.

Axoguard Nerve Cap has the following advantages:

•Separates the nerve end from surrounding tissue, neurotrophic factors and mechanical stimulation;

•Reduces painful neuroma formation;

•Allows for anchoring of a nerve end or stump to nearby tissue structure;

•Material gradually remodels into the patient’s own tissue to protect the nerve end;

•Semi-translucence allows for visualization of nerve ends or stumps and easy visualization for suture placement;

•Is available in six different sizes to address a variety of situations; and

•Stored at room temperature with a minimum of 18-month shelf life.

Avive+ Soft Tissue Matrix

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 repair.

Avive+ Soft Tissue Matrix has the following advantages:

•Keeps adjacent tissues separated and acts as a barrier to soft tissue attachment, which may reduce the potential of nerve tethering and impaired nerve function;

•Present for at least 16 weeks during the critical phase of tissue repair, as confirmed in an animal study model;

•Multi-layered design allows for ideal handling, easy repositioning, and the ability to suture or secure into place; and

•Unique, layered design features epithelial cells on both sides.

Tissue Recovery and Processing

Avance Nerve Graft Processing Overview

We developed our Avance Method®, an advanced and proprietary technique to process Avance Nerve Graft from donated human peripheral nerve tissue. Our Avance Method requires special training over several months for each manufacturing associate who processes Avance Nerve Grafts. The processing and manufacturing system for Avance Nerve Graft has required significant capital investment, and we seek to continually improve our manufacturing and quality assurance processes and systems. Our Avance Method is depicted as follows:

Biologic Tissue Processing

Our Avance Method comprises peripheral nerve tissue recovery/acquisition and testing, donor medical review and release, debridement and other processing steps, packaging, and sterilization to meet or exceed all applicable FDA, state, and international regulations and the American Association of Tissue Banks (“AATB”) standards. Our supply agreements with recovery and acquisition agencies for peripheral nerve tissue and our ability to enter into additional supply contracts, as necessary will provide us with the tissue volumes we require to meet the demand for our Avance implants. As an FDA registered tissue establishment, we use both our own personnel and subcontractors for recovery/acquisition, storage, testing, processing, and sterilization of the donated peripheral nerve tissue and placental tissues. Additionally, we and our subcontractors, have contracted with independent current Good Manufacturing Practice (“cGMP”) and Good Laboratory Practice (“GLP”) compliant laboratories to perform testing for product release. The safety of Avance Nerve Graft is supported by donor screening, process validation, process controls, and validated terminal sterilization methods. The Axogen Quality System has built in redundancies that are meant to ensure product release only after such product meets our quality control and product requirements.

Tissue Recovery and Biologic Processing Facilities

We partner with other FDA registered tissue establishments and AATB accredited recovery agencies or recovery agencies in compliance with FDA, state and international regulations and AATB standards for human tissue recovery. After consent for donation is obtained, donations are screened and tested in detail for safety in compliance with FDA, state and international regulations and AATB standards on communicable disease transmission.

In 2023, we successfully transferred the Avance Nerve Graft tissue processing and packaging to our Axogen Processing Center facility (the “APC Facility”), which is comprised of a 107,000 square foot building on approximately 8.5 acres of land

located in Vandalia, Ohio. It is expected that the APC Facility, along with the ability for expansion, will provide processing capabilities that will meet our intended sales growth. On December 3, 2025, the FDA approved the BLA for Avance. The APC Facility is now registered with the FDA as a biologics manufacturing facility.

We obtained certain economic development grants from state and local authorities totaling up to $2.7 million including $1.3 million of cash grants to offset costs to acquire and develop the APC Facility. Certain economic development grants were subject to fixed asset investments and job creation milestones with clawback clauses if we do not meet the minimum requirements for these milestones. In October 2025, we received notification from certain grant authorities that we are expected to satisfy our job creating milestone, assuming we continue to maintain certain headcount and payroll amount thresholds through December 31, 2026. If we are unable to maintain minimum requirements under our grant agreements, we could be obligated to pay back up to approximately $950 thousand as of December 31, 2025 related to these grants. See Part II, Item 8. Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements - Note 15 - Commitments and Contingencies - Service Agreements.

We process and package Avive+ Soft Tissue Matrix using our employees and equipment pursuant to a License and Services Agreement, as amended (the “License and Services Agreement”) with a third party (the “Service Provider”), in Dayton, Ohio at their facility (the “Dayton Facility”). We expect to continue to rely on the Dayton Facility for the processing of Avive+ Soft Tissue Matrix. The Service Provider is a FDA registered tissue establishment and an AATB accredited organization.

The current License and Services Agreement extends through December 31, 2026. Under the License and Services Agreement, we pay the Service Provider a facility fee for clean-room, manufacturing, storage, and office space. The Service Provider also provides services in support of our manufacturing such as routine sterilization of daily supplies, providing disposable supplies and microbial services, and office support. The service fee is based on a per donor batch rate. The Dayton Facility provides a cost effective, quality controlled and licensed facility. Our processing methods and process controls have been developed and validated to ensure product uniformity and quality. Pursuant to the License and Services Agreement, we pay license fees on a monthly basis. See Note 15 - Commitments and Contingencies - Service Agreements in the Notes to the Consolidated Financial Statements in Part II, Item 8 of this Form 10-K.

Tissue Packaging

After processing, the packaging operation for Avance Nerve Graft is performed in a controlled environment at the APC Facility and the packaging operation for Avive+ Soft Tissue Matrix is performed in a controlled environment at the Dayton Facility. Each Avance Nerve Graft and Avive+ Soft Tissue Matrix are visually inspected and organized by size into finished product codes. The tissue implants are then packaged in primary packaging. The outer pouch acts as the primary sterility and moisture barrier.

Tissue Sterilization and Labeling

After being processed and packaged, Avance Nerve Graft and Avive+ Soft Tissue Matrix are then terminally sterilized at a contract sterilization facility. After sterilization, Avance Nerve Graft and Avive+ Soft Tissue Matrix are shipped back to Axogen where the product lots will undergo quality review to ensure the lots meets specifications and then final packaging and labeling. Orders for Avance Nerve Graft and Avive+ Soft Tissue Matrix are placed with our customer care team, and the products are packaged and shipped from our distribution facilities.

Tissue Product Release

We have established quality procedures for review of tissue recovery, relevant donor medical record review, and release to processing that meet or exceed FDA requirements as defined in 21 CFR Part 1271, state regulations, international regulations, and AATB standards. The Axogen Quality System meets the requirements set forth under 21 CFR Part 1271 for HCT/Ps, including Good Tissue Practices (“GTP”) and is compliant with the 21 CFR Part 820 Quality System Regulation (“QSR”). Furthermore, we utilize validated processes for the handling of raw material components, environmental control, processing, packaging, and terminal sterilization. In addition to ongoing monitoring activities for product conformity to specifications and sterility, shipping methods have been validated in accordance with applicable industry standards.

Manufacturing of Our Medical Device Classified Products

Manufacturing for the Axoguard Product Line

Axoguard Nerve Connector, Axoguard Nerve Protector, Axoguard HA+ Nerve Protector, and Axoguard Nerve Cap (collectively, the “Axoguard Product Line”) are manufactured by Cook Biotech Incorporated (acquired on January 31, 2024 by RTI Surgical, Inc. and rebranded on December 17, 2024 as Evergen), in West Lafayette, Indiana (“Evergen”), which was established in 1995 to develop and manufacture implants utilizing porcine ECM. We do not expect this acquisition to have a material impact on our relationship with Evergen or on our operations. We decided to expand our portfolio of products and felt that the unique ECM material offered by Evergen provided the combination of properties needed in nerve reconstruction. Evergen’s ECM material is pliable, capable of being sutured, and translucent and allows the patient’s own cells to incorporate into the ECM to remodel and form a tissue similar to the nerve’s epineurium. Evergen has its own source of the raw material for the ECM material and manufactures products in the Axoguard Product Line from such sources.

Axoguard Nerve Connector and Axoguard Nerve Protector

On August 27, 2008, we entered into an agreement with Evergen, as amended on February 24, 2012, October 10, 2014, February 26, 2018, and August 4, 2023 (the “Distribution Agreement”), to distribute its ECM technology in the form of the Surgisis® Nerve Cuff, in the form of a nerve wrap or patch, or any other mutually agreed to configuration. The Surgisis products were rebranded under our Axoguard name and consist of the Axoguard Nerve Connector and Axoguard Nerve Protector. Our distribution rights are worldwide in the field of the peripheral and central nervous system but excluding use of the products in the oral cavity for endodontic and periodontal applications and oral maxillofacial surgery solely as they relate to dental, soft or hard tissue repair, or reconstruction. We believe the exclusion does not limit our identified oral maxillofacial market, but expansion into certain additional oral maxillofacial market areas could be limited to our other products not subject to the Distribution Agreement.

The Distribution Agreement terminates on December 31, 2030. Although the agreement requires certain minimum purchases, through mutual agreement, the parties have not established such minimums and to date have not enforced such provision. The Distribution Agreement also establishes a formula for the transfer cost of the Axoguard Nerve Connector and Axoguard Nerve Protector.

Axoguard Nerve Cap and Axoguard HA+ Nerve Protector

We developed, filed several patent applications, and, on August 8, 2017, obtained FDA 510(k) regulatory clearance for Axoguard Nerve Cap. We developed, filed several patent applications, and, on April 7, 2023, obtained FDA 510(k) regulatory clearance for Axoguard HA+ Nerve Protector and a second 510(k) regulatory clearance expanding the indication for use of Axoguard HA+ Nerve Protector on October 12, 2023. These devices are made with Evergen’s ECM material.

Pursuant to the Nerve End Cap Supply Agreement dated June 27, 2017, as amended on April 6, 2020 and August 4, 2023, (the “Amended Supply Agreement”), Evergen is the exclusive contract manufacturer of the Axoguard Nerve Cap and both parties have provided the other party the necessary licenses to their technologies for operation of the Amended Supply Agreement. The Amended Supply Agreement has a term through December 31, 2030.

Pursuant to the Axoguard HA+ Nerve Protector Supply Agreement dated May 2, 2023 (the “Axoguard HA+ Nerve Protector Supply Agreement”), Evergen is the exclusive contract manufacturer of Axoguard HA+ Nerve Protector and both parties have provided the other party with the necessary licenses to their technologies for operation under the agreement. The Axoguard HA+ Nerve Protector Supply Agreement has a term through June 30, 2030. Consistent with the Axoguard Nerve Connector and Axoguard Nerve Protector products, we are able to sell, subject to regulatory approvals, the Axoguard Nerve Cap and Axoguard HA+ Nerve Protector worldwide in the field of the peripheral and central nervous system, but subject to the same exclusions as Axoguard Nerve Connector and Axoguard Nerve Protector.

Sales and Marketing

Overview

We are focused on developing the peripheral nerve repair and regeneration market, committed to improving awareness of new surgical peripheral nerve repair options and building additional scientific and clinical data to assist surgeons and patients in making informed choices with respect to the repair of peripheral nerve injuries. We believe that there is an opportunity to improve current approaches to peripheral nerve repair and that our approach will solidify our position as a leader in the field of peripheral nerve repair products. The following provides the key elements of our sales and marketing strategy.

Increase Awareness of Our Products

Prior to the introduction of our portfolio of peripheral nerve repair products, surgeons had a limited number of options available to surgically repair damaged or transected peripheral nerves. We entered the market to improve the standard of care for nerve injury patients. We intend to increase market penetration and share by increasing awareness of the impact of nerve damage on quality of life and improving the adoption of nerve repair techniques and our products through the continued use of educational conferences and presentations, training for surgical residents, fellows and attending physicians, scientific publications, digital communication, and a knowledgeable and professional sales team. We work to increase awareness and the use of our products within high potential accounts that include hospitals that are level 1 trauma centers, academic affiliated and have a large number of microsurgical trained surgeons and large procedural volumes across our focus clinical specialties. Our customer call points are focused on plastic reconstructive surgeons, orthopedic and plastic hand surgeons who perform surgeries on patients suffering traumatic nerve damage or transection, on oral maxillofacial and head and neck surgeons who repair damaged oral and facial nerves, on plastic reconstructive surgeons who perform breast reconstruction and neurotization and on urologists who perform robotically assisted radical prostatectomies.

Expand Clinical and Scientific Data Regarding the Performance of Our Products

Generating robust clinical and scientific data is a cornerstone of our product development, regulatory, and commercialization strategy. As of December 31, 2025, there have been over 350 peer-reviewed clinical publications related to our products, with some publications including data across multiple product offerings. This expanding body of evidence reflects sustained and growing adoption of our technologies and continued clinical interest in peripheral nerve repair and protection.

Our RANGER® clinical study (defined below in Government Regulations - Clinical Trials), a comprehensive utilization registry of the Avance Nerve Graft, has enrolled more than 2,800 Avance Nerve Graft repairs to date. Enrollment and follow-up in the primary RANGER arms and the MATCH arm (defined below in Government Regulations - Clinical Trials) - evaluating autograft and conduit repair comparators - were completed in December 2023. Analyses from these studies supported our BLA submission. An additional arm of the RANGER study, Sensation-NOW®, tracks neurotization outcomes in autologous DIEP flap breast reconstruction and completed enrollment in November 2025. To date, the RANGER registry has generated 11 peer-reviewed publications and more than 100 scientific conference presentations, contributing to the clinical understanding of nerve repair across sensory, mixed, and motor nerve injuries and advancing the field of nerve repair.

In March 2025, enrollment was completed for COVERED (defined below in Government Regulations - Clinical Trials), a multi-center series evaluating Axoguard HA+ Nerve Protector for nerve protection in first revision cubital tunnel decompression.

We have also supported numerous investigator-initiated studies, case reports, and peer-reviewed publications across clinical areas including breast neurotization, head and neck reconstruction, compressive neuropathies, and the surgical treatment of pain. Additional case series are ongoing or in development for urology, brachial plexus, breast reconstruction neurotization, compression injuries, and the surgical treatment of pain. We continue to collaborate with external investigators and partners on clinically impactful research.

The RECON study (defined below in Government Regulations - Clinical Trials), a pivotal Phase III, multicenter, prospective, randomized, comparative study of hollow tube conduits and Avance Nerve Graft has successfully completed enrollment, follow-up, and analysis. Three peer-reviewed publications from this study have been published.

The REPOSE study pilot phase (defined below in Government Regulations - Clinical Trials), a multicenter, prospective, randomized, and subject-blinded study of Axoguard Nerve Cap as compared to neurectomy alone for the treatment of symptomatic neuroma, has also been published. The comparative phase has completed enrollment and follow-up, providing critical data to guide treatment strategies. Additionally, enrollment in REPOSE XL was completed in January 2025. This study is evaluating the tolerability and feasibility of a large diameter Axoguard Nerve Cap for protecting and preserving terminated nerve ends.

Through continued investment in clinical research, real-world evidence generation, and scientific dissemination, we aim to strengthen the clinical foundation supporting our products, inform regulatory and reimbursement strategies, and advance the standard of care in peripheral nerve repair and protection.

Commitment to the Education of Best Practices in Peripheral Nerve Repair

We have established educational conferences and presentations and surgical resident and fellow training that we believe have positioned us as a leader in providing peripheral nerve repair best practices. We have historically provided education on peripheral nerve repair through in-person national programs, including our “Advances and Best Practices in Nerve Repair” as well as local and regional educational events. In 2025, we offered multiple educational programs including virtual and in-person surgeon education programs.

Focused on Developing Deeper Penetration with Our Existing Accounts Through Development of Long-term Users of Our Algorithm in High Potential Accounts Across Our Targeted Surgical Procedures

We provide full sales and distribution services. As of December 31, 2025, we had 138 direct sales professionals in the U.S. Our direct sales force continues to be supplemented by independent sales agencies that represent approximately 8% of our total revenue. We believe that near-term growth can be supported first through expanded productivity of our existing sales force as they go into more depth with existing accounts and then by adding additional accounts. We expect the number of direct sales professionals to increase over time. Additionally, we have successfully utilized a hybrid commercial approach that includes the use of independent agencies in more remote geographies to provide appropriate local support for surgeons, without the travel time required of a direct sales representative.

Our products are available and sold in 18 countries outside the U.S. through a number of independent in-country distributors. We provide support and resources for independent agencies and distributors both within and outside the U.S. We provide our products to hospitals, surgery centers and military hospitals, calling on surgeons, including plastic reconstructive surgeons, orthopedic and plastic hand surgeons, and certain oral and maxillofacial surgeons to review the benefits of our products. While surgeons make the decision to implant our products in appropriate patients, hospitals make the decision to purchase the products from us. In today’s budget constrained environment, hospital committees review new technologies for cost effectiveness as well as quality. We believe that we have been successful in meeting the needs of these hospital committees by demonstrating the cost/benefit of our products and providing a fair value to the hospital.

Increased Patient Access via Improved Coverage and Payment

We actively support our sales and marketing strategy by ensuring a strong reimbursement foundation for our nerve repair products. We work closely with public and private payors so that hospitals and surgeons receive prompt, adequate payment for procedures using the Avance Products and Axoguard products. Dedicated Category I CPT codes for nerve allograft repair (CPT 64912, with add-on +64913) are in place, allowing providers to bill specifically for surgeries using Avance Products. Importantly, the Centers for Medicare & Medicaid Services (CMS) recognizes the complexity and cost of advanced nerve repairs – Avance Nerve Graft procedures carry a “device-intensive” designation and, effective January 1, 2026, CMS created a new Level 3 Ambulatory Payment Classification (APC 5433) for these nerve repair procedures. As a result, Medicare outpatient reimbursement rates have risen significantly, aligning payment with our products’ clinical value. For example, the national average facility payment for a nerve allograft repair procedure in a hospital outpatient setting is now 96% higher than in 2019 (221% higher in ambulatory surgery centers over the same period). This improved payment adequacy reduces economic barriers for providers and supports wider adoption of our nerve repair portfolio.

Concurrently, we are expanding coverage among private insurers through evidence-driven engagement. In partnership with leading surgeons and healthcare providers, our team works to reverse legacy non-coverage policies for Avance Products and Axoguard products. Many commercial payers that once deemed these innovations “investigational” have updated their coverage after reviewing clinical data and real-world outcomes. We have already achieved policy revisions with several regional insurance plans, adding coverage for millions of newly insured lives. Today, approximately 65% of commercially insured patients in the U.S. have coverage for procedures utilizing our products, and we continue to collaborate with payers to close remaining gaps. By ensuring that insurers cover our nerve repair solutions, we enhance patient access and give hospitals confidence that using Avance Products and Axoguard products will be reimbursed, directly supporting our sales efforts.

Expand the Product Pipeline and Applications in Peripheral Nerve Repair

We have developed and continue to develop new and next generation products to support surgeons in their needs for repairing damaged or transected peripheral nerves. We believe additional opportunities exist to develop or acquire complementary products in peripheral nerve repair. In addition, there are opportunities to expand the existing portfolio of products in new applications of peripheral nerve repair in applications such as lower extremity surgery, head and neck surgery, urology, and the surgical treatment of pain.

Avance Nerve Graft Performance

We have worked with leading institutions, researchers, and surgeons to support innovation in the field of surgical peripheral nerve repair. We believe our RANGER study is the largest multi-center clinical study conducted in peripheral nerve gap repair with more than 2,800 enrolled repairs. We have completed the RECON study. This study was a Phase III trial to support our BLA for Avance. See Government Regulations - Clinical Trials - Our Clinical Trials below.

International Opportunity for Revenue

We currently focus primarily on the U.S. market, with additional foreign distribution and sales in Canada, Germany, the U.K., Spain and several other countries. The need for the surgical repair of damaged or transected nerves is a global opportunity. Through our revenue outside the U.S., we have demonstrated the capability to take our current peripheral nerve repair surgical portfolio into new geographical markets.

We currently have European Union (“E.U.”) wide registration only for Axoguard Nerve Connector and Axoguard Nerve Protector as approval/registration for Avance Nerve Graft as human tissue is required in each individual country. Avance Nerve Graft was granted marketing authorization in Germany and direct commercial operations began in 2022. As a result of the BLA approval for Avance, some foreign regulators may request updated notifications or documentation regarding the FDA regulatory status of Avance and this may require a Certificate of Foreign Government which we would obtain from the FDA.

Currently, Axoguard Nerve Cap is available in the U.S. and New Zealand. Further Introduction of our portfolio of products into foreign markets is subject to meeting the appropriate regulatory standards of particular countries and any appropriate regional regulation or directive. In addition to regulatory approval, reimbursement approval is necessary to achieve material product adoption in most countries. Avance Nerve Graft has received a recommendation from the National Institute for Health and Care Excellence in the U.K. for digital nerve repair. To date, revenue from international distribution and sales have not been material, there are no material risks associated with foreign operations, and we do not have dependencies as to international revenue. See