mdxg-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the

Quarterly Period Ended

June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________________to______________________

Commission File Number 001-35887

MIMEDX GROUP, INC.

(Exact name of registrant as specified in its charter)


Florida						26-2792552
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


1775 West Oak Commons Ct NE Marietta, GA						30062
(Address of principal executive offices)						(Zip Code)

(770) 651-9100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	MDXG	The Nasdaq Stock Market

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x

Accelerated filer ¨

Non-accelerated filer ¨

Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No x

There were 146,809,007 shares of the registrant’s common stock, par value $0.001 per share, outstanding as of July 29, 2024.

Table of Contents


Part I FINANCIAL INFORMATION
Item 1	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	6
	Condensed Consolidated Statements of Operations	7
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to the Condensed Consolidated Financial Statements	11
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4	Controls and Procedures	29
Part II OTHER INFORMATION
Item 1	Legal Proceedings	30
Item 1A	Risk Factors	30
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 3	Defaults upon Senior Securities	30
Item 4	Mine Safety Disclosures	30
Item 5	Other Information	30
Item 6	Exhibits	31
Signatures		31

Explanatory Note and Important Cautionary Statement Regarding Forward-Looking Statements

As used herein, the terms “MIMEDX,” the “Company,” “we,” “our” and “us” refer to MiMedx Group, Inc., a Florida corporation, and its consolidated subsidiaries as a combined entity, except where it is clear that the terms mean only MiMedx Group, Inc.

Certain statements made in this Quarterly Report on Form 10-Q (this “Quarterly Report”) are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and section 21E of the Securities Exchange Act of 1934, as amended. All statements relating to events or results that may occur in the future are forward-looking statements, including, without limitation, statements regarding the following:

•our strategic focus and current business priorities, including broadening of our product portfolio, and our ability to implement these priorities, including as a result of our no longer being able to market certain products in our portfolio;

•the advantages of our products and development of new products;

•our expectations regarding ongoing regulatory obligations and oversight and the changing nature thereof impacting our products, research and clinical programs, and business, including those relating to patient privacy;

•our expectations regarding costs relating to compliance with regulatory requirements;

•our expectations regarding government and other third-party coverage and reimbursement for our existing and new products;

•our expectations regarding capital allocation;

•our expectations regarding future revenue growth;

•our expectations regarding the outcome of pending litigation and investigations;

•our expectations regarding future income tax liability;

•demographic and market trends; and

•our ability to compete effectively.

Forward-looking statements generally can be identified by words such as “expect,” “will,” “change,” “intend,” “seek,” “target,” “future,” “plan,” “continue,” “potential,” “possible,” “could,” “estimate,” “may,” “anticipate,” “to be” and similar expressions. These statements are based on numerous assumptions and involve known and unknown risks, uncertainties and other factors that could significantly affect the Company’s operations and may cause the Company’s actual actions, results, financial condition, performance or achievements to differ materially from any future actions, results, financial condition, performance or achievements expressed or implied by any such forward-looking statements. Factors that may cause such a difference include, without limitation, those discussed under the heading “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (our “2023 Form 10-K”), filed with the Securities and Exchange Commission (“SEC”) on February 28, 2024 and those discussed in Part II, Item 1A, Risk Factors, if any.

Unless required by law, the Company does not intend, and undertakes no obligation, to update or publicly release any revision to any forward-looking statements, whether as a result of the receipt of new information, the occurrence of subsequent events, a change in circumstances or otherwise. Each forward-looking statement contained in this Quarterly Report is specifically qualified in its entirety by the aforementioned factors. Readers are advised to carefully read this Quarterly Report in conjunction with the important disclaimers set forth above prior to reaching any conclusions or making any investment decisions and not to place undue reliance on forward-looking statements, which speak only as of the date of the filing of this Quarterly Report with the SEC.

Estimates and Projections

This Quarterly Report includes certain estimates, projections and other statistical data. These estimates and projections reflect management’s best estimates based upon currently available information and certain assumptions we believe to be reasonable as of the date of this Quarterly Report. These estimates are inherently uncertain, subject to risks and uncertainties, many of which are not within our control, have not been reviewed by our independent auditors and may be revised as a result of management’s further review. In addition, these estimates and projections are not a comprehensive statement of our financial results, and our actual results may differ materially from these estimates and projections due to developments that may arise between now and the time the results are final. There can be no assurance that the estimates will be realized, and our results may vary significantly from the estimates, including as a result of unexpected issues in our business and operations. Accordingly, you should not place undue reliance on such information. Projections, assumptions and estimates of our future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MIMEDX GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)


	June 30, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	69,037	$	82,000
Accounts receivable, net	52,798		53,871
Inventory	25,056		21,021
Prepaid expenses	4,030		5,624

Other current assets	3,097		1,745
Total current assets	154,018		164,261

Property and equipment, net	6,822		6,974
Right of use asset	3,175		2,132
Deferred tax asset, net	33,441		40,777
Goodwill	19,441		19,441
Intangible assets, net	12,047		5,257
Other assets	1,239		205

Total assets	$	230,183	$	239,047
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long term debt	$	1,000	$	1,000
Accounts payable	7,603		9,048
Accrued compensation	17,645		22,353
Accrued expenses	9,281		9,361
Current portion of Profit Share Payments	2,196		—
Current liabilities of discontinued operations	217		1,352
Other current liabilities	2,070		2,894
Total current liabilities	40,012		46,008
Long term debt, net	18,249		48,099
Other liabilities	3,882		2,223
Total liabilities	$	62,143	$	96,330
Commitments and contingencies (Note 12)

Stockholders' equity

Common stock; $0.001 par value; 250,000,000 shares authorized; 146,749,402 issued and outstanding at June 30, 2024 and 146,227,639 issued and outstanding at December 31, 2023	147		146
Additional paid-in capital	274,685		276,249

Accumulated deficit	(106,792)		(133,678)
Total stockholders' equity	168,040		142,717
Total liabilities and stockholders’ equity	$	230,183	$	239,047

See notes to unaudited condensed consolidated financial statements

MIMEDX GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023

Net sales	$	87,207	$	81,257	$	171,915	$	152,933



Cost of sales	14,855		13,583		27,841		26,002
Gross profit	72,352		67,674		144,074		126,931

Operating expenses:


Selling, general and administrative	55,401		51,955		110,530		104,203
Research and development	3,012		3,672		5,852		7,156
Investigation, restatement and related	(9,701)		1,017		(9,390)		4,690
Amortization of intangible assets	190		191		379		380
Impairment of intangible assets	—		—		54		—
Operating income	23,450		10,839		36,649		10,502

Other expense, net

Interest income (expense), net	3		(1,630)		(1,687)		(3,184)
Other expense, net	(237)		(32)		(336)		(32)
Income from continuing operations before income tax provision	23,216		9,177		34,626		7,286
Income tax provision (expense) benefit from continuing operations	(5,595)		74		(7,944)		23
Net income from continuing operations	17,621		9,251		26,682		7,309
Income (loss) from discontinued operations, net of tax	4		(8,051)		204		(11,092)
Net income (loss)	$	17,625	$	1,200	$	26,886	$	(3,783)

Net income available to common stockholders from continuing operations	$	17,621	$	7,523	$	26,682	$	3,898

Basic net income (loss) per common share:
Continuing operations	0.12		0.07		0.18		0.04
Discontinued operations	0.00		(0.07)		0.00		(0.10)
Basic net income (loss) per common share	$	0.12	$	(0.00)	$	0.18	$	(0.06)

Diluted net income (loss) per common share:
Continuing operations	0.12		0.06		0.18		0.04
Discontinued operations	0.00		(0.05)		0.00		(0.10)
Diluted net income (loss) per common share	$	0.12	$	0.01	$	0.18	$	(0.06)

Weighted average common shares outstanding - basic	147,326,273		115,866,371		147,033,879		115,136,646
Weighted average common shares outstanding - diluted	148,897,920		146,862,924		149,211,012		115,849,854

See notes to unaudited condensed consolidated financial statements

MIMEDX GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands, except share data)
(unaudited)


	Common Stock Issued			Additional Paid- In		Treasury Stock			Accumulated
	Shares	Amount		Capital		Shares	Amount		Deficit		Total
Balance at March 31, 2024	147,528,596	$	148	$	280,000	—	$	—	$	(124,417)	$	155,731

Share-based compensation expense	—	—		4,091		—	—		—		4,091
Exercise of stock options	36,100	—		244		—	—		—		244

Issuance of restricted stock, net	384,706	—		(351)		—	—		—		(351)
Shares received in settlement of litigation	(1,200,000)	(1)		(9,299)		—	—		—		(9,300)



Net income	—	—		—		—	—		17,625		17,625
Balance at June 30, 2024	146,749,402	$	147	$	274,685	—	$	—	$	(106,792)	$	168,040


	Common Stock Issued			Additional Paid- In		Treasury Stock			Accumulated
	Shares	Amount		Capital		Shares	Amount		Deficit		Total
Balance at March 31, 2023	115,380,542	$	115	$	178,829	334	$	(1)	$	(196,889)	$	(17,946)

Share-based compensation expense	—	—		4,060		—	—		—		4,060
Exercise of stock options	4,334	—		20		—	—		—		20
Issuance of restricted stock	724,249	1		(16)		(4,485)	15		—		—
Restricted stock shares canceled/forfeited	—	—		14		4,151	(14)		—		—


Net income	—	—		—		—	—		1,200		1,200

Balance at June 30, 2023	116,109,125	$	116	$	182,907	—	$	—	$	(195,689)	$	(12,666)


	Common Stock Issued			Additional Paid- In		Treasury Stock			Accumulated
	Shares	Amount		Capital		Shares	Amount		Deficit		Total
Balance at December 31, 2023	146,227,639	$	146	$	276,249	—	$	—	$	(133,678)	$	142,717


Share-based compensation expense	—	—		8,431		—	—		—		8,431
Employee stock purchase plan	121,783	—		797		—	—		—		797
Issuance of restricted stock, net	1,453,960	2		(2,503)		—	—		—		(2,501)
Exercise of stock options	146,020	—		1,010		—	—		—		1,010
Shares received in settlement of litigation	(1,200,000)	(1)		(9,299)		—	—		—		(9,300)

Net Income	—	—		—		—	—		26,886		26,886
Balance at June 30, 2024	146,749,402	$	147	$	274,685	—	$	—	$	(106,792)	$	168,040


	Common Stock Issued			Additional Paid- In		Treasury Stock			Accumulated
	Shares	Amount		Capital		Shares	Amount		Deficit		Total
Balance at December 31, 2022	113,705,447	$	114	$	173,804	—	$	—	$	(191,906)	$	(17,988)

Share-based compensation expense	—	—		8,405		—	—		—		8,405
Employee stock purchase plan	235,419	—		680		—	—		—		680
Issuance of restricted stock	2,163,925	2		(195)		(62,255)	193		—		—
Restricted stock shares canceled/forfeited	—	—		193		62,255	(193)		—		—
Exercise of stock options	4,334	—		20		—	—		—		20

Net loss	—	—		—		—	—		(3,783)		(3,783)

Balance at June 30, 2023	116,109,125	$	116	$	182,907	—	$	—	$	(195,689)	$	(12,666)

See notes to unaudited condensed consolidated financial statements

MIMEDX GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)

(unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net income (loss) from continuing operations	$	26,682	$	7,309
Adjustments to reconcile net income (loss) from continuing operations to net cash flows provided by operating activities from continuing operations:
Fair value of shares received in settlement of litigation	(9,300)

SEC Form 10-Q filed by MiMedx Group Inc