美國
證券交易委員會
華盛頓，直流電 20549
表格
（標記一）
截至季度末
或者
委員會文件號
（按其章程規定的確切註冊人名稱）
（註冊或組織的）提起訴訟的州或其他司法管轄區（如適用） 組建國的駐地 |
（IRS僱主 唯一識別號碼） |
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主要執行辦公室地址 |
(郵政編碼) |
(
(註冊人電話號碼，包括區號)
不適用
（前名稱、地址及財政年度，如果自上次報告以來有更改）
在法案第12(b)條的規定下注冊的證券：
每一類的名稱 |
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交易標誌 |
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在其上註冊的交易所的名稱 |
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請用勾號勾選以下內容：（1）在過去的12個月內（或者c註冊人所需要提交此類報告的更短期限內），c註冊人已經提交了根據1934年證券交易法第13或第15（d）條規定需要提交的全部報告；和（2）c註冊人在過去的90天內一直需要遵守此類提交要求。
請勾選一個框，表示在過去的12個月內（或註冊者要求遞交此類文件的較短期間內），是否已經遞交了根據S-T規則405條和本章232.405條所要求遞交的每個交互式數據文件。
請勾選標記以說明註冊人是大型快速申報人、加速申報人、非加速申報人、較小的報告公司還是新興成長型公司。請查看《交易所法》第120億.2條中「大型快速申報人」、「加速申報人」、「較小的報告公司」和「新興成長型公司」的定義。
大型加速報告人 |
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非加速文件提交人 |
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較小的報告公司 |
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新興成長公司 |
如果是新興成長公司，請勾選選擇不使用交易所法案第13條規定的任何新的或修訂財務會計準則的延遲過渡期，以符合規定。 ☐
在選項前打勾，表示註冊者是否爲外殼公司（按照《交易法》第12b-2條的定義）。是☐ 沒有
截至2024年11月5日，申報人的A類普通股流通股數量爲 461.4 百萬
Organogenesis控股公司
10-Q 表季度報告
截至2024年9月30日季度期末
目錄f 內容
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4 |
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項目 1。 |
4 |
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項目2。 |
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項目3。 |
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項目4。 |
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項目 1。 |
30 |
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項目1A |
30 |
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項目2。 |
30 |
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項目3。 |
30 |
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項目4。 |
30 |
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項目5。 |
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項目6。 |
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2
關於前瞻性聲明的注意事項
本季度的10-Q表格（以下簡稱「10-Q表格」）包含前瞻性陳述。這些陳述可能涉及但不限於我們未來業績預期、業務戰略和運營、融資計劃、潛在增長機會、產品候選藥物的臨床開發和商業化、潛在市場機會以及競爭影響，以及與前述有關的假設。前瞻性陳述在本質上受到風險和不確定性的影響，其中有些無法預測或量化。這些風險和其他因素包括但不限於「風險因素」下列出的那些。在某些情況下，您可以根據「可能」、「將」、「應當」、「可能」、「期望」、「計劃」、「預期」、「相信」、「估計」、「預測」、「打算」、「潛在」、「可能」、「將」、「持續」或這些術語的負面形式或其他類似術語確定前瞻性陳述。這些前瞻性陳述基於我們管理層對我們的業務和我們所處行業的預期、估計、預測和投影以及我們管理層的信念和假設。這些前瞻性陳述並非對未來業績或發展的擔保，涉及已知和未知風險、不確定性和在某些情況下超出我們控制範圍的其他因素。因此，本10-Q表格中我們的任何或所有前瞻性陳述可能被證明不準確。可能導致實際結果與當前預期有實質差異的因素包括但不限於在本10-Q表格中列出的「風險因素」和其他地方討論的因素，以及我們截至2023年12月31日年度10-K表格的「第I部分，項目1A—風險因素」中列出的內容。這些前瞻性陳述僅適用於本10-Q表格的日期。除非法律要求，我們不承擔因任何原因更新或修訂這些前瞻性陳述的義務，即使未來出現新信息。但您應該定期審查我們將在本10-Q表格日期之後向美國證券交易委員會（以下簡稱「SEC」）提交的報告中描述的因素和風險。
在本協議中，除非上下文另有指明，提到的「我們」、「我們」、「我們的」、「公司」、「Organogenesis」和「ORGO」將指Organogenesis Holdings Inc.及其子公司。
3
第一部分—財政財務信息
項目1。未經審計的簡明綜合財務報表。綜合財務報表。
器官發育控股有限公司。
壓縮的合併資產負債表蘭斯表格
(未經審計)
(除股本和每股數據外，金額以千歐元計)
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9月30日, |
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12月31日, |
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2024 |
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2023 |
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資產 |
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流動資產： |
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現金及現金等價物 |
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$ |
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$ |
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限制性現金 |
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應收賬款淨額 |
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淨存貨 |
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預付費用和其他流動資產 |
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總流動資產 |
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資產和設備，淨值 |
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無形資產, 淨額 |
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商譽 |
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經營租賃使用權資產，淨值 |
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遞延所得稅資產淨額 |
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其他 |
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總資產 |
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$ |
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$ |
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負債和股東權益 |
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流動負債: |
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長期貸款的流動部分 |
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$ |
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$ |
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融資租賃負債的流動部分 |
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相關方的經營租賃義務的流動部分 |
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經營租賃償還的當前部分 |
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應付賬款 |
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應計費用及其他流動負債 |
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流動負債合計 |
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長期貸款（扣除流動資產） |
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融資租賃負債，扣除流動部分淨額 |
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Operating lease obligations, net of current portion - related party |
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運營租賃義務，減去流動部分 |
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其他負債 |
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負債合計 |
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(注15) |
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股東權益: |
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優先股，$0.0001 |
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普通股，每股面值爲 $0.0001； |
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額外實收資本 |
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累積赤字 |
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股東權益總額 |
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負債和股東權益總額 |
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$ |
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$ |
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附註是這些未經審計的簡明綜合財務報表的組成部分。
4
器官發育控股有限公司。
綜合損益及業績表的壓縮合並報表經營和綜合收益（損失）附註
(未經審計)
(除股本和每股數據外，金額以千歐元計)
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截至三個月 |
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九個月結束 |
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2024 |
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2023 |
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2024 |
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2023 |
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淨收入 |
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$ |
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$ |
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$ |
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$ |
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營業成本 |
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毛利潤 |
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營業費用： |
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銷售、一般和管理費用 |
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研發費用 |
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財產和施工減值 |
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— |
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— |
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— |
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資本化內部使用軟件成本減記 |
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— |
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— |
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— |
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總營業費用 |
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營業收支（虧損） |
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其他費用，淨額： |
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利息支出，淨額 |
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( |
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( |
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( |
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其他收入，淨額 |
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其他支出合計，淨值 |
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( |
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( |
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( |
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( |
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稅前淨利潤（虧損） |
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( |
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所得稅效益(費用) |
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( |
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( |
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淨利潤及綜合收益（虧損） |
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$ |
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$ |
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$ |
( |
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$ |
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淨利潤每份股息： |
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基本 |
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$ |
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$ |
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$ |
( |
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$ |
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稀釋 |
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$ |
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$ |
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$ |
( |
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$ |
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加權平均普通股股數 |
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基本 |
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稀釋 |
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隨附的附註是這些未經審計的簡明合併財務報表的組成部分。
5
器官發育控股有限公司。
綜合損益及業績表的壓縮合並報表股東權益變動表
(未經審計)
（金額以千爲單位，除每股數據外）
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額外的 |
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普通股 |
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實繳 |
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累積 |
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總計 |
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股份 |
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金額 |
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資本 |
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赤字 |
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股東權益 |
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2023年12月31日的餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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行使股票期權 |
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— |
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— |
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RSUs歸屬，扣除用於支付稅款的股票 |
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— |
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( |
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— |
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( |
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以股票爲基礎的報酬費用 |
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— |
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— |
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— |
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淨損失 |
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— |
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— |
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— |
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( |
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( |
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2024年3月31日的餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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RSU的取得，減去用於支付稅款的股份 |
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— |
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( |
) |
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— |
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( |
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股權激勵支出 |
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— |
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— |
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— |
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淨損失 |
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— |
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— |
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— |
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( |
) |
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( |
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2024年6月30日的餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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行使期權 |
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— |
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— |
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RSU的取得，減去用於支付稅款的股份 |
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— |
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( |
) |
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— |
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( |
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股權激勵支出 |
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— |
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— |
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— |
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淨利潤 |
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— |
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— |
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— |
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2024年9月30日餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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額外的 |
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普通股 |
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實繳 |
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累積 |
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總計 |
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股份 |
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金額 |
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資本 |
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赤字 |
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股東權益 |
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截至2022年12月31日的餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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採用後的累積效應調整，稅後（附註2） ，稅後（附註2） |
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— |
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— |
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— |
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( |
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( |
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RSU歸屬釋股，稅後淨股數用於支付稅款 |
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— |
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( |
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— |
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( |
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以股票爲基礎的報酬費用 |
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— |
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— |
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— |
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淨損失 |
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— |
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— |
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— |
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( |
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( |
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截至2023年3月31日的餘額 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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RSUs歸屬，減去用於支付稅款的股票 |
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— |
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( |
) |
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— |
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( |
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股票報酬支出 |
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— |
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— |
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— |
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淨利潤 |
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— |
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— |
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— |
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截至2023年6月30日的餘額 |
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$ |
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$ |
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$ |
( |
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$ |
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RSUs歸屬，減去用於支付稅款的股票 |
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— |
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( |
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— |
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( |
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股票報酬支出 |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
淨利潤 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
截至2023年9月30日的餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
附註是這些未經審計的簡明綜合財務報表的組成部分。
6
器官發育控股有限公司。
綜合收益的壓縮綜合財務狀況表現金流量表
（未經審計，以千爲單位）
|
|
九個月結束 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
經營活動現金流量： |
|
|
|
|
|
|
||
淨利潤（損失） |
|
$ |
( |
) |
|
$ |
|
|
調整淨利潤(虧損)和經營活動提供的現金: |
|
|
|
|
|
|
||
折舊和攤銷 |
|
|
|
|
|
|
||
無形資產攤銷 |
|
|
|
|
|
|
||
減值後的使用權資產 |
|
|
|
|
|
|
||
非現金利息費用 |
|
|
|
|
|
|
||
遞延利息支出 |
|
|
|
|
|
|
||
爲信貸損失計提的準備金 |
|
|
|
|
|
|
||
遞延所得稅收益 |
|
|
( |
) |
|
|
|
|
處置固定資產和設備的損失 |
|
|
|
|
|
|
||
調整過剩和過時庫存 |
|
|
|
|
|
|
||
股權補償 |
|
|
|
|
|
|
||
房地產和施工的減值（附註6） |
|
|
|
|
|
|
||
記錄資本化內部使用的軟件成本（注6） |
|
|
|
|
|
|
||
經營性資產和負債變動: |
|
|
|
|
|
|
||
應收賬款 |
|
|
( |
) |
|
|
( |
) |
存貨 |
|
|
( |
) |
|
|
( |
) |
預付費用和其他流動資產及其他資產 |
|
|
( |
) |
|
|
( |
) |
經營租賃 |
|
|
( |
) |
|
|
( |
) |
應付賬款 |
|
|
( |
) |
|
|
( |
) |
應計費用及其他流動負債 |
|
|
|
|
|
|
||
其他負債 |
|
|
|
|
|
|
||
經營活動提供的淨現金 |
|
|
|
|
|
|
||
投資活動現金流量： |
|
|
|
|
|
|
||
購買固定資產 |
|
|
( |
) |
|
|
( |
) |
投資活動產生的淨現金流出 |
|
|
( |
) |
|
|
( |
) |
籌集資金的現金流量： |
|
|
|
|
|
|
||
2021年信貸協議下的分期貸款支付 |
|
|
( |
) |
|
|
( |
) |
償還融資租賃債務本金 |
|
|
( |
) |
|
|
( |
) |
與 RSUs 確權相關的預扣稅款支付 |
|
|
( |
) |
|
|
( |
) |
行使期權所得款項 |
|
|
|
|
|
|
||
籌集資金淨額 |
|
|
( |
) |
|
|
( |
) |
現金、現金等價物和受限制的現金的變動 |
|
|
( |
) |
|
|
( |
) |
期初現金、現金等價物和受限制的現金 |
|
|
|
|
|
|
||
期末現金、現金等價物及受限制的現金 |
|
$ |
|
|
$ |
|
||
現金流量補充披露： |
|
|
|
|
|
|
||
支付的利息現金 |
|
$ |
|
|
$ |
|
||
支付的所得稅費用 |
|
$ |
|
|
$ |
|
||
非現金投資和籌資活動的補充披露: |
|
|
|
|
|
|
||
採納ASU No. 2016-13的累積效應調整 |
|
$ |
|
|
$ |
|
||
包括在應付賬款、應計費用和其他流動負債中的財產和設備採購變化 |
|
$ |
( |
) |
|
$ |
|
|
通過營運租賃義務獲得的租賃資產 |
|
$ |
|
|
$ |
|
||
附註是這些未經審計的簡本合併基本報表的一部分。
7
器官發育控股有限公司。
未經審計的簡明綜合附註經審計的財務報表
(除股本和每股數據外，金額以千歐元計)
1.業務性質和基礎：
Organogenesis Holdings Inc.（ORGO或公司）是一家領先的再生醫學公司，專注於開發、製造和商業化先進傷口護理和外科以及體育醫學市場的解決方案。該公司投資組合中的一些現有和正在研發的產品已獲得美國食品和藥物管理局（FDA）的Premarket批准或Premarket通知510(k)清關。該公司的客戶包括醫院、傷口護理中心、政府機構、門診手術中心（ASCs）和醫生辦公室。該公司有
未經審計的中期財務信息
附帶的未經審計的簡明合併基本財務報表已由管理層根據美國通用會計準則（GAAP）編制，根據證券交易委員會（SEC）的規則和法規編制了中期財務報表。根據這些規則和法規，通常包括在根據GAAP編制的財務報表中的某些信息和腳註披露已被壓縮或省略。然而，該公司認爲這些披露足以使所呈現的信息不會誤導。這些未經審計的簡明合併財務報表應與截至2023年12月31日的年度報告的已審計合併財務報表和註釋一起閱讀，該報告包含於公司2023年12月31日結束的財政年度的Form 10-k年度報告，該年度報告於2024年2月29日向SEC提交（年度報告）。 截至2024年9月30日的九個月的結果並不一定代表2024年12月31日結束的年度，也不代表任何其他中期期間或未來的年度或期間。或任何未來的年度或期間。
2.重要會計政策摘要
關於公司的重大會計政策已在截至2023年12月31日的公司經過審計的合併財務報表以及相關附註中進行了描述，這些內容包含在年度報告中。除下文詳細說明的內容外，公司以前披露在年度報告中的重大會計政策未發生重大變化。
這些未經審計的簡明合併財務報表包括Organogenesis Holdings Inc.及其全資子公司Organogenesis Inc.、Organogenesis GmbH（一家瑞士公司）和Prime Merger Sub, LLC的賬目和業務結果。所有公司間的餘額和交易在合併時已予以消除。
不時有金融會計準則委員會（FASB）或其他標準制定機構發佈新的會計準則，公司將在特定的生效日期採納這些準則。除非在下文另有討論，公司認爲最近發佈的準則的採納對其簡明合併財務報表或披露並未造成或可能造成重大影響。
非經常性非金融資產的公允價值衡量
在必要時，公司估計公允價值以進行長期資產組的減值測試。在這種情況下，用於確定公允價值的方法主要基於貼現現金流量模型，並且用於這些模型的輸入被歸類爲公允價值層次結構的第3層。如果受損，這些資產或資產組將按照公允價值進行計量並記錄在附表中的未經審計的簡明合併財務報表中。
使用估計
按照GAAP的規定編制財務報表要求管理層作出影響資產和負債的報告金額以及期末報表日期和報告期間的業務結果的估計和假設。在編制簡明合併財務報表時，管理層認爲最重要且存在最大不確定性的估計和假設包括：營業收入確認；銷售退貨和信用損失；存貨準備；應收和遞延所得稅資產和負債的確認和計量；對長期資產的回收性評估，包括減值和減記；以及 股票補償的估值和確認。實際結果和後果可能與這些估計和假設顯著不同。
8
信貸風險集中
潛在有關公司承擔信貸風險集中的財務工具包括現金及現金等價物。公司將其現金等價物投資於信譽極高的貨幣市場基金中。存款可能超過聯邦保險限額，若發生金融機構違約導致帳戶餘額超過聯邦存款保險公司（FDIC）承保金額，則公司將面臨存款信貸風險。然而，公司每日隔夜清理現金並在各金融機構間分散投資，以減少此類風險。
最近發佈的未採納會計準則
2023年11月，FASB發佈了ASU 2023-07，分部報告（主題 280）：報告服務部門（主題 280）變更披露方式，通過升級對意義重大的分部費用的披露來改進分部報告披露要求。該準則適用於 2023 年 12 月 15 日之後的財年和 2024 年 12 月 15 日之後的財年間隔期。該準則必須適用於財務報表中呈現的所有期間的追溯。該公司目前正在評估該標準對合並財務報表的影響。，要求公共實體在中期和年度基礎上公開報告的各報告單元、重大費用和其他分部項目信息。具有單個報告單元的公共實體被要求遵守ASU 2023-07中的披露要求，以及ASC 280中的所有現有分部披露和協調要求。 ASU 2023-07在2023年12月15日後的財政年度開始生效，對2024年12月15日後的財政年度內的中期時段也適用，允許提前採納。公司目前正在評估採用ASU 2023-07的影響，並不認爲其對公司的報告和披露產生實質性影響。
2023年12月，FASB發佈了ASU 2023-09，所得稅（主題740）：改進所得稅披露。該標準要求上市的業務實體在每年披露稅率調節表的特定類別，併爲滿足數量門限的調節項目提供其他信息（如果這些調節項目的影響相當於或大於將稅前收入（或損失）與適用的法定所得稅率相乘所得金額的5%）。它還要求所有實體每年披露按聯邦、州和外國稅種分解的所支付的所得稅（扣除退款），以及按所支付的所得稅（扣除退款）在個別司法管轄區分解的金額，當所支付的所得稅（扣除退款）相當於或大於所支付的總所得稅（扣除退款）的5%時。最後，該標準取消了要求所有實體披露未識別稅務負債餘額在未來12個月內合理可能變動範圍的性質和估計，或聲明無法估算範圍的要求。該標準對公司自2026年1月1日開始的年度適用。可以提前採納該標準。該標準應以前瞻性基礎應用。允許追溯適用。公司目前正在評估該標準可能對其財務報表產生的影響。根據ASU 2023-09，公共實體需要披露在有效稅率調解中的特定類別，以及超過定量門檻的調解項目的附加信息。ASU 2023-09還要求所有實體披露按聯邦、州和外國稅收拆分支付的所得稅，以及針對超過所得稅支付總額5%的特定司法管轄區進行進一步細分拆分，包括其他擴展的披露內容。ASU 2023-09將於2024年12月15日之後開始的財政年度生效，允許提前採用。公司目前正在評估採用ASU 2023-09的影響。
無重大影響分類錯誤更正
3. 與客戶的合同收入
公司通過銷售愛文思控股傷口護理和手術以及體育醫學產品來實現營業收入。在公司所有合同中都存在單一履約義務，即公司承諾根據協議中的特定付款和運輸條款向客戶轉移公司的產品。產品營收在客戶取得公司產品的控制權時確認，這在時間點上發生，並且可能是在裝運、手術日期或交付時，取決於合同條件。營收扣除了退貨、折扣和集團採購組織（GPO）返點的準備金，這些減少是按照歷史經驗和特定情況在確認營收時進行的。這些減少是根據歷史經驗和特定情況在確認付款時進行的。在2024年和2023年截至9月30日的三個月和九個月中，公司分別記錄了GPO費用爲 $
下表列出了按產品類別劃分的營業收入 ：
|
|
截至9月30日的三個月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
愛文思控股傷口護理 |
|
$ |
|
|
$ |
|
||
外科及體育醫學 |
|
|
|
|
|
|
||
總淨營業收入 |
|
$ |
|
|
$ |
|
||
9
|
|
截至9月30日的九個月 |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
愛文思控股傷口護理 |
|
$ |
|
|
$ |
|
||
外科與體育醫學 |
|
|
|
|
|
|
||
總淨營業收入 |
|
$ |
|
|
$ |
|
||
4。應收賬款，淨額
賬目收款ble 由以下內容組成：
|
|
九月三十日 |
|
|
十二月 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
應收賬款 |
|
$ |
|
|
$ |
|
||
減去——信貸損失備抵金 |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
該公司的信貸損失備抵金包括以下內容：
|
|
三個月已結束 |
|
|
九個月已結束 |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
期初餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
採用亞利桑那州立大學的累積效應 2016-13 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
預期信貸損失準備金 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
註銷 |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
期末餘額 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
5. 存貨
存貨，減去相應的超額和過時準備 如下：
|
|
September 30, |
|
|
12月31日, |
|
||
|
|
2024 |
|
|
2023 |
|
||
原材料 |
|
$ |
|
|
$ |
|
||
在製品 |
|
|
|
|
|
|
||
成品 |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
10
6。財產和設備，淨額
財產和設備nt 由以下內容組成：
|
|
九月三十日 |
|
|
十二月 31, |
|
||
|
|
2024 |
|
|
2023 |
|
||
建築物和租賃權改進 |
|
$ |
|
|
$ |
|
||
內部使用軟件 |
|
|
|
|
|
|
||
傢俱、計算機和設備 |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
累計折舊和攤銷 |
|
|
( |
) |
|
|
( |
) |
在建工程 |
|
|
|
|
|
|
||
總計 |
|
$ |
|
|
$ |
|
||
折舊和攤銷費用爲 $
在2024年第二季度，公司將其企業資源規劃（ERP）系統的某些模塊投入使用，這些模塊的成本此前已隨着施工進行而資本化，並將在其預期使用壽命內計爲支出，目前估計爲
在2024年第二季度，該公司決定可能出售一座位於公司馬薩諸塞州坎頓校區內的已購建築物，該公司此前曾暫停該建築的施工。該公司認爲，使用該建築物作爲減值指標的預期發生了這種變化。公司確定該資產組由建築物和相關建築組成，並在資產集團層面進行了減值評估。公司通過將資產組的公允價值與其賬面價值進行比較來確定減值費用，並記錄了減值費用爲美元
在2024年第二季度，公司確定上述因素構成了與其剩餘全公司資產組相關的減值觸發因素。該公司根據ASC 360進行了可恢復性測試 不動產、廠房和設備。直接歸屬於該資產集團的估計未貼現現金流超過了其賬面價值，因此，公司沒有記錄與該資產組相關的任何減值。該公司做到了
7.商譽和無形資產
商譽在2024年4月30日和2024年1月31日均爲$
無形資產包括 如下資產 as of 2024年9月30日：
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原始的 |
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累積 |
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淨賬面 |
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成本 |
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攤銷 |
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值 |
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已開發技術 |
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$ |
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$ |
( |
) |
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$ |
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客戶關係 |
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( |
) |
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專利 |
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( |
) |
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獨立銷售代理網絡 |
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( |
) |
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商標與商號 |
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( |
) |
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競業禁止協議 |
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( |
) |
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總計 |
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$ |
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$ |
( |
) |
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$ |
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11
2023年12月31日，無形資產包括以下內容：
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原始的 |
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累積 |
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淨賬面 |
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成本 |
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攤銷 |
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值 |
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已開發技術 |
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$ |
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$ |
( |
) |
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$ |
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||
客戶關係 |
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( |
) |
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專利 |
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( |
) |
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獨立銷售代理機構網絡 |
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( |
) |
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商標與商號 |
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( |
) |
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競業禁止協議 |
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( |
) |
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總計 |
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$ |
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$ |
( |
) |
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$ |
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||
無形資產攤銷，可按直線法或使用加速法計算 $
8. 應計費用及其他流動負債
應計費用和其他流動負債包括 以下內容：
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September 30, |
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12月31日, |
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||
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2024 |
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2023 |
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人員成本 |
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$ |
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$ |
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特許權使用費 |
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應計但未支付的租賃債務利息（附註13） |
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應計的里程碑付款（附註15） |
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應計稅費 |
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其他 |
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總計 |
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$ |
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$ |
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||
9。重組
爲了降低公司的成本結構和提高運營效率，該公司已將其在不同地點的製造業務合併到馬薩諸塞州的工廠。
2023年2月3日，公司承諾實施一項重組員工隊伍的計劃，以提高生產率和盈利能力。裁員使公司的員工人數減少了
由於重組活動是的，公司記錄的稅前調整爲美元
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總計 |
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截至 2023 年 12 月 31 日的負債餘額 |
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$ |
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現金支出和其他調整 |
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( |
) |
截至 2024 年 9 月 30 日的負債餘額 |
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$ |
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12
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僱員 |
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其他 |
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總計 |
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|||
2022年12月31日責任餘額 |
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$ |
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$ |
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$ |
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|||
費用 |
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現金支出和其他調整 |
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( |
) |
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( |
) |
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( |
) |
2023年9月30日責任餘額 |
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$ |
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$ |
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$ |
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10。債務義務
債務包括 以下內容：
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九月三十日 |
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十二月 31, |
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2024 |
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2023 |
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旋轉設施 |
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$ |
— |
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$ |
— |
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定期貸款 |
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減少債務折扣和債務發行成本 |
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( |
) |
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( |
) |
定期貸款，扣除債務折扣和債務發行成本 |
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$ |
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$ |
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2021 年信貸協議
2021 年 8 月，作爲借款人的公司、作爲擔保人的子公司和硅谷銀行 (SVB）及其其他幾家貸款機構（統稱爲貸款人）簽訂了經修訂的信貸協議（2021年信貸協議），規定定期貸款額度不超過美元
根據2021年信貸協議提供的預付款可以是SOFR貸款或ABR貸款，由公司選擇。
2021年信貸協議要求公司連續按季度分期付款，金額等於以下金額：（a）從2021年9月30日起至2022年6月30日（含當日），美元
公司必須在2026年8月6日之前的每個季度的第一天（循環終止日期）和循環終止日拖欠公司未使用可用資金的費用（承諾費）。承諾費率介於
13
公司公司記錄了債務發行成本和相關費用爲$
截至2024年9月30日和2023年12月31日，公司在長期貸款設施下的未償還借款分別爲$
根據2024年9月30日到期的定期貸款工具，截至12月31日結束的日曆年度的未來支付如下： 根據2024年9月30日到期的定期貸款工具，截至12月31日結束的日曆年度的未來支付如下：
2024年（剩餘三個月） |
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2025 |
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2026 |
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總計 |
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$ |
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11. 股東權益和股權報酬
普通股
截至2024年9月30日，已發行的A類普通股包括
公司的2017年股權激勵計劃（2017計劃），於2018年2月修改，允許授予期權、限制股票獎勵、股票增值權和限制股票單位。
2018年11月28日，公司董事會通過了，並於2018年12月10日公司股東批准了Organogenesis 2018股權激勵計劃（2018計劃）。在2018計劃通過時，已獲得授權發行的A類普通股總數爲
Organogenesis 2003股權激勵計劃（2003計劃）規定公司發行限制性股票獎勵，或者授予激勵性股票期權或非法定股票期權。自2018年12月10日起，不得再根據2003計劃進行額外獎勵。
股票補償費用
股票期權授予的股權激勵計劃將於授予日期後年到期
基於股票的薪酬支出是 $
限制性股票獎勵(RSUs)
年發放了
14
限制股份活動其下面所列出的是：
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數字 |
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加權平均 |
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的RSUs |
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授予日期 |
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公允價值 |
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2023年12月31日的未歸屬股份 |
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$ |
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Granted |
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34,105 |
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( |
) |
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取消/放棄 |
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( |
) |
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2024年9月30日前尚未獲授的股份 |
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$ |
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截至2024年9月30日，預計將獲得的未歸屬限制性股票單位相關的總未識別補償成本爲 $
股票期權
以下表格總結了公司自2023年12月31日以來的股票期權活動自2023年12月31日起至今，如下表所示：
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加權的 |
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平均 |
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加權的 |
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剩餘 |
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平均 |
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加權 |
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總計 |
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數量 |
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行權 |
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期限 |
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截至2023年7月29日的餘額 |
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Options |
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價格 |
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（年） |
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值 |
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2023年12月31日持有量 |
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$ |
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$ |
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Granted |
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— |
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— |
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行使 |
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( |
) |
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— |
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已取消/被放棄 |
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( |
) |
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— |
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截至2024年9月30日爲止優秀 |
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$ |
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$ |
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期權可在2024年9月30日行使 |
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$ |
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$ |
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截至2024年9月30日已授予或預計授予的期權 |
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$ |
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$ |
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截至2024年和2023年9月30日結束的九個月期間授予的股票期權是
股票期權的合計內在價值是根據股票期權的行權價格與公司A類普通股的公允價值之間的差額計算的，對於那些行權價格低於公司A類普通股公允價值的股票期權。
2024年和2023年9月30日結束的九個月期間授予的股票期權的加權平均授予日期公允價值每股是 $
截至2024年9月30日，未實現的股票期權相關的總股票補償費用預計將爲 $
12每股收益（EPS）
基本每股收益是通過淨利潤除以期間內未來平均流通股份數來計算的。攤薄後每股收益是通過將淨利潤除以期間內未來平均流通股份數以及任何攤薄效應來計算的。
15
利用庫藏股法評估未列入認可補償費用的未體現收入的優秀股權獎勵。
歸屬於A類普通股股東的基本和攤薄淨利潤（虧損）的計算如下：
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截至9月30日的三個月 |
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截至9月30日的九個月 |
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2024 |
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2023 |
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2024 |
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2023 |
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分子： |
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淨利潤（損失） |
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$ |
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$ |
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$ |
( |
) |
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$ |
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分母： |
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加權平均流通在外普通股數—基本 |
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受限股票單位的發行效應 |
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— |
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期權的攤薄效應 |
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|
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— |
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稀釋後的加權平均普通股份 |
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每股基本淨收益 |
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$ |
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$ |
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$ |
( |
) |
|
$ |
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每股淨收益（攤薄） |
|
$ |
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$ |
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$ |
( |
) |
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$ |
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公司的潛在稀釋證券包括受限制的股票單位和期權，用於購買A類普通股。
13. 租約
公司的租賃主要包括房地產、設備和車輛租賃。
2013年1月1日，公司與65 Dan Road SPE, LLC、85 Dan Road Associates, LLC、Dan Road Equity I, LLC和275 Dan Road SPE, LLC簽訂了融資租賃協議，用於位於馬薩諸塞州坎頓的辦公室和實驗室空間（關聯方租賃）。65 Dan Road SPE, LLC、85 Dan Road Associates, LLC、Dan Road Equity I, LLC和275 Dan Road SPE, LLC是關聯方，因爲這些公司的所有者也是公司的董事、前董事和 / 或股東。
2019年4月1日，公司同意按2019年信貸協議規定的利率逾期支付給其關聯方租賃的房地產以及相關的已計但未支付租賃義務利息。在2024年第一季度，公司同意在整個2024年分期償還剩餘的已計但未支付租賃義務及相應的已計利息。以下顯示了關於三筆關聯方租賃的已計但未支付租賃義務及相關已計利息：
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September 30, |
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12月31日, |
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2024 |
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2023 |
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過去租金本金部分 |
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$ |
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$ |
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已計但未支付租賃義務的已計利息 |
|
$ |
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$ |
|
||
相關方租賃的應計但未支付的租金債務包括在2024年9月30日和2023年12月31日的附表簡明合併資產負債表中的經營租賃債務的流動部分中。應計但未支付的租金債務上應計的利息包括在2024年9月30日的簡明合併資產負債表中的應計費用和其他流動負債中。 和 2023年12月31日。
14. 公允價值衡量
16
2024年第二季度，公司確定一座購買的建築和未完成的施工工作已受損，並記錄了一項$的減值損失。
15.承諾和附帶條件
許可和製造協議
2023年11月，公司與Vivex生物製品公司（Vivex）簽訂了商標許可和製造協議，以銷售其CYGNUS Dual（Dual）和CYGNUS Matrix（Matrix）產品，並有選擇權許可VIA Matrix（VIA）產品。2024年3月，公司行使了許可VIA的選擇權，因此在2024年7月，與商標許可和製造協議的第一項修正協議達成一致（連同原始協議，即Vivex協議）。
公司向Vivex支付了一項預付許可費，以出售Dual和Matrix，並同意在Dual的平均銷售價格（ASP）由某些政府機構公佈的特定時間段內達到時，支付固定的里程碑付款。公司在2024年4月爲VIA支付了選擇權項款。此外，在Vivex協議中定義的版稅期內，公司應按Dual和VIA的淨銷售額支付低兩位數的版稅，分別按Matrix的淨銷售額支付高一位數的版稅。版稅期與合同的初始期限相當，並將繼續每個續約期限。協議的初始期限將於
本公司在2022財年錄得的%s百萬美元商譽減值損失主要源於Nice Talent資產管理有限公司和FTFT Finance UK Limited（即Khyber Money Exchange Ltd.）的收購。商譽減值測試截止於2022年12月31日，比較報告單元（包括商譽）的賬面價值與其公允價值。如果賬面價值超過公允價值，則將報告單元的商譽所隱含的公允價值與商譽的賬面價值進行比較。如果商譽的賬面價值超過了隱含的公允價值，就應該認定一筆商譽減值損失。
特許權使用費
公司與一所大學簽訂了許可協議，涉及其某種先進傷口護理產品的開發、使用和生產相關的專利權。根據該協議，公司針對淨產品銷售額的百分比發生專利權使用費，直至專利權到期，即2006年11月。
2017年10月，公司與第三方簽訂了一份許可協議。根據許可協議，公司需要根據授權產品的淨銷售額支付版稅，這些銷售發生在2017年12月31日後，直到2026年10月基礎專利到期，受最低版稅支付規定約束。
公司在截至2024年和2023年9月30日的三個月和九個月內記錄了總版稅支出 $
法律事項
公司在開展業務時，不時地會涉及各種索賠，並且也對他人提出索賠。管理層認爲，這些索賠的最終解決不會對公司的財務狀況、營運結果或現金流產生重大影響。公司在金額確定是可能並且可估計時爲這些索賠計提準備金。
16. 關聯方交易
對附屬公司的租賃義務，包括應計但尚未支付的租賃義務，與附屬公司的融資租賃買賣，以及與附屬公司續租的詳情請參閱附註13。 租約.
17. 稅收
公司主要受美國稅收法規約束。 公司在聯邦和各個州都有淨營運虧損的歷史，並開始利用這些虧損抵銷2020年的可徵稅所得。 隨着淨經營虧損的結轉被限制或完全利用，公司將計提當前聯邦和州所得稅費用。 公司的獨資子公司Organogenesis GmbH受到瑞士稅收管轄，並與其美國母公司Organogenesis Inc.簽訂了轉讓定價安排。
17
截至2024年9月30日的九個月的所得稅稅率爲 (
18。後續事件
訂閱協議和指定證書
2024年11月12日，公司與Avista Healthcare Partners III, L.P.（Avista Onshore）和AHP III Orchestra Holdings, L.P.（以及Avista Onshore、投資者和每位投資者）簽訂了認購協議（認購協議），投資者據此購買了該協議
根據A系列可轉換優先股指定證書（指定證書），每股可轉換優先股最初可轉換爲
在公司按照納斯達克上市規則的規定獲得股東批准之前，投資者不能將可轉換優先股轉換爲超過此類規則規定的限制的A類普通股，可轉換優先股的持有人（優先股持有人），否則投資者不能將可轉換優先股轉換爲超過此類規則規定的數量的普通股
可轉換優先股受某些轉讓限制，幷包含有關反稀釋、清算優先權和優先權的條款，其持有人將在轉換後與A類普通股一起投票。可轉換優先股可在2031年11月12日之後的任何時候由優先股持有人選擇贖回，如果公司普通股的收盤價等於或超過，則可在發行兩週年後由公司期權兌換
回購協議
2024年11月12日，公司與某些現有股東（包括公司的某些董事和關聯公司）簽訂了股票回購協議，根據該協議，公司將以收購價從賣出股東手中回購普通股
18
Third Amendment to Credit Agreement
On November 12, 2024, in connection with the Offering, the Company entered into a Third Amendment to the 2021 Credit Agreement (Third Amendment). The Third Amendment updated certain covenants in the Credit Agreement to permit the issuance of the Convertible Preferred Stock in connection with the Offering, the payment of dividends on such Convertible Preferred Stock, and the Repurchase.
The Third Amendment also provides that, in connection with the Offering, the Company is required to pay in full the outstanding principal amount of the term loan outstanding under the Term Loan Facility within one business day following the issuance of the Convertible Preferred Stock.
19
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our financial statements and accompanying notes included in this Form 10-Q and the financial statements and accompanying notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC, on February 29, 2024. Please refer to our cautionary note regarding forward-looking statements on page 3 of this Form 10-Q, which is incorporated herein by this reference.
Overview
We are a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the Advanced Wound Care and Surgical & Sports Medicine markets. Our products have been shown through clinical and scientific studies to support and in some cases accelerate tissue healing and improve patient outcomes. We are advancing the standard of care in each phase of the healing process through multiple breakthroughs in tissue engineering and cell therapy. Our solutions address large and growing markets driven by aging demographics and increases in comorbidities such as diabetes, obesity, and cardiovascular and peripheral vascular disease. We offer our differentiated products and in-house customer support to a wide range of health care customers including hospitals, wound care centers, government facilities, ambulatory surgery centers (ASCs) and physician offices. Our mission is to provide integrated healing solutions that substantially improve medical outcomes and the lives of patients while lowering the overall cost of care.
We offer a comprehensive portfolio of products in the markets we serve that address patient needs across the continuum of care. We have and intend to continue to generate data from clinical trials, real-world outcomes and health economics research that validate the clinical efficacy and value proposition offered by our products. Several of our existing and pipeline products in our portfolio have PMA approval, or 510(k) clearance from the FDA. Given the extensive time and cost required to conduct clinical trials and receive FDA approvals, we believe that our data and regulatory approvals provide us with a strong competitive advantage. Our product development expertise and multiple technology platforms provide a robust product pipeline, which we believe will drive future growth.
In the Advanced Wound Care market, we focus on the development and commercialization of advanced wound care products for the treatment of chronic and acute wounds in various treatment settings. We have a comprehensive portfolio of regenerative medicine products, capable of supporting patients from early in the wound healing process through wound closure regardless of wound type. Our Advanced Wound Care products include Apligraf for the treatment of venous leg ulcers (VLUs) and diabetic foot ulcers (DFUs); Dermagraft for the treatment of DFUs (manufacturing and distribution currently suspended pending transition to a new manufacturing facility or engagement of a third-party manufacturer); PuraPly AM and PuraPly XT as antimicrobial barriers and native, cross-linked extracellular matrix (ECM) scaffolds for a broad variety of wound types; and Affinity, Novachor, NuShield, and CYGNUS placental allografts to address a variety of wound sizes and types as a protective barrier and ECM scaffold. We have a highly trained and specialized direct wound care sales force paired with comprehensive customer support services.
In the Surgical & Sports Medicine market, we are leveraging our broad regenerative medicine capabilities to address chronic and acute surgical wounds and tendon and ligament injuries. Our Sports Medicine products include NuShield for surgical applications in targeted soft tissue repairs; and Affinity, Novachor, PuraPly AM, PuraPly MZ, and PuraPly SX for management of open wounds in the surgical setting. We currently sell these products through independent agencies and our direct sales force.
In May 2024, we announced that our Phase 3 randomized control trial (RCT) evaluating the safety and efficacy of ReNu, a cryopreserved amniotic suspension allograft (ASA) for the management of symptoms associated with knee osteoarthritis (OA), achieved its primary endpoint upon the analysis of positive top line data. Specifically, as previously announced, the first Phase 3 RCT achieved the pre-defined requirements - statistically significant reduction in knee pain (p=0.0177) and statistically significant maintenance of function (p<0.0001), at six months.
We completed a Type-B meeting with the FDA on July 25, 2024. The FDA typically requires two well-controlled Phase 3 clinical trials to support regulatory approval. The FDA indicated that a second Phase 3 study would be needed to support biologics license application (BLA) submission. We recently completed enrollment in the second Phase 3 multi-center RCT evaluating the safety and efficacy of ReNu with 594 patients, outperforming enrollment expectations. We expect to receive the outcome of the pre-specified interim analysis of the first 50% of the required patients by the end of November, and are still on track to submit the BLA by the end of 2025.
Dermagraft
As previously disclosed, we have not manufactured or sold Dermagraft since 2022. During this time, we have successfully leveraged our highly differentiated broad cellular and tissue-based products (CTPs), including Apligraf and Affinity, as substitutes for Dermagraft. Accordingly, the suspension of Dermagraft sales has not had a material impact on our net revenue. We currently plan to transition our Dermagraft manufacturing to a new facility, which we expect will result in substantial long-term cost savings. If we do
20
not realize these expected substantial long-term cost savings or if recommencement of manufacture and sale of Dermagraft is significantly delayed, our net revenue and results of operations could be adversely impacted.
Local Coverage Determinations
In August 2023, three Medicare Administrative Contractors (MACs) issued local coverage determinations (LCDs) eliminating coverage for DFUs and VLUs for over 130 products, including five of our commercially marketed products. The LCDs were scheduled to take effect on September 17, 2023, and subsequently delayed to October 1, 2023. Given the potential adverse impact these LCDs could have on patients and on our business, we worked with our advisors to convince the MACs to withdraw the LCDs and incurred legal expenses and compensation expenses related to retention for impacted sales employees. On September 28, 2023, the three MACs withdrew the LCDs. Notwithstanding the ultimate withdrawal of the LCDs, we believe that some of our customers elected to purchase covered products from our competitors, reducing our revenue for the third and fourth quarters of the year ended December 31, 2023.
On April 25, 2024, seven MACs published proposed LCDs for skin substitute grafts/CTPs for the treatment of DFUs and VLUs in the Medicare population, that propose to cover three of our products, and to non-cover five of our commercially marketed product lines. We have engaged with the MACs, reiterated our support of the evidence-based approach reflected in the draft LCDs and requested that the final LCD include certain of our products for which we have provided clinical evidence, demonstrating their efficacy for the treatment of DFUs and VLUs, as covered products. There is no guarantee that the MACs will agree to cover these products in the final LCDs.
License And Manufacturing Agreement
In November 2023, we entered into a trademark license and manufacturing agreement with Vivex Biologics, Inc. (Vivex) to sell its CYGNUS Dual (Dual) and CYGNUS Matrix (Matrix) products, with the option to license the VIA Matrix (VIA) products. In March 2024, we exercised the option to license VIA, and accordingly in July 2024, entered into the first amendment to the trademark license and manufacturing agreement (together with the original agreement, the Vivex Agreement).
We paid an upfront licensing fee to Vivex to sell Dual and Matrix, and also agreed to pay a fixed milestone payment for Dual in the event that its average sales price (ASP) is published by certain government agencies for a specified period of time. We remitted the option payment for VIA in April 2024. Additionally, we are required to pay a low double-digit royalty on the Net Sales of Dual and VIA, and a high single-digit royalty on the Net Sales of Matrix, respectively, during the royalty term, as defined in the Vivex Agreement. The royalty term is commensurate with the initial term of the contract and will continue for each subsequent renewal period. The initial term of the agreement expires on December 31, 2026 and can be renewed for up to five additional one-year terms.
Components of Our Condensed Consolidated Results of Operations
In assessing the performance of our business, we consider a variety of performance and financial measures. We believe the items discussed below provide insight into the factors that affect these key measures.
Revenue
We derive our net revenue from our portfolio of Advanced Wound Care and Surgical & Sports Medicine products. We primarily sell our Advanced Wound Care products through direct sales representatives who manage and maintain the sales relationships with hospitals, wound care centers, government facilities, ASCs and physician offices. We primarily sell our Surgical & Sports Medicine products through third party agencies. As of September 30, 2024, we had approximately 262 direct sales representatives and approximately 161 independent agencies.
We recognize revenue from sales of our Advanced Wound Care and Surgical & Sports Medicine products when the customer obtains control of our product, which occurs at a point in time and may be upon procedure date, shipment, or delivery, based on the contractual terms of a contract. We record revenue net of a reserve for returns, discounts and Group Purchasing Organization (GPO) rebates, which represent a direct reduction to the revenue we recognize.
Several factors affect our reported revenue in any period, including product, payer and geographic sales mix, operational effectiveness, pricing realization, marketing and promotional efforts, the timing of orders and shipments, regulatory actions including healthcare reimbursement scenarios, competition and business acquisitions.
Cost of goods sold and gross profit
Cost of goods sold includes personnel costs, product testing costs, quality assurance costs, raw materials and product costs, manufacturing costs, and the costs associated with our manufacturing and warehouse facilities. The changes in our cost of goods sold correspond with the changes in sales units and are also affected by product mix.
21
Gross profit is calculated as net revenue less cost of goods sold and generally increases as revenue increases. Our gross profit is affected by product and geographic sales mix, realized pricing of our products, the efficiency of our manufacturing operations, and the costs of materials used and fees charged by third-party manufacturers to produce our products. Regulatory actions, including healthcare reimbursement scenarios, which may require costly expenditures or result in pricing pressures, may decrease our gross profit.
Selling, general and administrative expenses
Selling, general and administrative expenses generally include personnel costs for sales, marketing, sales support, customer support, and general and administrative personnel, sales commissions, incentive compensation, insurance, professional fees, depreciation, amortization, bad debt expense, royalties, information systems costs, gain or loss on disposal of long-lived assets, and costs associated with our administrative facilities. We generally expect our selling, general and administrative expenses to continue to increase due to increased investments in market development and the geographic expansion of our sales forces as we drive for continued revenue growth.
Research and development expenses
Research and development expenses include expenses for clinical trials, personnel costs for our research and development personnel, expenses related to improvements in our manufacturing processes, enhancements to our currently available products, and additional investments in our product and platform development pipeline. We expense research and development costs as incurred. We generally expect that research and development expenses will increase as we continue to conduct clinical trials on new and existing products, move products through the regulatory pathway (e.g., seek biologics license application approval), add personnel to support product enhancements as well as to bring new products to market, and enhance our manufacturing process and procedures.
Impairment and write down expenses
Impairment of property and construction relates to the potential sale of one of our buildings located on our Canton, Massachusetts campus and consists of the building and associated unfinished construction costs. Write down of capitalized internal-use software costs consists of the development costs for certain modules of our ERP system that were determined to have no future value.
Other expense, net
Other expense, net consists primarily of interest expense, which is interest on our outstanding indebtedness, including amortization of debt discount and debt issuance costs, net of interest income recognized.
Income taxes
We account for income taxes using an asset and liability approach. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided when necessary to reduce net deferred tax assets to an amount that is more likely than not to be realized.
In determining whether a valuation allowance for deferred tax assets is necessary, we analyze both positive and negative evidence related to the realization of deferred tax assets including projected future taxable income, recent financial results and estimates of future reversals of deferred tax assets and liabilities. We expect to realize the benefit of our federal and state deferred tax assets, and accordingly have not recorded a valuation allowance for these deferred tax assets as of September 30, 2024 or December 31, 2023.
We account for uncertainty in income taxes recognized in the condensed consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.
22
Results of Operations
The following table sets forth, for the periods indicated, our results of operations:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Net revenue |
|
$ |
115,177 |
|
|
$ |
108,531 |
|
|
$ |
355,387 |
|
|
$ |
333,489 |
|
Cost of goods sold |
|
|
26,796 |
|
|
|
25,789 |
|
|
|
84,690 |
|
|
|
78,712 |
|
Gross profit |
|
|
88,381 |
|
|
|
82,742 |
|
|
|
270,697 |
|
|
|
254,777 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative |
|
|
71,795 |
|
|
|
64,222 |
|
|
|
220,657 |
|
|
|
208,373 |
|
Research and development |
|
|
10,344 |
|
|
|
10,470 |
|
|
|
38,741 |
|
|
|
32,610 |
|
Impairment of property and construction |
|
|
— |
|
|
|
— |
|
|
|
18,842 |
|
|
|
— |
|
Write down of capitalized internal-use software costs |
|
|
— |
|
|
|
— |
|
|
|
3,959 |
|
|
|
— |
|
Total operating expenses |
|
|
82,139 |
|
|
|
74,692 |
|
|
|
282,199 |
|
|
|
240,983 |
|
Income (loss) from operations |
|
|
6,242 |
|
|
|
8,050 |
|
|
|
(11,502 |
) |
|
|
13,794 |
|
Other expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
|
(471 |
) |
|
|
(444 |
) |
|
|
(1,605 |
) |
|
|
(1,688 |
) |
Other income, net |
|
|
52 |
|
|
|
31 |
|
|
|
47 |
|
|
|
82 |
|
Total other expense, net |
|
|
(419 |
) |
|
|
(413 |
) |
|
|
(1,558 |
) |
|
|
(1,606 |
) |
Net income (loss) before income taxes |
|
|
5,823 |
|
|
|
7,637 |
|
|
|
(13,060 |
) |
|
|
12,188 |
|
Income tax benefit (expense) |
|
|
6,508 |
|
|
|
(4,470 |
) |
|
|
6,248 |
|
|
|
(6,675 |
) |
Net income (loss) and comprehensive income (loss) |
|
$ |
12,331 |
|
|
$ |
3,167 |
|
|
$ |
(6,812 |
) |
|
$ |
5,513 |
|
EBITDA and Adjusted EBITDA
Our management uses financial measures that are not in accordance with generally accepted accounting principles in the United States (non-GAAP), in addition to financial measures in accordance with generally accepted accounting principles in the United States (GAAP) to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Our management uses Adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.
The following is a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP Adjusted EBITDA for each of the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Net income (loss) |
|
$ |
12,331 |
|
|
$ |
3,167 |
|
|
$ |
(6,812 |
) |
|
$ |
5,513 |
|
Interest expense, net |
|
|
471 |
|
|
|
444 |
|
|
|
1,605 |
|
|
|
1,688 |
|
Income tax benefit (expense) |
|
|
(6,508 |
) |
|
|
4,470 |
|
|
|
(6,248 |
) |
|
|
6,675 |
|
Depreciation and amortization |
|
|
3,570 |
|
|
|
2,544 |
|
|
|
10,008 |
|
|
|
7,466 |
|
Amortization of intangible assets |
|
|
834 |
|
|
|
1,229 |
|
|
|
2,569 |
|
|
|
3,688 |
|
EBITDA |
|
|
10,698 |
|
|
|
11,854 |
|
|
|
1,122 |
|
|
|
25,030 |
|
Stock-based compensation expense |
|
|
2,712 |
|
|
|
2,417 |
|
|
|
7,687 |
|
|
|
6,630 |
|
Restructuring charge (1) |
|
|
— |
|
|
|
95 |
|
|
|
— |
|
|
|
1,878 |
|
Legal fees (2) |
|
|
— |
|
|
|
1,182 |
|
|
|
— |
|
|
|
1,182 |
|
Sales retention (3) |
|
|
— |
|
|
|
422 |
|
|
|
— |
|
|
|
422 |
|
Impairment of building and improvements (4) |
|
|
— |
|
|
|
— |
|
|
|
18,842 |
|
|
|
— |
|
Write-down of capitalized software costs (5) |
|
|
— |
|
|
|
— |
|
|
|
3,959 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
13,410 |
|
|
$ |
15,970 |
|
|
$ |
31,610 |
|
|
$ |
35,142 |
|
23
Comparison of Three and Nine Months Ended September 30, 2024 and 2023
Revenue
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Advanced Wound Care |
|
$ |
107,953 |
|
|
$ |
101,357 |
|
|
$ |
6,596 |
|
|
|
7 |
% |
Surgical & Sports Medicine |
|
|
7,224 |
|
|
|
7,174 |
|
|
|
50 |
|
|
|
1 |
% |
Net revenue |
|
$ |
115,177 |
|
|
$ |
108,531 |
|
|
$ |
6,646 |
|
|
|
6 |
% |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Advanced Wound Care |
|
$ |
335,054 |
|
|
$ |
312,349 |
|
|
$ |
22,705 |
|
|
|
7 |
% |
Surgical & Sports Medicine |
|
|
20,333 |
|
|
|
21,140 |
|
|
|
(807 |
) |
|
|
(4 |
%) |
Net revenue |
|
$ |
355,387 |
|
|
$ |
333,489 |
|
|
$ |
21,898 |
|
|
|
7 |
% |
Net revenue from our Advanced Wound Care products increased by $6.6 million, or 7%, to $108.0 million in the three months ended September 30, 2024, from $101.4 million in the three months ended September 30, 2023. Net revenue from our Advanced Wound Care products increased by $22.7 million, or 7%, to $335.1 million in the nine months ended September 30, 2024, from $312.3 million in the nine months ended September 30, 2023. The increase in Advanced Wound Care net revenue was primarily attributable to an increase in product sales of certain of our products to our existing and new customers.
Net revenue from our Surgical & Sports Medicine products remained relatively consistent at $7.2 million in the three months ended September 30, 2024 and in the three months ended September 30, 2023. Net revenue from our Surgical & Sports Medicine products decreased by $0.8 million, or 4% to $20.3 million in the nine months ended September 30, 2024 from $21.1 million in the nine months ended September 30, 2023. The decrease in Surgical & Sports Medicine net revenue was primarily due to a decrease in certain customer buying patterns.
Cost of goods sold and gross profit
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Cost of goods sold |
|
$ |
26,796 |
|
|
$ |
25,789 |
|
|
$ |
1,007 |
|
|
|
4 |
% |
Gross profit |
|
$ |
88,381 |
|
|
$ |
82,742 |
|
|
$ |
5,639 |
|
|
|
7 |
% |
24
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Cost of goods sold |
|
$ |
84,690 |
|
|
$ |
78,712 |
|
|
$ |
5,978 |
|
|
|
8 |
% |
Gross profit |
|
$ |
270,697 |
|
|
$ |
254,777 |
|
|
$ |
15,920 |
|
|
|
6 |
% |
Cost of goods sold increased by $1.0 million, or 4%, to $26.8 million in the three months ended September 30, 2024, from $25.8 million in the three months ended September 30, 2023. Cost of goods sold increased by $6.0 million, or 8%, to $84.7 million in the nine months ended September 30, 2024, from $78.7 million in the nine months ended September 30, 2023. The increase in cost of goods sold was primarily due to an increase in sales volume as well as a shift in product mix.
Gross profit increased by $5.6 million to $88.4 million in the three months ended September 30, 2024 from $82.7 million in the three months ended September 30, 2023. Gross profit increased by $15.9 million to $270.7 million in the nine months ended September 30, 2024 from $254.8 million in the nine months ended September 30, 2023. The increase in gross profit was primarily due to a shift in product mix.
Selling, General and Administrative Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Selling, general and administrative |
|
$ |
71,795 |
|
|
$ |
64,222 |
|
|
$ |
7,573 |
|
|
|
12 |
% |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Selling, general and administrative |
|
$ |
220,657 |
|
|
$ |
208,373 |
|
|
$ |
12,284 |
|
|
|
6 |
% |
Selling, general and administrative expenses increased by $7.6 million, or 12%, to $71.8 million in the three months ended September 30, 2024 from $64.2 million in the three months ended September 30, 2023. The increase in selling, general and administrative expenses was primarily due to an increase in royalty expense of $4.8 million, an increase in travel-related expenses of $1.1 million, an increase in facilities and supplies expense of $1.1 million, and an increase in our allowance for expected credit losses of $0.6 million.
Selling, general and administrative expenses increased by $12.3 million, or 6%, to $220.7 million in the nine months ended September 30, 2024 from $208.4 million in the nine months ended September 30, 2023. The increase in selling, general and administrative expenses was primarily due to an increase in royalty expense of $14.0 million, an increase in our allowance for expected credit losses of $2.5 million, an increase in building and other facilities expenses of $3.8 million, and an increase in consulting expenses of $2.2 million; partially offset by a decrease of $8.1 million in salaries, restructuring, and other headcount-related expenses, and a decrease of $2.1 million in other marketing expenses.
Research and Development Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Research and development |
|
$ |
10,344 |
|
|
$ |
10,470 |
|
|
$ |
(126 |
) |
|
|
(1 |
%) |
25
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Research and development |
|
$ |
38,741 |
|
|
$ |
32,610 |
|
|
$ |
6,131 |
|
|
|
19 |
% |
Research and development expenses decreased by approximately $0.1 million, or 1%, to $10.3 million in the three months ended September 30, 2024 from $10.5 million in the three months ended September 30, 2023. Research and development expenses increased by $6.1 million, or 19%, to $38.7 million in the nine months ended September 30, 2024 from $32.6 million in the nine months ended September 30, 2023. Research and development expenses were generally consistent in the three months ended September 30, 2024 from the three months ended September 30, 2023, and the increase in research and development expenses in the nine months ended September 30, 2024 from the nine months ended September 30, 2023 was primarily due to expenses associated with clinical research and trials, primarily related to ReNu, and support of Biologics License Application (BLA) efforts.
Impairment and Write Down Expenses
During the nine months ended September 30, 2024, we recorded a $4.0 million write down of costs related to internal-use software and an $18.8 million impairment of a purchased building and associated unfinished construction work. There were no such costs recorded in the three months ended September 30, 2024, or in the three and nine months ended September 30, 2023. See Note 6, Property and Equipment, Net, to our condensed consolidated financial statements included in this Quarterly Report.
Income Tax Benefit (Expense)
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Income tax benefit (expense) |
|
$ |
6,508 |
|
|
$ |
(4,470 |
) |
|
$ |
10,978 |
|
|
|
(246 |
%) |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Income tax benefit (expense) |
|
$ |
6,248 |
|
|
$ |
(6,675 |
) |
|
$ |
12,923 |
|
|
|
(194 |
%) |
Income tax expense decreased by $11.0 million, or approximately 246%, to a benefit of $6.5 million in the three months ended September 30, 2024 from expense of $4.5 million in the three months ended September 30, 2023. Income tax expense decreased by $12.9 million, or approximately 194%, to a benefit of $6.2 million in the nine months ended September 30, 2024 from expense of $6.7 million in the nine months ended September 30, 2023. The decrease in the income tax expense is primarily attributable to a lower estimated effective tax rate for the twelve months ended December 31, 2024 due to our research and development tax credits, as well as a reduction in expected pre-tax income in 2024 compared to 2023.
Liquidity and Capital Resources
As of September 30, 2024, we had working capital of $161.2 million, which included $94.3 million in cash and cash equivalents. We also have $125.0 million available for future revolving borrowings under our Revolving Facility (see Note 10, Long-Term Debt Obligations to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q). We expect that our cash on hand and other components of working capital as of September 30, 2024, availability under the 2021 Credit Agreement, proceeds received in connection with our offering of Series A Convertible Preferred Stock, par value $0.0001 per share, which closed on November 12, 2024, plus net cash flows from product sales, will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this quarterly report.
Our primary uses of cash are working capital requirements, capital expenditure and debt service payments. Additionally, from time to time, we may use capital for acquisitions and other investing and financing activities. Working capital is used principally for our personnel as well as manufacturing costs related to the production of our products and research and development costs. Our working capital requirements vary from period to period depending on manufacturing volumes, the timing of shipments and the payment cycles of our customers and payers. Our capital expenditures consist primarily of building improvements, manufacturing equipment, and computer hardware and software.
To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute on our business
26
strategy, we anticipate that they will be obtained through additional equity or debt financings, other strategic transactions or a combination of these potential sources of funds. There can be no assurance that we will be able to obtain additional funds on terms acceptable to us, on a timely basis, or at all.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
|
|
(in thousands) |
|
|||||
Net cash provided by operating activities |
|
$ |
3,271 |
|
|
$ |
20,303 |
|
Net cash used in investing activities |
|
|
(6,671 |
) |
|
|
(21,040 |
) |
Net cash used in financing activities |
|
|
(6,012 |
) |
|
|
(3,728 |
) |
Net change in cash, cash equivalents, and restricted cash |
|
$ |
(9,412 |
) |
|
$ |
(4,465 |
) |
Operating Activities
During the nine months ended September 30, 2024, net cash provided by operating activities was $3.3 million, resulting from our net loss of $6.8 million and net cash used in connection with changes in our operating assets and liabilities of $42.1 million, offset by net non-cash charges of $52.2 million. Changes in our operating assets and liabilities included an increase in accounts receivable of $23.0 million, an increase in inventories of $5.7 million, an increase in prepaid expenses and other current assets and other assets of $4.1 million, a decrease in operating lease liabilities of $9.3 million, and a decrease in accounts payable of $6.0 million, partially offset by an increase in accrued expenses and other current liabilities of $5.9 million, and an increase in other liabilities of $0.1 million.
During the nine months ended September 30, 2023, net cash provided by operating activities was $20.3 million, resulting from our net income of $5.5 million and non-cash charges of $30.2 million, partially offset by net cash used in connection with changes in our operating assets and liabilities of $15.4 million. Net cash used in changes in our operating assets and liabilities included an increase in inventory of $7.5 million, an increase in prepaid expenses and other current assets of $4.5 million, an increase in accounts receivable of $1.8 million, a decrease in operating lease liabilities of $6.3 million, and a decrease in accounts payable of $3.7 million, partially offset by an increase in accrued expenses and other liabilities of $8.2 million.
Investing Activities
During the nine months ended September 30, 2024, we used $6.7 million of cash in investing activities consisting exclusively of capital expenditures.
During the nine months ended September 30, 2023, we used $21.0 million of cash in investing activities consisting exclusively of capital expenditures.
Financing Activities
During the nine months ended September 30, 2024, net cash used in financing activities was $6.0 million. This consisted of the principal payment on our term loan of $4.2 million, principal payments on finance lease obligations of $0.8 million, and net cash payments associated with our stock awards activities of $1.0 million.
During the nine months ended September 30, 2023, net cash used in financing activities was $3.7 million. This consisted of the payment of our term loan of $3.3 million, payment of the finance lease obligations and the stock awards activities of $0.3 million, and principal repayments of finance lease obligations of $0.1 million.
Indebtedness
2021 Credit Agreement
In August 2021, we and our subsidiaries entered into a credit agreement with SVB and several other lenders, which we refer to as the 2021 Credit Agreement. The 2021 Credit Agreement, as amended, provides for a term loan facility not to exceed $75.0 million (the Term Loan Facility) and a revolving credit facility not to exceed $125.0 million (the Revolving Facility).
Advances made under the 2021 Credit Agreement may be either SOFR Loans or ABR Loans, at our option. For SOFR Loans, the interest rate is a per annum interest rate equal to the Adjusted Term SOFR plus an Applicable Margin between 2.00% to 3.25% based on the Total Net Leverage Ratio. For ABR Loans, the interest rate is equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between
27
1.00% to 2.25% based on the Total Net Leverage Ratio. On September 30, 2024, the applicable interest rate for outstanding borrowings is 7.56%.
The 2021 Credit Agreement requires us to make consecutive quarterly installment payments equal to the following: (a) from September 30, 2021 through and including June 30, 2022, $0.5 million; (b) from September 30, 2022 through and including June 30, 2023, $0.9 million; (c) from September 30, 2023 through and including June 30, 2025, $1.4 million and (d) from September 30, 2025 and the last day of each quarter thereafter until August 6, 2026 (the Term Loan Maturity Date), $1.9 million. The remaining principal balance of $50.6 million is also due on the Term Loan Maturity Date. We may prepay the Term Loan Facility. Once repaid, amounts borrowed under the Term Loan Facility may not be re-borrowed.
We must pay in arrears, on the first day of each quarter prior to August 6, 2026 (the Revolving Termination Date) and on the Revolving Termination Date, a fee for our non-use of available funds (the Commitment Fee). The Commitment Fee rate is between 0.25% to 0.45% based on the Total Net Leverage Ratio. We may elect to reduce or terminate the Revolving Facility in its entirety at any time by repaying all outstanding principal and unpaid accrued interest.
Under the 2021 Credit Agreement, we are required to comply with certain financial covenants including the Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio, tested quarterly. In addition, we are also required to make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and acquisitions.
As of September 30, 2024, we were in compliance with the covenants under the 2021 Credit Agreement. We had outstanding borrowings of $62.3 million under our Term Loan Facility and no borrowings outstanding under our Revolving Facility with $125.0 million available for future revolving borrowings, respectively.
Critical Accounting Policies and Significant Judgments and Estimates
Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and the disclosure at the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses recorded during the reporting periods. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our unaudited condensed consolidated financial statements, which, in turn, could materially change our results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis. Historically, our critical accounting estimates have not differed materially from actual results. However, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material adverse effect on our condensed consolidated statements of operations and comprehensive income (loss), liquidity and financial condition. See also our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for information about these accounting policies as well as a description of our other significant accounting policies.
Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Recently Issued Accounting Pronouncements
We have reviewed all recently issued standards as disclosed in Note 2, Summary of Significant Accounting Policies to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
During the nine months ended September 30, 2024, there were no material changes to our market risk disclosures as set forth in Part II, Item 7A, Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
28
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means controls and other procedures of a company that 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 recorded, processed, summarized and reported, within the time periods specified in the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures 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 accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Based on that evaluation, our management, including our principal executive officer and principal financial officer, concluded that, as of September 30, 2024, our disclosure controls and procedures were ineffective because, as disclosed in the Company’s Annual Report for the fiscal year ended December 31, 2023, we did not design and maintain effective controls over information technology general controls and proper segregation of duties to support the proper initiation and recording of transactions and the resulting impact on business process controls and applications that rely on such data.
Management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria established in the SEC guidance on conducting such assessments as of the end of the period covered by this report. Management conducted the assessment based on certain criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013 (COSO framework). Although it has made progress in remediating the remaining material weakness, as a result of its assessment, management concluded that as of September 30, 2024, our internal control over financial reporting was ineffective based on the criteria of the COSO framework, and the continued existence of the material weakness described above.
Plans for Remediation of Material Weakness
Management has taken actions to remediate the deficiencies in its internal controls over financial reporting and implemented additional processes and controls designed to address the underlying causes associated with the above-mentioned material weakness. Management’s internal control remediation efforts include the following:
We believe the appropriate controls have been implemented in remediating the remaining material weakness. Until the controls have been operating for a sufficient period of time during 2024 and management has concluded, through testing, that these controls are executed consistently and operating effectively, the material weakness described above will continue to exist.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than those described above related to remediation efforts of the remaining material weakness. As the implementation of the remaining modules of the new ERP system continues, and management continues to test its aforementioned new controls throughout 2024, we will change our processes and procedures, which in turn, could result in changes to our internal control over financial reporting. As such changes occur, we will evaluate quarterly whether such changes materially affect our internal control over financial reporting.
29
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings. From time to time, we may become involved in litigation or other legal proceedings relating to claims arising from the ordinary course of business. These matters may include intellectual property, employment and other general claims. With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.
Item 1A. Risk Factors
Investing in our Class A common stock involves a high degree of risk. Our Annual Report on Form 10-K for the year ended December 31, 2023, includes a detailed discussion of our risk factors under the heading Part I, Item 1A—Risk Factors. Except as set forth below, there have been no material changes from such risk factors during the quarter ended September 30, 2024. You should consider carefully the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023, and all other information contained in or incorporated by reference in this Quarterly Report on Form 10-Q before making an investment decision. If any of the risks discussed in the Annual Report on Form 10-K for the year ended December 31, 2023, or herein actually occur, they may materially harm our business, financial condition, operating results, cash flows or growth prospects. As a result, the market price of our Class A common stock could decline, and you could lose all or part of your investment. Additional risks and uncertainties that are not yet identified or that we think are immaterial may also materially harm our business, financial condition, operating results, cash flows or growth prospects and could result in a complete loss of your investment.
Seven MACs published new proposed LCDs, for skin substitute grafts/CTPs for the treatment of DFUs and VLUs in the Medicare population that list certain of our products as non-covered. If the final LCDs include this non-coverage determination, it could, at least in the near term, have a material adverse effect on utilization of these products, our business and our revenue.
On April 25, 2024, seven MACs (CGS, WPS, NGS, Palmetto, Novitas, First Coast Services, and Noridian) published new proposed LCDs for skin substitute grafts/CTPs for the treatment of DFUs and VLUs in the Medicare population. While our Affinity, Apligraf and Dermagraft products remain covered, the proposed LCDs classify our PuraPly, Novachor, TransCyte, NuShield, Dual, and Matrix products as “non-covered.” If the final LCDs do not include coverage for these products, it would present a significant amount of uncertainty, at least in the near term, regarding future revenue for these products. Although we have engaged with the MACs and provided clinical evidence for certain of these non-covered products demonstrating their efficacy for the treatment of DFUs and VLUs, there is no guarantee that the MACs will agree to cover these products in the final LCDs. If these products are not covered in the final LCDs, it could, at least in the near term, materially and adversely impact utilization of these products, our business and our revenue.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the three months ended September 30, 2024,
30
Item 6. Exhibits
Exhibit number |
|
Description |
|
|
|
3.1 |
|
|
|
|
|
3.2 |
|
|
|
|
|
3.3 |
|
Certificate of Designation of Series A Convertible Preferred Stock of Organogenesis Holdings Inc. |
|
|
|
3.4 |
|
|
|
|
|
31.1† |
|
|
|
|
|
31.2† |
|
|
|
|
|
32.1† |
|
|
|
|
|
101.INS† |
|
Inline XBRL Instance Document XBRL |
|
|
|
101.SCH† |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL† |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF† |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB† |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE† |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104† |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
† Filed herewith
31
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 12, 2024 |
|
Organogenesis Holdings Inc. |
|
|
|
|
|
(Registrant) |
|
|
|
|
|
|
|
|
/s/ David Francisco |
|
|
|
|
|
David Francisco |
|
|
Chief Financial Officer |
|
|
|
|
|
(Principal Financial and Accounting Officer) |
|
|
|
|
|
|
32