ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations together with the consolidated financial statements and related notes that are included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under the sections contained in this Annual Report on Form 10-K entitled Item 1A. “Risk Factors”; Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and Item 7A. “Quantitative and Qualitative Disclosures about Market Risk”. See “Special Note Regarding Forward-Looking Statements” preceding Part I of this Annual Report on Form 10-K.

Overview

Our line of silicone gel-filled breast implants, branded as Motiva Implants, is the centerpiece of our medical technology platform. Our post-market surveillance data (which was not generated in connection with a United States Food and Drug Administration, or FDA, pre-market approval, or PMA, study collected at defined follow-ups, but was patient or practitioner reported) and published third-party registries and data indicate that Motiva Implants have low rates of adverse events (including rupture, capsular contracture, and safety related reoperations) that we believe compare favorably with those of our competitors. We believe the proprietary technologies that differentiate our Motiva Implants enable improved safety and aesthetic outcomes and drive our revenue growth. We have developed other complementary products and services, which are aimed at further enhancing patient outcomes.

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We have devoted a majority of our resources since inception to developing our Motiva Implants, which we began selling in October 2010. We have incurred net losses in each year since inception, and we have financed our operations primarily through equity financings and debt financings.

In September 2024, we received FDA approval to sell Motiva Implants in the United States.

Financial Highlights

Our revenue for the years ended December 31, 2024 and 2023 was $166.0 million and $165.2 million, respectively, an increase of $0.8 million, or 0.5%. Net losses were $84.6 million for the year ended December 31, 2024 as compared to $78.5 million for the year ended December 31, 2023. As of December 31, 2024, we had an accumulated deficit of $444.7 million.

Our cash balance as of December 31, 2024 was $90.3 million.

Recent Developments

Regulatory and Operational Updates

In February 2025, we launched Preservé, a minimally invasive breast tissue-preserving technology for breast augmentation, revision augmentation and mastopexy augmentation. The initial commercial launch took place in Brazil, with additional launches planned in other countries throughout 2025.

In January 2025, we announced the retirement of Juan José Chacón-Quirós as CEO, effective March 1, 2025. Peter Caldini, our current President, will serve as Interim CEO effective the same day. Following his departure as Chief Executive Officer, Mr. Chacón-Quirós will continue as a member of the Board and as an advisor with the Company.

In October 2024, we completed and announced the results of the three-year 100-patient clinical study for Mia Femtech, our patented technology that can increase breast shape by 1 to 2 cups in a 15-minute procedure without the need for general anesthesia. The single-center, Institutional Review Board approved study began in December 2020 and involved the participation of fifteen board-certified plastic surgeons in multiple geographies. We currently offer Mia Femtech in multiple countries across the world with plastic surgeons fully certified to provide the Mia experience.

In September 2024, we received PMA approval from the FDA for our Motiva Implants. Beginning in October 2024, we began selling Motiva Implants for use in breast augmentation for patients in the United States.

In June 2024, we finalized the construction of our manufacturing and corporate offices in the Coyol Free Zone, or CFZ, in Costa Rica, which includes approximately 100,000 square feet of facility space intended to increase our manufacturing capacity by approximately 730,000 units per year. The facility has obtained necessary regulatory approvals to commence manufacturing. We incurred approximately $56.0 million in costs for this phase of the project over the time frame of 2020 to 2024. Additional phases of the project may be executed, at our option, to further expand manufacturing capacity at the new facility.

In January 2024, we announced the commercial launch of Motiva Implants in China and the completion of the first procedure with the Motiva Flora SmoothSilk Tissue Expander in the United States. These events followed our receipt of National Medical Products Administration, or NMPA, approval in China for Motiva Implants and our 510(k) clearance from the FDA for the Motiva Flora SmoothSilk Tissue Expander in the United States, both in November 2023.

Financing Activities

On November 7, 2024, we entered into a securities purchase agreement with a limited number of purchasers in connection with a registered direct offering of 765,696 common shares and pre-funded warrants to purchase up to 328,154 common shares. We also agreed to issue up to 76,569 additional common shares and additional pre-funded warrants to purchase up to 32,814 common shares for no additional consideration if the average closing price of our common shares on The Nasdaq Capital Market, or Nasdaq, during the period from January 1, 2025 to August 31, 2025 does not exceed the $45.71 price per common share sold in the offering. Our net proceeds from the offering, after deducting offering expenses, were approximately $49.7 million. See Note 8 “Shareholders’ Equity” for additional information.

Also on November 7, 2024, we entered into a Third Amendment to the Credit Agreement and Guaranty, dated April 26, 2022, or the Credit Agreement, that we entered into together with certain of our subsidiaries party thereto

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as guarantors, the lenders from time to time party thereto, or the Lenders, and Oaktree Fund Administration, LLC, as administrative agent for the Lenders, or the Administrative Agent. The Third Amendment extended the commitment termination date, with respect to the commitments applicable to the Tranche D Term Loans, from June 30, 2025 to December 31, 2025, and modified the milestones triggering the availability of the Tranche D Term Loans. The terms of the Tranche A Term Loans, Tranche B and Tranche C Term Loans were not modified. See Note 6 “Debt” for additional information.

In February 2024, we entered into a Second Amendment to the Credit Agreement, which provides for term loans in an aggregate principal amount of up to $225 million. The Second Amendment modified the access conditions, commitment termination dates and interest rates for the two remaining available tranches, Tranche C Term Loans and Tranche D Term Loans. See Note 6 “Debt” for additional information. The Tranche C Term Loan of $25 million was advanced in October 2024 at the Company’s election following the administrative agent’s receipt of evidence that the FDA’s approval of Motiva Implants for augmentation use in the United States had been issued, subject to the other terms and conditions of the Credit Agreement, as amended.

In January 2024, we entered into a securities purchase agreement with select institutional accredited investors pursuant to which we agreed to sell to the investors in a private placement 1,101,565 common shares and pre-funded warrants to purchase up to 898,435 common shares. The pre-funded warrants are exercisable immediately, at a price of $0.001 per share, until exercised in full. Net proceeds to us from the offering, after deducting offering expenses, were approximately $49.7 million. See Note 8 “Shareholders’ Equity” for additional information.

Components of Results of Operations

Revenue

We commenced sales of our Motiva Implants in October 2010 and these products have historically accounted for the majority of our revenues. Sales of our Motiva breast implants accounted for over 96% of our revenues for the year ended December 31, 2024, and we expect our revenues to continue to be driven primarily by sales of these products. We primarily derive revenue from sales of our Motiva Implants to two types of customers: (1) medical distributors and (2) direct sales to physicians, hospitals, and clinics.

We recognize revenue related to the sales of products at the time of shipment, except for a portion of our direct sales revenue that is generated from the sale of consigned inventory maintained at physician, hospital, and clinic locations. For consignment sales, revenue is recognized at the time we are notified by the consignee that the product has been implanted. Our contracts with distributors do not typically contain right of return or price protection and have no post-delivery obligations.

We expect our revenue to fluctuate from quarter to quarter due to a variety of factors, including seasonal fluctuations in demand for Motiva Implants and foreign currency fluctuations.

Cost of Revenue and Gross Margin

Our implants are manufactured at our facilities in Costa Rica. Construction of our third facility in Costa Rica was completed in June 2024. Subsequently, the smallest manufacturing facility ceased production in August 2024. Cost of revenue is primarily the cost of silicone but also includes other raw materials, packaging, components, quality assurance, labor costs, as well as manufacturing and overhead expenses. Cost of revenue also includes depreciation expense for production equipment and amortization of certain intangible assets.

We calculate gross margin as revenue less cost of revenue for a given period divided by revenue. Our gross margin may fluctuate from period to period depending, in part, on the efficiency and utilization of our manufacturing facilities, fluctuations of foreign currency exchange rates, targeted pricing programs and sales volume based on geography, customer and product type.

Operating Expenses

Sales, General and Administrative

Sales, general and administrative, or SG&A, expenses primarily consist of compensation, including salary, share-based compensation and employee benefits for our sales and marketing personnel, and for administrative personnel that support our general operations such as information technology, executive management, financial accounting, customer service, and human resources personnel. SG&A expenses also includes costs attributable

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to freight, marketing, sales support, travel, legal services, financial audit fees, insurance costs, and consulting services.

We expect our SG&A expenses to remain significant in absolute dollars as our business grows and we continue to invest in our sales, marketing, medical education, training and general administration resources to build our corporate infrastructure. However, we expect our SG&A expenses to decrease as a percentage of our revenue over the long term, although our SG&A expenses may fluctuate from period to period due to the timing of expenses related to our sales and marketing campaigns, as well as expansion into new markets and geographies.

Research and Development

Our research and development, or R&D, activities primarily consist of engineering and research programs associated with our products under development, as well as R&D activities associated with our clinical development activities. Our R&D expenses primarily consist of compensation, including salary, share-based compensation and employee benefits for our R&D and clinical personnel. We also incur significant expenses for supplies, development prototypes, design and testing, clinical study costs and product regulatory and consulting expenses.

We expect our R&D expenses to remain elevated for the foreseeable future as we continue to advance our products under development, as well as initiate and prepare for additional clinical studies. We received an approval of an IDE from the FDA in March 2018 to initiate a clinical trial and enrolled the first patient in April 2018. The IDE clinical trial is expected to cost between $30.0 million and $40.0 million over the duration of the clinical trial period of ten years. As of December 31, 2024, approximately $32.2 million has been spent on the trial to date. We also have other products under development for which we may be required to conduct clinical trials in future periods in order to receive regulatory approval to market these products.

Interest Expense

Interest expense consists primarily of cash and non-cash interest related to outstanding debt and amortization of debt discounts. As of December 31, 2024, we had $221.4 million in outstanding principal under our term loan, including interest accrued into the principal balance. See Note 6 “Debt” for additional information.

Other Expense, Net

Other expense, net primarily consists of foreign currency gains/losses and interest income. As of December 31, 2024, it also included $6.0 million of contract termination costs related to cancellation of certain contracts in the fourth quarter of fiscal 2024. See Note 2 “Summary of Significant Accounting Policies” for additional information.

Income Tax Expense

Income tax expense consists primarily of income taxes in foreign jurisdictions in which we conduct business. Due to its history of losses, Motiva USA LLC, our U.S. subsidiary, maintains a full valuation allowance for deferred tax assets including net operating loss carry-forwards, R&D tax credits, capitalized R&D and other book versus tax differences.

Business Update Regarding Macroeconomic Conditions

•2024 Results: Demand in fiscal 2024 improved in our Asian markets while Latin America, Brazil in particular, continues to suffer from weaker underlying demand for aesthetic and reconstructive plastic surgery compared to fiscal 2023. In September 2024, we received FDA approval to sell Motiva Implants in the United States and have seen strong demand from the plastic surgeon community and positive feedback. We were able to achieve higher selling prices in the United States which had a positive impact on gross margins the fourth quarter of 2024.

•Outlook: Demand for our products is dependent on the relative strength of the global and regional medical device markets, which are sensitive to general macroeconomic conditions. The current global macroeconomic environment remains complex, with elevated inflation and interest rates driving reductions in discretionary spending in the markets we operate. While several regions are showing strong performance, the demand remains inconsistent, with Latin America, especially Brazil, underperforming. We expect significant demand for our products as we further develop the U.S. market. Despite our continued emphasis on managing operating costs, our commercial and operational efforts have intensified post-FDA approval of Motiva Implants. Therefore, we expect an uptick in overall operating expenses in fiscal 2025 relative to fiscal 2024.

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For additional information on the various risks and other uncertain macroeconomic conditions on our business, financial condition and results of operations, please see Part I, Item 1A. “Risk Factors” of this report.

Consolidated Results of Operations

The following table sets forth our results of operations for the years presented, in dollars:

Year Ended December 31,

(in thousands)

Operating expenses:

Benefit for income taxes 32 81

Comparison of the Year Ended December 31, 2024 and 2023

Year Ended December 31,

(in thousands)

Revenue

Revenue increased $0.8 million, or 0.5%, to $166.0 million for the year ended December 31, 2024, as compared to $165.2 million for the year ended December 31, 2023. The increase was primarily due to a 43% revenue increase in the Asia Pacific region and higher revenue in North America after FDA approval of Motiva Implants in September 2024, partially offset by a 28% revenue decrease in Latin America compared to the same period in fiscal 2023. Revenue from our EMEA market remained relatively stable.

Cost of Revenue and Gross Margin

Cost of revenue decreased $1.7 million, or 2.9%, to $56.5 million for the year ended December 31, 2024, compared to $58.2 million for the year ended December 31, 2023. The decrease in cost of revenue is primarily due to improved manufacturing efficiencies achieved at the new facility and the closure of the smallest manufacturing location.

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Gross margin increased to 66.0% for the year ended December 31, 2024, compared to 64.8% for the year ended December 31, 2023 driven by a lower cost of revenue, as noted above, along with the favorable margin impact from sales within the United States due to higher selling prices.

Operating Expenses

Year Ended December 31,

(in thousands)

Operating expenses:

Sales, General and Administrative Expense

SG&A expense decreased $5.8 million, or 4.0%, to $139.8 million for the year ended December 31, 2024, compared to $145.6 million for the year ended December 31, 2023. The decrease was primarily due to a $6.2 million decrease in in consulting fees, a $4.1 million decrease in sales and marketing expenses and a $3.6 million decrease in freight costs, partially offset by a $2.1 million increase in depreciation and amortization costs, a $1.5 million increase in personnel and related costs, a $1.3 million increase in insurance expenses, and a $1.1 million increase in software implementation costs.

Research and Development Expense

R&D expense decreased $6.7 million, or 25.4%, to $19.7 million for the year ended December 31, 2024, compared to $26.4 million for the year ended December 31, 2023. The decrease in R&D expense was primarily due to a $6.0 million decrease in personnel cost and a $1.0 million decrease in expenditures related to our IDE clinical trial in the United States, partially offset by a $0.2 million increase in regulatory affairs costs.

Interest Expense

Interest expense increased $5.4 million, or 35.1%, to $20.8 million for the year ended December 31, 2024, as compared to $15.4 million for the year ended December 31, 2023. The increase was primarily due to an increase in debt principal.

Benefit for Income Taxes

Benefit for income taxes for the year ended December 31, 2024 of $32.0 thousand stayed comparable to the tax benefit of $81.0 thousand for the year ended December 31, 2023.

Other Income (Expense), Net

Other income (expense), net, decreased $15.6 million to an expense of $13.8 million for the year ended December 31, 2024, compared to an income of $1.8 million for the year ended December 31, 2023. The decrease was primarily due to $6.0 million in contract termination costs incurred in the fourth quarter of fiscal 2024 and to the foreign currency fluctuations of the Brazilian real and the euro as compared to the U.S. dollar, resulting in a foreign currency transaction loss of $8.8 million, for the year ended December 31, 2024, compared to a gain of $1.8 million for the year ended December 31, 2023. Interest income amounted to $1.5 million or the year ended December 31, 2024, as compared to $1.0 million for the year ended December 31, 2023.

Comparison of the Year Ended December 31, 2023 and 2022

The discussion related to our results of operations and changes in financial condition for 2023 compared to 2022 is incorporated by reference to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 4, 2024.

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Liquidity and Capital Resources

As of December 31, 2024, we had an accumulated deficit of $444.7 million. Since our inception, we have generated losses and expect to continue to generate losses in the near term. We have financed our operations through a combination of equity financings and debt financings, and from cash generated from operations, primarily from the collection of accounts receivable resulting from sales. Our historical cash outflows have primarily been associated with cash used for operating activities such as expansion of our sales and marketing and distributor infrastructure, investing in inventory, R&D activities, asset acquisitions, capital improvements, including our new manufacturing facility and other working capital needs. As of December 31, 2024 and 2023, we had cash of $90.3 million and $40.0 million, respectively.

As described above under “Recent Developments - Financing Activities,” in February 2024 and November 2024, we entered into amendments to the Credit Agreement, which, among other changes, extended the termination date for commitments for Tranche C and Tranche D Term Loans and modified the milestones triggering the availability of those loans. The Tranche C Term Loan of $25 million was advanced in October 2024. See Note 6 “Debt” for additional information regarding the Credit Agreement.

During 2024, we also engaged in capital markets financing activities. These included a registered direct offering of common shares and pre-funded warrants to purchase common shares that we completed in November 2024 resulting in net proceeds to us, after deducting offering expenses, of approximately $49.7 million, and a private offering of our common shares and pre-funded warrants to purchase our common shares that we completed in January 2024 resulting in net proceeds to us, after deducting offering expenses, of approximately $49.7 million. In 2023, we completed an underwritten public offering of common shares, resulting in net proceeds to us after deducting underwriting discounts and offering expenses of approximately $84.6 million. See Note 8 “Shareholders’ Equity” for additional information.

Our short-term liquidity requirements consist primarily of operating expenses and interest payments on the Credit Agreement. We believe that our available cash and cash from operations will be sufficient to satisfy our liquidity requirements for at least the next 12 months, including our contractual and other obligations summarized below under “Material Cash Requirements” section. Our long-term liquidity needs consist primarily of operating expenses, including expected increases in SG&A and R&D expenses related to our IDE clinical trial, regulatory compliance and product development and funds necessary to pay for the interest and principal payment on our Term Loans (as defined below). Our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect.

Our future capital requirements will depend on many factors, including:

•the degree and rate of market adoption of our products;

•the cost and timing of our regulatory activities;

•the emergence of new competing technologies and products;

•the costs of R&D activities we undertake to develop and expand our products;

•the costs of commercialization activities, including sales, marketing and manufacturing;

•the level of working capital required to support our growth; and

•our need for additional personnel, information technology or other operating infrastructure to support our growth and operations as a public company.

We may need to raise additional capital to execute our business plan. In April 2023, we filed an automatic shelf registration statement, or Shelf Registration Statement, with the SEC that expires in April 2026, which will allow us to offer and sell our common shares, warrants, rights and units. We may use the Shelf Registration Statement or other capital sources, including other offerings of equity or debt securities or the credit markets, to satisfy future financing needs. If we are unable to raise additional capital when desired, or on terms acceptable to us, our business, results of operations, and financial condition would be adversely affected.

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Cash Flows

The discussion related to our cash flows for 2023 is incorporated by reference to Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on March 4, 2024.

The following table sets forth the primary sources and uses of cash for each of the years presented below:

Year Ended December 31,

(in thousands)

Net cash provided by (used in):

Effect of exchange rate changes on cash (1,456) 513

Net (decrease) increase in cash $ 50,312 $ (26,320)

Net Cash Used in Operating Activities

Net cash used in operating activities of $58.5 million for the year ended December 31, 2024 was primarily comprised of a net loss of $84.6 million, changes in operating assets and liabilities of $15.5 million, a $2.2 million change in provision for deferred income taxes and $0.6 million of interest capitalized for construction in progress, partially offset by $14.4 million of share-based compensation expense, $6.8 million of non-cash depreciation and amortization expense, $6.4 million of non-cash interest expense due to accretion of debt discounts, $6.0 million of non-cash loss on contract termination, $5.3 million of unrealized foreign currency loss, a $1.8 million change in provision for inventory obsolescence, a $1.7 million change in allowance for doubtful accounts, $1.0 million of stock compensation in lieu of cash fees and $0.7 million of non-cash amortization expense of right-to-use assets.

Net cash used in operating activities of $88.5 million for the year ended December 31, 2023 was primarily comprised of a net loss of $78.5 million, changes in operating assets and liabilities of $34.1 million, $4.2 million of unrealized foreign currency gain and $3.6 million of interest capitalized for construction in progress, partially offset by $14.4 million of share-based compensation expense, $13.3 million of non-cash interest expense due to accretion of debt discounts, $4.2 million of non-cash depreciation and amortization expense, a $1.4 million change in provision for inventory obsolescence, a $1.2 million change in allowance for doubtful accounts and $0.7 million of non-cash amortization expense of right-to-use assets.

Net Cash Used in Investing Activities

Net cash used in investing activities of $15.6 million for the year ended December 31, 2024 primarily consisted of $7.0 million in purchases of intangibles, $6.1 million in purchases of property and equipment related to the new manufacturing facility and $2.4 million of cash paid for capital expenditures on construction in progress related to our new manufacturing facility in the Coyol Free Zone in Costa Rica

Net cash used in investing activities of $24.5 million for the year ended December 31, 2023 primarily consisted of $15.3 million of cash paid for capital expenditures on construction in progress related to our new manufacturing facility in the Coyol Free Zone in Costa Rica, $7.9 million in purchases of property and equipment related to the new manufacturing facility and $1.3 million in purchases of intangibles.

Net Cash Provided by Financing Activities

Net cash provided by financing activities of $125.9 million for the year ended December 31, 2024 primarily consisted of $99.5 million of proceeds received for the issuance of common shares, net of underwriters’ discount and issuance costs, from our public offering in April 2023, $24.5 million of borrowings under the Tranche C Term Loan of the Credit Agreement and $2.5 million in proceeds received for stock option exercises, partially offset by $0.5 million paid to satisfy tax withholding obligations upon the vesting of restricted stock.

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Net cash provided by financing activities of $86.2 million for the year ended December 31, 2023 primarily consisted of $84.5 million of proceeds received for the issuance of common shares, net of underwriters’ discount and issuance costs, from our public offering in April 2023 and $2.2 million in proceeds received for stock option exercises, partially offset by $0.5 million paid to satisfy tax withholding obligations upon the vesting of restricted stock.

Material Cash Requirements

The following table provides a summary of our material cash requirements from known contractual and other obligations, including commitments for capital expenditures, as of December 31, 2024:

(in thousands)

Debt obligations - principal (1) $ — $ — $ 221,367 $ — $ — $ — $ 221,367

Short-term borrowing (4) 1,722 — — — — — 1,722

Indebtedness

On April 26, 2022, or the Closing Date, we entered into the new Credit Agreement, pursuant to which the lenders agreed to make term loans in an aggregate principal amount of up to $225 million, which we collectively refer to as the Term Loans, with the first tranche of $150 million advanced on the Closing Date. Part of the first tranche was used to repay the outstanding principal and interest under our previous credit agreement with Madryn Health Partners, LP in full, including the early repayment penalty of $6.5 million. In December 2022, $25 million was advanced under the second tranche. In October 2024, $25 million was advanced under the third tranche. The Term Loans will mature on the 5-year anniversary of the Closing Date and accrue interest at a rate equal to 9% per annum for the first two tranches and 10% for the third and fourth tranches. As of December 31, 2024, $221.4 million was outstanding under the Credit Agreement representing the initial principal of $150 million for the Tranche A Term Loan, $25 million for the Tranche B Term Loan, $25 million for the Tranche C Term Loan and $17.6 million of interest accrued into the principal balance. See Note 6 “Debt” for additional information.

Critical Accounting Policies, Significant Judgments and Use of Estimates

This discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with the generally accepted accounting principles in the United States of America, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, revenue and expenses, and the disclosure of contingent assets and liabilities. Our estimates are based on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. Actual results may differ from these estimates. We believe that the critical accounting policies discussed below are essential to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s estimates and judgments.

Revenue Recognition

We recognize revenue related to sales of products to distributors or directly to customers in markets where it has regulatory approval, net of discounts and allowances. The Company recognizes revenue in accordance with

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Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers. ASC 606 requires the Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services.

We recognize revenue related to the sales of products to distributors at the time of shipment of the product, which represents the point in time when the distributor has taken ownership and assumed the risk of loss and the required revenue recognition criteria are satisfied. Our distributors are obligated to pay within specified terms regardless of when, or if, they sell the products. Our contracts with distributors typically do not contain right of return or price protection and have no post-delivery obligations.

We recognize revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of us or any written matters requiring customer acceptance. We allow for the return of product from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. As of December 31, 2024 and 2023, an allowance of $0.4 million and $0.3 million was recorded for product returns, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales.

A portion of the our revenue is generated from the sale of consigned inventory maintained at physician, hospital, and clinic locations. For these products, revenue is recognized at the time we are notified by the consignee that the product has been implanted, not when the consigned products are delivered to the consignee’s warehouse.

We have a limited warranty for the shelf life of breast implants, which is five years from the time of manufacture. Estimated warranty obligations are recorded at the time of sale. We also offer a warranty to patients in the event of rupture and a replacement program for capsular contracture events, provided certain registration requirements are met. Revenue for extended warranties is recognized ratably over the term of the agreement. To date, these warranty and program costs have been de minimis. We will continue to evaluate the warranty reserve policies for adequacy considering claims history.

Deferred revenue primarily consists of payments received in advance of meeting revenue recognition criteria. We have received payments from distributors to provide distribution exclusivity within a geographic area and recognizes deferred revenue on a ratable basis over the term of such contractual distribution relationship. Additionally, we have received payments from customers in direct markets prior to surgical implantation and recognizes deferred revenue at the time we are notified by the customer that the product has been implanted. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue and included in “Other liabilities, long-term” on the consolidated balance sheets (see Note 3 “Balance Sheet Accounts”).

Research and Development

Costs related to research and development, or R&D, activities are expensed as incurred. R&D costs primarily include personnel costs, materials, clinical expenses, regulatory expenses, product development, consulting services, and outside research activities, all of which are directly related to research and development activities.

We estimate IDE clinical trial expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations that conduct and manage clinical trials on its behalf. In accruing service fees, we estimate the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, we will adjust the accrual accordingly.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable is stated at invoice value less estimated allowances for returns and credit losses. We continually monitor customer payments and maintains an allowance for estimated losses resulting from customers’ inability to make required payments. In evaluating our ability to collect outstanding receivable balances, we consider various factors including the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, an allowance is recorded against amounts due, which reduces the net recognized receivable

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to the amount reasonably believed to be collectible.

Inventory and Cost of Revenue

Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. We regularly reviews inventory quantities considering actual losses, projected future demand, and remaining shelf life to record a provision for excess and slow-moving inventory. Provision for inventory obsolescence of $4.2 million and $3.9 million has been recorded as of December 31, 2024 and 2023, respectively.

Long-Lived Assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There were no impairment charges, or changes in estimated useful lives recorded during the years ended December 31, 2024 and 2023.

Income Taxes

We record income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized.

We operate in various tax jurisdictions and are subject to audit by various tax authorities.

We record uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold we recognize the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. Our policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions.

There were no material uncertain tax positions as of December 31, 2024 and 2023.

Foreign Currency

The financial statements of our foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, shareholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net” in the consolidated statement of operations. For the year ended December 31, 2024, foreign currency transaction loss amounted to $8.8 million as compared to a foreign currency transaction gain of $1.8 million for the year ended December 31, 2023.

Share-Based Compensation

We measures and recognizes compensation expense for all share-based awards in accordance with the provisions of ASC 718, Stock Compensation. Share-based awards granted include stock options, restricted stock units, or RSUs, and restricted stock awards, or RSAs. Share-based compensation expense for stock options and RSAs granted to employees is measured at the grant date based on the fair value of the awards and is recognized as an expense ratably on a straight-line basis over the requisite service period. The fair value of

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options to purchase shares granted to employees is estimated on the grant date using the Black-Scholes option valuation model.

The calculation of share-based compensation expense requires us to make assumptions and judgments about the variables used in the Black-Scholes model, including the expected term, expected volatility of the underlying common shares, risk-free interest rate and dividends.

See Note 10 “Share-Based Compensation” for additional information.

Recent Accounting Pronouncements

Please refer to Note 2 “Summary of Significant Accounting Policies” in the notes to the consolidated financial statements included in this Form 10-K for information on recent accounting pronouncements and the expected impact on our unaudited consolidated financial statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We had cash of $90.3 million and $40.0 million as of December 31, 2024 and 2023, respectively. We manage our cash portfolio for operating and working capital purposes. Our cash balances are held in bank checking accounts, and we believe that we do not have any material exposure to changes in the fair value of our cash portfolio as a result of changes in interest rates.

Foreign Currency Exchange Risk

To date, the majority of our revenue has been denominated in U.S. dollars, Brazilian reals and euros. Some of our operating expenses are subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the euro and Brazilian real. Fluctuations in foreign currency exchange rates may cause us to recognize transaction gains and losses in our consolidated statements of operations. For the year ended December 31, 2024, foreign currency transaction loss amounted to $8.8 million primarily related to the remeasurement of transactions denominated in the U.S. dollar into the Brazilian real and the euro as part of the financial reporting consolidation process under GAAP. We have not engaged in any foreign currency hedging activities. As our international operations grow, we will continue to reassess our approach to managing the risks relating to fluctuations in foreign currency exchange rates. During the year ended December 31, 2024, the effect of an immediate 10% adverse change in foreign exchange rates on foreign-denominated accounts as of December 31, 2024 would have had an impact of approximately 2.4% on revenues and would have impacted our net loss by a commensurate amount.

Inflation Risk

We do not believe that inflation had a significant impact on our results of operations for any periods presented in our consolidated financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements required to be filed pursuant to this Item 8 are appended to this report beginning on page F‐1. An index of those financial statements is included in Part IV, Item 15 below.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of December 31, 2024, the end of the period covered by this Annual Report on Form 10-K, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial

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officer, as appropriate to allow timely decisions regarding required disclosure. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this annual report at the reasonable assurance level.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) of the Exchange Act. Our management has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 using the criteria established in “Internal Control—Integrated Framework” (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Based on that assessment, our management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2024.

Our management has excluded Motiva Benelux BV, a wholly-owned subsidiary of the Company, from its assessment of internal control over financial reporting as of December 31, 2024 because this entity was acquired by the Company in a business combinations in the fourth quarter of 2024.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during the three months ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving the desired control objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Similarly, an evaluation of controls cannot provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected.

Attestation Report of the Independent Registered Public Accounting Firm

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Marcum LLP, an independent registered public accounting firm, as stated in their report which is included below.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors of

Establishment Labs Holdings Inc.

Opinion on Internal Control over Financial Reporting

We have audited Establishment Labs Holdings Inc.'s (the “Company”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2024 and 2023 and the related consolidated statements of operations, comprehensive loss, shareholders’ (deficit) equity, and cash flows and the related notes for each of the three years in the period ended December 31, 2024 of the Company, and our report dated February 28, 2025 expressed an unqualified opinion on those financial statements.

Explanatory Paragraph – Excluded Subsidiary

As described in Management Annual Report on Internal Control over Financial Reporting, management has excluded its wholly-owned subsidiary, Motiva Benelux BV, from its assessment of internal control over financial reporting as of December 31, 2024 because this entity was acquired by the Company in purchase business combinations during 2024. We have also excluded Motiva Benelux BV from our audit of internal control over financial reporting. This subsidiary’s combined total assets and total revenues represent approximately 2.0% and 1.0%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2024.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such

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other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum LLP

Marcum LLP

Los Angeles, California

February 28, 2025

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ITEM 9B. OTHER INFORMATION

Insider Trading Arrangements

During the three months ended December 31, 2024, no director or Section 16 officer of the Company adopted or terminated any contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense condition of Rule 10b5-1(c) of the Exchange Act or any "non-Rule 10b5-1 trading arrangement" (as defined in the Exchange Act).

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Code of Business Conduct and Ethics

Our Board has adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including our chief executive officer, and other executive and senior financial officers. A copy of the code is posted under "Corporate Governance" in the Investors section of our website at https://establishmentlabs.com. If we make any substantive amendments to, or grant any waivers from, the Code of Business Conduct and Ethics for any officer or director, we will disclose the nature of such amendment or waiver on our website or in a current report on Form 8-K.

The remaining information required by this Item is incorporated by reference from the information in our Proxy Statement for our 2025 Annual Meeting of Shareholders, which we will file with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates.

ITEM 11. EXECUTIVE COMPENSATION

Incorporated by reference from the information in our Proxy Statement for our 2025 Annual Meeting of Shareholders, which we will file with the SEC within 120 days of the end of the fiscal year to which this Annual Report on Form 10-K relates.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

PART IV

ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

The following statements are filed as part of this Annual Report on Form 10-K:

1. Financial Statements.

A listing of the Consolidated Financial Statements, related notes and Report of Independent Registered Public Accounting is set forth on page F-1 in this Annual Report on Form 10-K.

2. Financial Statement Schedules.

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All schedules have been omitted since the required information is not present or is not present in amounts sufficient to require submission of a schedule, or because the information required is included in the financial statements or related notes.

3. Index to Exhibits.

Exhibit Number Description of Exhibit Incorporation by Reference

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Exhibit Number Description of Exhibit Incorporation by Reference

19.1 Insider Trading Policy Filed herewith.

21.1 List of Subsidiaries of the Registrant. Filed herewith.

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Exhibit Number Description of Exhibit Incorporation by Reference

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

ITEM 16. FORM 10-K SUMMARY

None.

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PAGE

Report of Independent Registered Public Accounting Firm (PCAOB ID: 688) F-1

Consolidated Financial Statements

Consolidated Balance Sheets at December 31, 2024 and 2023 F-2

Notes to Consolidated Financial Statements F-8

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Establishment Labs Holdings Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Establishment Labs Holdings Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, comprehensive loss, shareholders’ (deficit) equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023 and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2024, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated February 28, 2025, expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters.

/s/ Marcum LLP

Marcum LLP (688)

We have served as the Company’s auditor since 2016.

Los Angeles, California

February 28, 2025

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ESTABLISHMENT LABS HOLDINGS INC.

Consolidated Balance Sheets

(In thousands, except share data)

December 31,

Assets

Current assets:

Prepaid expenses and other current assets 8,922 8,477

Long-term assets:

Property and equipment, net of accumulated depreciation 78,028 77,205

Intangible assets, net of accumulated amortization 11,683 7,987

Right-of-use operating lease assets, net 5,561 3,381

Liabilities and shareholders’ equity

Current liabilities:

Other liabilities, short-term 6,982 1,836

Long-term liabilities:

Note payable, Oaktree, net of debt discount and issuance costs 219,577 188,739

Operating lease liabilities, non-current 4,203 2,712

Commitments and contingencies (Note 16)

Shareholders’ equity:

Accumulated other comprehensive income 3,285 1,963

Total liabilities and shareholders’ equity $ 346,831 $ 268,641

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

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ESTABLISHMENT LABS HOLDINGS INC.

Consolidated Statements of Operations

(In thousands, except share and per share data)

Year Ended December 31,

Operating expenses:

Change in fair value of derivative instruments — — 703

Loss on extinguishment of debt — — (19,019)

Benefit (provision) for income taxes 32 81 (2,385)

Basic and diluted net loss per share $ (3.00) $ (3.07) $ (3.08)

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

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ESTABLISHMENT LABS HOLDINGS INC.

Consolidated Statements of Comprehensive Loss

(In thousands)

Year Ended December 31,

Other comprehensive income:

Foreign currency translation gain (loss) 1,322 (752) (942)

Other comprehensive income (loss) 1,322 (752) (942)

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

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ESTABLISHMENT LABS HOLDINGS INC.

Consolidated Statements of Shareholders’ (Deficit) Equity

(In thousands, except share data)

Shares Amount Shares Amount

Warrant exercises 4,703 5 — — (5) — — —

Foreign currency translation gain (loss) — — — — — — (942) (942)

Issuance of common shares in lieu of cash compensation 23,041 745 — — — — — 745

Foreign currency translation gain (loss) — — — — — — (752) (752)

Foreign currency translation gain (loss) — — — — — — 1,322 1,322

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

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ESTABLISHMENT LABS HOLDINGS INC.

Consolidated Statements of Cash Flows

(In thousands)

Year Ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Change in reserve for PP&E impairment — (341) 341

Provision for deferred income taxes (2,178) (3,706) 86

Loss from disposal of property and equipment 163 280 229

Unrealized foreign currency (gain)/loss, net 5,302 (4,181) 1,732

Loss on extinguishment of debt — — 19,019

Amortization of right-to-use asset 743 717 469

Gain from write-off of liability — — (1,866)

Change in fair value of derivative instruments — — (703)

Non-cash loss on contract termination 6,004 — —

Stock compensation in lieu of cash fees 964 495 —

Interest capitalized for construction in progress (555) (3,567) (1,762)

Non-cash interest expense and amortization of debt discount 6,371 13,278 8,124

Changes in operating assets and liabilities:

Prepaid expenses and other current assets 86 2,637 (4,489)

Cash flows from investing activities:

Cash used in business acquisitions, net of cash acquired (50) — —

Cash used in asset acquisitions — — (525)

Capital expenditures on construction in progress (2,414) (15,311) (29,924)

Cash flows from financing activities:

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

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ESTABLISHMENT LABS HOLDINGS INC.

Consolidated Statements of Cash Flows

(In thousands)

Year Ended December 31,

Repayment of Madryn debt agreement — — (71,681)

Repayments on finance leases — — (26)

Effect of exchange rate changes on cash and cash equivalents (1,456) 513 (358)

Supplemental disclosures:

Supplemental disclosures of non-cash investing and financing activities:

Unpaid balance for property and equipment $ 240 $ 2,847 $ 1,129

Unpaid balance for intangible assets $ 592 $ 2,907 $ —

Equity consideration in an asset acquisition $ — $ 250 $ —

Equity consideration in a business acquisition $ 1,177 $ — $ —

Contingent consideration payable related to a business acquisition $ 973 $ — $ —

Consideration payable related to a business acquisition $ 3,262 $ — $ —

Cashless option exercises $ — $ 4,500 $ —

Cashless warrant exercises $ 600 $ — $ —

Cash payable to settle contract termination $ 214 $ — $ —

Liability to issue shares to settle contract termination $ 1,320 $ — $ —

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

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

1. Formation and Business of the Company

Formation and Business of the Company

Establishment Labs Holdings Inc. along with its wholly owned subsidiaries, or the Company, is a global company that manufactures and markets innovative medical devices for aesthetic and reconstructive plastic surgery. The Company was established in the British Virgin Islands on October 9, 2013, at which time Establishment Labs, S.A., the Costa Rican manufacturing company, was reincorporated as a wholly-owned subsidiary. As of December 31, 2024, the Company also has wholly-owned subsidiaries in the United States (JAMM Technologies, Inc. and Motiva USA LLC), Brazil (Establishment Labs Produtos para Saude Ltda), Belgium (European Distribution Center Motiva BV and Motiva Benelux BV), Netherlands (Motiva NL BV), France (Motiva Implants France SAS), Sweden (Motiva Nordica AB), Switzerland (JEN-Vault AG), the United Kingdom (Motiva Implants UK Limited), Italy (Motiva Italy S.R.L), Spain (Motiva Implants Spain, S.L.), Austria (Motiva Austria GmbH), Germany (Motiva Germany GmbH) and Argentina (Motiva Argentina S.R.L). Substantially all of the Company’s revenues are derived from the sale of silicone gel-filled breast implants, branded as Motiva Implants.

The main manufacturing activities are conducted at two manufacturing facilities in Costa Rica. In 2024, the Company completed construction of its newest facility. In 2010, the Company began operating under the Costa Rica free zone regime (Régimen de Zona Franca), which provides for reduced income tax and other tax obligations pursuant to an agreement with the Costa Rican authorities.

The Company’s products are approved for sale in Europe, the Middle East, Latin America, Asia and the United States. The Company sells its products internationally through a combination of distributors and direct sales to customers. In September 2024, the Company received PMA approval from the FDA for its Motiva Implants. Beginning in October 2024, the Company began selling Motiva Implants for use in breast augmentation for patients in the United States.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC.

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

The consolidated financial statements include the Company’s accounts and those of its wholly owned subsidiaries as of December 31, 2024 as follows:

Subsidiary Incorporation/Acquisition Date

Establishment Labs, S.A. (Costa Rica) January 18, 2004

Motiva USA, LLC (USA) February 20, 2014

JAMM Technologies, Inc. (USA) October 27, 2015

Establishment Labs Produtos par Saude Ltda (Brazil) January 4, 2016

European Distribution Center Motiva BV (Belgium) March 4, 2016

Motiva Implants France SAS (France) September 12, 2016

JEN-Vault AG (Switzerland) November 22, 2016

Motiva Nordica AB (Sweden) November 2, 2017

Motiva Implants UK Limited (the United Kingdom) July 31, 2018

Motiva Italy S.R.L (Italy) July 31, 2018

Motiva Implants Spain, S.L. (Spain) January 3, 2019

Motiva Austria GmbH (Austria) January 14, 2019

Motiva Germany GmbH (Germany) August 1, 2019

Motiva Argentina S.R.L. (Argentina) February 7, 2020

Motiva Benelux BV (Belgium) October 1, 2024

Motiva NL BV (Netherlands) October 1, 2024

All intercompany accounts and transactions have been eliminated in consolidation.

Segments

The chief operating decision maker, or CODM, for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a consolidated basis, accompanied by information about revenue by geographic region, for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the consolidated unit level. Accordingly, the Company has determined that it has one single reportable and operating segment structure. The Company and its Chief Executive Officer evaluate performance based primarily on revenue in the geographic regions in which the Company operates. See the consolidated statements of operations for the consolidated financial information and “Revenue Recognition” for revenue by geographic region used in evaluating financial performance. The level of disaggregation and amounts of significant segment expenses that are regularly provided to the CODM are the same as those presented in the consolidated statements of operations. Likewise, the measure of segment assets is reported on the consolidated balance sheets as total assets.

Geographic Concentrations

The Company derives substantially all its revenues from sales to customers in Europe, the Middle East, Latin America, and Asia. The Company received approval to sell its Motiva Implants in the United States in September 2024 and Motiva Flora Tissue Expanded in October 2023. The revenue derived in the United States prior to the FDA approvals consisted of microtransponder sales.

For the year ended December 31, 2024, no individual country exceeded 10% of consolidated revenue, on a ship-to-destination basis. For the years ended December 31, 2023 and 2022, Brazil accounted for 13.3% and 16.6%, respectively, of consolidated revenue and no other individual country exceeded 10% of consolidated revenue, on a ship-to destination basis.

The majority of the Company’s consolidated total assets, including cash and tangible assets, is held in the United

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

States. The Company’s long-lived assets, which primarily consist of property and equipment and intangible assets located in Costa Rica represented 78% and 80% of the total long-lived assets as of December 31, 2024 and 2023, respectively.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant accounting estimates and management judgments reflected in the consolidated financial statements include items such as accounts receivable valuation and allowances, inventory valuation and allowances, valuation of acquired intangible assets and valuation of deferred income tax assets, including tax valuation allowances. Estimates are based on historical experience, where applicable, and other assumptions believed to be reasonable by management. Actual results may differ from those estimates under different assumptions or conditions.

Concentration of Credit Risk and Other Risks and Uncertainties

Financial instruments that potentially subject the Company to a concentration of credit risk consist principally of cash and accounts receivable. The majority of the Company’s cash is held at two financial institutions in the United States. Balances in the Company’s cash accounts exceed the Federal Deposit Insurance Corporation, or FDIC, limit of $250,000. The Company has not experienced any losses to its deposits of cash.

Substantially all of the Company’s revenue has been derived from sales of its products in international markets, principally Europe, the Middle East, Latin America, and Asia. In the international markets in which the Company operates, the Company uses a combination of distributors and direct sales to customers. The Company performs ongoing credit evaluations of its distributors and customers, does not require collateral, and maintains allowances for potential credit losses on customer accounts when deemed necessary.

Substantially all of the Company’s revenues were derived from the sale of Motiva Implants. During the years ended December 31, 2024, 2023 and 2022, no customer accounted for more than 10% of the Company’s revenue. One customer accounted for 17.0% of the Company’s trade accounts receivable balance as of December 31, 2024. Two customers accounted for 12.7% and 11.6% of the Company’s trade accounts receivable balance as of December 31, 2023.

The Company relies on Avantor, Inc. (formerly NuSil Technology, LLC), or Avantor, as the sole supplier of medical-grade silicone used in Motiva Implants. During the years ended December 31, 2024, 2023 and 2022, the Company had purchases of $29.2 million, or 44.7% of total purchases, $53.7 million, or 68.4% of total purchases, and $32.1 million or 38.2% of total purchases, respectively, from Avantor. As of December 31, 2024 and 2023, the Company had an outstanding balance owed to this vendor of $15.0 million and $5.3 million, respectively.

The Company’s financial condition and future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, unfavorable economic conditions, uncertainty of continued or new regulatory approval for the Company’s current and potential future products, uncertainty of market acceptance of the Company’s products, competition from substitute products and larger companies, securing and protecting proprietary technology, access to capital, strategic relationships and dependence on key individuals and sole source suppliers.

Products developed by the Company require clearance from the FDA or other international regulatory agencies prior to commercial sales. There can be no assurance that the products will receive the necessary clearances. If the Company is denied clearance, clearance is delayed, or the Company is unable to maintain its existing clearances, these developments could have a material adverse impact on the Company.

Cash and Cash Equivalents

The Company’s cash consists of cash maintained in checking and interest-bearing accounts. The majority of the Company’s cash is held at two financial institutions in the United States, with balances in excess of FDIC insurance limits. The Company accounts for financial instruments with original maturities of three months or less at the date of purchase as cash equivalents. The Company held $3.0 million and $2.8 million cash equivalents as

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

of December 31, 2024 and 2023, respectively.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable balance is stated at invoice value less estimated allowances for returns and credit losses. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from customers’ inability to make required payments. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition. In cases where there are circumstances that may impair a specific customer’s ability to meet its financial obligations, an allowance is recorded against amounts due, which reduces the net recognized receivable to the amount reasonably believed to be collectible.

A roll-forward of the allowance for credit losses is as follows:

Year Ended December 31,

(in thousands)

Inventory and Cost of Revenue

Inventory is stated at the lower of cost to purchase or manufacture the inventory or the net realizable value of such inventory. Cost is determined using the standard cost method which approximates actual costs using the first-in, first-out basis. The Company regularly reviews inventory quantities, actual losses, projected future demand, and remaining shelf life to record a provision for obsolete and/or damaged inventory.

A roll-forward of the inventory reserve is as follows:

Year Ended December 31,

(in thousands)

The Company recognizes the cost of inventory transferred to the customer in cost of revenue when revenue is recognized.

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

Leases

The Company determines if an arrangement is, or contains, a lease at the inception date of the contract. The Company has elected an expedient to account for each separate lease component and its associated non-lease components as a single lease component for the majority of its asset classes.

The lease term may include periods covered by options to extend or terminate the lease when it is reasonably certain that the Company will exercise a renewal option, or reasonably certain it will not exercise an early termination option. The Company recognizes lease liabilities and right-of-use, or ROU, assets upon commencement for all material leases with a term greater than 12 months. The Company has elected an expedient not to recognize leases with a lease term of 12 months or less on the balance sheet. These short-term leases are expensed on a straight-line basis over the lease term.

Shipping and Handling Costs

Shipping and handling costs are expensed as incurred and are included in selling, general and administrative, or SG&A, expenses. For the years ended December 31, 2024, 2023 and 2022, shipping and handling costs were $7.2 million, $11.8 million and $9.0 million, respectively.

Revenue Recognition

The Company recognizes revenue related to sales of products to distributors or directly to customers in markets where it has regulatory approval, net of discounts and allowances. The Company recognizes revenue in accordance with Accounting Standards Codification, or ASC, Revenue from Contracts with Customers (Topic 606). ASC 606 requires the Company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods or services.

The Company recognizes revenue related to the sales of products to distributors at the time of shipment of the product, which represents the point in time when the distributor has taken ownership and assumed the risk of loss, and the required revenue recognition criteria are satisfied. The Company’s distributors are obligated to pay within specified terms regardless of when, or if, they sell the products. The Company’s contracts with distributors typically do not contain right of return or price protection and have no post-delivery obligations.

The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of products from direct customers in certain regions in limited instances within fifteen days after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period is recorded. As of December 31, 2024 and 2023, an allowance of $0.4 million and $0.3 million was recorded for product returns, respectively. Taxes collected from customers for remittance to governmental authorities are excluded from net sales.

A portion of the Company’s revenue is generated from the sale of consigned inventory maintained at physician, hospital, or clinic locations. For these products, revenue is recognized at the time the Company is notified by the consignee that the product has been implanted, not when the consigned products are delivered to the consignee’s warehouse.

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

Revenue was generated in these primary geographic markets:

Year Ended December 31,

(in thousands)

The Company has a limited warranty for the shelf life of breast implants, which is five years from the time of manufacture. Estimated warranty obligations are recorded at the time of sale. The Company also offers a warranty to patients in the event of rupture and a replacement program for capsular contracture events, provided certain registration requirements are met. Revenue for extended warranties is recognized ratably over the term of the agreement. To date, these warranty and program costs have been de minimis. The Company will continue to evaluate the warranty reserve policies for adequacy considering claims history.

Deferred revenue primarily consists of payments received in advance of meeting revenue recognition criteria. The Company has received payments from distributors to provide distribution exclusivity within a geographic area and recognizes revenue on a ratable basis over the term of such contractual distribution relationship. Additionally, the Company has received payments from customers in direct markets prior to surgical implantation and recognizes deferred revenue at the time the Company is notified by the customer that the product has been implanted. For all arrangements, any revenue that has been deferred and is expected to be recognized beyond one year is classified as long-term deferred revenue and included in “Other liabilities, long-term” on the consolidated balance sheets (see Note 3).

Research and Development

The Company estimates IDE clinical trial expenses based on the services performed, pursuant to contracts with research institutions and clinical research organizations that conduct and manage clinical trials on its behalf. In accruing service fees, the Company estimates the time period over which services will be performed and the level of patient enrollment and activity expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual accordingly.

Selling, General and Administrative Expenses

SG&A expenses include sales and marketing costs, payroll and related benefit costs, insurance expenses, shipping and handling costs, legal and professional fees and administrative overhead.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization.

The Company depreciates owned buildings on a straight-line basis over 50 years of useful life. Depreciation of property and equipment is computed using the straight-line method over the assets’ estimated useful lives of five to ten years. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the asset or the remaining lease term after factoring expected renewal periods. Upon retirement or disposal of assets, the costs and related accumulated depreciation are eliminated from the accounts and any gain or loss is recognized in operations. Maintenance and repairs are expensed as incurred. Substantially all of the

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

Company’s manufacturing operations and related property and equipment are located in Costa Rica.

Goodwill and Intangible Assets

The Company records the excess of the acquisition purchase price over the net fair value of the tangible and identifiable intangible assets acquired and liabilities assumed as goodwill. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company tests goodwill for impairment annually during the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. In connection with the annual impairment test for goodwill, the Company elected the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If the Company determines that it was more likely than not that the fair value of the reporting unit is less than its carrying amount, then the impairment test is performed.

Consistent with the Company's assessment that it has only one reporting segment, the Company has determined that it has only one reporting unit and tests goodwill for impairment at the entity level using the two-step process required by ASC 350. In the first step, the Company compares the carrying amount of the reporting unit to the fair value of the enterprise. If the fair value of the enterprise exceeds the carrying value, goodwill is not considered impaired and no further testing is required. If the carrying value of the enterprise exceeds the fair value, goodwill is potentially impaired, and the second step of the impairment test must be performed. In the second step, the Company compares the implied fair value of the goodwill, as defined by ASC 350, to its carrying amount to determine the impairment loss, if any.

The Company capitalizes certain costs related to intangible assets, such as patents, trademarks and software development costs. The Company follows the provisions of ASC 350-40, Internal Use Software for determining whether computer software is internal-use software and on accounting for the costs of computer software originally developed or obtained for internal use. The Company expenses all costs incurred during the preliminary project stage of software development and capitalizes the costs incurred during the application development stage. Costs incurred relating to upgrades and enhancements to the software are capitalized if it is determined that these upgrades or enhancements add additional functionality to the software. Costs incurred to improve and support products after they become available are charged to expense as incurred.

The Company records purchased intangible assets at their respective estimated fair values at the date of acquisition. Purchased finite-lived intangible assets are being amortized using the straight-line method over their remaining estimated useful lives, which range from one to ten years. The Company evaluates the remaining useful lives of intangible assets on a periodic basis to determine whether events or circumstances warrant a revision to the remaining estimated amortization period. The Company tests indefinite-lived intangible assets for impairment on at least an annual basis and whenever circumstances suggest the assets may be impaired. If indicators of impairment are present, the Company evaluates the carrying value of the intangible assets in relation to estimates of future undiscounted cash flows. The Company also evaluates the remaining useful life of an indefinite-lived intangible asset to determine whether events and circumstances continue to support an indefinite useful life.

During the years ended December 31, 2024, 2023 and 2022, there has been no impairment of goodwill or intangible assets based on the qualitative assessments performed by the Company.

Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been impairment by comparing the anticipated undiscounted future net cash flows to the related asset group’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. There were no impairment charges, or changes in estimated useful lives recorded during the years ended December 31, 2024, 2023 and 2022.

Debt Issuance Costs and Debt Discounts

Costs incurred in connection with the issuance of new debt are capitalized. Capitalizable debt issuance costs paid to third parties and debt discounts, net of amortization, are recorded as a reduction to the long-term debt balance

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

on the consolidated balance sheets. Amortization expense on capitalized debt issuance costs and debt discounts related to loans are calculated using the effective interest method over the term of the loan commitment and is recorded as interest expense in the consolidated statements of operations.

Income Taxes

The Company records income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the Company’s consolidated financial statements or income tax returns. In estimating future tax consequences, expected future events, enactments or changes in the tax law or rates are considered. Valuation allowances are provided when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company operates in various tax jurisdictions and is subject to audits by various tax authorities.

The Company records uncertain tax positions based on a two-step process whereby (1) a determination is made as to whether it is more likely than not that the tax positions will be sustained based on the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold the Company recognizes the largest amount of tax benefit that is greater than 50% likely to be realized upon ultimate settlement with the related tax authority. The Company’s policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense. Significant judgment is required in the identification of uncertain tax positions and in the estimation of penalties and interest on uncertain tax positions.

There were no material uncertain tax positions in the years ended December 31, 2024, 2023 and 2022.

Foreign Currency

The financial statements of the Company’s foreign subsidiaries whose functional currencies are the local currencies are translated into U.S. dollars for consolidation as follows: assets and liabilities at the exchange rate as of the balance sheet date, shareholders’ equity at the historical rates of exchange, and income and expense amounts at the average exchange rate for the period. Translation adjustments resulting from the translation of the subsidiaries’ accounts are included in “Accumulated other comprehensive income” as equity in the consolidated balance sheet. Transactions denominated in currencies other than the applicable functional currency are converted to the functional currency at the exchange rate on the transaction date. At period end, monetary assets and liabilities are remeasured to the functional currency using exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are remeasured at historical exchange rates. Gains and losses resulting from foreign currency transactions are included within “Other income (expense), net” in the consolidated statement of operations. For the years ended December 31, 2024, 2023 and 2022, foreign currency transaction gain/loss amounted to a loss of $8.8 million, a gain of $1.8 million and a loss of $3.0 million, respectively.

Contract Termination Costs

In the fourth quarter of 2024, the Company entered into a contract termination agreement with a third-party in connection with its Mia products in Europe. In lieu of a cash settlement, the Company and the third-party agreed to settle previous amounts incurred by each respective party from separate and unrelated contracts. Such amounts included $5.7 million of accounts receivable owed to the Company from the third-party and $1.3 million of accounts payable owed to the third party by the Company, resulting in a net non-cash balance totaling $4.5 million. The Company’s management determined that the accounts receivable owed from the third-party was deemed collectible prior to settlement. The Company recorded an additional $1.5 million liability for contract termination payments resulting in a total loss on contract termination of $6.0 million reported under "Other income (expense), net" for the year ending December 31, 2024. There were no such costs in the years ended December 31, 2023 and 2022.

Comprehensive Loss

The Company’s comprehensive loss consists of net loss and foreign currency translation adjustments arising from the consolidation of the Company’s foreign subsidiaries.

Share-Based Compensation

The Company measures and recognizes compensation expense for all share-based awards in accordance with the provisions of ASC 718, Stock Compensation. Share-based awards granted include stock options, restricted

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

stock units, or RSUs, and restricted stock awards, or RSAs. Share-based compensation expense for stock options, RSUs and RSAs granted to employees is measured at the grant date based on the fair value of the awards and is recognized as an expense ratably on a straight-line basis over the requisite service period. The fair value of options to purchase shares is estimated on the grant date using the Black-Scholes option valuation model.

The calculation of share-based compensation expense requires the Company to make assumptions and judgments about the variables used in the Black-Scholes model, including the expected term, expected volatility of the underlying common shares, risk-free interest rate and dividends.

Net Income (Loss) Per Share

Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to shareholders by the weighted-average number of shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, any shares issuable upon exercise of warrants, stock options and non-vested RSUs or RSAs outstanding under the Company’s equity plan are potentially dilutive securities. Diluted net loss per share is the same as basic net loss per share for periods where the Company reported a net loss because including the dilutive securities would be anti-dilutive.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year presentation. These reclassifications had no material impact on the Company’s financial position as of December 31, 2024 or results of operations for year ended December 31, 2024.

Recent Accounting Standards

Periodically, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption.

Recently Adopted Accounting Standards

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which expands annual and interim disclosure requirements for reportable segments, especially significant segment expenses, and provides new disclosure requirements for entities with a single reportable segment. The new guidance is effective for our annual periods beginning after December 15, 2023, and for interim periods beginning December 15, 2024. The Company adopted ASU No. 2023-07 as of December 31, 2024, utilizing the modified retrospective method and accordingly did not recast comparative period financial information. Upon adoption, the Company expanded disclosures under “Segments” above.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses, which enhances disclosure requirements over the disaggregation of relevant expense categories within the income statement. The new guidance requires tabular presentation of prescribed expense categories such as the purchases of inventory, employee compensation, depreciation, intangible asset amortization, and other specific expense, gains and losses required by existing GAAP, that reconciles to the face of the income statement. It is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15,

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

2027, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the potential effect that the updated standard will have on the financial statement disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topics 740): Improvements to Income Tax Disclosures, which enhances the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid and certain other amendments to improve the effectiveness of income tax disclosures. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted, and may be applied either prospectively or retrospectively. The Company is currently evaluating the potential effect that the updated standard will have on the financial statement disclosures.

3. Balance Sheet Accounts

Inventory, Net

December 31,

(in thousands)

As of December 31, 2024 and 2023, $9.0 million and $7.1 million of inventory was on consignment, respectively.

Prepaid Expenses and Other Current Assets

December 31,

(in thousands)

Prepaid raw materials and accessories 1,005 468

Prepaid U.S. clinical trial costs 184 176

Prepaid warranty and distribution rights 409 275

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

Property and Equipment, Net

December 31,

(in thousands)

Construction in process — 30,593

Less: Accumulated depreciation and amortization (20,116) (16,327)

Total property and equipment, net $ 78,028 $ 77,205

For the years ended December 31, 2024, 2023 and 2022, depreciation and amortization expense related to property and equipment was $4.7 million,$2.8 million and $2.5 million, respectively.

In August 2021, the Company entered into a contract with the Zona Franca Coyol, S.A., or ZFC, to begin construction of a new manufacturing facility in in the Coyol Free Zone, or the CFZ, in Costa Rica. The costs for improvement of the land and construction of a cold shell building were being paid for by ZFC while the Company was paying for internal improvements and customization. In 2022, the Company exercised its option to purchase the title to the land and cold shell building for approximately $12.6 million. The construction for this facility was completed in June 2024. The Company also has the option to buy an adjacent lot of land for approximately $2.8 million and engage ZFC to construct an additional manufacturing facility.

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ESTABLISHMENT LABS HOLDINGS, INC.

Notes to Consolidated Financial Statements

For the Years Ended December 31, 2024, 2023 and 2022

Accrued Liabilities

Accrued liabilities consisted of the following:

December 31,

ESTA US Equity

ESTA · 10-K · period ended 2024-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES

ITEM 9B. OTHER INFORMATION

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

ITEM 16. FORM 10-K SUMMARY

ESTA US Equity☆

ESTA · 10-K · period ended 2024-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES

ITEM 9B. OTHER INFORMATION

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES

ITEM 16. FORM 10-K SUMMARY

ESTA US Equity