Q3 2025 --12-31 false 0000898437 false false false false 1 0 0 3 3 10 3 2 0 0 0 0 0 0 0000898437 2025-01-01 2025-09-30 thunderdome:item iso4217:USD 0000898437 us-gaap:OperatingSegmentsMember 2024-01-01 2024-09-30 0000898437 us-gaap:OperatingSegmentsMember 2025-01-01 2025-09-30 0000898437 us-gaap:OperatingSegmentsMember 2024-07-01 2024-09-30 0000898437 us-gaap:OperatingSegmentsMember 2025-07-01 2025-09-30 xbrli:pure xbrli:shares 0000898437 anik:May2024ShareRepurchasePlanRule10b51Member 2025-07-01 2025-09-30 0000898437 anik:May2024ShareRepurchasePlanRule10b51Member 2025-01-01 2025-06-30 iso4217:USD xbrli:shares 0000898437 anik:May2024ShareRepurchasePlanMember 2024-05-28 0000898437 anik:May2024ShareRepurchasePlanRule10b51Member 2024-05-28 0000898437 anik:RestrictedStockUnitsAndPerformanceStockUnitsMember 2024-01-01 2024-09-30 0000898437 anik:RestrictedStockUnitsAndPerformanceStockUnitsMember 2025-01-01 2025-09-30 0000898437 us-gaap:EmployeeStockOptionMember 2024-01-01 2024-09-30 0000898437 us-gaap:EmployeeStockOptionMember 2025-01-01 2025-09-30 0000898437 us-gaap:ForeignTaxJurisdictionOtherMember us-gaap:MinistryOfEconomicAffairsAndFinanceItalyMember 2024-09-01 2024-09-30 0000898437 2024-01-01 2024-09-30 0000898437 2024-07-01 2024-09-30 0000898437 2025-07-01 2025-09-30 utr:Y 0000898437 us-gaap:PerformanceSharesMember 2025-01-01 2025-06-30 0000898437 us-gaap:PerformanceSharesMember 2025-06-30 0000898437 us-gaap:PerformanceSharesMember srt:MaximumMember anik:MarketBasedVestingMember 2025-01-01 2025-06-30 0000898437 us-gaap:PerformanceSharesMember srt:MinimumMember anik:MarketBasedVestingMember 2025-01-01 2025-06-30 0000898437 us-gaap:PerformanceSharesMember 2025-03-14 2025-03-14 0000898437 us-gaap:PerformanceSharesMember 2024-01-01 2024-06-30 0000898437 us-gaap:PerformanceSharesMember 2024-12-31 0000898437 anik:March2024Member us-gaap:RestrictedStockUnitsRSUMember 2025-01-01 2025-06-30 0000898437 anik:March2024Member us-gaap:RestrictedStockUnitsRSUMember 2025-06-30 0000898437 us-gaap:RestrictedStockUnitsRSUMember 2025-03-01 2025-06-30 0000898437 us-gaap:RestrictedStockUnitsRSUMember 2025-01-01 2025-06-30 0000898437 us-gaap:RestrictedStockUnitsRSUMember 2025-06-30 0000898437 us-gaap:RestrictedStockUnitsRSUMember 2024-01-01 2024-06-30 0000898437 us-gaap:RestrictedStockUnitsRSUMember 2024-12-31 0000898437 us-gaap:RestrictedStockUnitsRSUMember srt:MinimumMember 2025-01-01 2025-06-30 0000898437 us-gaap:EmployeeStockOptionMember 2025-01-01 2025-06-30 0000898437 us-gaap:EmployeeStockOptionMember 2025-06-30 0000898437 2024-06-30 0000898437 2025-06-30 0000898437 2024-01-01 2024-06-30 0000898437 2025-01-01 2025-06-30 0000898437 srt:MaximumMember 2024-01-01 2024-06-30 0000898437 srt:MinimumMember 2024-01-01 2024-06-30 0000898437 srt:MaximumMember 2025-01-01 2025-06-30 0000898437 srt:MinimumMember 2025-01-01 2025-06-30 0000898437 2024-12-31 0000898437 anik:PremiumPricedEmployeeStockOptionsMember 2025-01-01 2025-06-30 0000898437 2024-04-01 2024-06-30 0000898437 2025-04-01 2025-06-30 0000898437 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2024-01-01 2024-06-30 0000898437 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2025-01-01 2025-06-30 0000898437 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2024-04-01 2024-06-30 0000898437 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2025-04-01 2025-06-30 0000898437 us-gaap:ResearchAndDevelopmentExpenseMember 2024-01-01 2024-06-30 0000898437 us-gaap:ResearchAndDevelopmentExpenseMember 2025-01-01 2025-06-30 0000898437 us-gaap:ResearchAndDevelopmentExpenseMember 2024-04-01 2024-06-30 0000898437 us-gaap:ResearchAndDevelopmentExpenseMember 2025-04-01 2025-06-30 0000898437 us-gaap:CostOfSalesMember 2024-01-01 2024-06-30 0000898437 us-gaap:CostOfSalesMember 2025-01-01 2025-06-30 0000898437 us-gaap:CostOfSalesMember 2024-04-01 2024-06-30 0000898437 us-gaap:CostOfSalesMember 2025-04-01 2025-06-30 0000898437 anik:The2021InducementPlanMember 2025-01-01 2025-06-30 0000898437 anik:The2021InducementPlanMember 2025-06-30 0000898437 anik:The2021InducementPlanMember 2024-05-02 0000898437 anik:The2021InducementPlanMember 2024-05-02 2024-05-02 0000898437 anik:The2017PlanMember 2025-06-30 0000898437 anik:The2017PlanMember 2017-06-13 0000898437 anik:The2017PlanMember 2023-06-14 0000898437 anik:The2017PlanMember 2023-06-13 0000898437 anik:The2017PlanMember 2023-06-14 2023-06-14 0000898437 anik:OtherLocationMember 2024-01-01 2024-09-30 0000898437 anik:OtherLocationMember 2025-01-01 2025-09-30 0000898437 srt:EuropeMember 2024-01-01 2024-09-30 0000898437 srt:EuropeMember 2025-01-01 2025-09-30 0000898437 country:US 2024-01-01 2024-09-30 0000898437 country:US 2025-01-01 2025-09-30 0000898437 anik:OtherLocationMember 2024-07-01 2024-09-30 0000898437 anik:OtherLocationMember 2025-07-01 2025-09-30 0000898437 srt:EuropeMember 2024-07-01 2024-09-30 0000898437 srt:EuropeMember 2025-07-01 2025-09-30 0000898437 country:US 2024-07-01 2024-09-30 0000898437 country:US 2025-07-01 2025-09-30 0000898437 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember anik:DepuySynthesMitekSportsMedicineMember 2024-01-01 2024-09-30 0000898437 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember anik:DepuySynthesMitekSportsMedicineMember 2025-01-01 2025-09-30 0000898437 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember anik:DepuySynthesMitekSportsMedicineMember 2024-07-01 2024-09-30 0000898437 us-gaap:SalesRevenueNetMember us-gaap:CustomerConcentrationRiskMember anik:DepuySynthesMitekSportsMedicineMember 2025-07-01 2025-09-30 0000898437 anik:CommercialChannelMember 2024-01-01 2024-09-30 0000898437 anik:CommercialChannelMember 2025-01-01 2025-09-30 0000898437 anik:CommercialChannelMember 2024-07-01 2024-09-30 0000898437 anik:CommercialChannelMember 2025-07-01 2025-09-30 0000898437 anik:OEMChannelMember 2024-01-01 2024-09-30 0000898437 anik:OEMChannelMember 2025-01-01 2025-09-30 0000898437 anik:OEMChannelMember 2024-07-01 2024-09-30 0000898437 anik:OEMChannelMember 2025-07-01 2025-09-30 0000898437 2025-09-30 0000898437 us-gaap:DevelopedTechnologyRightsMember 2025-04-01 2025-06-30 0000898437 us-gaap:PatentsMember 2024-12-31 0000898437 us-gaap:PatentsMember 2025-09-30 0000898437 us-gaap:PatentsMember 2025-01-01 2025-09-30 0000898437 us-gaap:InProcessResearchAndDevelopmentMember 2024-12-31 0000898437 us-gaap:InProcessResearchAndDevelopmentMember 2025-09-30 0000898437 us-gaap:InProcessResearchAndDevelopmentMember 2025-01-01 2025-09-30 0000898437 us-gaap:DevelopedTechnologyRightsMember 2024-12-31 0000898437 us-gaap:DevelopedTechnologyRightsMember 2025-09-30 0000898437 us-gaap:DevelopedTechnologyRightsMember 2025-01-01 2025-09-30 0000898437 us-gaap:ConstructionInProgressMember 2024-12-31 0000898437 us-gaap:ConstructionInProgressMember 2025-06-30 0000898437 us-gaap:LeaseholdImprovementsMember 2024-12-31 0000898437 us-gaap:LeaseholdImprovementsMember 2025-06-30 0000898437 us-gaap:FurnitureAndFixturesMember 2024-12-31 0000898437 us-gaap:FurnitureAndFixturesMember 2025-06-30 0000898437 anik:EquipmentAndSoftwareMember 2024-12-31 0000898437 anik:EquipmentAndSoftwareMember 2025-06-30 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2024-12-31 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-12-31 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-12-31 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-12-31 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2024-12-31 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:CarryingReportedAmountFairValueDisclosureMember 2025-09-30 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel3Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2025-09-30 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel2Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2025-09-30 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:EstimateOfFairValueFairValueDisclosureMember 2025-09-30 0000898437 us-gaap:MoneyMarketFundsMember us-gaap:EstimateOfFairValueFairValueDisclosureMember 2025-09-30 0000898437 2024-09-30 0000898437 2023-12-31 0000898437 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2024-01-01 2024-09-30 0000898437 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember 2025-01-01 2025-09-30 0000898437 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember anik:ParcusMedicalMember 2025-03-07 0000898437 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember anik:ArthrosurfaceIncorporatedMember 2024-12-31 0000898437 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember anik:ArthrosurfaceIncorporatedMember 2025-09-30 0000898437 us-gaap:DiscontinuedOperationsDisposedOfBySaleMember anik:ArthrosurfaceIncorporatedMember 2024-10-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-09-30 0000898437 us-gaap:RetainedEarningsMember 2024-09-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-09-30 0000898437 anik:CommonStockOutstandingMember 2024-09-30 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-07-01 2024-09-30 0000898437 us-gaap:RetainedEarningsMember 2024-07-01 2024-09-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-07-01 2024-09-30 0000898437 anik:CommonStockOutstandingMember 2024-07-01 2024-09-30 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-06-30 0000898437 us-gaap:RetainedEarningsMember 2024-06-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-06-30 0000898437 anik:CommonStockOutstandingMember 2024-06-30 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-04-01 2024-06-30 0000898437 us-gaap:RetainedEarningsMember 2024-04-01 2024-06-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-04-01 2024-06-30 0000898437 anik:CommonStockOutstandingMember 2024-04-01 2024-06-30 0000898437 2024-03-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-03-31 0000898437 us-gaap:RetainedEarningsMember 2024-03-31 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-03-31 0000898437 anik:CommonStockOutstandingMember 2024-03-31 0000898437 2024-01-01 2024-03-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-01-01 2024-03-31 0000898437 us-gaap:RetainedEarningsMember 2024-01-01 2024-03-31 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-01-01 2024-03-31 0000898437 anik:CommonStockOutstandingMember 2024-01-01 2024-03-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2023-12-31 0000898437 us-gaap:RetainedEarningsMember 2023-12-31 0000898437 us-gaap:AdditionalPaidInCapitalMember 2023-12-31 0000898437 anik:CommonStockOutstandingMember 2023-12-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-09-30 0000898437 us-gaap:RetainedEarningsMember 2025-09-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2025-09-30 0000898437 anik:CommonStockOutstandingMember 2025-09-30 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-07-01 2025-09-30 0000898437 us-gaap:RetainedEarningsMember 2025-07-01 2025-09-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2025-07-01 2025-09-30 0000898437 anik:CommonStockOutstandingMember 2025-07-01 2025-09-30 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-06-30 0000898437 us-gaap:RetainedEarningsMember 2025-06-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2025-06-30 0000898437 anik:CommonStockOutstandingMember 2025-06-30 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-04-01 2025-06-30 0000898437 us-gaap:RetainedEarningsMember 2025-04-01 2025-06-30 0000898437 us-gaap:AdditionalPaidInCapitalMember 2025-04-01 2025-06-30 0000898437 anik:CommonStockOutstandingMember 2025-04-01 2025-06-30 0000898437 2025-03-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-03-31 0000898437 us-gaap:RetainedEarningsMember 2025-03-31 0000898437 us-gaap:AdditionalPaidInCapitalMember 2025-03-31 0000898437 anik:CommonStockOutstandingMember 2025-03-31 0000898437 2025-01-01 2025-03-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2025-01-01 2025-03-31 0000898437 us-gaap:RetainedEarningsMember 2025-01-01 2025-03-31 0000898437 us-gaap:AdditionalPaidInCapitalMember 2025-01-01 2025-03-31 0000898437 anik:CommonStockOutstandingMember 2025-01-01 2025-03-31 0000898437 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2024-12-31 0000898437 us-gaap:RetainedEarningsMember 2024-12-31 0000898437 us-gaap:AdditionalPaidInCapitalMember 2024-12-31 0000898437 anik:CommonStockOutstandingMember 2024-12-31 0000898437 2025-10-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ | 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 001-14027

Anika Therapeutics, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware | 04-3145961
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.)

32 Wiggins Avenue, Bedford, Massachusetts 01730

(Address of Principal Executive Offices) (Zip Code)

(781) 457-9000

(Registrant’s Telephone Number, Including Area Code)

N/A

(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
Common Stock, par value $0.01 per share | ANIK | NASDAQ Global Select Market

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 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.

Large accelerated filer ☐ | 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 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 ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of October 29, 2025, there were 14,421,219 outstanding shares of Common Stock, par value $0.01 per share.

ANIKA THERAPEUTICS, INC.

TABLE OF CONTENTS

|  | Page
Part I | Financial Information | 3
Item 1. | Condensed Consolidated Financial Statements (unaudited): | 3
| Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 | 3
| Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) for the three and nine months ended September 30, 2025 and 2024 | 4
| Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2025 and 2024 | 5
| Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 | 6
| Notes to Condensed Consolidated Financial Statements | 7
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 26
Item 4. | Controls and Procedures | 26
Part II | Other Information | 26
Item 1. | Legal Proceedings | 26
Item 1A. | Risk Factors | 26
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 27
Item 3. | Defaults Upon Senior Securities | 27
Item 4. | Mine Safety Disclosures | 27
Item 5. | Other Information | 27
Item 6. | Exhibits | 28
Signatures | 29

References in this Quarterly Report on Form 10-Q to “we,” “us,” “our,” “our company,” and other similar references refer to Anika Therapeutics, Inc. and its subsidiaries unless the context otherwise indicates.

ANIKA, ANIKA THERAPEUTICS, CINGAL, HYAFF, HYALOFAST, INTEGRITY, MONOVISC, ORTHOVISC, and TACTOSET are our registered trademarks that appear in this Quarterly Report on Form 10-Q. For convenience, these trademarks appear in this Quarterly Report on Form 10-Q without ® and ™ symbols, but that practice does not mean that we will not assert, to the fullest extent under applicable law, our rights to the trademarks. This Quarterly Report on Form 10-Q also contains trademarks and trade names that are the property of other companies and licensed to us.

PART I: | FINANCIAL INFORMATION
ITEM 1. | FINANCIAL STATEMENTS

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

(unaudited)

|  | September 30, |  |  | December 31, |
ASSETS |  | 2025 |  |  | 2024 |
Current assets: |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 57,990 |  |  | $ | 55,629 |
Accounts receivable, net |  |  | 22,187 |  |  |  | 23,594 |
Inventories |  |  | 16,284 |  |  |  | 23,809 |
Prepaid expenses and other current assets |  |  | 5,129 |  |  |  | 5,494 |
Current assets held for sale |  |  | - |  |  |  | 5,126 |
Total current assets |  |  | 101,590 |  |  |  | 113,652 |
Property and equipment, net |  |  | 40,684 |  |  |  | 38,994 |
Right-of-use assets |  |  | 24,226 |  |  |  | 25,685 |
Other long-term assets |  |  | 5,507 |  |  |  | 5,656 |
Notes receivable |  |  | 6,478 |  |  |  | 5,935 |
Deferred tax assets |  |  | 1,251 |  |  |  | 1,177 |
Intangible assets, net |  |  | 1,650 |  |  |  | 2,490 |
Goodwill |  |  | 8,051 |  |  |  | 7,125 |
Non-current assets held for sale |  |  | - |  |  |  | 2,026 |
Total assets |  | $ | 189,437 |  |  | $ | 202,740 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |
Accounts payable |  | $ | 4,732 |  |  | $ | 5,617 |
Accrued expenses and other current liabilities |  |  | 14,357 |  |  |  | 13,567 |
Current liabilities held for sale |  |  | - |  |  |  | 4,122 |
Total current liabilities |  |  | 19,089 |  |  |  | 23,306 |
Other long-term liabilities |  |  | 761 |  |  |  | 772 |
Lease liabilities |  |  | 22,782 |  |  |  | 24,014 |
Non-current liabilities held for sale |  |  | - |  |  |  | 659 |
Commitments and contingencies (Note 11) |  |  |  |  |  |  |  |
Stockholders’ equity: |  |  |  |  |  |  |  |
Preferred stock, $0.01 par value; 1,250 shares authorized, no shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively |  |  | - |  |  |  | - |
Common stock, $0.01 par value; 90,000 shares authorized, 15,355 issued and 14,421 outstanding and 15,010 issued and 14,416 outstanding at September 30, 2025 and December 31, 2024, respectively |  |  | 144 |  |  |  | 144 |
Additional paid-in-capital |  |  | 91,105 |  |  |  | 88,961 |
Accumulated other comprehensive loss |  |  | (4,939 | ) |  |  | (6,783 | )
Retained earnings |  |  | 60,495 |  |  |  | 71,667 |
Total stockholders’ equity |  |  | 146,805 |  |  |  | 153,989 |
Total liabilities and stockholders’ equity |  | $ | 189,437 |  |  | $ | 202,740 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

(in thousands, except per share data)

(unaudited)

|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenue |  | $ | 27,817 |  |  | $ | 29,559 |  |  | $ | 82,204 |  |  | $ | 89,305 |
Cost of product revenue |  |  | 12,233 |  |  |  | 10,151 |  |  |  | 37,576 |  |  |  | 30,433 |
Gross profit |  |  | 15,584 |  |  |  | 19,408 |  |  |  | 44,628 |  |  |  | 58,872 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research & development |  |  | 6,946 |  |  |  | 5,946 |  |  |  | 19,318 |  |  |  | 19,037 |
Selling, general & administrative |  |  | 11,871 |  |  |  | 13,543 |  |  |  | 37,007 |  |  |  | 44,231 |
Total operating expenses |  |  | 18,817 |  |  |  | 19,489 |  |  |  | 56,325 |  |  |  | 63,268 |
Loss from operations |  |  | (3,233 | ) |  |  | (81 | ) |  |  | (11,697 | ) |  |  | (4,396 | )
Interest and other income, net |  |  | 997 |  |  |  | 406 |  |  |  | 1,626 |  |  |  | 1,593 |
(Loss) income before income taxes |  |  | (2,236 | ) |  |  | 325 |  |  |  | (10,071 | ) |  |  | (2,803 | )
Provision for income taxes |  |  | 939 |  |  |  | 2,170 |  |  |  | 1,709 |  |  |  | 3,539 |
Loss from continuing operations |  |  | (3,175 | ) |  |  | (1,845 | ) |  |  | (11,780 | ) |  |  | (6,342 | )
Income (loss) from discontinued operations, net of tax |  |  | 846 |  |  |  | (28,073 | ) |  |  | 608 |  |  |  | (28,178 | )
Net loss |  | $ | (2,329 | ) |  | $ | (29,918 | ) |  | $ | (11,172 | ) |  | $ | (34,520 | )
Income (loss) per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  |  | (0.22 | ) |  |  | (0.12 | ) |  |  | (0.82 | ) |  |  | (0.43 | )
Discontinued operations |  |  | 0.06 |  |  |  | (1.91 | ) |  |  | 0.04 |  |  |  | (1.91 | )
|  | $ | (0.16 | ) |  | $ | (2.03 | ) |  | $ | (0.78 | ) |  | $ | (2.34 | )
Diluted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Continuing operations |  |  | (0.22 | ) |  |  | (0.12 | ) |  |  | (0.82 | ) |  |  | (0.43 | )
Discontinued operations |  |  | 0.06 |  |  |  | (1.91 | ) |  |  | 0.04 |  |  |  | (1.91 | )
|  | $ | (0.16 | ) |  | $ | (2.03 | ) |  | $ | (0.78 | ) |  | $ | (2.34 | )
Weighted average common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 14,419 |  |  |  | 14,768 |  |  |  | 14,361 |  |  |  | 14,769 |
Diluted |  |  | 14,419 |  |  |  | 14,768 |  |  |  | 14,361 |  |  |  | 14,769 |
Net loss |  | $ | (2,329 | ) |  | $ | (29,918 | ) |  | $ | (11,172 | ) |  | $ | (34,520 | )
Foreign currency translation adjustment |  |  | (184 | ) |  |  | 715 |  |  |  | 1,844 |  |  |  | 242 |
Comprehensive loss |  | $ | (2,513 | ) |  | $ | (29,203 | ) |  | $ | (9,328 | ) |  | $ | (34,278 | )

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders' Equity

(in thousands, except per share data)

(unaudited)

|  | Nine Months Ended September 30, 2025 |
|  | Common Stock |  |  |  |  |  |  | Accumulated |  |  |  |  |
|  | Number of |  |  | $.01 Par |  |  | Additional Paid |  |  | Retained |  |  | Other Comprehensive |  |  | Total Stockholders' |
|  | Shares |  |  | Value |  |  | in Capital |  |  | Earnings |  |  | Loss |  |  | Equity |
Balance, January 1, 2025 |  |  | 14,416 |  |  | $ | 144 |  |  | $ | 88,961 |  |  | $ | 71,667 |  |  | $ | (6,783 | ) |  | $ | 153,989 |
Vesting of restricted stock units |  |  | 250 |  |  |  | 2 |  |  |  | 1,693 |  |  |  | - |  |  |  | - |  |  |  | 1,695 |
Stock-based compensation expense |  |  | - |  |  |  | - |  |  |  | 2,344 |  |  |  | - |  |  |  | - |  |  |  | 2,344 |
Retirement of common stock for minimum tax withholdings |  |  | (90 | ) |  |  | (1 | ) |  |  | (1,466 | ) |  |  | - |  |  |  | - |  |  |  | (1,467 | )
Repurchase of common stock |  |  | (241 | ) |  |  | (2 | ) |  |  | (3,969 | ) |  |  | - |  |  |  | - |  |  |  | (3,971 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,873 | ) |  |  | - |  |  |  | (4,873 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 680 |  |  |  | 680 |
Balance, March 31, 2025 |  |  | 14,335 |  |  | $ | 143 |  |  | $ | 87,563 |  |  | $ | 66,794 |  |  | $ | (6,103 | ) |  | $ | 148,397 |
Vesting of restricted stock units |  |  | 62 |  |  |  | 1 |  |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | - |
Issuance of ESPP shares |  |  | 27 |  |  |  | - |  |  |  | 261 |  |  |  | - |  |  |  | - |  |  |  | 261 |
Stock-based compensation expense |  |  | - |  |  |  | - |  |  |  | 1,719 |  |  |  | - |  |  |  | - |  |  |  | 1,719 |
Retirement of common stock for minimum tax withholdings |  |  | (6 | ) |  |  | - |  |  |  | (83 | ) |  |  | - |  |  |  | - |  |  |  | (83 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (3,970 | ) |  |  | - |  |  |  | (3,970 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,348 |  |  |  | 1,348 |
Balance, June 30, 2025 |  |  | 14,418 |  |  | $ | 144 |  |  | $ | 89,459 |  |  | $ | 62,824 |  |  | $ | (4,755 | ) |  | $ | 147,672 |
Vesting of restricted stock units |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Stock-based compensation expense |  |  | - |  |  |  | - |  |  |  | 1,659 |  |  |  | - |  |  |  | - |  |  |  | 1,659 |
Retirement of common stock for minimum tax withholdings |  |  | (2 | ) |  |  | - |  |  |  | (13 | ) |  |  | - |  |  |  | - |  |  |  | (13 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2,329 | ) |  |  | - |  |  |  | (2,329 | )
Other comprehensive loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (184 | ) |  |  | (184 | )
Balance, September 30, 2025 |  |  | 14,421 |  |  | $ | 144 |  |  | $ | 91,105 |  |  | $ | 60,495 |  |  | $ | (4,939 | ) |  | $ | 146,805 |

|  | Nine Months Ended September 30, 2024 |
|  | Common Stock |  |  |  |  |  |  | Accumulated |  |  |  |  |
|  | Number of |  |  | $.01 Par |  |  | Additional Paid |  |  | Retained |  |  | Other Comprehensive |  |  | Total Stockholders' |
|  | Shares |  |  | Value |  |  | in Capital |  |  | Earnings |  |  | Loss |  |  | Equity |
Balance, January 1, 2024 |  |  | 14,660 |  |  | $ | 147 |  |  | $ | 90,009 |  |  | $ | 128,052 |  |  | $ | (5,943 | ) |  | $ | 212,265 |
Issuance of common stock for equity awards |  |  | 1 |  |  |  | - |  |  |  | 23 |  |  |  | - |  |  |  | - |  |  |  | 23 |
Vesting of restricted stock units |  |  | 250 |  |  |  | 2 |  |  |  | (2 | ) |  |  | - |  |  |  | - |  |  |  | - |
Stock-based compensation expense |  |  | - |  |  |  | - |  |  |  | 3,430 |  |  |  | - |  |  |  | - |  |  |  | 3,430 |
Retirement of common stock for minimum tax withholdings |  |  | (90 | ) |  |  | (1 | ) |  |  | (2,295 | ) |  |  | - |  |  |  | - |  |  |  | (2,296 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (4,514 | ) |  |  | - |  |  |  | (4,514 | )
Other comprehensive loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (372 | ) |  |  | (372 | )
Balance, March 31, 2024 |  |  | 14,821 |  |  | $ | 148 |  |  | $ | 91,165 |  |  | $ | 123,538 |  |  | $ | (6,315 | ) |  | $ | 208,536 |
Issuance of common stock for equity awards |  |  | 2 |  |  |  | - |  |  |  | 53 |  |  |  | - |  |  |  | - |  |  |  | 53 |
Vesting of restricted stock units |  |  | 49 |  |  |  | 1 |  |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | - |
Issuance of ESPP shares |  |  | 24 |  |  |  | - |  |  |  | 411 |  |  |  | - |  |  |  | - |  |  |  | 411 |
Stock-based compensation expense |  |  | - |  |  |  | - |  |  |  | 3,103 |  |  |  | - |  |  |  | - |  |  |  | 3,103 |
Repurchase of common stock |  |  | (53 | ) |  |  | (1 | ) |  |  | (1,369 | ) |  |  | - |  |  |  | - |  |  |  | (1,370 | )
Retirement of common stock for minimum tax withholdings |  |  | (4 | ) |  |  | - |  |  |  | (206 | ) |  |  | - |  |  |  | - |  |  |  | (206 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (88 | ) |  |  | - |  |  |  | (88 | )
Other comprehensive loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (101 | ) |  |  | (101 | )
Balance, June 30, 2024 |  |  | 14,839 |  |  | $ | 148 |  |  | $ | 93,156 |  |  | $ | 123,450 |  |  | $ | (6,416 | ) |  | $ | 210,338 |
Vesting of restricted stock units |  |  | 10 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Stock-based compensation expense |  |  | - |  |  |  | - |  |  |  | 2,718 |  |  |  | - |  |  |  | - |  |  |  | 2,718 |
Repurchase of common stock |  |  | (152 | ) |  |  | (1 | ) |  |  | (3,967 | ) |  |  | - |  |  |  | - |  |  |  | (3,968 | )
Retirement of common stock for minimum tax withholdings |  |  | (3 | ) |  |  | - |  |  |  | (21 | ) |  |  | - |  |  |  | - |  |  |  | (21 | )
Net loss |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (29,918 | ) |  |  | - |  |  |  | (29,918 | )
Other comprehensive income |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 715 |  |  |  | 715 |
Balance, September 30, 2024 |  |  | 14,694 |  |  | $ | 147 |  |  | $ | 91,886 |  |  | $ | 93,532 |  |  | $ | (5,701 | ) |  | $ | 179,864 |

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

5

Anika Therapeutics, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |
Cash flows from operating activities: |  |  |  |  |  |  |  |
Net loss |  | $ | (11,172 | ) |  | $ | (34,520 | )
Adjustments to reconcile net income to net cash used in operating activities: |  |  |  |  |  |  |  |
Depreciation |  |  | 4,054 |  |  |  | 5,324 |
Amortization of acquisition related intangible assets |  |  | 357 |  |  |  | 985 |
Non-cash operating lease cost |  |  | 1,562 |  |  |  | 1,561 |
Impairment of long-lived assets |  |  | - |  |  |  | 3,101 |
Stock-based compensation expense |  |  | 7,626 |  |  |  | 10,875 |
Deferred income taxes |  |  | 18 |  |  |  | 26 |
Provision for credit losses |  |  | 209 |  |  |  | 1,023 |
Provision for inventory |  |  | 4,969 |  |  |  | 26,078 |
Interest income on notes receivable |  |  | (424 | ) |  |  | - |
(Gain) loss on sale of assets |  |  | (956 | ) |  |  | 97 |
Changes in operating assets and liabilities: |  |  |  |  |  |  |  |
Accounts receivable |  |  | 1,953 |  |  |  | 6,638 |
Inventories |  |  | 1,809 |  |  |  | (11,815 | )
Prepaid expenses, other current and long-term assets |  |  | 1,016 |  |  |  | 504 |
Accounts payable |  |  | (835 | ) |  |  | (2,385 | )
Operating lease liabilities |  |  | (1,525 | ) |  |  | (1,505 | )
Accrued expenses, other current and long-term liabilities |  |  | (1,641 | ) |  |  | (2,734 | )
Income taxes |  |  | (469 | ) |  |  | 568 |
Net cash provided from operating activities |  |  | 6,551 |  |  |  | 3,821 |
Cash flows from investing activities: |  |  |  |  |  |  |  |
Proceeds from sale of Parcus |  |  | 4,496 |  |  |  | - |
Proceeds from sale of intangible assets |  |  | 600 |  |  |  | - |
Notes receivable |  |  | 483 |  |  |  | - |
Purchases of property and equipment |  |  | (6,178 | ) |  |  | (6,427 | )
Acquisition of intangible assets |  |  | - |  |  |  | (600 | )
Net cash used in investing activities |  |  | (599 | ) |  |  | (7,027 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |
Proceeds from employee stock purchase program |  |  | 261 |  |  |  | 411 |
Cash paid for tax withheld on vested restricted stock awards |  |  | (1,562 | ) |  |  | (2,523 | )
Proceeds from exercises of equity awards |  |  | - |  |  |  | 76 |
Repurchases of common stock |  |  | (3,971 | ) |  |  | (5,339 | )
Net cash used in financing activities |  |  | (5,272 | ) |  |  | (7,375 | )
Exchange rate impact on cash |  |  | 151 |  |  |  | 82 |
Increase (decrease) in cash and cash equivalents |  |  | 831 |  |  |  | (10,499 | )
Cash and cash equivalents at beginning of period |  |  | 57,159 |  |  |  | 72,867 |
Cash and cash equivalents at end of period |  | $ | 57,990 |  |  | $ | 62,368 |
Supplemental disclosure of cash flow information: |  |  |  |  |  |  |  |
Non-cash investing activities: |  |  |  |  |  |  |  |
Purchases of property and equipment included in accounts payable and accrued expenses |  | $ | 36 |  |  | $ | 118 |

(a) |  | The cash flows related to discontinued operations and held-for-use assets and liabilities have not been segregated and remain included in the major classes of assets and liabilities. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 3 for selected financial information related to significant operating and investing cash flow items from discontinued operations.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

Anika Therapeutics, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(amounts in thousands, except share and per share amounts or as otherwise noted)

(unaudited)

1. | Nature of Business

Anika Therapeutics, Inc. (the “Company”) is a global joint preservation company in osteoarthritis (“OA”) pain management and regenerative solutions, focusing on early intervention orthopedics. The Company offers hyaluronic acid-based advancements in its OA Pain Management and Regenerative Solutions businesses, designed to restore active living, empower surgeon choice, and enhance patient outcomes worldwide.

In early 2020, the Company expanded its overall technology platform through its acquisitions of Parcus Medical, LLC (“Parcus Medical”), a sports medicine implant and instrumentation company, and Arthrosurface Incorporated (“Arthrosurface”), a company specializing in less invasive, bone preserving partial and total joint replacement solutions. These acquisitions broadened the Company's product portfolio, developed over its 30 years of expertise in hyaluronic acid technology, into joint preservation and restoration, increased its commercial capabilities, diversified its revenue base, and expanded its product pipeline and research and development expertise.

In October 2024, the Company announced a strategic shift to focus on its OA Pain Management and Regenerative Solutions businesses. This strategic decision resulted in the sale of Arthrosurface on October 31, 2024 and the sale of Parcus Medical on March 7, 2025.

The Company is subject to risks common to companies in the life sciences industry including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, commercialization of existing and new products, and compliance with U.S. Food and Drug Administration (“FDA”) and foreign regulations and approval requirements, as well as the ability to grow the Company’s business through appropriate commercial strategies.

2. | Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and related notes have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”). The financial statements include the accounts of Anika Therapeutics, Inc. and its subsidiaries. Inter-company transactions and balances have been eliminated. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to SEC rules and regulations relating to interim financial statements. The December 31, 2024 balances reported herein were derived from the audited consolidated financial statements. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to fairly state the condensed consolidated financial statements.

The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual financial statements filed with its Annual Report on Form 10-K for the year ended December 31, 2024. The results of operations for the three and nine-month periods ended September 30, 2025 are not indicative of the results to be expected for the year ending December 31, 2025.

As noted above, the Company made a strategic decision in October 2024 that resulted in the sales of Arthrosurface and Parcus Medical. See Note 3, Discontinued Operations, for further information. The condensed consolidated financial statements reflect Arthrosurface and Parcus Medical’s results of operations as discontinued operations for all periods presented, and the related assets and liabilities as held-for-sale as of December 31, 2024.

7

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, entities must consistently categorize and provide greater disaggregation of information in the rate reconciliation and must also disaggregate income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is evaluating the impact of ASU 2023-09 on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, and in January 2025, the FASB issued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. ASU 2024-03 requires additional disclosure of the nature of expenses included in the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income statement. ASU 2024-03, as clarified by ASU 2025-01, is effective for public companies for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of ASU 2024-03 on its disclosures.

3. | Discontinued Operations

In October 2024, the Company announced a strategic shift to focus on its OA Pain Management and Regenerative Solutions businesses. This strategic decision resulted in the sale of Arthrosurface on October 31, 2024 and the sale of Parcus Medical on March 7, 2025.

Arthrosurface

On October 31, 2024 (the “Closing Date”), the Company completed the sale of all of the outstanding equity interests of Arthrosurface, a Delaware corporation and former wholly-owned subsidiary of the Company, which held the Company’s Arthrosurface business, to Phoenix Brio, Incorporated, a Delaware corporation (the “Buyer”), pursuant to the terms and conditions of a Share Purchase Agreement, dated as of the Closing Date (the “Purchase Agreement”), by and among the Company, Arthrosurface and Buyer (the “Arthrosurface Transaction”).

As consideration for the Arthrosurface Transaction, at the closing, the Buyer delivered to the Company a ten-year non-interest-bearing promissory note in the principal amount of $7.0 million. Under the terms of the Purchase Agreement, the Company is also eligible to receive: (i) for each calendar quarter, an amount equal to a percentage of the net sales (the “Revenue Payments”) for the sale of certain commercial and pipeline products during the period commencing on the Closing Date and ending on the earlier of the fifth (5th) anniversary of the Closing Date or the date on which the Buy-Out Payment (as defined below) is paid to the Company; and (ii) a percentage of the gross proceeds with respect to the sale of certain commercial and pipeline products in a bona-fide arm’s length transaction with a third party that is not an affiliate of Buyer or the Company occurring within the first twenty four (24) months following the Closing Date. The Buyer can also elect to make a payment in an amount equal to the greater of (A) $14.0 million or (B) ten (10) times the Revenue Payments ((A) and (B) together, the “Buy-Out Payment”) paid to the Company during the last full calendar year prior to the consummation of a change of control transaction or Buyer’s written notice to the Company that it is electing to make the Buy-Out Payment. Pursuant to the Purchase Agreement, the aggregate consideration is subject to customary post-closing adjustments. The Company determined the fair value of the consideration with the sale of the Arthrosurface asset group to be $5.9 million and recorded as Notes Receivable on its balance sheet at the time of divestiture. The carrying value of the Notes Receivable was $6.5 million and $5.9 million, as of September 30, 2025 and December 31, 2024, respectively.

Parcus Medical

On March 7, 2025, the Company completed the sale of all outstanding equity interests of Parcus Medical, to Medacta Americas Manufacturing, Inc. (“Medacta”), pursuant to the terms and conditions of a Membership Interest Purchase Agreement (the “Parcus Transaction”). As consideration for the Parcus Transaction, at closing, Medacta paid $4.5 million in cash. Pursuant to the terms of the agreement, the aggregate consideration is subject to customary post-closing adjustments.

The components of loss from discontinued operations for the three and nine months ended September 30, 2025 and 2024, consist of the following (in thousands):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenue |  | $ | - |  |  | $ | 9,193 |  |  | $ | 2,710 |  |  | $ | 31,892 |
Costs and expenses |  |  | - |  |  |  | 37,131 |  |  |  | 3,611 |  |  |  | 60,416 |
Loss from discontinued operations before income taxes |  |  | - |  |  |  | (27,938 | ) |  |  | (901 | ) |  |  | (28,524 | )
(Benefit from) provision for income taxes |  |  | (845 | ) |  |  | 135 |  |  |  | (1,508 | ) |  |  | (346 | )
Net income (loss) from discontinued operations |  | $ | 845 |  |  | $ | (28,073 | ) |  | $ | 607 |  |  | $ | (28,178 | )

8

The assets and liabilities reported as held-for-sale consist of the following (in thousands):

|  | As of December 31, |
|  | 2024 |
Assets |  |  |  |
Cash and cash equivalents |  | $ | 1,531 |
Accounts receivable, net |  |  | 3,285 |
Inventories |  |  | 221 |
Prepaid expenses and other current assets |  |  | 89 |
Property and equipment, net |  |  | 1,134 |
Right-of-use assets |  |  | 892 |
Total assets held-for-sale |  | $ | 7,152 |
Liabilities |  |  |  |
Accounts payable |  | $ | 797 |
Accrued expenses and other current liabilities |  |  | 3,324 |
Lease liabilities |  |  | 660 |
Total liabilities held-for-sale |  | $ | 4,781 |

There are no assets and liabilities reported as held-for-sale as of September 30, 2025, as the Company completed the divestitures of the Arthrosurface and Parcus Medical asset groups prior to September 30, 2025.

Selected financial information related to significant operating and investing cash flow items from discontinued operations (excluding working capital impacts) are as follows (in thousands):

|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |
Depreciation |  | $ | 149 |  |  | $ | 1,546 |
Amortization of acquisition related intangible assets |  | $ | - |  |  | $ | 509 |
Non-cash operating lease cost |  | $ | 55 |  |  | $ | 161 |
Stock-based compensation expense |  | $ | 132 |  |  | $ | 968 |
Impairment of long-lived assets |  | $ | - |  |  | $ | 3,102 |
Provision for inventory |  | $ | - |  |  | $ | 24,557 |
Purchases of property and equipment |  | $ | 19 |  |  | $ | 678 |

4. | Accounts Receivable

The Company estimates an allowance for credit losses with its accounts receivable resulting from the inability of its customers to make required payments, which is included in selling, general and administrative expenses in the accompanying consolidated statements of operations. In determining the adequacy of the allowance, management specifically analyzes individual accounts receivable, historical bad debts, customer concentrations, customer creditworthiness, current and reasonable and supportable forecasts of future economic conditions, accounts receivable aging trends, and changes in the Company’s customer payment terms.

The components of the Company’s accounts receivable are as follows:

|  | As of |  |  | As of |
|  | September 30, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Accounts Receivable |  | $ | 23,057 |  |  | $ | 24,324 |
Less: Allowance for credit losses |  |  | 870 |  |  |  | 730 |
Net balance, end of period |  | $ | 22,187 |  |  | $ | 23,594 |

A summary of activity in the allowance for credit losses is as follows:

|  | As of September 30, |
|  | 2025 |  |  | 2024 |
Balance, beginning of the period |  | $ | 730 |  |  | $ | 666 |
Amounts provided |  |  | 344 |  |  |  | 108 |
Amounts recovered |  |  | (135 | ) |  |  | (66 | )
Amounts written off |  |  | (136 | ) |  |  | (37 | )
Translation adjustments |  |  | 67 |  |  |  | 6 |
Balance, end of period |  | $ | 870 |  |  | $ | 677 |

9

5. | Fair Value Measurements

The Company has certain cash equivalents in money market funds that are classified within Level 1 of the fair value hierarchy and are valued based on quoted prices in active markets. For cash, accounts receivables, accounts payable, and accrued interest, the carrying amounts approximate fair value, because of the short maturity of these instruments, and therefore fair value information items is not included in the table below. There were no transfers between fair value levels during the nine-month periods ended September 30, 2025 and 2024, respectively.

The classification of the Company’s cash equivalents within the fair value hierarchy was as follows:

|  | September 30, |  |  | Active Markets for Identical Assets |  |  | Significant Other Observable Inputs |  |  | Significant Unobservable Inputs |  |  | Amortized |
|  | 2025 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Cost |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money Market Funds |  | $ | 45,823 |  |  | $ | 45,823 |  |  | $ | - |  |  | $ | - |  |  | $ | 45,823 |

|  | December 31, |  |  | Active Markets for Identical Assets |  |  | Significant Other Observable Inputs |  |  | Significant Unobservable Inputs |  |  | Amortized |
|  | 2024 |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |  |  | Cost |
Cash equivalents: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money Market Funds |  | $ | 46,061 |  |  | $ | 46,061 |  |  | $ | - |  |  | $ | - |  |  | $ | 46,061 |

6. | Inventories

Inventories consist of the following:

|  | September 30, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Raw materials |  | $ | 9,967 |  |  | $ | 13,180 |
Work-in-process |  |  | 6,951 |  |  |  | 7,001 |
Finished goods |  |  | 4,476 |  |  |  | 8,761 |
Total |  | $ | 21,394 |  |  | $ | 28,942 |
Inventories |  | $ | 16,284 |  |  | $ | 23,809 |
Other long-term assets |  |  | 5,110 |  |  |  | 5,133 |
Total |  | $ | 21,394 |  |  | $ | 28,942 |

Inventories are stated net of inventory reserves of approximately $6.1 million and $3.9 million, as of September 30, 2025 and December 31, 2024, respectively.

10

7. | Property and Equipment

Property and equipment is stated at cost and consists of the following:

|  | September 30, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Equipment and software |  | $ | 47,742 |  |  | $ | 41,390 |
Furniture and fixtures |  |  | 1,652 |  |  |  | 1,509 |
Leasehold improvements |  |  | 37,846 |  |  |  | 36,340 |
Construction in progress |  |  | 4,010 |  |  |  | 6,039 |
Subtotal |  |  | 91,250 |  |  |  | 85,278 |
Less accumulated depreciation |  |  | (50,566 | ) |  |  | (46,284 | )
Total |  | $ | 40,684 |  |  | $ | 38,994 |

Depreciation expense was $1.4 million and $1.3 million for the three-month periods ended September 30, 2025 and 2024, respectively. Depreciation was $4.0 million and $3.8 million for the nine-month periods ended September 30, 2025 and 2024, respectively.

8. | Intangible Assets

Intangible assets as of September 30, 2025 and December 31, 2024 consisted of the following:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, |  |  |  |  |
|  |  |  |  |  | Nine Months ended September 30, 2025 |  |  | 2024 |  |  |  |  |
|  | Gross Value |  |  | Less: Disposals |  |  | Less: Accumulated Currency Translation Adjustment |  |  | Less: Accumulated Amortization |  |  | Net Book Value |  |  | Net Book Value |  |  | Weighted Average Useful Life |
Developed technology |  | $ | 12,080 |  |  | $ | (600 | ) |  | $ | (1,608 | ) |  | $ | (9,872 | ) |  | $ | - |  |  | $ | 805 |  |  |  | 15 |
In-process research & development |  |  | 2,656 |  |  |  | - |  |  |  | (1,006 | ) |  |  | - |  |  |  | 1,650 |  |  |  | 1,650 |  |  | Indefinite |
Patents |  |  | 1,000 |  |  |  | - |  |  |  | (189 | ) |  |  | (811 | ) |  |  | - |  |  |  | 35 |  |  |  | 16 |
Total |  | $ | 15,736 |  |  | $ | (600 | ) |  | $ | (2,803 | ) |  | $ | (10,683 | ) |  | $ | 1,650 |  |  | $ | 2,490 |  |  |  | 13 |

The aggregate amortization expense related to intangible assets was $0 and $0.2 million for the three-month periods ended September 30, 2025 and 2024, respectively and $0.4 million and $0.5 million for the nine-month periods ended September 30, 2025 and 2024, respectively. During the three-month period ended June 30, 2025, the Company sold a developed technology intangible asset for $0.6 million which resulted in a gain of $0.1 million.

9. | Goodwill

The Company assesses goodwill for impairment annually, or, under certain circumstances, more frequently, such as when events or changes in circumstances indicate there may be impairment.

Changes in the carrying value of goodwill for the nine-months ended September 30, 2025 were as follows:

|  | Nine Months Ended September 30, |
|  | 2025 |
Balance, beginning of period |  | $ | 7,125 |
Effect of foreign currency adjustments |  |  | 926 |
Balance, ending of period |  | $ | 8,051 |

10. | Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consist of the following:

|  | September 30, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
Compensation and related expenses |  | $ | 8,111 |  |  | $ | 6,828 |
Professional fees |  |  | 1,777 |  |  |  | 2,485 |
Operating lease liability – current |  |  | 1,725 |  |  |  | 1,918 |
Stock-based compensation |  |  | 1,656 |  |  |  | 1,213 |
Clinical trial costs |  |  | 338 |  |  |  | 295 |
Income taxes payable |  |  | - |  |  |  | 63 |
Other |  |  | 750 |  |  |  | 765 |
Total |  | $ | 14,357 |  |  | $ | 13,567 |

11

11. | Commitments and Contingencies

In certain of its contracts, the Company warrants to its customers that the products it manufactures conform to the product specifications as in effect at the time of delivery of the specific product. The Company may also warrant that the products it manufactures do not infringe, violate, or breach any U.S. or international patent or intellectual property right, trade secret, or other proprietary information of any third party. On occasion, the Company contractually indemnifies its customers against any and all losses arising out of, or in any way connected with, any claim or claims of breach of its warranties or any actual or alleged defect in any product caused by the negligent acts or omissions of the Company. The Company maintains a products liability insurance policy that limits its exposure to these risks. Based on the Company’s historical activity, in combination with its liability insurance coverage, the Company believes the estimated fair value of these indemnification agreements is immaterial. The Company had no accrued warranties as of September 30, 2025 or December 31, 2024 and has no history of claims paid.

The Company is also involved from time-to-time in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, the Company does not expect the resolution of these occasional legal proceedings to have a material adverse effect on its financial position, results of operations, or cash flow.

12. | Revenue and Geographic Information

Revenue by product classification is as follows:

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Original Equipment Manufacturer (“OEM”) Channel |  | $ | 15,844 |  |  | $ | 19,764 |  |  | $ | 47,093 |  |  | $ | 58,101 |
Commercial Channel |  |  | 11,973 |  |  |  | 9,795 |  |  |  | 35,111 |  |  |  | 31,204 |
|  | $ | 27,817 |  |  | $ | 29,559 |  |  | $ | 82,204 |  |  | $ | 89,305 |

Revenue from the Company’s sole significant customer, Johnson & Johnson MedTech (“J&J MedTech”), part of the Johnson & Johnson Medical Companies, as a percentage of the Company’s total revenue was 51% and 59% for the three-months ended September 30, 2025 and 2024, respectively, and 50% and 58% for the nine-months ended September 30, 2025 and 2024, respectively.

Total revenue by geographic location based on the location of the customer in total and as a percentage of total revenue were as follows:

|  | Three Months Ended September 30, |
|  | 2025 |  |  | 2024 |
|  |  |  |  |  | Percentage of |  |  |  |  |  |  | Percentage of |
|  | Revenue |  |  | Revenue |  |  | Revenue |  |  | Revenue |
Geographic Location: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 17,446 |  |  |  | 63 | % |  | $ | 20,589 |  |  |  | 70 | %
Europe |  |  | 5,668 |  |  |  | 20 | % |  |  | 4,795 |  |  |  | 16 | %
Other |  |  | 4,703 |  |  |  | 17 | % |  |  | 4,175 |  |  |  | 14 | %
Total |  | $ | 27,817 |  |  |  | 100 | % |  | $ | 29,559 |  |  |  | 100 | %

|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |
|  |  |  |  |  | Percentage of |  |  |  |  |  |  | Percentage of |
|  | Revenue |  |  | Revenue |  |  | Revenue |  |  | Revenue |
Geographic Location: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 51,733 |  |  |  | 63 | % |  | $ | 61,051 |  |  |  | 68 | %
Europe |  |  | 16,218 |  |  |  | 20 | % |  |  | 15,073 |  |  |  | 17 | %
Other |  |  | 14,253 |  |  |  | 17 | % |  |  | 13,181 |  |  |  | 15 | %
Total |  | $ | 82,204 |  |  |  | 100 | % |  | $ | 89,305 |  |  |  | 100 | %

12

13. | Equity Incentive Plans

Equity Incentive Plans

The Anika Therapeutics, Inc. 2017 Omnibus Incentive Plan (the “2017 Plan”) was approved by the Company’s stockholders on June 13, 2017 and subsequently amended most recently on June 20, 2025. On June 20, 2025, the Company’s stockholders approved an amendment to the 2017 Plan increasing the number of shares by 475,000 shares from 5,285,000 shares to 5,760,000 shares. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights (“SARs”), restricted stock awards, performance restricted stock units (“PSUs”), restricted stock units (“RSUs”), total shareholder return options (“TSRs”) and performance options that may be settled in cash, stock, or other property. In accordance with the 2017 Plan approved by the Company’s stockholders, including the amendments thereto, each share award other than stock options or SARs will reduce the number of total shares available for grant by two shares. Subject to adjustment for specified types of changes in the Company’s capitalization, no more than 5.8 million shares of common stock may be issued under the 2017 Plan. There were 1.3 million shares available for future grant at September 30, 2025 under the 2017 Plan.

The Anika Therapeutics, Inc. 2021 Inducement Plan (the “Inducement Plan”) was adopted by the Company’s board of directors on November 4, 2021 and subsequently amended most recently on May 2, 2024. On May 2, 2024, the Company’s board of directors approved an amendment to the Inducement Plan increasing the number of shares by 100,000 shares. The Inducement Plan reserves 350,000 shares of common stock for issuance pursuant to equity-based awards granted under the Inducement Plan. Such awards may be granted only to an individual who was not previously the Company’s employee or director with the Company. The Inducement Plan provides for the grant of awards under terms substantially similar to the 2017 Plan (as amended). Subject to adjustment for specified types of changes in the Company’s capitalization, no more than 350,000 shares of common stock may be issued under the Inducement Plan. There were 0.1 million shares available for future grant at September 30, 2025 under the Inducement Plan.

The Company may satisfy share-settled awards upon exercise, or upon fulfillment of the vesting requirements for other equity-based awards, with either newly issued shares or shares reacquired by the Company. Stock-based awards are granted with an exercise price equal to or greater than the market price of the Company’s stock on the date of grant. Awards contain service conditions or service and performance conditions, and they generally become exercisable ratably over three years with a maximum contractual term of ten years.

The Company presents the expenses related to stock-based compensation awards in the same expense line items as cash compensation paid to each of its employees as follows (in thousands):

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Cost of revenue |  | $ | 61 |  |  | $ | 84 |  |  | $ | 223 |  |  | $ | 357 |
Research & development |  |  | 284 |  |  |  | 446 |  |  |  | 909 |  |  |  | 1,447 |
Selling, general & administrative |  |  | 1,870 |  |  |  | 2,588 |  |  |  | 6,626 |  |  |  | 8,104 |
Total stock-based compensation expense |  | $ | 2,215 |  |  | $ | 3,118 |  |  | $ | 7,758 |  |  | $ | 9,908 |

Stock Options

Stock options are granted to purchase common shares at prices that are equal to the fair market value of the shares on the date the options are granted or, in the case of premium options, are granted with an exercise price at 110% of the market price of the Company’s common stock on the date of grant. Options generally vest in equal annual installments over a period of three years and expire 10 years after the date of grant. The grant-date fair value of options is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period.

13

The following summarizes the activity under the Company’s stock option plans:

|  |  |  |  |  |  |  |  |  | Weighted |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Average |  |  |  |  |
|  |  |  |  |  | Weighted |  |  | Remaining |  |  | Aggregate |
|  |  |  |  |  | Average |  |  | Contractual |  |  | Intrinsic |
|  | Number of |  |  | Exercise |  |  | Term |  |  | Value |
|  | Options |  |  | Price |  |  | (in years) |  |  | (in thousands) |
Outstanding as of December 31, 2024 |  |  | 2,089,040 |  |  | $ | 32.07 |  |  |  |  |  |  | $ | - |
Granted |  |  | 16,300 |  |  | $ | 12.71 |  |  |  |  |  |  |  |  |
Exercised |  |  | - |  |  | $ | - |  |  |  |  |  |  | $ | - |
Forfeited and canceled |  |  | (333,240 | ) |  | $ | 34.43 |  |  |  |  |  |  | $ | - |
Outstanding as of September 30, 2025 |  |  | 1,772,100 |  |  | $ | 31.45 |  |  |  | 6.5 |  |  | $ | 1 |
Vested, September 30, 2025 |  |  | 1,349,013 |  |  | $ | 32.64 |  |  |  | 6.0 |  |  | $ | - |
Vested or expected to vest, September 30, 2025 |  |  | 1,772,100 |  |  | $ | 31.45 |  |  |  | 6.5 |  |  | $ | 1 |

There were no options exercised for the nine-month period ended September 30, 2025.

The Company uses the Black-Scholes pricing model to determine the fair value of options granted. The calculation of the fair value of stock options is affected by the stock price on the grant date, the expected volatility of the Company’s common stock over the expected term of the award, the expected life of the award, the risk-free interest rate and the dividend yield.

The assumptions used in the Black-Scholes pricing model for options granted during the nine months September 30, 2025 and 2024, along with the weighted-average grant-date fair values, were as follows:

| Nine Months Ended |
| September 30, |
| 2025 |  | 2024 |
Risk free interest rate |  | 3.7 | % |  | - |  | 4.0 | % |  | 3.6 | % |  | - |  | 4.6 | %
Expected volatility |  | 41.6 | % |  | - |  | 45.7 | % |  | 44.5 | % |  | - |  | 48.2 | %
Expected life (years) |  |  |  |  | 4.5 |  |  |  |  |  |  |  | 4.5 |  |  |
Expected dividend yield |  |  |  |  | 0.0 | % |  |  |  |  |  |  | 0.0 | % |  |
Fair value per option |  |  |  | $ | 5.13 |  |  |  |  |  |  | $ | 10.53 |  |  |

As of September 30, 2025, there was $3.0 million of unrecognized compensation related to unvested stock options. This expense is expected to be recognized over a weighted average period of 1.4 years.

Restricted Stock Units (“RSUs”)

RSUs generally vest in equal annual installments over a three-year period. The grant-date fair value of RSUs is recognized as expense on a straight-line basis over the requisite service period, which is generally the vesting period. The Company determines the fair value of RSUs based on the closing price of its common stock on the date of grant.

RSU activity for the nine-month period ended September 30, 2025 was as follows:

|  |  |  |  |  | Weighted Average |
|  | Number of |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding as of December 31, 2024 |  |  | 836,562 |  |  | $ | 26.70 |
Granted |  |  | 569,042 |  |  | $ | 14.85 |
Vested |  |  | (316,105 | ) |  | $ | 25.82 |
Forfeited and cancelled |  |  | (132,161 | ) |  | $ | 23.15 |
Outstanding as of September 30, 2025 |  |  | 957,338 |  |  | $ | 20.44 |

14

The weighted-average grant-date fair value per share of RSUs granted was $14.85 and $26.62 for the nine-month periods ended September 30, 2025 and 2024, respectively. The total fair value of RSUs vested was $8.2 million and $9.6 million for the nine-month periods ended September 30, 2025 and 2024, respectively. As of September 30, 2025, there was $2.4 million of unrecognized compensation cost related to time-based RSUs not subject to cash vesting, which was expected to be recognized over a weighted-average period of 0.9 years.

The Company’s annual grants of RSU awards in March 2024 and 2025 can be settled at vesting in cash or shares at the Company’s election. The Company has recorded these RSUs as a liability due to the expectation that the Company will settle the vesting of these RSU awards in cash due to a potential shortage of shares in the 2017 Plan at the time of vesting. As a result, these RSUs will be subject to change in value at the time of each reporting period. The first tranche of the March 2024 RSU awards, 106,550 shares, vested in March 2025 and were settled in shares. As of September 30, 2025, the Company had 612,880 RSU shares outstanding for which a liability of $1.2 million was recorded in Accrued Expenses and Other Liabilities and there is unrecorded compensation cost of $4.5 million which is to be recognized over a weighted-average period of 2.2 years.

Performance Stock Units (“PSUs”)

PSU activity for the nine-month period ended September 30, 2025 was as follows:

|  |  |  |  |  | Weighted Average |
|  | Number of |  |  | Grant Date |
|  | Shares |  |  | Fair Value |
Outstanding as of December 31, 2024 |  |  | - |  |  | $ | - |
Granted |  |  | 290,792 |  |  | $ | 15.36 |
Vested |  |  | - |  |  | $ | - |
Forfeited and cancelled |  |  | (11,038 | ) |  | $ | 15.42 |
Outstanding as of September 30, 2025 |  |  | 279,754 |  |  | $ | 15.36 |

The weighted-average grant-date fair value per share of PSUs granted was $15.36 for the nine-month period ended September 30, 2025. There were no PSUs granted in the nine-month period ended September 30, 2024.

On March 14, 2025, the Company granted 290,792 PSUs to certain senior management employees. The Company granted two different PSU awards to each PSU award recipient. One form of PSU award is a 3-year cliff vest subject to achievement of certain market-based metrics in which 50-200% of target shares granted may vest based on achievement of the specified Company market price targets during the performance period from March 14, 2025 through March 1, 2028. No shares will vest if these market price targets are not achieved. The Company estimated the fair value of these market-based PSUs using a Monte Carlo simulation model at the grant date and will continue to use the Monte- Carlo simulation model to update the fair value at the end of each reporting period.

The second form of PSU awards is vesting in equal annual installments of target on each anniversary date of grant over three years, subject to annual achievement of the specified strategic performance objectives each year based upon certain regulatory milestones and financial targets. Subject to achievement of each milestone, these awards will vest annually on each anniversary date of the grant date over three years. The Company recognizes stock-based compensation based on the evaluation of probability outcomes of achieving these milestones each reporting period.

The Company’s annual grants of PSU awards in March 2025 can be settled at vesting in cash or shares at the Company’s election. The Company has recorded these PSUs as a liability due to the expectation that the Company will settle the vesting of these PSU awards in cash due to a potential shortage of shares in the 2017 Plan at the time of vesting. As a result, these PSUs will be subject to change in value at the time of each reporting period. As of September 30, 2025, the Company had 279,754 shares outstanding for which a liability of $0.4 million was recorded in Accrued Expenses and Other Liabilities and there is unrecorded compensation cost of $1.1 million associated with these PSUs which is to be recognized over a weighted-average period of 2.5 years.

14. | Income Taxes

The income tax expense was $0.9 million and $1.7 million for the three- and nine-month periods ended September 30, 2025, resulting in effective tax rates of (42.0)% and (17.0)%, respectively. The income tax expense was $2.2 million and $3.5 million for the three- and nine-month periods ended September 30, 2024, resulting in an effective tax rate of 667.7 % and (126.3)%, respectively.

The net change in the effective tax rate for the three- and nine-month periods ended September 30, 2025, compared to the same periods in 2024, was primarily driven by the impact of a higher year-to-date pre-tax loss in the current year and higher U.S. current tax expense in the prior year. The higher income tax expense in the prior year was due to higher current income tax expense in the U.S. The Company’s effective tax rate for the three-month and nine-month periods ended September 30, 2025 was primarily driven by the full valuation on the Company's deferred tax assets in the U.S. and the projected taxable income for the Company resulting in current tax expense in 2025.

15

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, carryback potential if permitted under the tax law, and results of recent operations. The Company has incurred operating losses in recent years. As a result, the Company anticipates that deferred tax assets originating during the year ended December 31, 2025 will exceed the availability of reversing taxable temporary differences. Due to significant negative evidence, including the Company’s prior year operating losses, the Company concluded its anticipated net deferred tax assets in the U.S. are not more likely than not to be realizable. Accordingly, the income tax provision for the nine-month period ended September 30, 2025 includes an adjustment for the valuation allowance required against the U.S. deferred tax assets. As of September 30, 2025, the Company continues to believe its foreign deferred tax assets are realizable based upon future reversals of existing taxable temporary differences and projected future taxable income.

The Company files income tax returns in the United States on a federal basis, in certain U.S. states, and in certain foreign jurisdictions. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate, which varies by jurisdiction. In September 2024, the Company was notified by the Italian tax authorities that it had selected the Company’s tax returns for its Italian subsidiary for 2021 for examination and they remain under review.

On July 4, 2025, new U.S. tax legislation was enacted, including updates to provisions related to research and development expensing for income tax purposes, bonus depreciation, and international tax regimes. During the three-months ended September 30, 2025, the Company evaluated the elective provisions allowed under the new U.S. tax legislation and accounted for tax deductions for bonus depreciation and research and development expenses allowed under the new legislation. Other enacted changes are not expected to have a material impact on the Company’s financial statements.

15. | Earnings Per Share (“EPS”)

Basic EPS is calculated by dividing net income (loss) by the weighted average number of shares outstanding during the period. Unvested restricted shares, although legally issued and outstanding, are not considered outstanding for purposes of calculating basic EPS. Diluted EPS is calculated by dividing net income by the weighted average number of shares outstanding plus the dilutive effect, if any, of outstanding share-based awards using the treasury stock method. Due to the Company’s loss position, the share-based payment awards are anti-dilutive.

The Company had a net loss during the nine-month periods ended September 30, 2025 and 2024, respectively, and therefore all potential common shares would have been anti-dilutive and accordingly were excluded from the computation of diluted EPS. Stock options of 1.8 million shares and 2.2 million shares were outstanding at September 30, 2025 and 2024, respectively. Restricted and performance stock units totaling 1.2 million and 0.9 million were outstanding at September 30, 2025 and 2024, respectively. These securities were not included in the computation of diluted EPS because the equity awards impact on EPS would have been anti-dilutive.

16. | Share Repurchase

In May 2024, the Company agreed to implement a share repurchase program (“Share Repurchase Program”) for an aggregate purchase price of $40.0 million to occur as follows: (i) first $15.0 million was effected through a Rule 10b5-1 Plan initiated prior to June 1, 2024 and to be effective through June 30, 2025, and (ii) the remaining amount to be purchased in the open market through June 2026. In the event of positive “free cash flow” as defined in the Cooperation Agreement dated May 28, 2024, with Caligan Partners LP, Caligan Partners Master Fund LP and David Johnson, for the period from July 1, 2024 through June 30, 2025, the amount under the share repurchase program shall be increased by 50% of such positive amount. In no event would we be required to make any purchases in the event that the Company’s cash would be less than $45.0 million after taking into account the share repurchase and reasonably anticipated capital expenditures and restructuring costs.

On May 28, 2024, the Company entered into a share repurchase agreement under a Rule 10b5-1 Plan with Bank of America. As of June 30, 2025, the Company completed the first part of the share repurchase program in which it purchased 746,431 shares at an average cost of $20.10 per share for a total cost of $15.0 million. No share repurchases were made during the three-months ended September 30, 2025.

16

17. | Segment Information

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. The Company operates in one business segment. The Company’s CODM is its President and Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM’s financial review is focused on the consolidated financial results of the Company which is used as the basis for financial performance assessment and allocation of resources.

The following table presents financial information with respect to the Company’s single operating segment for the three and nine months ended September 30, 2025 and 2024 (in thousands):

|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Revenue |  | $ | 27,817 |  |  | $ | 29,559 |  |  | $ | 82,204 |  |  | $ | 89,305 |
Cost of product revenue |  |  | 12,233 |  |  |  | 10,151 |  |  |  | 37,576 |  |  |  | 30,433 |
Gross Profit |  |  | 15,584 |  |  |  | 19,408 |  |  |  | 44,628 |  |  |  | 58,872 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research & development |  |  | 6,946 |  |  |  | 5,946 |  |  |  | 19,318 |  |  |  | 19,037 |
Selling, general & administrative |  |  | 11,871 |  |  |  | 13,543 |  |  |  | 37,007 |  |  |  | 44,231 |
Total operating expenses |  |  | 18,817 |  |  |  | 19,489 |  |  |  | 56,325 |  |  |  | 63,268 |
Loss from operations |  |  | (3,233 | ) |  |  | (81 | ) |  |  | (11,697 | ) |  |  | (4,396 | )
Interest and other income, net |  |  | 997 |  |  |  | 406 |  |  |  | 1,626 |  |  |  | 1,593 |
(Loss) income before income taxes |  |  | (2,236 | ) |  |  | 325 |  |  |  | (10,071 | ) |  |  | (2,803 | )
Provision for income taxes |  |  | 939 |  |  |  | 2,170 |  |  |  | 1,709 |  |  |  | 3,539 |
Loss from continuing operations |  |  | (3,175 | ) |  |  | (1,845 | ) |  |  | (11,780 | ) |  |  | (6,342 | )
Income (loss) from discontinued operations, net of tax |  |  | 846 |  |  |  | (28,073 | ) |  |  | 608 |  |  |  | (28,178 | )
Net loss |  | $ | (2,329 | ) |  | $ | (29,918 | ) |  | $ | (11,172 | ) |  | $ | (34,520 | )

17

ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion in conjunction with our financial statements and related notes appearing elsewhere in this report and our audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the year ended December 31, 2024, or our 2024 Form 10-K. In addition to historical information, this report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 concerning our business, consolidated financial condition, and results of operations. The Securities and Exchange Commission, or the SEC, encourages companies to disclose forward-looking statements so that investors can better understand a company’s future prospects and make informed investment decisions. Forward-looking statements are subject to risks and uncertainties, many of which are outside our control, which could cause actual results to differ materially from these statements. Therefore, you should not rely on any of these forward-looking statements. Forward-looking statements can be identified by such words as "will," "likely," "may," "believe," "expect," "anticipate," "intend," "seek," "designed," "develop," "would," "future," "can," "could," and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters. All statements other than statements of historical facts included in this report regarding our strategies, prospects, financial condition, operations, costs, plans, and objectives are forward-looking statements. Examples of forward-looking statements include, among others, statements regarding expected future operating results, expectations regarding the timing and receipt of regulatory results, anticipated levels of capital expenditures, and expectations of the effect on our financial condition of claims, litigation, and governmental and regulatory proceedings.

Please also refer to “Item 1A. Risk Factors” of our 2024 Form 10-K for important factors that we believe could cause actual results to differ materially from those in our forward-looking statements. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Management Overview

We are a global joint preservation company that creates and delivers meaningful advancements in early intervention orthopedic care. Based on our collaborations with clinicians to understand what they need most to treat their patients, we develop minimally invasive products that restore active living for people around the world. We are committed to leading in high opportunity spaces within orthopedics, including osteoarthritis, or OA, pain management and regenerative solutions.

We have over thirty years of global expertise developing, manufacturing and commercializing products based on our hyaluronic acid, or HA, technology platform. HA is a naturally occurring polymer found throughout the body that is vital for proper joint health and tissue function. Our proprietary technologies for modifying the HA molecule allow product properties to be tailored specifically to multiple uses, including enabling longer residence time to support OA pain management and creating a solid form of HA called Hyaff, which is a platform utilized in our Regenerative Solutions portfolio.

In early 2020, we expanded our overall technology platform, product portfolio, and significantly expanded our commercial infrastructure, especially in the United States, through our strategic acquisitions of Parcus Medical, LLC, or Parcus Medical, a sports medicine and instrumentation solutions provider, and Arthrosurface Incorporated, or Arthrosurface, a company specializing in bone preserving partial and total joint replacement solutions. These acquisitions augmented our HA-based OA Pain Management and Regenerative Solutions products with a broad suite of products and capabilities focused on early intervention joint preservation, primarily in upper and lower extremities such as shoulder, foot/ankle, knee and hand/wrist.

In October 2024, we announced a strategic shift to focus on our OA Pain Management and our Regenerative Solutions businesses. This strategic decision involved the sale of Arthrosurface in October 2024 and the sale of Parcus Medical in March 2025.

As we look towards the future, our business is positioned to capture value within our target markets of OA Pain Management and Regenerative Solutions. We believe our future success will be driven by our:

| ● | Over 30 years of experience in HA and HA-based regenerative solutions and early intervention orthopedics, combined with seasoned leadership with a strong financial foundation for future investment in meaningful solutions for our customers and their patients;

18

| ● | Utilizing proprietary HA-based technology and manufacturing expertise to provide new and differentiated solutions in next generation OA pain management (e.g., Cingal) and regenerative (e.g., Integrity Implant System and Hyalofast) markets;

| ● | Growth of the Integrity Implant System, our hyaluronic acid-based scaffold for rotator cuff and other tendon repairs, launched in 2024;

| ● | Targeting to introduce key HA-based products into the US market upon FDA approval/clearance, such as Cingal and Hyalofast, and developing additional products that leverage our proprietary Hyaff regenerative platform;

| ● | Robust network of stakeholders in our target markets to identify evolving unmet patient treatment needs;

| ● | Global commercial expertise, which we will leverage to drive growth across our product portfolio, including continued international expansion;

| ● | Opportunity to pursue strategic inorganic growth opportunities, including potential partnerships and smaller acquisitions, technology licensing, and leveraging our strong financial foundation and operational capabilities; and

| ● | Energized and experienced team focused on strong values, talent, and culture.

Products

OA Pain Management

Our OA Pain Management product family consists of Monovisc and Orthovisc, our injectable, HA-based OA pain management offerings that are indicated to provide pain relief from osteoarthritis conditions; and Cingal, our novel, single-injection OA Pain Management product consisting of our proprietary cross-linked HA combined with a fast-acting steroid.

In the United States, Monovisc and Orthovisc are marketed exclusively by J&J MedTech. In December 2011, we entered into a fifteen-year licensing agreement with J&J MedTech to exclusively market Monovisc in the United States through December 2026. On October 16, 2025, J&J MedTech extended the agreement to exclusively market Monovisc in the United States through December 2031. In December 2003, we entered into a ten-year licensing agreement to exclusively market Orthovisc in the United States. J&J MedTech has subsequently extended this agreement, most recently in August 2022 through December 2028. Internationally, we market Monovisc and Orthovisc directly through a worldwide network of commercial distributors.

Cingal is our next generation fast-acting, long-lasting, non-opioid, clinically proven osteoarthritis pain product which is designed to provide both short- and long-term pain relief through at least six months. It is currently sold outside the United States in over 50 countries. In 2022, we completed a third Phase III clinical trial for Cingal, which achieved its primary endpoint. Cingal is not currently approved for commercial use in the United States. We have been actively engaging with the U.S. Food and Drug Administration, or the FDA, on next steps for U.S. regulatory approval.

Regenerative Solutions

Our Regenerative Solutions product family consists of: (a) our portfolio of orthopedic regenerative solutions products utilizing HA, including Integrity, our hyaluronic acid-based scaffold for rotator cuff repair and other tendon procedures, Tactoset, an HA-enhanced, flowable, injectable and settable bone void filler used to facilitate bone regeneration and augment hardware in poor quality bone, and Hyalofast, a hyaluronic acid scaffold for cartilage repair, sold outside of the United States in over 30 countries. Hyalofast is not currently approved for commercial use in the United States.

In early 2023, we completed enrollment of 200 patients in our U.S. pivotal FastTRACK Phase III clinical trial evaluating Hyalofast, a single-stage, hyaluronic acid-based scaffold for cartilage repair. This clinical trial had a two-year follow-up protocol. We are using a modular Premarket Approval, or PMA, filing process for our regulatory submission to the FDA for approval of Hyalofast in the U.S. We filed the first two modules with the FDA. In July 2025, we received topline results from the study and Hyalofast did not achieve significance on its pre-specified co-primary endpoints for pain and function. Although the study did not meet its co-primary endpoints, Hyalofast demonstrated consistent improvements over microfracture across all measures of pain and function, including statistically significant outcomes on key secondary endpoints such as Knee Injury and Osteoarthritis Outcomes Score, or KOOS, Sports and Recreation Function and Quality of Life and other measures including Total KOOS. The statistical analysis was impacted by both a disproportionately higher subject dropout rate in the microfracture arm and missed visits due to COVID. Based on the strength and consistency of the overall data and the positive real-world clinical experience including data from multiple independent studies outside the U.S. over the past 15 years, we submitted the final PMA module to the FDA on October 31, 2025.

Results of Operations

Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024

|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | $ Change |  |  | % Change |  |  | 2025 |  |  | 2024 |  |  | $ Change |  |  | % Change |
|  | (in thousands, except percentages) |  |  |  |  |  |  | (in thousands, except percentages) |  |  |  |  |
Revenue |  | $ | 27,817 |  |  | $ | 29,559 |  |  | $ | (1,742 | ) |  |  | (6 | %) |  | $ | 82,204 |  |  | $ | 89,305 |  |  | $ | (7,101 | ) |  |  | (8 | %)
Cost of revenue |  |  | 12,233 |  |  |  | 10,151 |  |  |  | 2,082 |  |  |  | 21 | % |  |  | 37,576 |  |  |  | 30,433 |  |  |  | 7,143 |  |  |  | 23 | %
Gross profit |  |  | 15,584 |  |  |  | 19,408 |  |  |  | (3,824 | ) |  |  | (20 | %) |  |  | 44,628 |  |  |  | 58,872 |  |  |  | (14,244 | ) |  |  | (24 | %)
Gross margin |  |  | 56 | % |  |  | 66 | % |  |  |  |  |  |  |  |  |  |  | 54 | % |  |  | 66 | % |  |  |  |  |  |  |  |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Research & development |  |  | 6,946 |  |  |  | 5,946 |  |  |  | 1,000 |  |  |  | 17 | % |  |  | 19,318 |  |  |  | 19,037 |  |  |  | 281 |  |  |  | 1 | %
Selling, general & administrative |  |  | 11,871 |  |  |  | 13,543 |  |  |  | (1,672 | ) |  |  | (12 | %) |  |  | 37,007 |  |  |  | 44,231 |  |  |  | (7,224 | ) |  |  | (16 | %)
Total operating expenses |  |  | 18,817 |  |  |  | 19,489 |  |  |  | (672 | ) |  |  | (3 | %) |  |  | 56,325 |  |  |  | 63,268 |  |  |  | (6,943 | ) |  |  | (11 | %)
Loss from operations |  |  | (3,233 | ) |  |  | (81 | ) |  |  | (3,152 | ) |  |  | 3,891 | % |  |  | (11,697 | ) |  |  | (4,396 | ) |  |  | (7,301 | ) |  |  | 166 | %
Interest and other income, net |  |  | 997 |  |  |  | 406 |  |  |  | 591 |  |  |  | 146 | % |  |  | 1,626 |  |  |  | 1,593 |  |  |  | 33 |  |  |  | 2 | %
Loss before income taxes |  |  | (2,236 | ) |  |  | 325 |  |  |  | (2,561 | ) |  |  | (788 | %) |  |  | (10,071 | ) |  |  | (2,803 | ) |  |  | (7,268 | ) |  |  | 259 | %
Provision for income taxes |  |  | 938 |  |  |  | 2,170 |  |  |  | (1,232 | ) |  |  | (57 | %) |  |  | 1,708 |  |  |  | 3,539 |  |  |  | (1,831 | ) |  |  | (52 | %)
Loss from continuing operations |  |  | (3,174 | ) |  |  | (1,845 | ) |  |  | (1,329 | ) |  |  | 72 | % |  |  | (11,779 | ) |  |  | (6,342 | ) |  |  | (5,437 | ) |  |  | 86 | %
Income (loss) from discontinued operations, net of tax |  |  | 845 |  |  |  | (28,073 | ) |  |  | 28,918 |  |  |  | (103 | %) |  |  | 607 |  |  |  | (28,178 | ) |  |  | 28,785 |  |  |  | (102 | %)
Net loss |  | $ | (2,329 | ) |  | $ | (29,918 | ) |  | $ | 27,589 |  |  |  | (92 | %) |  | $ | (11,172 | ) |  | $ | (34,520 | ) |  | $ | 23,348 |  |  |  | (68 | %)

19

Revenue

During the year ended December 31, 2024, we changed our classification of revenue. We previously disclosed revenue in three categories: OA Pain Management, Joint Preservation and Restoration and Non-Orthopedic. As a result of a change in strategic focus announced by us in 2024, revenue classification was delineated to provide a clear view to our value drivers. Revenue has been split between the Commercial Channel and the Original Equipment Manufacturer, or OEM, Channel. In the Commercial Channel, we have full responsibility for sales, marketing, and pricing of products through our commercial leaders, direct sales representatives, and independent distributors. Revenue from our Regenerative Solutions and international OA Pain Management businesses is included in the Commercial Channel. In the OEM Channel, we are responsible for development and manufacturing of products sold to our OEM partners governed by long-term agreements, but we do not control sales, marketing, or pricing with end users. Revenue from our U.S. OA Pain Management business and the Non-Orthopedic business is now included in the OEM Channel. All other revenue is reported in the Commercial Channel.

The following table presents revenue by product family for the three and nine-month periods ended September 30, 2025 and 2024:

|  | Three Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | $ Change |  |  | % Change |
|  | (in thousands, except percentages) |
Original Equipment Manufacturer (“OEM”) Channel |  | $ | 15,844 |  |  | $ | 19,764 |  |  | $ | (3,920 | ) |  |  | (20 | %)
Commercial Channel |  |  | 11,973 |  |  |  | 9,795 |  |  |  | 2,178 |  |  |  | 22 | %
|  | $ | 27,817 |  |  | $ | 29,559 |  |  | $ | (1,742 | ) |  |  | (6 | %)

|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | $ Change |  |  | % Change |
|  | (in thousands, except percentages) |
Original Equipment Manufacturer (“OEM”) Channel |  | $ | 47,093 |  |  | $ | 58,101 |  |  | $ | (11,008 | ) |  |  | (19 | %)
Commercial Channel |  |  | 35,111 |  |  |  | 31,204 |  |  |  | 3,907 |  |  |  | 13 | %
|  | $ | 82,204 |  |  | $ | 89,305 |  |  | $ | (7,101 | ) |  |  | (8 | %)

Revenue for the three- and nine- month periods ended September 30, 2025 were $27.8 million and $82.2 million, respectively. Revenue decreased $1.7 million and $7.1 million, or 6% and 8%, for the three- and nine- month periods ended September 30, 2025 compared to the same period in 2024, respectively. The decrease in revenue was driven by lower pricing with our OEM Channel partners, primarily J&J MedTech.

Revenue from our OEM Channel product family decreased by 20% and 19% for the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same period in 2024. For the three-month period ended September 30, 2025, the $3.9 million decrease was primarily driven by a $3.2 million decrease in J&J MedTech revenue which was all attributable to lower pricing. There was also a $0.7 million decrease in non-orthopedic product revenue due to lower volume of veterinary product sales. For the nine-month period ended September 30, 2025, the $11.0 million decrease in our OEM Channel revenue was primarily due to a $10.4 million reduction in J&J MedTech revenue, attributable primarily to lower pricing which contributed $8.3 million of the decrease, as well as lower sales volumes accounting for $2.1 million of the decrease. There was a $0.6 million decrease in non-orthopedic revenue for the nine-month period ended September 30, 2025 with prior year due to lower veterinary product sales offset somewhat by higher ophthalmic sales.

Revenue from our Commercial Channel product family increased by 22% and 13% for the three- and nine-month periods ended September 30, 2025, respectively, as compared to the same period in 2024. For the three-month period ended September 30, 2025, international OA pain management product sales increased $1.5 million, primarily related to higher Cingal and Orthovisc sales and regenerative revenue was up $0.7 million due primarily to an increase of Integrity and Hyalofast sales. For the nine-month period ended September 30, 2025, regenerative revenue was up $2.4 million due primarily due to an increase in Integrity and Hyalofast revenues and international OA pain management sales were up $1.4 million due to higher Cingal and Orthovisc sales offset somewhat by lower Monovisc sales.

Gross Profit and Margin

Gross profit for the three- and nine-month periods ended September 30, 2025 was $15.6 million and $44.6 million, respectively. Gross profit for the three- and nine-month periods ended September 30, 2024 was $19.4 million and $58.9 million, respectively. The decrease in gross profit for the three- and nine-month periods ended September 30, 2025 was primarily related to higher inventory reserves, higher production costs and a larger percentage of international sales which have a lower average selling price.

Gross margin for the three- and nine-month periods ended September 30, 2025 was 56% and 54%, respectively. Gross margin was 66% for each of the three- and nine-month periods ended September 30, 2024. The decrease in gross margin was due to higher inventory reserves, higher manufacturing costs and a larger percentage of international sales which have a lower average selling price.

20

Research and Development

Research and development expenses for the three- and nine-month periods ended September 30, 2025 were as follows:

|  | Three Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | $ Change |  |  | % Change |
|  | (in thousands, except percentages) |
External costs by program |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hyalofast clinical study |  | $ | 671 |  |  | $ | 617 |  |  | $ | 54 |  |  |  | 9 | %
Integrity development costs |  |  | 286 |  |  |  | 170 |  |  |  | 116 |  |  |  | 68 | %
Cingal clinical study |  |  | 1,058 |  |  |  | 38 |  |  |  | 1,020 |  |  |  | 2,684 | %
Regulatory external costs |  |  | 118 |  |  |  | 250 |  |  |  | (132 | ) |  |  | (53 | %)
Other early programs and unallocated expenses |  |  | 1,118 |  |  |  | 1,210 |  |  |  | (92 | ) |  |  | (8 | %)
Total external costs |  |  | 3,251 |  |  |  | 2,285 |  |  |  | 966 |  |  |  | 42 | %
Internal costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation and benefits |  |  | 3,171 |  |  |  | 3,076 |  |  |  | 95 |  |  |  | 3 | %
Facility and other |  |  | 524 |  |  |  | 585 |  |  |  | (61 | ) |  |  | (10 | %)
Total internal costs |  |  | 3,695 |  |  |  | 3,661 |  |  |  | 34 |  |  |  | 1 | %
Total research and development expense |  | $ | 6,946 |  |  | $ | 5,946 |  |  | $ | 1,000 |  |  |  | 17 | %

|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | $ Change |  |  | % Change |
|  | (in thousands, except percentages) |
External costs by program |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Hyalofast clinical study |  | $ | 1,812 |  |  | $ | 1,324 |  |  | $ | 488 |  |  |  | 37 | %
Integrity development costs |  |  | 1,017 |  |  |  | 800 |  |  |  | 217 |  |  |  | 27 | %
Cingal clinical study |  |  | 2,096 |  |  |  | 103 |  |  |  | 1,993 |  |  |  | 1,935 | %
Regulatory external costs |  |  | 675 |  |  |  | 888 |  |  |  | (213 | ) |  |  | (24 | %)
Other early programs and unallocated expenses |  |  | 2,766 |  |  |  | 3,481 |  |  |  | (715 | ) |  |  | (21 | %)
Total external costs |  |  | 8,366 |  |  |  | 6,596 |  |  |  | 1,770 |  |  |  | 27 | %
Internal costs: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Employee compensation and benefits |  |  | 9,495 |  |  |  | 10,745 |  |  |  | (1,250 | ) |  |  | (12 | %)
Facility and other |  |  | 1,457 |  |  |  | 1,696 |  |  |  | (239 | ) |  |  | (14 | %)
Total internal costs |  |  | 10,952 |  |  |  | 12,441 |  |  |  | (1,489 | ) |  |  | (12 | %)
Total research and development expense |  | $ | 19,318 |  |  | $ | 19,037 |  |  | $ | 281 |  |  |  | 1 | %

Research and development external costs for the three- and nine-month periods ended September 30, 2025 were $3.3 million and $8.4 million, respectively. Research and development external costs for the three- and nine-month periods ended September 30, 2024 were $2.3 million and $6.6 million, respectively. The increase in research and development external costs was primarily due to increased spending on Cingal regulatory submission activities and Integrity clinical studies.

Research and development internal costs for the three- and nine-month periods ended September 30, 2025 were $3.7 million and $11.0 million, respectively. Research and development internal costs for the three- and nine-month periods ended September 30, 2024 were $3.7 million and $12.4 million, respectively. The decrease in internal research and development costs was primarily due to a reduction in headcount and a gain on the sale of an intangible asset during the three-month period ended September 30, 2025.

21

Selling, General and Administrative

Selling, general and administrative expenses for the three- and nine-month periods ended September 30, 2025 were $11.9 million and $37.0 million, respectively. Selling, general and administrative expenses for the three- and nine-month periods ended September 30, 2024 were $13.5 million and $44.2 million, respectively. The decrease for the three-month period ended September 30, 2025 was due to a $0.7 million decrease in stock-based compensation with the reminder of the decrease attributed to lower headcount. The decrease for the nine-month period ended September 30, 2025 was primarily due to $2.2 million in non-recurring shareholder activism costs, a $1.5 million decrease in stock-based compensation with the remainder of the decrease attributed to lower headcount and professional fees.

Loss from Continuing Operations

For the three- and nine-month periods ended September 30, 2025, the loss from continuing operations was $3.2 million and $11.8 million, respectively. For the three- and nine-month periods ended September 30, 2024, the loss from continuing operations was $1.8 million and $6.3 million, respectively. The increase in the loss from continuing operations was primarily due to lower revenue and lower gross margin due to higher manufacturing costs and increased inventory reserves.

Income Taxes

The income tax expense was $0.9 million and $1.7 million for the three- and nine-month periods ended September 30, 2025, resulting in effective tax rates of (42.0)% and (17.0)%, respectively. The income tax expense was $2.2 million and $3.5 million for the three- and nine-month periods ended September 30, 2024, resulting in an effective tax rate of 667.7% and (126.3)%, respectively.

The net change in the effective tax rate for the three- and nine-month periods ended September 30, 2025, compared to the same periods in 2024, was primarily driven by the impact of a higher year-to-date pre-tax loss in the current year and higher U.S. current tax expense in the prior year. The higher tax expense in the prior year was due to higher current income tax expense in the U.S.

Non-GAAP Financial Measures

We present certain information with respect to adjusted Earnings Before Interest, Tax, Depreciation and Amortization, or EBITDA, adjusted net income, adjusted diluted earnings per share or adjusted EPS, which are financial measures not based on any standardized methodology prescribed by accounting principles generally accepted in the United States, or GAAP, and is not necessarily comparable to similarly titled measures presented by other companies.

We have presented adjusted EBITDA, adjusted net income, adjusted EPS, because they are key measures used by our management and board of directors to understand and evaluate our operating performance and to develop operational goals for managing our business. We believe these financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude. In particular, we believe that the exclusion of these items in calculating these measures can provide a useful tool for period-to-period comparisons of our core operating performance. Accordingly, we believe that these measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects and allowing for greater transparency with respect to key financial metrics used by our management in their financial and operational decision-making.

Adjusted EBITDA

We present information below with respect to adjusted EBITDA, which we define as our net income (loss) excluding interest and other expense, net, income tax benefit, depreciation and amortization, stock-based compensation, and acquisition-related expenses.

Adjusted EBITDA is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of adjusted EBITDA rather than net (loss) income, which is the nearest GAAP equivalent. Some of these limitations are:

| ● | adjusted EBITDA excludes depreciation and amortization, and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future, the cash requirements for which are not reflected in adjusted EBITDA;

| ● | we exclude share-based compensation expense from adjusted EBITDA although (a) it has been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be higher, which would affect our cash position;

| ● | the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results;

22

The following is a reconciliation of adjusted EBITDA, a non-GAAP metric, to net loss, the most directly comparable GAAP financial measure, for the three and nine-month periods ended September 30, 2025 and 2024, respectively:

|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Net loss from continuing operations |  | $ | (3,175 | ) |  | $ | (1,845 | ) |  | $ | (11,780 | ) |  | $ | (6,342 | )
Interest and other income, net |  |  | (997 | ) |  |  | (406 | ) |  |  | (1,626 | ) |  |  | (1,593 | )
Provision for income taxes |  |  | 939 |  |  |  | 2,171 |  |  |  | 1,709 |  |  |  | 3,539 |
Depreciation and amortization |  |  | 1,403 |  |  |  | 1,504 |  |  |  | 4,263 |  |  |  | 4,254 |
Share-based compensation |  |  | 2,215 |  |  |  | 3,118 |  |  |  | 7,758 |  |  |  | 9,907 |
Non-recurring professional fees |  |  | 480 |  |  |  | - |  |  |  | 480 |  |  |  | - |
Costs of shareholder activism |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,185 |
Adjusted EBITDA |  | $ | 865 |  |  | $ | 4,542 |  |  | $ | 804 |  |  | $ | 11,950 |

Adjusted EBITDA in the three-month period ended September 30, 2025 decreased by $3.7 million as compared with the same period in 2024. The decrease in Adjusted EBITDA for the period was primarily driven by lower revenue due primarily to a decrease in J&J Medtech sales and lower gross profit from higher manufacturing costs and higher proportion of international sales that have a lower average selling price.

Adjusted EBITDA in the nine-month period ended September 30, 2025, decreased $11.1 million as compared with the same period in 2024. The decrease in Adjusted EBITDA for the period was primarily driven by lower revenue due primarily to a decrease in J&J Medtech sales and lower gross profit from higher manufacturing costs, higher inventory reserves and higher proportion of international sales that have a lower average selling price.

Adjusted Net Income (Loss) and Adjusted EPS

We present information below with respect to adjusted net (loss) income and adjusted EPS. We define adjusted net (loss) income as our net (loss) income excluding amortization and depreciation of acquired assets, share-based compensation, and other non-recurring items, such as product rationalization charges, severance costs and costs of shareholder activism. We define adjusted EPS as GAAP diluted earnings per share excluding the above adjustments to net (loss) income used in calculating adjusted net (loss) income, each on a per share and tax effected basis.

23

The following is a reconciliation of adjusted net loss, a non-GAAP metric, to net income (loss), the most directly comparable GAAP financial measure, for the three and nine-month periods ended September 30, 2025 and 2024, respectively:

|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Net loss from continuing operations |  | $ | (3,175 | ) |  | $ | (1,845 | ) |  | $ | (11,780 | ) |  | $ | (6,342 | )
Share based compensation, tax effected |  |  | 3,145 |  |  |  | 2,913 |  |  |  | 9,075 |  |  |  | 8,232 |
Non-recurring professional fees, tax effected |  |  | 682 |  |  |  | - |  |  |  | 561 |  |  |  | - |
Costs of shareholder activism, tax effected |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,816 |
Adjusted net income (loss) from continued operations |  | $ | 652 |  |  | $ | 1,068 |  |  | $ | (2,144 | ) |  | $ | 3,706 |

The following is a reconciliation of adjusted diluted EPS, a non-GAAP metric, to diluted EPS, the most directly comparable GAAP financial measure, for the three and nine-month periods ended September 30, 2025 and 2024, respectively:

|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Diluted loss from continuing operations per share |  | $ | (0.22 | ) |  | $ | (0.12 | ) |  | $ | (0.82 | ) |  | $ | (0.43 | )
Share based compensation, tax effected |  |  | 0.21 |  |  |  | 0.19 |  |  |  | 0.63 |  |  |  | 0.56 |
Non-recurring professional fees, tax effected |  |  | 0.05 |  |  |  | - |  |  |  | 0.04 |  |  |  | - |
Cost of shareholder activism, tax effected |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 0.12 |
Adjusted diluted income (loss) from continuing operations per share |  | $ | 0.04 |  |  | $ | 0.07 |  |  | $ | (0.15 | ) |  | $ | 0.25 |

Adjusted net income and adjusted diluted earnings per share in the three-month period ended September 30, 2025 decreased $0.4 million and $0.03, respectively, as compared with the same period in 2024. The decrease for the period was primarily due to lower revenues and lower gross profit.

Adjusted net income and adjusted diluted earnings per share in the nine-month period ended September 30, 2025 decreased $5.8 million and $0.40, respectively, as compared with the same period in 2024. The decrease for the period was primarily due to lower revenues and lower gross profit due primarily to higher inventory reserves.

Liquidity and Capital Resources

We require cash to fund our operating activities and to make capital expenditures and other investments in the business. We expect that our requirements for cash to fund these uses will increase as our operations expand. We continue to generate cash from operating activities and believe that our operating cash flows, cash currently on our balance sheet and availability under our credit facility will be sufficient to allow us to continue to invest in our existing business, to manage our capital structure on a short and long-term basis, and to meet our anticipated operating cash needs. Cash and cash equivalents aggregated $58.0 million and $55.6 million, and working capital totaled $82.5 million and $90.3 million, at September 30, 2025 and December 31, 2024, respectively.

On November 12, 2021, we entered into a Third Amendment to Credit Agreement with Bank of America N.A. as administrative agent, which amended our existing revolving line of credit agreement dated October 24, 2017 which provides up to $75.0 million in the form of a senior revolving line of credit. Subject to certain conditions, we may request up to an additional $75.0 million for a maximum aggregate commitment of $150.0 million. As of September 30, 2025 and December 31, 2024, there were no outstanding borrowings, and we are in compliance with the terms of the credit facility.

24

Summary of Cash Flows (in thousands):

|  | Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |
Cash (used in) provided by |  |  |  |  |  |  |  |
Operating activities |  | $ | 6,551 |  |  | $ | 3,821 |
Investing activities |  |  | (599 | ) |  |  | (7,027 | )
Financing activities |  |  | (5,272 | ) |  |  | (7,375 | )
Effect of exchange rate changes on cash |  |  | 151 |  |  |  | 82 |
Net increase (decrease) in cash and cash equivalents |  | $ | 831 |  |  | $ | (10,499 | )

The following changes contributed to the net change in cash and cash equivalents in the nine-month period ended September 30, 2025 as compared to the same period in 2024.

Operating Activities

Cash provided by operating activities was $6.6 million for the nine-month period ended September 30, 2025, as compared to cash provided by operating activities of $3.8 million for the same period in 2024. The increase in cash provided by operating activities for the nine-months ended September 30, 2025, compared to the same period in prior year, was primarily due to a lower net loss and an improvement in the change in working capital during the nine-month period ended September 30, 2025, primarily from a reduction in inventory and an increase in accounts payable.

Investing Activities

Cash used in investing activities was $0.6 million for the nine-month period ended September 30, 2025, as compared to cash used in investing activities of $7.0 million for the same period in 2024. The change was primarily due to $4.5 million received from the sale of Parcus Medical. Capital expenditures were $6.2 million in the nine-month period ended September 30, 2025 compared to $6.4 million for the same period in 2024. The decrease in capital expenditures was due to timing of purchases related to our continued manufacturing capacity expansion at our facility in Bedford, Massachusetts.

Financing Activities

Cash used in financing activities was $5.3 million for the nine-month period ended September 30, 2025, as compared to cash used in financing activities of $7.4 million for the same period in 2024. In both periods, the cash used in financing activities was primarily attributable to utilization of cash for share repurchases and employee tax withholding in exchange for shares surrendered by equity award holders.

Critical Accounting Policies and Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. We believe that our accounting policies for revenue recognition, accounts receivable and allowance for credit losses, goodwill, acquired in-process research and development, inventory and contingencies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. There have been no significant changes to the above critical accounting policies or in the underlying accounting assumptions and estimates used in such policies from those disclosed in our annual consolidated financial statements and accompanying notes included in our 2024 Form 10-K for the year ended December 31, 2024. We monitor our estimates on an ongoing basis for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. We base our estimates on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.

Recent Accounting Pronouncements

A discussion of Recent Accounting Pronouncements is included in our 2024 Form 10-K for the fiscal year ended December 31, 2024 and is updated in the Notes to the condensed consolidated financial statements included in this report.

Contractual Obligations and Other Commercial Commitments

Our contractual obligations and other commercial commitments are summarized in the section captioned “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Contractual Obligations and Other Commercial Commitments” in our 2024 Form 10-K for the year ended December 31, 2024. There were no material changes to our contractual obligations reported in our 2024 Form 10-K during the nine months ended September 30, 2025. For additional discussion, see Note 11 to the condensed consolidated financial statements included in this report.

To the extent that funds generated from our operations, together with our existing capital resources, are insufficient to meet future requirements, we will be required to obtain additional funds through equity or debt financings, strategic alliances with corporate partners and others, or through other sources. No assurance can be given that any additional financing will be made available to us or will be available on acceptable terms should such a need arise.

25

ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risks and the ways we manage them are summarized in the section captioned “Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes in the first nine months of 2025 to our market risks or to our management of such risks.

ITEM 4. | CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined by Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this report. Based upon that evaluation, the chief executive officer and chief financial officer have concluded as of September 30, 2025 that our disclosure controls and procedures are effective 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 SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. On an on-going basis, we review and document our disclosure controls and procedures, and our internal control over financial reporting, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

(b) Changes in internal controls over financial reporting.

There were no material changes in our internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

PART II: | OTHER INFORMATION

ITEM 1. | LEGAL PROCEEDINGS

We are involved from time-to-time in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, we do not expect the resolution of these occasional legal proceedings to have a material adverse effect on our financial position, results of operations, or cash flow. There have been no material changes to the information provided in the section captioned “Part I, Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 1A. | RISK FACTORS

Except as set forth below, there have been no material changes to the risk factors described in the section captioned “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 as amended and supplemented by the information in “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly periods ended on March 31, 2025 and June 30, 2025. In addition to the other information set forth in this report, you should carefully consider the factors discussed in the section captioned “Part I, Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and in “Part II, Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarterly periods ended March 31, 2025 and June 30, 2025, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report on Form 10-K and such subsequently filed Quarterly Reports on Form 10-Q are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may have a material adverse effect on our business, financial condition, and/or operating results.

Our license agreements with J&J MedTech provide substantial control of Monovisc and Orthovisc in the United States to J&J MedTech and J&J MedTech’s actions could have a material impact on our business, financial condition and results of operations.

Our license and distribution agreements with J&J MedTech related to Monovisc and Orthovisc provide J&J MedTech with, among other things, the exclusive right to market and sell Monovisc and Orthovisc in the United States, unilateral decision-making authority over the sale, price, and promotion of Monovisc and Orthovisc in the United States, substantial control over the future development of Monovisc and Orthovisc related to the treatment of pain associated with osteoarthritis, a license to manufacture and have manufactured such products in the event that we are unable to supply J&J MedTech with Monovisc or Orthovisc in accordance with the terms of the relevant agreement, and certain rights of first refusal with respect to future products we develop for the treatment of pain associated with osteoarthritis. In exchange, J&J MedTech pays us a transfer price calculated with reference to historical end-user prices in the market and a fixed royalty rate per product on their net product sales. As J&J MedTech accounts for a large percentage of our revenue and has unilateral decision-making authority over in-market activities, including end-user pricing and discounts, reimbursement strategy, and overall promotion strategy, actions taken by J&J MedTech impact our ability to predict and generate revenue and have a material impact on our business, financial condition, and results of operations.

In October 2025, J&J MedTech announced that it planned to divest its orthopedics implants and related surgical products business which would include Monovisc and Orthovisc products that we manufacture. This action by J&J MedTech could impact our ability to predict and generate revenue and have a material impact on our business, financial condition, and results of operations.

We may experience difficulties or delays in securing regulatory approval for Hyalofast, which could negatively affect our business and financial results.

In July 2025, we announced topline results from our U.S. pivotal FastTRACK Phase III trial of Hyalofast, our single-stage, off-the-shelf, cartilage repair therapy, currently sold only outside the United States. This trial failed to achieve the pre-specified co-primary endpoints, although it did demonstrate statistically significant improvements in key pre-defined secondary endpoints. Although we believe the totality of the data we submitted to the FDA may be sufficient to support approval, there can be no assurance that the FDA will agree. Failure to achieve the pre-specified co-primary endpoints in the trial could materially negatively impact our ability to obtain regulatory approval, or delay a decision by FDA. Moreover, the FDA may determine that any post hoc analyses or alternative endpoints we propose are not sufficient to support approval. Although the FDA may have used similar endpoints for other cartilage repair product approvals in the past, there can be no assurance they will apply the same standards in this case because, among other factors, these endpoints used by the FDA were not part of our original trial design. If the FDA’s review of this submission is delayed, or if we fail to achieve regulatory approval for this product candidate, it would have a material adverse effect on our future revenue and adversely impact our business and financial results, including impairment of our in-process research and development intangible asset.

Failure to obtain, or any delay in obtaining, FDA or other U.S. and foreign governmental clearances or approvals for our products may have a material adverse effect on our business, financial condition, and results of operations.

Several of our current products under development, and certain future products we may develop, will require clinical trials to determine their safety and efficacy for marketing approval by regulatory bodies, including the FDA. Product development and clearance or approval within the FDA and international regulatory frameworks takes several years and involves the expenditure of substantial resources. There can be no assurance that the FDA or other regulatory authorities will accept submissions related to our new products or the expansion of the indications of our current products, and, even if submissions are accepted, there can be no guarantee that the FDA or other regulatory authorities will grant clearance or approval for our new products, on a timely basis, if at all. In addition to regulations enforced by the FDA, we are subject to other existing and future federal, state, local, and foreign regulations applicable to product clearance or approval, which may vary significantly across jurisdictions. Additional clearance or approval of existing products may be required when changes to such products may affect the safety and effectiveness, including for new indications for use, labeling changes, process or manufacturing changes, the use of a different facility to manufacture, process or package the product, and changes in performance or design specifications. For our devices that are subject to 510(k) clearances, the FDA requires device manufacturers to make a determination of whether a modification requires a clearance; however, the FDA can review a manufacturer’s decision not to submit for additional clearances. We cannot provide any assurance that the FDA will agree with our decisions not to seek clearances for particular device modifications. If the FDA disagrees, and requires new clearances or approvals for any modifications, and we fail to obtain such approvals or clearances or fail to secure approvals or clearances in a timely manner, we may be required to recall and to stop the manufacturing and marketing of the modified device until we obtain the FDA approval or clearance, and we may be subject to significant regulatory fines or penalties. Failure to obtain regulatory clearance or approvals of our products, including any changes to existing products, could have an adverse material impact on our business, financial condition, and results of operations.

Even if ultimately granted, the FDA and international regulatory clearances or approvals may be subject to significant, unanticipated delays throughout the regulatory review process. Internally, we make assumptions regarding product clearance or approval timelines, both in the United States and internationally, in our business planning, and any delay in clearance or approval could materially affect our competitive position in the relevant product market and our projections related to future business results.

26

Disruptions at the FDA, including as a result of reductions in force, significant organizational changes, substantial leadership departures, and policy changes, may also slow the product clearance or approval timelines, which would adversely affect our business. Changes and cuts in FDA staffing have also been reported by some within the pharmaceutical and medical device industry as creating instances of delays in the FDA’s responsiveness, ability to issue regulations or guidance, or ability to implement or enforce regulatory requirements in a timely fashion. In addition, over the past decade, the U.S. government has shut down several times, including beginning on October 1, 2025, and certain regulatory agencies, such as the FDA, have had to furlough critical employees and stop critical activities. The duration of the current government shutdown is unknown. If a prolonged government shutdown occurs or there is a widespread freeze on federal funding, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We cannot be certain that product clearance or approvals, both in the United States and internationally, will not include significant limitations on the product indications, and other claims sought for use, under which the products may be marketed. The relevant approval or clearance may also include other significant conditions such as post-market testing, tracking, or surveillance requirements. Any of these factors could significantly impact our competitive position in relation to such products and could have a negative impact on the sales of such products.

Significant political, trade, regulatory developments, and other circumstances beyond our control, could have a material adverse effect on our financial condition or results of operations.

Significant political, trade, or regulatory developments, such as those stemming from changes in the U.S. federal administration, are difficult to predict and may have a material adverse effect on us, as we both import materials and equipment necessary to manufacture our products in the U.S., and export materials and products from the U.S. Similarly, changes in U.S. federal policy that affect the geopolitical landscape could give rise to circumstances outside our control that could have negative impacts on our business operations. Changes to U.S. policy implemented by the U.S. Congress, the current administration or any new administration have impacted and may in the future impact, among other things, the U.S. and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S. regulatory environment, inflation and other areas. For example, certain governments (including the United States and other countries) have imposed or may impose tariffs on a wide range of products, raw materials, and intermediate goods. Additional tariffs, or retaliatory measures by other countries in response, may be implemented at any time. Historically, tariffs have led to increased trade and political tensions. In response to tariffs, other countries have implemented retaliatory tariffs on U.S. goods. Political tensions as a result of trade policies could reduce trade volume, investment, technological exchange, and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets. Any changes in political, trade, regulatory, and economic conditions, including U.S. trade policies, could have a material adverse effect on our financial condition or results of operations. Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system, the duration that those policy changes remain in effect, and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

In May 2024, we agreed to implement a share repurchase program for an aggregate purchase price of $40.0 million to occur as follows: (i) first $15.0 million was to be effected through a Rule 10b5-1 plan initiated prior to June 1, 2024 and to be effective through June 30, 2025, and (ii) the remaining amount to be purchased in the open market (the “2024 Share Repurchase Program”). In the event of positive “free cash flow” as defined in the Cooperation Agreement dated May 28, 2024, with Caligan Partners LP, Caligan Partners Master Fund LP and David Johnson, for the period from July 1, 2024 through June 30, 2025, the amount under the share repurchase program shall be increased by 50% of such positive amount. In no event would we be required to make any purchases in the event that our cash would be less than $45.0 million after taking into account the share repurchase and reasonably anticipated capital expenditures and restructuring costs. This new authorization replaces our share repurchase program previously announced in April 2023. On May 28, 2024, the Company entered into a share repurchase agreement under a Rule 10b5-1 with Bank of America. As of June 30, 2025, the Company had repurchased 746,431 shares at an average cost of $20.10 per share, representing 38% of the then estimated total number of shares expected to be repurchased under the 2024 Share Repurchase Program. No share repurchases were made during the quarter ended September 30, 2025.

Recent Sales of Unregistered Securities

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 fiscal quarter ended September 30, 2025, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

27

ITEM 6. | EXHIBITS

Exhibit No. | Description
3.1 | Certificate of Incorporation of Anika Therapeutics, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-14027) filed by the Registrant on June 6, 2018)
3.2 | Bylaws of Anika Therapeutics, Inc., effective as of June 6, 2018 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-14027) filed by the Registrant on June 6, 2018)
(31) | Rule 13a-14(a)/15d-14(a) Certifications
*31.1 | Certification of Dr. Cheryl R. Blanchard, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2 | Certification of Stephen Griffin, pursuant to Rules 13a-15(e) and 15d-15(e), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
(32) | Section 1350 Certifications
**32.1 | Certification of Dr. Cheryl R. Blanchard, and Stephen Griffin, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(101) | XBRL
*101 | The following materials from Anika Therapeutics, Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 as filed with the SEC on November 5, 2025, formatted in Inline XBRL (eXtensible Business Reporting Language), as follows:

| i. | Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024 (unaudited)

| ii. | Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and September 30, 2024 (unaudited)

| iii. | Condensed Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2025 and September 30, 2024 (unaudited)

| iv. | Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and September 30, 2024 (unaudited)

| v. | Notes to Condensed Consolidated Financial Statements (unaudited)

104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* | Filed herewith.

** | Furnished herewith.

28

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.

|  | ANIKA THERAPEUTICS, INC. |
|  | (Registrant) |
Date: November 5, 2025 | By: | /s/ STEPHEN GRIFFIN |
|  | Stephen Griffin |
|  | Executive Vice President, Chief Financial Officer and Chief Operating Officer
|  | (Authorized Officer and Principal Financial Officer)

29