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What changed in Bioventus Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Bioventus Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+561 added−615 removedSource: 10-K (2025-03-11) vs 10-K (2024-03-12)

Top changes in Bioventus Inc.'s 2024 10-K

561 paragraphs added · 615 removed · 437 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

129 edited+24 added−52 removed140 unchanged
Biggest changeOur portfolio of products is grouped into three areas based on clinical use: (i) Pain Treatments, (ii) Surgical Solutions and (iii) Restorative Therapies. 1 Table of Contents Pain Treatments Our Pain Treatment products include hyaluronic acid-based (“HA”) products for knee osteoarthritis and peripheral nerve stimulation (“PNS”) devices.
Biggest changeOur portfolio of products is comprised of five patient-focused areas, grouped into three businesses based on clinical use: (i) Pain Treatments, (ii) Surgical Solutions and (iii) Restorative Therapies. • Pain Treatments, comprised of: ◦ Knee Osteoarthritis (“KOA”) area : Our product portfolio includes a range of intra-articular, hyaluronic acid (“HA”) injections that help relieve patient discomfort and improve quality of life. ◦ Peripheral Nerve Stimulation (“PNS”) area: We are focused on developing a full portfolio of peripheral nerve stimulation products with solutions for acute, temporary and chronic pain. • Surgical Solutions, comprised of: ◦ Ultrasonics: Our Ultrasonics business offers precision bone resection for patients with degenerative spine conditions and spinal deformities.
These laws are enforced by, without limitation, CMS, other divisions of the U.S. Department of Health and Human Services (“HHS”), including without limitation the HHS Office of Inspector General (“OIG”), the U.S. Department of Justice and individual U.S. Attorney offices within the Department of Justice, as well as state and local governments.
These laws are enforced by, without limitation, CMS, other divisions of the U.S. Department of Health and Human Services (“HHS”), including the HHS Office of Inspector General (“OIG”), the U.S. Department of Justice and individual U.S. Attorney offices within the Department of Justice, as well as state and local governments.
Privacy and data protection laws We are subject to a number of federal, state and foreign laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and security laws, data breach notification laws, and consumer protection laws and regulations (e.g., Section 5 of the Federal Trade Commission Act).
Privacy and data protection laws We are subject to a number of federal, state and foreign laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information, including health information privacy and data security laws, data breach notification laws, and consumer protection laws and regulations (e.g., Section 5 of the Federal Trade Commission Act).
Failure to meet the requirements of an applicable AKS exception or safe harbor, however, does not render an arrangement illegal. Rather, the government must evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and may be subject to greater scrutiny by enforcement agencies.
Failure to meet the requirements of an applicable AKS exception or safe harbor, however, does not render an arrangement illegal. Rather, the government must evaluate such arrangements on a case-by-case basis, taking into account all facts and circumstances, including the parties’ intent and the arrangement’s potential for abuse, and those arrangements may be subject to greater scrutiny by enforcement agencies.
Reficio DBM is indicated for use as a bone void filler and bone graft substitute for voids or gaps that are not intrinsic to the stability to the bony structure, specifically for the treatment of surgically created osseous defects or osseous defects from traumatic injury to the bone. Reficio DBM can be used for extremities, posterolateral spine and pelvis.
Reficio DBM is indicated for use as a bone void filler and bone graft substitute for voids or gaps that are not intrinsic to the stability of the bony structure, specifically for the treatment of surgically created osseous defects or osseous defects from traumatic injury to the bone. Reficio DBM can be used in the extremities, posterolateral spine and pelvis.
In connection with the IPO and the UP-C structure, we completed a series of organizational transactions including, without limitation, the following: • the limited liability company agreement of BV LLC was amended and restated (“Bioventus LLC Agreement”) to, among other things, (i) provide for a new single class of common membership interests in BV LLC (“LLC Interests”), (ii) exchange all of the then existing membership interests of the holders of BV LLC membership interests (“Original LLC Owners”) for LLC Interests and (iii) appoint Bioventus Inc. as the sole managing member of BV LLC; and • the acquisition, by merger, of certain members of BV LLC (“Former LLC Owners”), for which we issued shares of Class A common stock as merger consideration (“Merger”). • We amended and restated its certificate of incorporation to authorize Class A common stock, Class B common stock and undesignated preferred stock.
In connection with the IPO and the UP-C structure, we completed a series of organizational transactions including, without limitation, the following: • the limited liability company agreement of BV LLC was amended and restated (“Bioventus LLC Agreement”) to, among other things, (i) provide for a new single class of common membership interests in BV LLC (“LLC Interests”), (ii) exchange all of the then existing membership interests of the holders of BV LLC membership interests (“Original LLC Owners”) for LLC Interests and (iii) appoint Bioventus Inc. as the sole managing member of BV LLC; and • the acquisition, by merger, of certain members of BV LLC (“Former LLC Owners”), for which we issued shares of Class A common stock as merger consideration (“Merger”). • We amended and restated our certificate of incorporation to authorize Class A common stock, Class B common stock and undesignated preferred stock.
Among other things, these laws, and others aimed at curbing FWA, generally: (1) prohibit the provision of anything of value in exchange for the referral of patients or for the purchase, order, or recommendation of any item or service reimbursed by a federal healthcare program, (including Medicare and Medicaid); (2) require that claims for payment submitted to federal healthcare programs be truthful; and (3) require the maintenance of certain government licenses and permits.
Among other things, these laws, and others aimed at curbing FWA, generally: (1) prohibit providing anything of value in exchange for the referral of patients or for the purchase, order, or recommendation of any item or service reimbursed by a federal healthcare program, (including Medicare and Medicaid); (2) require that claims for payment submitted to federal healthcare programs be truthful; and (3) require the maintenance of certain government licenses and permits.
The goals of these and other similar initiatives is to encourage broad and diverse viewpoints to achieve the best outcomes for the patients, healthcare providers, and employees we serve. 20 Table of Contents Our Organizational Structure Bioventus Inc. is a Delaware corporation formed on December 22, 2015 and functions as a holding company with no direct operations and our principal asset is the equity interest in BV LLC.
The goals of these and other similar initiatives is to encourage broad and diverse viewpoints to achieve the best outcomes for the patients, healthcare providers, and employees we serve. 19 Table of Contents Our Organizational Structure Bioventus Inc. is a Delaware corporation formed on December 22, 2015 and functions as a holding company with no direct operations and our principal asset is the equity interest in BV LLC.
The new Regulation among other things: • strengthens the rules on placing devices on the market (e.g., reclassification of certain devices and wider scope than the EU Medical Devices Directive) and reinforces surveillance once they are available; • establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • establishes explicit provisions on importers’ and distributors’ obligations and responsibilities; • imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation; • improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk; • sets up a central database (Eudamed) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and 15 Table of Contents • strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.
The new regulation among other things: • strengthens the rules on placing devices on the market (e.g., reclassification of certain devices and wider scope than the EU Medical Devices Directive) and reinforces surveillance once they are available; • establishes explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • establishes explicit provisions on importers’ and distributors’ obligations and responsibilities; • imposes an obligation to identify a responsible person who is ultimately responsible for all aspects of compliance with the requirements of the new regulation; • improves the traceability of medical devices throughout the supply chain to the end-user or patient through the introduction of a unique identification number, to increase the ability of manufacturers and regulatory authorities to trace specific devices through the supply chain and to facilitate the prompt and efficient recall of medical devices that have been found to present a safety risk; • sets up a central database (“Eudamed”) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and • strengthens rules for the assessment of certain high-risk devices, such as implants, which may have to undergo a clinical evaluation consultation procedure by experts before they are placed on the market.
A nonunion fracture is considered to be established when the fracture site shows no visibly progressive signs of healing. EXOGEN has been sold commercially for over 25 years and is FDA-approved for the accelerated healing of fresh, closed posteriorly displaced distal fractures of the radius and fresh, closed or Grade I open long bone fractures.
A nonunion fracture is considered to be established when the fracture site shows no visibly progressive signs of healing. EXOGEN has been sold commercially for over 30 years and is FDA-approved for the accelerated healing of fresh, closed posteriorly displaced distal fractures of the radius and fresh, closed or Grade I open long bone fractures.
We believe our manufacturing operations are in compliance with regulations mandated by the FDA. We are an FDA-registered medical device manufacturer. Our manufacturing facilities and processes are subject to periodic inspections and audits by various federal, state and foreign regulatory agencies. Our products include components manufactured by other companies in the United States and elsewhere.
We believe our manufacturing operations comply with regulations mandated by the FDA. We are an FDA-registered medical device manufacturer. Our manufacturing facilities and processes are subject to periodic inspections and audits by various federal, state and foreign regulatory agencies. Our products include components manufactured by other companies in the United States and elsewhere.
Under this approach, the FDA indicated that high-risk products and uses could be subject to immediate enforcement action. In July 2020, the FDA extended its period of enforcement discretion to May 31, 2021. The FDA resumed enforcement of IND and premarket approval requirements with respect to these products as of June 1, 2021. U.S.
Under this approach, the FDA indicated that high-risk products and uses could be subject to immediate enforcement action. In July 2020, the FDA extended its period of enforcement discretion to May 31, 2021. The FDA resumed enforcement of IND and premarket approval requirements with respect to these products as of June 1, 2021.
The solution treats knee OA by providing temporary replacement for the diseased synovial fluid and restoring the lubricity of bearing joint surfaces. Physicians administer GELSYN-3 to the affected knee joint once a week for three consecutive weeks. GELSYN-3 provides relief of knee pain and may help delay the need for total knee replacement surgery.
The solution treats KOA by providing temporary replacement for the diseased synovial fluid and restoring the lubricity of bearing joint surfaces. Physicians administer GELSYN-3 to the affected knee joint once a week for three consecutive weeks. GELSYN-3 provides relief of knee pain and may help delay the need for total knee replacement surgery.
A predicate device is a legally marketed device that is not subject to premarket approval, i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendment device) and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process.
A predicate device is a legally marketed device that is not subject to PMA, i.e., a device that was legally marketed prior to May 28, 1976 (pre-amendment device) and for which a PMA is not required, a device that has been reclassified from Class III to Class II or I, or a device that was found substantially equivalent through the 510(k) process.
The process required by the FDA before a drug or biologic may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements; • submission to the FDA of an IND, which must become effective before clinical trials may begin; • approval by an IRB or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety, efficacy, purity and potency of the proposed product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA for biologics or New Drug Application (NDA) for small molecule drugs after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA or NDA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCPs”); and • FDA review and approval of the BLA or NDA to permit commercial marketing of the product for particular indications for use in the United States.
The process required by the FDA before a drug or biologic may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s Good Laboratory Practice requirements; • submission to the FDA of an IND, which must become effective before clinical trials may begin; • approval by an IRB or ethics committee at each clinical site before the trial is commenced; • performance of adequate and well-controlled human clinical trials to establish the safety, efficacy, purity and potency of the proposed product candidate for its intended purpose; • preparation of and submission to the FDA of a BLA for biologics or New Drug Application (“NDA”) for small molecule drugs after completion of all pivotal clinical trials; • satisfactory completion of an FDA Advisory Committee review, if applicable; • a determination by the FDA within 60 days of its receipt of a BLA or NDA to file the application for review; • satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMPs and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCPs”); and • FDA review and approval of the BLA or NDA to permit commercial marketing of the product for particular indications for use in the United States. 11 Table of Contents Prior to beginning clinical trials of a new drug or biologic product in the United States, an IND must be submitted to the FDA.
Any drugs or biologics manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Any drugs or biologics manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse events, periodic reporting, product sampling and distribution, and advertising and promotion of the product.
Singleton received his Bachelor of Science from Purdue University and his Master of Business Administration from Duke University, Fuqua School of Business. 21 Table of Contents Anthony D’Adamio has served as our Senior Vice President and General Counsel since August 2017. Previously, Mr.
Singleton received his Bachelor of Science from Purdue University and his Master of Business Administration from Duke University, Fuqua School of Business. 20 Table of Contents Anthony D’Adamio has served as our Senior Vice President and General Counsel since August 2017. Previously, Mr.
GELSYN-3 is derived from bacterial fermentation, is highly purified and does not involve the use of animal products, thereby reducing the potential risk of an immune response following injection. We currently market GELSYN-3 in the United States. SUPARTZ™ is an FDA-approved sterile and viscoelastic solution of HA that is administered as a five injection HA viscosupplementation therapy.
GELSYN-3 is derived from bacterial fermentation, is highly purified and does not involve the use of animal products, thereby reducing the potential risk of an immune response following injection. We currently market GELSYN-3 in the United States. 2 Table of Contents SUPARTZ is an FDA-approved sterile and viscoelastic solution of HA that is administered as a five-injection HA viscosupplementation therapy.
We manage our business through two reporting segments, U.S. and International, which accounted for 88% and 12%, respectively, of our total net sales during the fiscal year ended December 31, 2023.
We manage our business through two reporting segments, U.S. and International, which accounted for 88% and 12%, respectively, of our total net sales during the fiscal year ended December 31, 2024.
The neXus platform is driven by a proprietary digital algorithm designed to provide more power, efficiency, and control for the surgeon. The device incorporates technology that allows for intuitive set-up and use.
The neXus platform is driven by a proprietary digital algorithm designed to deliver more power, efficiency, and control for the surgeon. The device incorporates technology that allows for intuitive set-up and use.
Class B common stock has voting rights but no economic rights. We have a majority economic interest, the sole voting interest in, and control the management of, BV LLC. As a result, we will consolidate the financial results of BV LLC and reports a non-controlling interest representing the LLC Interests held by Smith & Nephew, Inc. (“Continuing LLC Owner”).
Class B common stock has voting rights but no economic rights. We have a majority economic interest, the sole voting interest in, and control the management of, BV LLC. As a result, we will consolidate the financial results of BV LLC and reports a noncontrolling interest representing the LLC Interests held by Smith & Nephew, Inc. (“Continuing LLC Owner”).
These products are used for precise bone cutting and sculpting, soft tissue management (i.e., tumor and liver resections) and tissue debridement, in various surgeries including minimally invasive applications, primarily in the areas of neurosurgery, orthopedic surgery, general surgery, wound, plastics/reconstruction, and cranio-maxillo-facial surgery.
Our Ultrasonics products are used for precise bone cutting and sculpting, soft tissue management (i.e., tumor and liver resections) and tissue debridement in various surgeries including minimally invasive applications, primarily in the areas of orthopedic surgery, neurosurgery, general surgery, wound, plastics/reconstruction, and cranio-maxillo-facial surgery.
It is indicated for the treatment of pain in patients with knee OA who failed to adequately respond to conservative nonpharmacological therapy and simple analgesics. The solution treats knee OA by providing temporary replacement for the diseased synovial fluid and restoring the lubricity of the bearing joint surfaces.
It is indicated for the treatment of pain in patients with KOA who failed to adequately respond to conservative nonpharmacological therapy and simple analgesics. The solution treats KOA by providing temporary replacement for the diseased synovial fluid and restoring the lubricity of the bearing joint surfaces.
The Stark Law also prohibits the entity from billing for any such prohibited referral.
The Stark Law also prohibits the entity from billing for any prohibited referral.
If the Stark Law applies and the elements of an applicable exception have not been met, then the government is prohibited from making payment for such services and any amount paid pursuant to a non-compliant financial relationship must be reimbursed to the government.
If the Stark Law applies and the elements of an applicable exception have not been met, then the government is prohibited from paying for such services and any amount paid pursuant to a non-compliant financial relationship must be reimbursed to the government.
Other internal or governmental investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence. We are also subject to the UK and Brazilian equivalents, the UK Bribery Act and the Brazil Clean Company Act.
Other internal or governmental investigations or legal or regulatory proceedings, including lawsuits brought by private litigants, may also follow as a consequence. We are also subject to the United Kingdom and Brazilian equivalents, the United Kingdom Bribery Act and the Brazil Clean Company Act.
We currently market Durolane in the United States and Europe. GELSYN-3™ is an FDA-approved sterile, buffered solution of highly purified sodium hyaluronate that is administered as a three injection HA viscosupplementation therapy. It is indicated for the treatment of pain due to knee OA in patients who have failed to respond adequately to conservative non-pharmacologic therapy and simple analgesics.
We currently market Durolane in the United States and internationally. GELSYN-3 is an FDA-approved sterile, buffered solution of highly purified sodium hyaluronate that is administered as a three injection HA viscosupplementation therapy. It is indicated for the treatment of pain due to KOA in patients who have failed to respond adequately to conservative non-pharmacologic therapy and simple analgesics.
Regulation of Drugs and biological products In the United States, the FDA regulates drugs under the FDCA and its implementing regulations, and biologics under the FDCA and the PHSA and their implementing regulations.
U.S. regulation of drugs and biological products In the United States, the FDA regulates drugs under the FDCA and its implementing regulations, and biologics under the FDCA and the PHSA and their implementing regulations.
These include: • establishment registration and device listing with the FDA; • QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; • labeling and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provide adequate directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; • clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; • medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; • correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; • complying with requirements governing Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when the FDA deems them necessary to protect the public health or to provide additional safety and effectiveness data for the device.
These include: • establishment registration and device listing with the FDA; • QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; • labeling and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provides adequate directions for use and that all claims are substantiated, and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; • clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices; • medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; • correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; • complying with requirements governing Unique Device Identifiers on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database; • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when the FDA deems them necessary to protect the public health or to provide additional safety and effectiveness data for the device. 10 Table of Contents HCT/Ps Certain of our products are regulated as “HCT/P”, which is an acronym for human cell, tissue, and cellular and tissue-based products.
The federal Anti-Kickback Statute (“AKS”) prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, in cash or kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
The federal AKS prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, in cash or kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid.
Criminal penalties and administrative sanctions for violating the AKS include civil penalties of up to $120,816 per violation plus three times the amount of the improper remuneration, criminal penalties up to $100,000 per violation, prison terms, and exclusion from participation in the Federal health care programs.
Criminal penalties and administrative sanctions for violating the AKS include civil penalties exceeding $130,000 per violation plus three times the amount of the improper remuneration, criminal penalties up to $100,000 per violation, prison terms, and exclusion from participation in the federal health care programs.
Such realtors, often current or former employees or competitors, share in any amounts paid to the government in fines or settlement.
Such relators, often current or former employees or competitors, share in any amounts paid to the government in fines or settlement.
Developmental and clinical pipeline for Pain Treatments The TalisMann® Pulse Generator and Receiver (not yet cleared by FDA) is an accessory to the StimRouter® PNS system and is designed to provide more powerful stimulation to the targeted peripheral nerve, potentially enabling physicians to address chronic pain of a peripheral nerve origin in larger, deeper, or damaged nerves.
Developmental and clinical pipeline for Pain Treatments The TalisMann Pulse Generator and Receiver is an accessory to the StimRouter PNS system and is designed to provide more powerful stimulation to the targeted peripheral nerve, potentially enabling physicians to address chronic pain of a peripheral nerve origin in larger, deeper, or damaged nerves.
Private individuals, known as qui tam relators, also have the ability to bring actions under these false claims laws in the name of the government alleging false and fraudulent claims presented to or paid by the government (or other violations of the statutes).
Private individuals, known as qui tam relators, are also able to bring actions under these false claims laws in the name of the government alleging false and fraudulent claims presented to or paid by the government (or other violations of the statutes).
The Health Insurance Portability and Accountability Act (“HIPAA”) also established federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
HIPAA also established federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Surgical Solutions Our Surgical Solutions product portfolio is comprised of clinically efficacious and cost-effective bone graft solutions to meet a broad range of patient needs and procedures.
Our surgical product portfolio is also comprised of clinically efficacious bone graft solutions to meet a broad range of patient needs and procedures.
Information about our Executive Officers The following table sets forth information concerning our executive officers as of March 1, 2024: Name Age Position(s) Robert E. Claypoole 52 President and Chief Executive Officer Mark L.
Information about our Executive Officers The following table sets forth information concerning our executive officers as of March 1, 2025: Name Age Position(s) Robert E. Claypoole 53 President and Chief Executive Officer Mark L.
The U.S. patents are expected to expire between 2026 and 2037, and the foreign patents are expected to expire between 2026 and 2037. The pending patent applications, if issued, are expected to expire between 2032 and 2037, without accounting for potential patent term extensions and adjustments.
The U.S. patents are expected to expire between 2025 and 2039, and the foreign patents are expected to expire between 2026 and 2038. The pending patent applications, if issued, are expected to expire between 2037 and 2038, without accounting for potential patent term extensions and adjustments.
Our PNS product targets peripheral nerve pain at its source without the use of drugs and its small profile allows the system to be implanted in many locations on the body, depending on patient needs.
Our PNS product targets peripheral nerve pain at its source without the use of drugs and its small profile allows the system to be implanted in many locations on the body, depending on patient needs. Durolane is an U.S.
Employee and Human Capital Resources As of December 31, 2023, we had approximately 970 employees, none of whom were covered by collective bargaining agreements. Most of these employees are located in the United States with approximately 120 located outside the United States. We believe that our relations with our employees are generally good.
Employee and Human Capital Resources As of December 31, 2024, we had approximately 930 employees, none of whom were covered by collective bargaining agreements. Most of these employees are located in the United States with approximately 98 located outside the United States. We believe that our relations with our employees are generally good.
Durolane is an FDA-approved, sterile, transparent and viscoelastic gel that is a single injection therapy that is indicated in the United States for the symptomatic treatment of osteoarthritis (“OA”) in the knee in patients who have failed to respond adequately to conservative non-pharmacological therapy and simple analgesics.
Food & Drug Administration-approved, sterile, transparent and viscoelastic gel that is a single injection therapy that is indicated in the United States for the symptomatic treatment of osteoarthritis (“OA”) in the knee in patients who have failed to respond adequately to conservative non-pharmacological therapy and simple analgesics.
Singleton 55 Senior Vice President and Chief Financial Officer Anthony D’Adamio 63 Senior Vice President and General Counsel Katrina Church 62 Senior Vice President and Chief Compliance Officer Robert Claypoole joined Bioventus in January 2024 from Mölnlycke Health Care (“Mölnlycke”), a world-leading medical products and solutions company, where he served as Executive Vice President of Wound Care since July 2021.
Singleton 56 Senior Vice President and Chief Financial Officer Anthony D’Adamio 64 Senior Vice President and General Counsel Katrina Church 63 Senior Vice President and Chief Compliance Officer Robert Claypoole joined Bioventus in January 2024 as President and Chief Executive Officer and as a member of the Board of Directors from Mölnlycke Health Care (“Mölnlycke”), a world-leading medical products and solutions company, where he served as Executive Vice President of Wound Care since July 2021.
The Medicare program is expected to continue to implement a new payment mechanism for certain durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) items via the implementation of its competitive bidding program. Bone growth therapy devices are currently exempt from this competitive bidding process.
The Medicare program is expected to continue to implement a new payment mechanism for certain durable medical equipment, prosthetics, orthotics, and supplies (“DMEPOS”) items via the implementation of its competitive bidding program. Bone growth therapy devices are currently exempt from this competitive bidding process. The current federal administration has granted the U.S.
Physicians administer SUPARTZ FX to the affected knee joint once a week for five consecutive weeks. SUPARTZ FX may also delay the need for total knee replacement. SUPARTZ FX is derived from HA extracted from certified and veterinary inspected chicken combs.
Physicians administer SUPARTZ FX to the affected knee joint once a week for five consecutive weeks. SUPARTZ FX may also delay the need for total knee replacement. SUPARTZ FX is derived from HA extracted from certified and veterinary inspected chicken combs. We currently market SUPARTZ FX in the United States.
Section 361 HCT/Ps do not require 510(k) clearance, PMA approval, BLAs, or other premarket authorization from the FDA before marketing.
Section 361 HCT/Ps do not require 510(k) clearance, PMA approval, Biological License Applications (“BLAs”), or other premarket authorization from the FDA before marketing.
If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years.
Following receipt of a PMA, the FDA determines whether the application is sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA to complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take up to several years.
The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices and biological products to ensure that such products distributed domestically are safe and effective for their intended uses and otherwise meet the applicable requirements of the FDCA and PHSA.
The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging, storage, installation, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising, promotion, marketing and distribution, and import and export of medical devices and biological products to ensure that such products distributed domestically are safe and effective for their intended uses and otherwise meet the applicable requirements of the FDCA and PHSA. 8 Table of Contents U.S. regulation of medical devices In the United States, the majority of our products are regulated as medical devices by the FDA.
We own two issued U.S. patents, ten issued foreign patents, and eight pending foreign patent applications directed to our OsteoAMP product, including foreign patents and patent applications in Europe, Asia, Canada and Australia. The issued U.S. patent is expected to expire in 2029. The issued foreign patents are expected to expire in 2029.
The U.S. patents are expected to expire between 2025 and 2029, and the foreign patent is expected to expire in 2025. We own two issued U.S. patents, and 18 issued foreign patents directed to our OSTEOAMP product, including foreign patents in Europe, Asia, Canada and Australia. The issued U.S. patents are expected to expire in 2029.
StimRouter is programmed with up to eight different stimulation programs from which the patient is able to select, turn off/on and increase or decrease the stimulation intensity.
StimRouter is programmed with up to eight different stimulation programs from which the patient is able to select, turn off/on and increase or decrease the stimulation intensity. We currently market StimRouter in the United States and internationally.
Developmental and clinical pipeline for Surgical Solutions (including Investments) As we build the body of clinical evidence supporting our products, we continue to look for and execute on opportunities to innovate in our Surgical Solutions portfolio.
We currently market Reficio DBM in the United States. Developmental and clinical pipeline for Surgical Solutions As we build the body of clinical evidence supporting our products, we continue to look for and execute on opportunities to innovate in our Surgical Solutions portfolio.
We will continue to seek patent, trademark, and copyright protection as we deem advisable to protect the markets for our products and to support our research and development efforts. Manufacturing and supply We largely manufacture and assemble our medical device products at our production facilities located in Cordova, TN, Farmingdale, NY, Valencia, CA and Hod Hasharon, Israel.
We will continue to seek patent, trademark, and copyright protection as we deem advisable to protect the markets for our products and to support our research and development efforts. Manufacturing and supply We largely manufacture and assemble our medical device products at our production facility located in Cordova, Tennessee.
In addition, certain state and foreign laws, including without limitation the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), General Data Protection Regulation (“GDPR”) and the United Kingdom General Data Protection Regulation (“UK GDPR”), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts. 19 Table of Contents Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.
In addition, certain state and foreign laws, including without limitation the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act (“CPRA”), General Data Protection Regulation (“GDPR”) and the United Kingdom General Data Protection Regulation (“UK GDPR”), govern the privacy and data security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
Foreign Corrupt Practices Act We are subject to the Foreign Corrupt Practices Act of 1977, as amended (“FCPA”). The FCPA prohibits U.S. companies and their representatives from processing, offering, or making payments of money or anything of value to foreign officials with the intent to obtain or retain business or seek a business advantage.
The FCPA prohibits U.S. companies and their representatives from processing, offering, or making payments of money or anything of value to foreign officials with the intent to obtain or retain business or seek a business advantage.
We intend to focus our international business on current markets which present the greatest growth opportunities, and where our existing portfolio can maintain and increase profitable growth over time, either through direct or distributor based channels. We also plan to strategically expand to new markets with our existing portfolio and intend to pursue further new market opportunities selectively.
We intend to focus our international business on current markets which present the greatest growth opportunities, and where our portfolio can maintain and increase profitable growth over time, either through direct or distributor-based channels.
The SonaStar System provides powerful and precise ablation and removal of soft tissue. The SonaStar has been used for a wide variety of surgical procedures applying both open and minimally invasive approaches, including neurosurgery and general surgery.
We currently market BoneScalpel and BoneScalpel Access in the United States and certain international markets. The SonaStar System provides powerful and precise ablation and removal of soft tissue. SonaStar has been used for a wide variety of surgical procedures applying both open and minimally invasive approaches, including neurosurgery and general surgery.
A claim includes “any request or demand” for money or property presented to the United States government. Moreover, the government may assert that a claim including items and services resulting from a violation of the AKS or the Stark Law constitutes a false or fraudulent claim for purposes of the civil False Claims Act.
Moreover, the government may assert that a claim including items and services resulting from a violation of the AKS or the Stark Law constitutes a false or fraudulent claim for purposes of the civil False Claims Act.
Bioventus has recently received FDA clearance for expanded indications for the use of SIGNAFUSE in spinal procedures, specifically for filling cages. We expect this expanded indication will continue to drive sales of the product. We currently market SIGNAFUSE in the United States.
In 2023, Bioventus received FDA clearance for expanded indications. We expect our expanded indication for the use of SIGNAFUSE in spinal procedures, specifically for filling cages, to continue driving growth of the product. We currently market SIGNAFUSE in the United States.
Unlike Section 361 HCT/Ps, HCT/Ps regulated as “Section 351” HCT/Ps are subject to premarket review and/or approval by the FDA, as required. 12 Table of Contents In November 2017, the FDA released a guidance document entitled “Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue—Based Products: Minimal Manipulation and Homologous Use—Guidance for Industry and Food and Drug Administration Staff.” The guidance outlined the FDA’s position that all lyophilized amniotic products are more than minimally manipulated and would therefore require a BLA to be lawfully marketed in the United States.
In November 2017, the FDA released a guidance document entitled “Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue—Based Products: Minimal Manipulation and Homologous Use—Guidance for Industry and Food and Drug Administration Staff.” The guidance outlined the FDA’s position that all lyophilized amniotic products are more than minimally manipulated and would therefore require a BLA to be lawfully marketed in the United States.
Other potential consequences include, among other things: complete withdrawal of the product from the market, product recalls, fines, warning letters, untitled letters, clinical holds on clinical studies, refusal of the FDA to approve pending applications or supplements to approved applications, product seizures or detention, refusal to permit the import or export of products, consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: complete withdrawal of the product from the market, product recalls, fines, warning letters, untitled letters, clinical holds on clinical studies, refusal of the FDA to approve pending applications or supplements to approved applications, product seizures or detention, refusal to permit the import or export of products, consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs, the issuance of corrective information, injunctions, or the imposition of civil or criminal penalties. 12 Table of Contents In addition, the FDA closely regulates the marketing, labeling, advertising and promotion of drugs, biologics (including Section 361 HCT/Ps) and medical devices.
Prior to beginning clinical trials of a new drug or biologic product in the United States, an IND must be submitted to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. An IND must become effective before human clinical trials may begin.
An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. An IND must become effective before human clinical trials may begin.
The SonicOne Ultrasonic Cleansing and Debridement System is a highly innovative, tissue specific approach for the removal of devitalized or necrotic tissue and fibrin deposits while sparing viable, surrounding cellular structures.
We currently market SonaStar System and SonaStar Elite in the United States. 4 Table of Contents The SonicOne Ultrasonic Cleansing and Debridement System is a highly innovative, tissue-specific approach for the removal of devitalized or necrotic tissue and fibrin deposits while sparing viable, surrounding cellular structures.
The pending patent applications, if issued, are expected to expire in 2029, without accounting for potential patent term extensions and adjustments. We also own ten issued U.S. patents and twelve issued foreign patents in Australia, Canada, Europe, and Japan directed to our StimRouter system.
The pending patent applications, if issued, are expected to expire between 2034 and 2039, without accounting for potential patent term extensions and adjustments. We also own 19 issued U.S. patents, 20 issued foreign patents, and six pending foreign patent applications directed to our SonicOne System, including foreign patents and patent applications in Australia, Canada, and Europe.
If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements.
If the device presents a non-significant risk to the patient, a sponsor may begin the clinical trial after obtaining approval for the trial by one or more IRBs without separate approval from the FDA, but must still follow abbreviated IDE requirements, such as monitoring the investigation, ensuring that the investigators obtain informed consent, and labeling and record-keeping requirements. 9 Table of Contents In addition to clinical and preclinical data, the PMA must contain a full description of the device and its components, a full description of the methods, facilities, and controls used for manufacturing, and proposed labeling.
Class III devices require approval of a premarket approval application, or PMA, evidencing safety and effectiveness of the device. 10 Table of Contents To obtain 510(k) clearance, a manufacturer must submit a premarket notification demonstrating to the FDA’s satisfaction that the proposed device is “substantially equivalent” to another legally marketed device that itself does not require PMA approval (a predicate device).
To obtain 510(k) clearance, a manufacturer must submit a premarket notification demonstrating to the FDA’s satisfaction that the proposed device is “substantially equivalent” to another legally marketed device that itself does not require PMA approval (a predicate device).
We also rely on trademarks, trade secrets and careful monitoring of and contractual obligations with respect to our proprietary information to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. 8 Table of Contents Patents, trade secrets, assignments and licenses We rely on a combination of patents, trade secrets, assignment and license agreements, and non-disclosure agreements to protect our proprietary intellectual property.
We also rely on trademarks, trade secrets and careful monitoring of and contractual obligations with respect to our proprietary information to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations, in the event that a corporate integrity agreement or other agreement is required to resolve allegations of noncompliance with these laws, the curtailment or restructuring of operations, exclusion from participation in government healthcare programs and/or individual imprisonment. 18 Table of Contents We also participate in state government-managed Medicaid programs as well as certain other qualifying federal and state government programs where discounts and mandatory rebates are provided to participating state and local government entities.
Violation of any of these laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement, fines, additional reporting requirements and compliance oversight obligations (if a corporate integrity agreement or other agreement is required to resolve allegations of noncompliance with these laws), the curtailment or restructuring of operations, exclusion from participation in government healthcare programs, and/or individual imprisonment.
Anti-kickback Statute, False Claims Act and other healthcare laws We are subject to a number of U.S. laws regulating healthcare fraud, waste, and abuse (“FWA”) including without limitation the federal Anti-Kickback Statute and the federal Physician Self-Referral Law (known as the Stark Law), the Civil False Claims Act, the civil prohibition on beneficiary inducements, and the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as well as numerous state laws regulating healthcare and insurance.
In the event of either of these occurrences, we could be instructed to recall products, cease distribution and/or be subject to civil or criminal penalties. 15 Table of Contents Anti-kickback Statute, False Claims Act and other healthcare laws We are subject to a number of U.S. laws regulating healthcare fraud, waste, and abuse (“FWA”) including without limitation the federal Anti-Kickback Statute (“AKS”) and the federal Physician Self-Referral Law (known as the Stark Law), the Civil False Claims Act, the civil prohibition on beneficiary inducements, and the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), as well as numerous state laws and regulations regarding healthcare and insurance services.
Pursuing marketing of medical devices in the EU will notably require that all of our devices not currently certified under the new requirements set forth in the EU Medical Devices Regulation receive such certification when the current certificates expire. 14 Table of Contents Medical Devices Directive Under the EU Medical Devices Directive, all medical devices placed on the market in the EU must meet the relevant essential requirements in Annex I to the EU Medical Devices Directive, including the requirement that a medical device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others.
Medical Devices Directive Under the EU Medical Devices Directive, all medical devices placed on the market in the EU must meet the relevant essential requirements in Annex I to the EU Medical Devices Directive, including the requirement that a medical device must be designed and manufactured in such a way that it will not compromise the clinical condition or safety of patients, or the safety and health of users and others.
Competition The medical device industry is highly competitive, subject to change and significantly affected by the activities of industry participants. We believe that the principal competitive factors in our markets are product features, value-added solutions, reliability, clinical and economic evidence, reimbursement coverage, and price. Customer support, reputation, and efficient distribution are also important factors.
We believe that the principal competitive factors in our markets are product features, value-added solutions, reliability, clinical and economic evidence, reimbursement coverage, and price. Customer support, reputation, and efficient distribution are also important factors.
We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third-parties.
Our Restorative Therapies compete with products marketed by Orthofix Medical Inc., Zimmer Biomet Holdings, Inc., Enovis and XFT Medical. We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third-parties.
In addition to soft tissue applications, SonaStar may be used with hard tissue tips to enable precise shaping or shaving of bony structures that prevent access to partially or completely hidden soft tissue masses.
In addition to soft tissue applications, SonaStar may be used with hard tissue tips to enable precise shaping or shaving of bony structures that prevent access to partially or completely hidden soft tissue masses. Our SonaStar Elite handpiece and accessories expand the frequency capabilities of the neXus System, adding 36 kHz capabilities.
U.S. Regulation of Medical Devices In the United States, the majority of our products are regulated as medical devices by the FDA. Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification, or approval of a PMA application.
Unless an exemption applies, each medical device commercially distributed in the United States requires either FDA clearance of a 510(k) premarket notification or approval of a premarket approval (“PMA”) application.
We currently market EXTRACTOR in the United States. Reficio Demineralized Bone Matrix (“Reficio DBM”) is a putty comprised of human demineralized bone matrix and a biocompatible bioabsorbable carrier, carboxymethylcellulose, mixed into a putty-like consistency for ease in surgical use.
All tissues are screened for the standard panel of infectious viruses. We currently market PUREBONE in the United States. 5 Table of Contents Reficio Demineralized Bone Matrix (“Reficio DBM”) is a putty comprised of human demineralized bone matrix and a biocompatible, bioabsorbable carrier, carboxymethylcellulose, mixed into a putty-like consistency for ease of use during surgery.
The Federal False Claims Act (“FCA”) prohibits a person from knowingly presenting, or caused to be presented, a false or fraudulent request for payment from the federal government, or from making a false statement or using a false record to have a claim approved.
The FCA prohibits a person from knowingly presenting, or causing to be presented, a false or fraudulent request for payment from the federal government, or from making a false statement or using a false record to have a claim approved. A claim includes “any request or demand” for money or property presented to the United States government.
The U.S. patents are expected to expire between 2033 and 2038, and the foreign patents are expected to expire between 2034 and 2037. The pending patent applications, if issued, are expected to expire between 2033 and 2038, without accounting for potential patent term extensions and adjustments.
The pending patent applications, if issued, are expected to expire between 2039 and 2040, without accounting for potential patent term extensions and adjustments.
StimRouter is ideally suited for patients with chronic pain of a peripheral origin who are unable to find sustained pain relief with other treatment options such as nerve blocks, nerve ablation, and other temporary treatments.
Its small profile allows the system to be implanted in many locations around the body, depending on patient needs. StimRouter is ideally suited for patients with chronic pain of a peripheral origin who are unable to find sustained pain relief with other treatment options such as nerve blocks, nerve ablation, and other temporary treatments.
These agreements further restrict the use and disclosure of Bioventus’ confidential information and proprietary information belonging to any third party.
These agreements further restrict the use and disclosure of Bioventus’ confidential information and proprietary information belonging to any third party. These agreements further prohibit our employees from using, disclosing, or bringing onto the premises any proprietary information belonging to any third party.
Throughout the term of the certificate of conformity, the manufacturer will be subject to periodic surveillance audits to verify continued compliance with the applicable requirements. In particular, there will be a new audit by the notified body before it will renew the relevant certificate(s). Medical Device Regulation The regulatory landscape related to medical devices in the EU continues to evolve.
In particular, there will be a new audit by the notified body before it will renew the relevant certificate(s). 13 Table of Contents Medical Device Regulation The regulatory landscape related to medical devices in the EU continues to evolve.
The speed with which we can develop products, complete clinical testing and regulatory clearance processes and supply commercial quantities of our products to the market are therefore important competitive factors. We compete with many companies having more significant capital resources, larger research laboratories and more extensive distribution systems than we do.
The speed with which we can develop products, complete clinical testing and regulatory clearance processes and supply commercial quantities of our products to the market are therefore important competitive factors.
This allows a hospital to access all of our Surgical Solutions product offerings on this all-in-one console. The neXus Ultrasonic Surgical System has been commercialized successfully in several global markets. 5 Table of Contents The BoneScalpel ® is a state of the art, surgical solution enabling precise cuts in hard tissue (e.g., bone).
This allows a hospital to access all of our Ultrasonic product offerings in this all-in-one console. We currently market the neXus Ultrasonic Surgical System in the United States and internationally. The BoneScalpel is a state of the art, surgical solution enabling precise cuts in hard tissue (e.g., bone).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese provisions might also prevent or frustrate attempts by our stockholders to replace or remove management, and include provisions that: • authorize the issuance of “blank check” preferred stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt; • establish a classified Board so that not all members of our Board are elected at one time; • provide the removal of directors only for cause; • prohibit the use of cumulative voting for the election of directors; • limit the ability of stockholders to call special meetings or amend our bylaws; • require all stockholder actions to be taken at a meeting of our stockholders; and • establish advance notice and duration of ownership requirements for nominations for election to the Board or for proposing matters that can be acted upon by stockholders at stockholder meetings. 64 Table of Contents These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management, which could in turn limit the opportunity for our stockholders to receive a premium for their shares of our common stock and affect the price that some investors are willing to pay for our common stock.
Biggest changeThese provisions might also prevent or frustrate attempts by our stockholders to replace or remove management, and include provisions that: • authorize the issuance of “blank check” preferred stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt; • establish a classified Board so that not all members of our Board are elected at one time, which is currently being phased out and will be discontinued beginning with our 2026 annual meeting of stockholders; • provide the removal of directors only for cause, provided directors may be removed with or without cause beginning with our 2026 annual meeting of stockholders; • prohibit the use of cumulative voting for the election of directors; • limit the ability of stockholders to call special meetings or amend our bylaws; • require all stockholder actions to be taken at a meeting of our stockholders; and • establish advance notice and duration of ownership requirements for nominations for election to the Board or for proposing matters that can be acted upon by stockholders at stockholder meetings.
Device, biologic or drug HCT/Ps must comply both with the requirements exclusively applicable to Section 361 HCT/Ps and, in addition, with other requirements, including requirements for marketing authorization, such as 510(k) clearance or PMA or BLA approvals before marketing.
Device, biologic or drug HCT/Ps must comply both with the requirements exclusively applicable to Section 361 HCT/Ps and, in addition, with other requirements, including requirements for marketing authorization, such as 510(k) clearance, PMA or BLA approvals before marketing.
The FDA could disagree with our determination that these human tissue products are Section 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or PMA approval, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA.
The FDA could disagree with our determination that these human tissue products are Section 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or a PMA, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA.
While we are able to continue marketing our currently CE-marked products in the Europe after the effective date of the EU MDR until the associated CE mark certificates expire, securing renewals of our existing CE mark certificates to allow for continued marketing of the product after CE mark expiration or obtaining certifications for new products requires the performance of certain conformity assessment procedures by a notified body.
While we are able to continue marketing our currently CE-marked products in Europe after the effective date of the EU MDR until the associated CE mark certificates expire, securing renewals of our existing CE mark certificates to allow for continued marketing of the product after CE mark expiration or obtaining certifications for new products requires the performance of certain conformity assessment procedures by a notified body.
Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, none of the Original LLC Owners or any director who is not employed by us or his or her affiliates will have any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us.
Our amended and restated certificate of incorporation, as amended, provides that, to the fullest extent permitted by law, none of the Original LLC Owners or any director who is not employed by us or his or her affiliates will have any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us.
The choice of forum provision in our amended and restated certificate of incorporation does not designate the Court of Chancery as the exclusive forum for any claim for which the applicable statute creates exclusive jurisdiction in another forum and, accordingly, does not apply to any claims brought to enforce any liability or duty created by the Exchange Act.
The choice of forum provision in our amended and restated certificate of incorporation, as amended does not designate the Court of Chancery as the exclusive forum for any claim for which the applicable statute creates exclusive jurisdiction in another forum and, accordingly, does not apply to any claims brought to enforce any liability or duty created by the Exchange Act.
Our amended and restated certificate of incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or the Court of Chancery, will be, to the fullest extent permitted by law, the sole and exclusive forum for: (a) any derivative action, suit or proceeding brought on our behalf; (b) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers or stockholders to us or to our stockholders; (c) any action, suit or proceeding arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or amended bylaws (as either may be amended from time to time); or, (d) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; provided that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our amended and restated certificate of incorporation, as amended, provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or the Court of Chancery, will be, to the fullest extent permitted by law, the sole and exclusive forum for: (a) any derivative action, suit or proceeding brought on our behalf; (b) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers or stockholders to us or to our stockholders; (c) any action, suit or proceeding arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, as amended, or our second amended and restated bylaws (as either may be amended from time to time); or, (d) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine; provided that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Purchasing decisions are gradually shifting to hospitals, IDNs and other hospital groups, with surgeons and other physicians increasingly acting only as “employees.” Changes in the purchasing behavior of hospitals or the amount that third-party payers are willing to reimburse our customers for procedures using our products, including as result of healthcare reform initiatives, could create additional pricing pressure on us.
Purchasing decisions are shifting to hospitals, IDNs and other hospital groups, with surgeons and other physicians increasingly acting only as “employees.” Changes in the purchasing behavior of hospitals or the amount that third-party payers are willing to reimburse our customers for procedures using our products, including as result of healthcare reform initiatives, could create additional pricing pressure on us.
If the FDA disagrees with our decision not to seek a new 510(k) or PMA approval for changes or modifications to existing devices and requires new clearances or approvals, we may be required to recall and stop marketing our products as modified, which could require us to redesign our products, conduct clinical trials to support any modifications, and pay significant regulatory fines or penalties.
If the FDA disagrees with our decision not to seek a new 510(k) or PMA for changes or modifications to existing devices and requires new clearances or approvals, we may be required to recall and stop marketing our products as modified, which could require us to redesign our products, conduct clinical trials to support any modifications, and pay significant regulatory fines or penalties.
Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be, to the fullest extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be, to the fullest extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
While we attempt to address the associated risks by performing security assessments and detailed due diligence, we cannot assure you that these contractual measures and our own privacy and security-related due diligence safeguards will protect us from the risks associated with the processing, storage and transmission of such information by service providers and others acting on our behalf.
While we attempt to address the associated risks by performing security assessments and detailed due diligence, we cannot assure you that these contractual measures and our own privacy and security-related due diligence safeguards will protect us from the risks associated with the processing, storage and transmission of such information by vendors, service providers and others acting on our behalf.
Additionally, under HIPAA, covered entities must report breaches of unsecured PHI to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach or, if earlier, the date on which the breach would have been discovered through the exercise of reasonable diligence. Notification also must be made to the U.S.
Additionally, under the HIPAA Breach Notification Rule, covered entities must report breaches of unsecured PHI to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach or, if earlier, the date on which the breach would have been discovered through the exercise of reasonable diligence. Notification also must be made to the U.S.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.
Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.
Additionally, the American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Third-party payers also regularly update payments to physicians and hospitals where our products are used.
The American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. Third-party payers also regularly update payments to physicians and hospitals where our products are used.
In addition, FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, propose new reclassification orders, or take other actions, which may prevent or delay approval or clearance of our future products under development or impact our ability to market or modify our currently cleared products on a timely basis.
In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, propose new reclassification orders, or take other actions, which may prevent or delay approval or clearance of our future products under development or impact our ability to market or modify our currently cleared products on a timely basis.
Before we can market or sell a new medical device or other product or a new use of or a claim for or significant modification to an existing medical device in the United States, we must obtain either clearance from the FDA under 510(k) pathway or approval of a Pre-Market Approval (“PMA”), unless an exemption applies.
Before we can market or sell a new medical device or other product or a new use of or a claim for or significant modification to an existing medical device in the United States, we must obtain either clearance from the FDA under the 510(k) pathway or approval of an application for Pre-market Approval (“PMA”), unless an exemption applies.
The FDA requires every manufacturer to make the determination regarding the need for a new 510(k) submission in the first instance, but the FDA may review any manufacturer’s decision. We may make changes to our 510(k)-cleared products in the future that we may determine do not require a new 510(k) clearance or PMA approval.
The FDA requires every manufacturer to make the determination regarding the need for a new 510(k) submission in the first instance, but the FDA may review any manufacturer’s decision. We may make changes to our 510(k)-cleared products in the future that we may determine do not require a new 510(k) clearance or PMA.
In July 2020, the Court of Justice of the EU (“CJEU”) limited how organizations could lawfully transfer personal data from the EU/EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“SCCs”).
In 2020, the Court of Justice of the EU (“CJEU”) limited how organizations could lawfully transfer personal data from the EU/EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“SCCs”).
These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance. The risks described below are those that we have identified as material and is not an exhaustive list of all the risks we face.
These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance. The risks described below are those that we have identified as material and are not an exhaustive list of all the risks we face.
Competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitive technologies that fall outside of our intellectual property rights.
Competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitive technologies that fall outside the scope of our intellectual property rights.
Even if we are successful in developing additional products, the success of any new product offering or enhancements to existing products will depend on several factors, including our ability to: • properly identify and anticipate the needs of healthcare professionals and patients; • develop and introduce new products, line extensions and expanded indications in a timely manner; • distinguish our products from those of our competitors; • avoid infringing upon the intellectual property rights of third parties and maintain necessary intellectual property licenses from third parties; • demonstrate, if required, the safety and efficacy of new products with data from preclinical studies and clinical trials; • obtain clearance, approval, or certification, if required, from the FDA and other regulatory agencies or notified bodies, for such new products, line extensions and expanded indications, and maintain full compliance with FDA and other regulatory requirements applicable to new devices or products or modifications of existing devices or products; • provide adequate training to potential users of our products; • market acceptance of our newly developed or acquired products or therapies; • receive adequate coverage and reimbursement for our products; and • maintain an effective and dedicated sales and marketing team.
Even if we are successful in developing additional products, the success of any new product offering or enhancements to existing products will depend on several factors, including our ability to: • properly identify and anticipate the needs of healthcare professionals and patients; • develop and introduce new products, line extensions and expanded indications in a timely manner; • distinguish our products from those of our competitors; 23 Table of Contents • avoid infringing upon the intellectual property rights of third parties and maintain necessary intellectual property licenses from third parties; • demonstrate, if required, the safety and efficacy of new products with data from preclinical studies and clinical trials; • obtain clearance, approval, or certification, if required, from the FDA and other regulatory agencies or notified bodies, for such new products, line extensions and expanded indications, and maintain full compliance with FDA and other regulatory requirements applicable to new devices or products or modifications of existing devices or products; • provide adequate training to potential users of our products; • market acceptance of our newly developed or acquired products or therapies; • receive adequate coverage and reimbursement for our products; and • maintain an effective and dedicated sales and marketing team.
Department of Health and Human Services (“OIG”) to resolve potential liabilities associated with a self-disclosure we made to the OIG in November 2018 regarding violations of certain Medicare claim submission requirements. See Part I, Item 1A.
Department of Health and Human Services to resolve potential liabilities associated with a self-disclosure we made to the OIG in November 2018 regarding violations of certain Medicare claim submission requirements. See Part I, Item 1A.
Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.
Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective. Moreover, our competitors may independently develop equivalent knowledge, methods or know-how.
We believe our HCT/Ps are regulated solely under Section 361 of the PHSA, and therefore, we have not sought or obtained 510(k) clearance, PMA approval, or licensure through a BLA for such HCT/Ps.
We believe our HCT/Ps are regulated solely under Section 361 of the PHSA, and therefore, we have not sought or obtained 510(k) clearance, a PMA, or licensure through a BLA for such HCT/Ps.
Among other things, the ACA: • increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; • created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; • extended manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; • expanded eligibility criteria for Medicaid programs; • established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and • implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
Among other things, the ACA: • increased the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; 44 Table of Contents • created a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected; • extended manufacturers’ Medicaid rebate liability to individuals enrolled in Medicaid managed care organizations; • expanded eligibility criteria for Medicaid programs; • established a new Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate and develop such research; and • implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
Failure or perceived failure by us or our service providers to comply with any privacy, data security, or data protection laws or other obligations, or any security incident or data breach experienced by us, one of our service providers, or another party, could adversely affect our business.
Failure or perceived failure by us or our vendors or service providers to comply with any privacy, data security, or data protection laws or other obligations, or any security incident or data breach experienced by us, one of our vendors service providers, or another party, could adversely affect our business.
Our amended and restated certificate of incorporation, to the extent permitted by applicable law, contains provisions renouncing our interest and expectation to participate in certain corporate opportunities identified or presented to certain of our Original LLC Owners.
Our amended and restated certificate of incorporation, as amended, to the extent permitted by applicable law, contains provisions renouncing our interest and expectation to participate in certain corporate opportunities identified or presented to certain of our Original LLC Owners.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. 55 Table of Contents Moreover, the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. 53 Table of Contents Moreover, the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process.
Over the long term, if we are unable to establish name recognition based on our trademarks, then we may not be able to compete effectively and our business, results of operations and financial condition may be adversely affected. 56 Table of Contents Trade secrets and know-how We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by consultants, vendors, former employees or current employees, despite the existence generally of confidentiality agreements and other contractual restrictions.
Over the long term, if we are unable to establish name recognition based on our trademarks, then we may not be able to compete effectively and our business, results of operations and financial condition may be adversely affected. 54 Table of Contents Trade secrets and know-how We may not be able to prevent the unauthorized disclosure or use of our technical knowledge or other trade secrets by consultants, vendors, former employees or current employees, despite the existence generally of confidentiality agreements and other contractual restrictions.
We are subject to certain covenants under the Amended 2019 Credit Agreement, including, but not limited to: • a minimum interest coverage ratio and a maximum debt leverage ratio requirement as defined in the Amended 2019 Credit Agreement; • a minimum Liquidity (as defined in the Amended 2019 Credit Agreement) of not less than $10.0 million as of the end of each calendar month through October 29, 2025; • restrictions on the declaration or payment of certain distributions on or in respect of our equity interests; • restrictions on acquisitions, investments and certain other payments; • limitations on the incurrence of new indebtedness; • limitations on the incurrence of new liens on property or assets; • limitations on transfers, sales and other dispositions; • limitations on entering into transactions with affiliates; and • limitations on making any material change in any of our business objectives that could reasonably be expected to have a material adverse effect on the repayment of our Amended 2019 Credit Agreement.
We are subject to certain covenants under the Amended 2019 Credit Agreement, including, but not limited to: • a minimum interest coverage ratio and a maximum debt leverage ratio requirement as defined in the Amended 2019 Credit Agreement; • minimum Liquidity (as defined in the Amended 2019 Credit Agreement) of not less than $10.0 million as of the end of each calendar month through October 29, 2025; • restrictions on the declaration or payment of certain distributions on or in respect of our equity interests; • restrictions on acquisitions, investments and certain other payments; • limitations on the incurrence of new indebtedness; • limitations on the incurrence of new liens on property or assets; • limitations on transfers, sales and other dispositions; • limitations on entering into transactions with affiliates; and 21 Table of Contents • limitations on making any material change in any of our business objectives that could reasonably be expected to have a material adverse effect on the repayment of our Amended 2019 Credit Agreement.
If we are required or agree to defend or indemnify any of these third parties in connection with any infringement claims, we could incur significant costs and expenses that could adversely affect our business, results of operation and financial condition. 59 Table of Contents We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our competitors or former employers or are in breach of non-competition or non-solicitation agreements with our competitors or former employers.
If we are required or agree to defend or indemnify any of these third parties in connection with any infringement claims, we could incur significant costs and expenses that could adversely affect our business, results of operation and financial condition. 57 Table of Contents We may be subject to damages resulting from claims that we or our employees have wrongfully used or disclosed alleged trade secrets of our competitors or former employers or are in breach of non-competition or non-solicitation agreements with our competitors or former employers.
Risks related to our business We are currently subject to securities class action litigation and derivative shareholder lawsuits and may be subject to similar or other litigation in the future, which will require significant management time and attention, result in significant legal expenses and may result in unfavorable outcomes, which may have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.
Risks related to our business We are currently subject derivative shareholder lawsuits and have been defendants in securities class action litigation and may be subject to similar or other litigation in the future, which will require significant management time and attention, result in significant legal expenses and may result in unfavorable outcomes, which may have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 54 Table of Contents The process of applying for patent protection is time-consuming and expensive and we cannot assure you that all of our patent applications will issue as patents or that, if issued, they will issue in a form that will be advantageous to us.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 52 Table of Contents The process of applying for patent protection is time-consuming and expensive and we cannot assure you that all of our patent applications will issue as patents or that, if issued, they will issue in a form that will be advantageous to us.
In addition, if BV LLC does not have sufficient funds to make distributions, our ability to declare and pay cash dividends will also be restricted or impaired. 61 Table of Contents The TRA with the Continuing LLC Owner requires us to make cash payments to it in respect of certain tax benefits to which we are or may become entitled, and we expect that the payments we will be required to make could be significant.
In addition, if BV LLC does not have sufficient funds to make distributions, our ability to declare and pay cash dividends will also be restricted or impaired. 59 Table of Contents The TRA with the Continuing LLC Owner requires us to make cash payments to it in respect of certain tax benefits to which we are or may become entitled, and we expect that the payments we will be required to make could be significant.
In addition, our indebtedness could have significant consequences on our financial position, including: • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of funding growth, working capital, capital expenditures, investments or other cash requirements; • reducing our flexibility to adjust to changing business conditions or obtain additional financing; • exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our term loan, are at variable rates, making it more difficult for us to make payments on our indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; and 23 Table of Contents • limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements and general corporate or other purposes.
In addition, our indebtedness could have significant consequences on our financial position, including: • requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of funding growth, working capital, capital expenditures, investments or other cash requirements; • reducing our flexibility to adjust to changing business conditions or obtain additional financing; • exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our term loan, are at variable rates, making it more difficult for us to make payments on our indebtedness; • restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; and • limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements and general corporate or other purposes.
Other risks involving potential future and completed acquisitions and strategic investments include: • risks associated with conducting due diligence; • problems integrating the purchased technologies, products or business operations; • inability to achieve the anticipated synergies and overpaying for acquisitions or unanticipated costs associated with acquisitions; • invalid net sales assumptions for potential acquisitions; • issues maintaining uniform standards, procedures, controls and policies; • diversion of management’s attention from our core business; • adverse effects on existing business relationships with suppliers, distributors and customers; • risks associated with entering new markets in which we have limited or no experience; • potential loss of key employees of acquired businesses; and • increased legal, accounting and compliance costs.
Other risks involving potential future and completed acquisitions and strategic investments include: • risks associated with conducting due diligence; • problems integrating the purchased technologies, products or business operations; 27 Table of Contents • inability to achieve the anticipated synergies and overpaying for acquisitions or unanticipated costs associated with acquisitions; • invalid net sales assumptions for potential acquisitions; • issues maintaining uniform standards, procedures, controls and policies; • diversion of management’s attention from our core business; • adverse effects on existing business relationships with suppliers, distributors and customers; • risks associated with entering new markets in which we have limited or no experience; • potential loss of key employees of acquired businesses; and • increased legal, accounting and compliance costs.
The Budget Control Act of 2011, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2022, unless additional Congressional action is taken.
In addition, the Budget Act of 2011, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2022, unless additional congressional action is taken.
We cannot assure you that we will prevail in such actions, or that other actions alleging misappropriation or misuse by us of third-party trade secrets or infringement by us of third-party patents, copyrights, trademarks or other rights or challenging the validity of our patents, copyrights, trademarks or other rights will not be asserted against us. 58 Table of Contents We may also initiate litigation against third parties to enforce our patent and proprietary rights or to determine the scope, enforceability or validity of the proprietary rights of others.
We cannot assure you that we will prevail in such actions, or that other actions alleging misappropriation or misuse by us of third-party trade secrets or infringement by us of third-party patents, copyrights, trademarks or other rights or challenging the validity of our patents, copyrights, trademarks or other rights will not be asserted against us. 56 Table of Contents We may also initiate litigation against third parties to enforce our patent and proprietary rights or to determine the scope, enforceability or validity of the proprietary rights of others.
We may elect to completely terminate the TRA early only with the written approval of a majority of our directors other than any directors that have been appointed or designated by the Continuing LLC Owner or any of such person’s affiliates. 62 Table of Contents We may make payments to the Continuing LLC Owner under the TRA that exceed the tax benefits actually realized by us in the event that any tax benefits are disallowed by a taxing authority.
We may elect to completely terminate the TRA early only with the written approval of a majority of our directors other than any directors that have been appointed or designated by the Continuing LLC Owner or any of such person’s affiliates. 60 Table of Contents We may make payments to the Continuing LLC Owner under the TRA that exceed the tax benefits actually realized by us in the event that any tax benefits are disallowed by a taxing authority.
Some of our competitors have several competitive advantages over us, including: • greater financial, human and other resources for product research and development, sales and marketing and litigation; • significantly greater name recognition; • control of intellectual property and more expansive portfolios of intellectual property rights, which could impact future products under development; 30 Table of Contents • greater experience in obtaining and maintaining regulatory clearances, approvals or certifications for products and product enhancements; • established relationships with hospitals and other healthcare providers, physicians, suppliers, customers and third-party payers; • additional lines of products, and the ability to bundle products to offer greater incentives to gain a competitive advantage; and • more established sales, marketing and worldwide distribution networks.
Some of our competitors have several competitive advantages over us, including: • greater financial, human and other resources for product research and development, sales and marketing and litigation; • significantly greater name recognition; • control of intellectual property and more expansive portfolios of intellectual property rights, which could impact future products under development; • greater experience in obtaining and maintaining regulatory clearances, approvals or certifications for products and product enhancements; • established relationships with hospitals and other healthcare providers, physicians, suppliers, customers and third-party payers; • additional lines of products, and the ability to bundle products to offer greater incentives to gain a competitive advantage; and • more established sales, marketing and worldwide distribution networks.
In our capacity as a pharmaceutical and medical device manufacturer, as a supplier of covered items and services to federal health care program beneficiaries, and with respect to items and services for which we submit claims for reimbursement from such programs, we are subject to healthcare fraud, waste and abuse regulation and enforcement by federal, state and foreign governments, which could adversely impact our business, results of operations and financial condition.
In our capacity as a pharmaceutical and medical device manufacturer, as a supplier of covered items and services to federal healthcare program beneficiaries, and with respect to items and services for which we submit claims for reimbursement from such programs, we are subject to healthcare fraud, waste and abuse regulation and enforcement by federal, state and foreign governments, which could adversely impact our business, results of operations and financial condition.
If our licensor or other ultimate owners of such patents fails to properly enforce the patents subject to our license in the event of third-party infringement, our ability to retain our competitive advantage with respect to our products may be materially and adversely affected. 57 Table of Contents Licensing of intellectual property is an important part of our business and involves complex legal, business and scientific issues.
If our licensor or other ultimate owners of such patents fails to properly enforce the patents subject to our license in the event of third-party infringement, our ability to retain our competitive advantage with respect to our products may be materially and adversely affected. 55 Table of Contents Licensing of intellectual property is an important part of our business and involves complex legal, business and scientific issues.
The FDA and other U.S. and foreign governmental agencies and authorities regulate and oversee, among other things: • design, development and manufacturing; • testing, labeling, content and language of instructions for use and storage; • clinical trials; • product safety; • marketing, sales and distribution; • premarket clearance, approval and certification; • conformity assessment procedures; • record-keeping procedures; • advertising and promotion; 38 Table of Contents • recalls and other field safety corrective actions; • post market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; • post market studies; and • product import and export.
The FDA and other U.S. and foreign governmental agencies and authorities regulate and oversee, among other things: • design, development and manufacturing; • testing, labeling, content and language of instructions for use and storage; • clinical trials; • product safety; • marketing, sales and distribution; • premarket clearance, approval and certification; • conformity assessment procedures; • record-keeping procedures; • advertising and promotion; • recalls and other field safety corrective actions; • post market surveillance, including reporting of deaths or serious injuries and malfunctions that, if they were to recur, could lead to death or serious injury; • post market studies; and • product import and export.
The following examples are illustrative: • others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology, but that are not covered by the claims of the patents that we own or control, assuming such patents have issued or do issue; 60 Table of Contents • we, the inventors of any in-licensed patent rights, or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we, the investors of any in-licensed patent rights, or any future strategic partners might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • our pending patent applications may not lead to issued patents; • issued patents that we own or exclusively license may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • third parties performing manufacturing or testing for us using our products or technologies could use the intellectual property of others without obtaining a proper license; • parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; • we may not develop or in-license additional proprietary technologies that are patentable; • we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and • the patents of others may adversely affect our business.
The following examples are illustrative: • others may be able to develop and/or practice technology that is similar to our technology or aspects of our technology, but that are not covered by the claims of the patents that we own or control, assuming such patents have issued or do issue; 58 Table of Contents • we, the inventors of any in-licensed patent rights, or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed; • we, the filing party(ies) of any in-licensed patent rights, or any future strategic partners might not have been the first to file patent applications covering certain of our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • our pending patent applications may not lead to issued patents; • issued patents that we own or exclusively license may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors; • our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • third parties performing manufacturing or testing for us using our products or technologies could use the intellectual property of others without obtaining a proper license; • parties may assert an ownership interest in our intellectual property and, if successful, such disputes may preclude us from exercising exclusive rights over that intellectual property; • we may not develop or in-license additional proprietary technologies that are patentable; • we may not be able to obtain and maintain necessary licenses on commercially reasonable terms, or at all; and • the patents of others may adversely affect our business.
From our initial public offering in February 2021 through February 27, 2024, the per share trading price of our Class A common stock has been as high as $19.94 and as low as $0.80. It might continue to fluctuate significantly in response to various factors, some of which are beyond our control.
From our initial public offering in February 2021 through February 27, 2025, the per share trading price of our Class A common stock has been as high as $19.94 and as low as $0.80. It might continue to fluctuate significantly in response to various factors, some of which are beyond our control.
In addition, our third-party contractors are not our employees, and except for remedies available to us under our agreements with them, we cannot control whether or not they devote sufficient time and resources to our on-going clinical, nonclinical and preclinical programs. Switching or adding additional third-party contractors involves additional cost and requires management time and focus.
In addition, our third-party contractors are not our employees, and except for remedies available to us under our agreements with them, we cannot control whether or not they devote sufficient time and resources to our on-going clinical, non-clinical and preclinical programs. Switching or adding additional third-party contractors involves additional cost and requires management time and focus.
In the United States, we have obtained 510(k) clearance from the FDA to market certain of our products such as Signafuse Bioactive Bone Graft Putty, Interface Bioactive Bone Graft and Signafuse Mineralized Collagen Scaffold. Our Pain Treatment products, including Durolane, GELSYN-3 and SUPARTZ FX, and our Exogen system, have an obtained PMA.
In the United States, we have obtained 510(k) clearance from the FDA to market certain of our products such as SIGNAFUSE Bioactive Bone Graft Putty, Interface Bioactive Bone Graft and SIGNAFUSE Mineralized Collagen Scaffold. Our Pain Treatment products, including Durolane, GELSYN-3 and SUPARTZ FX, and our EXOGEN system, have obtained a PMA.
We will likely need to conduct additional clinical studies in the future to support new indications for our products or for clearances, approvals or certifications of new product lines, or for the approval or certification of the use of our products in some foreign countries. Clinical testing can take many years, can be expensive and carries uncertain outcomes.
We will likely need to conduct additional clinical studies in the future to support new indications for our products or for clearances, approvals or certifications of new product lines, or for the approval or certification of the use of our products in some foreign countries. Clinical testing can take many years, is expensive and carries uncertain outcomes.
In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreement (“TRA”), which we expect could be significant. See Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence-Tax Receivable Agreement in this Annual Report for further information .
In addition to tax expenses, we will also incur expenses related to our operations, including payments under the TRA, which we expect could be significant. See Part III, Item 13. Certain Relationships and Related Transactions, and Director Independence-Tax Receivable Agreement in this Annual Report for further information .
It is unknown whether any other sterilization facilities we may contract with in the future will experience reduced capacity related to new regulatory requirements or will be required to shut down, either temporarily related to upgrading emissions controls or permanently due to inability to comply with new environmental regulation.
It is unknown whether any other sterilization facilities we may contract with in the future will experience reduced capacity related to new regulatory requirements or will be required to shut down, either temporarily related to upgrading emissions controls or permanently due to inability to comply with the new environmental regulations.
Bioventus is controlled by the Original LLC Owners, whose interests may differ from those of our public stockholders. As of December 31, 2023, the Original LLC Owners control approximately 41.8% of the combined voting power of our common stock through their ownership of both Class A common stock and Class B common stock.
Bioventus is controlled by the Original LLC Owners, whose interests may differ from those of our public stockholders. As of December 31, 2024, the Original LLC Owners control approximately 41.8% of the combined voting power of our common stock through their ownership of both Class A common stock and Class B common stock.
Certain provisions of our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could render more difficult, delay or prevent transactions that stockholders consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock.
Certain provisions of our amended and restated certificate of incorporation, as amended, our second amended and restated bylaws and Delaware law could render more difficult, delay or prevent transactions that stockholders consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • costs of litigation; • distraction of management’s attention from our primary business; • the inability to commercialize existing or new products; • decreased demand for our products or, if cleared or approved, products in development; 32 Table of Contents • damage to our business reputation; • product recalls or withdrawals from the market; • withdrawal of clinical trial participants; • substantial monetary awards to patients or other claimants; and • loss of net sales.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • costs of litigation; • distraction of management’s attention from our primary business; • the inability to commercialize existing or new products; • decreased demand for our products or, if cleared or approved, products in development; • damage to our business reputation; • product recalls or withdrawals from the market; • withdrawal of clinical trial participants; • substantial monetary awards to patients or other claimants; and • loss of net sales.
Concerns about unsafe levels of ethylene oxide emissions in the air around some sterilization facilities have resulted in certain state environmental protection agency actions against those facilities that have impacted available capacity for medical device manufacturers’ to sterilize their devices.
Concerns about unsafe levels of ethylene oxide emissions in the air around some sterilization facilities have resulted in certain state environmental protection agency actions against those facilities that have impacted available capacity for medical device manufacturers to sterilize their devices.
However, these contracts may not continue in effect past their current term or we may not be able to negotiate satisfactory contracts in the future with current or new business partners, which may adversely affect our business, results of operations and financial condition. 34 Table of Contents Actual or attempted breaches of security, unauthorized access to or disclosure of information, cyberattacks, or other incidents or the perception that personal and/or other sensitive or confidential information in our possession or control or in the possession or control of our third-party vendors or service providers is not secure, could result in a material loss of business, substantial legal liability or significant harm to our reputation.
However, these contracts may not continue in effect past their current term or we may not be able to negotiate satisfactory contracts in the future with current or new business partners, which may adversely affect our business, results of operations and financial condition. 32 Table of Contents Actual or attempted breaches of security, unauthorized access to or disclosure of information, cyberattacks, or other incidents or the perception that personal and/or other sensitive or confidential information in our possession or control or in the possession or control of our vendors or service providers is not secure, could result in a material loss of business, substantial legal liability or significant harm to our reputation.
In the PMA process, the FDA must determine that a proposed product is safe and effective for our intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data.
In the PMA process, the FDA must determine that a proposed product is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data.
Product liability and related claims could divert management’s attention from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance. 44 Table of Contents Further, our promotional materials and training methods must comply with FDA and other applicable laws and regulations, including the prohibition of the promotion of off-label use.
Product liability and related claims could divert management’s attention from our core business, be expensive to defend and result in sizeable damage awards against us that may not be covered by insurance. Further, our promotional materials and training methods must comply with FDA and other applicable laws and regulations, including the prohibition of the promotion of off-label use.
While such actions have not disrupted our ability to supply products and the previously shut down facilities have been permitted to resume certain operations after implementation of increased emissions controls, it is uncertain as to whether these facilities will be shut down or experience capacity reductions related to environmental, health and safety concerns. The U.S.
While such actions have not disrupted our ability to supply products and the previously shut down facilities have been permitted to resume certain operations after implementation of increased emissions controls, it is uncertain as to whether these facilities will be shut down or experience capacity reductions related to environmental, health and safety concerns. In March 2024, the U.S.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and take additional enforcement actions, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and take additional enforcement actions, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, impose challenges associated with the geographical location or segregation of our relevant systems and operations, and adversely affect our financial results.
In the United States in recent years, new legislation has been proposed and adopted at the federal and state level that is effecting major changes in the healthcare system. In addition, new regulations and interpretations of existing healthcare statutes and regulations are frequently adopted.
In the United States, legislation has been proposed and adopted at the federal and state level that is effecting major changes in the healthcare system. In addition, new regulations and interpretations of existing healthcare statutes and regulations are frequently adopted.
The replacement of any of our key personnel likely would involve significant time and costs and may significantly delay or prevent the achievement of our business objectives and could therefore adversely affect our business, results of operations and financial condition.
The replacement of any of our key personnel likely would involve significant time and cost and may significantly delay or prevent the achievement of our business objectives and could therefore adversely affect our business, results of operations and financial condition.
For example, a third-party vendor recently informed us that Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our Exogen device to commercial payers, experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems.
For example, a vendor informed us that Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our EXOGEN device to commercial payers, experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems.
If we have to cease marketing and/or have to recall any of our Surgical Solutions products our net sales would decrease, which would adversely affect our business, results of operations and financial condition. HCT/Ps that do not meet the criteria of Section 361 are regulated under Section 351 of the PHSA.
If we have to cease marketing and/or have to recall any of our Surgical Solutions products our net sales would decrease, which would adversely affect our business, results of operations and financial condition. 40 Table of Contents HCT/Ps that do not meet the criteria of Section 361 are regulated under Section 351 of the PHSA.
Furthermore, we may expend significant effort in these time-consuming processes and still may not obtain a purchase contract from such hospitals. Governments outside the United States may not provide coverage or reimbursement of our products, which may adversely affect our business, results of operations and financial condition.
Furthermore, we may expend significant effort in these time-consuming processes and still may not obtain a purchase contract from such hospitals. 28 Table of Contents Governments outside the United States may not provide coverage or reimbursement of our products, which may adversely affect our business, results of operations and financial condition.
Also in 2020, the Orthopaedic and Rehabilitation Devices Panel of the FDA Medical Devices Advisory Committee met and ultimately voted in favor of the FDA’s proposal to down-classify non-invasive bone growth stimulators.
Also in 2020, the Orthopedic and Rehabilitation Devices Panel of the FDA Medical Devices Advisory Committee met and ultimately voted in favor of the FDA’s proposal to down-classify non-invasive bone growth stimulators.
We have availed ourselves of some of these reduced reporting obligations and exemptions in our SEC filings and expect to continue to do so in future SEC filings. In addition, emerging growth companies can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
We have availed ourselves of some of these reduced reporting obligations and exemptions in our SEC filings and expect to continue to do so in future SEC filings. 63 Table of Contents In addition, emerging growth companies can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.
Violations of the CMPL may result in administrative penalties ranging from $5,000 to $100,000 per violation depending on the conduct involved; • the criminal healthcare fraud provisions of Health Insurance Portability and Accountability Act, or “HIPAA”, and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Violations of the CMPL may result in CMPs of $24,947 and in administrative penalties ranging up to $100,000 per violation depending on the conduct involved; • the criminal healthcare fraud provisions of Health Insurance Portability and Accountability Act, or “HIPAA”, and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
Patients may also not participate in our clinical trials if they choose to participate in contemporaneous clinical trials of competitive products. In addition, patients participating in clinical trials may die before completion of the trial or suffer adverse medical events unrelated to investigational products. 43 Table of Contents Clinical failure can occur at any stage of testing.
Patients may also not participate in our clinical trials if they choose to participate in contemporaneous clinical trials of competitive products. In addition, patients participating in clinical trials may die before completion of the trial or suffer adverse medical events unrelated to investigational products. Clinical failure can occur at any stage of testing.
It is also possible that our competition will be able to leverage their large market share to set prices at a level below that which is profitable for us.
It is also possible that our competitors will be able to leverage their large market share to set prices at a level below that which is profitable for us.
The PMA process is typically required for products that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. 40 Table of Contents Both the PMA approval and the 510(k) clearance process can be expensive, lengthy and uncertain. The FDA’s 510(k) clearance process usually takes from three to twelve months, but can last longer.
The PMA process is typically required for products that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices. Both the PMA approval and the 510(k) clearance process can be expensive, lengthy and uncertain. The FDA’s 510(k) clearance process usually takes from three to twelve months, but can last longer.
Office of Foreign Assets Controls, and U.S. anti-money laundering regulations, as well as disadvantages of competing against companies from countries that are not subject to these regulatory regimes; • training of third parties on our products and the procedures in which they are used; • reduced protection for and greater difficulty enforcing our intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements, export licensing requirements or other restrictive actions by foreign governments; • difficulty in staffing and managing widespread operations, including compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • exposure to liability under a variety of local, national and multinational laws and regulations in multiple jurisdictions, including data privacy laws, healthcare and pharmaceutical laws, antitrust and competition laws, anti-bribery and anti-corruption laws and international trade laws; • international regulators and third-party payers requiring additional clinical studies prior to approving or allowing reimbursement for our products; • complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; • production shortages resulting from any events affecting material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism (including the current conflicts between Russia and Ukraine and between Israel and Hamas), global pandemics or natural disasters including earthquakes, hurricanes, floods and fires.
Office of Foreign Assets Controls, and U.S. anti-money laundering regulations, as well as disadvantages of competing against companies from countries that are not subject to these regulatory regimes; 34 Table of Contents • training of third parties on our products and the procedures in which they are used; • reduced protection for and greater difficulty enforcing our intellectual property rights; • difficulty in staffing and managing widespread operations, including compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign taxes, including withholding of payroll taxes; • workforce uncertainty in countries where labor unrest is more common than in the United States; • exposure to liability under a variety of local, national and multinational laws and regulations in multiple jurisdictions, including data privacy laws, healthcare and pharmaceutical laws, antitrust and competition laws, anti-bribery and anti-corruption laws and international trade laws; • international regulators and third-party payers requiring additional clinical studies prior to approving or allowing reimbursement for our products; • complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems; • production shortages resulting from any events affecting material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism (including the current conflicts between Russia and Ukraine and between Israel and Hamas), global pandemics or natural disasters including earthquakes, hurricanes, floods and fires.
Even after clearance or approval for our products is obtained, we and the products are subject to extensive post market regulation by the FDA, including with respect to advertising, marketing, labeling, manufacturing, distribution, import, export, and clinical evaluation. We are also required to timely file various reports with regulatory agencies.
Even after clearance or approval for our products is obtained, we and the products are subject to extensive post market regulation by the FDA, including with respect to advertising, marketing, labeling, manufacturing, distribution, import, export, and clinical evaluation. 38 Table of Contents We are also required to timely file various reports with regulatory agencies.
In particular, the methods used in, and the facilities used for, the manufacture of the products that we own and distribute that are regulated as medical devices must comply with the FDA’s Quality System Regulation (“QSR”), which covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of medical devices.
In particular, the methods used in, and the facilities used for, the manufacture of the products that we own and distribute that are regulated as medical devices must comply with the FDA’s QSR, which covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of medical devices.
If we are unsuccessful in developing, acquiring and commercializing new products or enhancing our existing product offerings through line extensions and expanded indications, our long-term growth may be negatively affected.
If we are unsuccessful in developing, acquiring and commercializing new products or enhancing our existing product offerings through line extensions and expanded indications across our current product portfolio, our long-term growth may be negatively affected.
Our future growth depends on physician awareness of the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products. We focus our sales, marketing and training efforts on physicians, surgeons and other health care professionals.
Our future growth depends on physician awareness of the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products. We focus our sales, marketing and training efforts on physicians, surgeons and other healthcare professionals.
Despite any precautions we may take, our systems and software and hardware could be exposed to damage or interruption from circumstances beyond our control, such as fire, natural disasters, systems failures, power outages, cyber-attacks, terrorism, energy loss, telecommunications failure, security breaches and attempts thereof, computer viruses and similar disruptions affecting the global Internet.
Despite any precautions we may take, our systems and software and hardware could be exposed to damage or interruption from circumstances beyond our control, such as fire, natural disasters, systems failures, power outages, cyberattacks, terrorism, energy loss, telecommunications failure, security breaches, computer viruses and similar disruptions affecting the global Internet.
Regulatory reforms, such as the EU Medical Devices Regulation, could limit our ability to market and distribute our products after clearance, approval or certification is obtained and make it more difficult or costly for us to obtain regulatory clearance, approval or certification of any future products, which could adversely affect our competitive position and materially affect our business and financial results.
Risk Factors—Risks related to government regulation—Regulatory reforms, such as the EU Medical Devices Regulation, could limit our ability to market and distribute our products after clearance, approval or certification is obtained and make it more difficult or costly for us to obtain regulatory clearance, approval or certification of any future products, which could adversely affect our competitive position and materially affect our business and financial results.
Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with the acquisition of Misonix, Bioness, and other potential acquisitions.
Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with potential acquisitions.
In addition to reimbursing the government any associated overpayment, violations of the Stark Law can lead to: (1) civil penalties of nearly $29,000 per claim (in 2023, adjusted annually for inflation); (2) three times the amount of damages suffered by the government; and (3) potential exclusion from participation in federal healthcare programs; 48 Table of Contents • the False Claims Act, or “FCA”, which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits.
In addition to reimbursing the government any associated overpayment, violations of the Stark Law can lead to: (1) civil penalties of nearly $30,868 per claim (in 2024, adjusted annually for inflation); (2) three times the amount of damages suffered by the government; and (3) potential exclusion from participation in federal healthcare programs; • the False Claims Act, or “FCA”, which imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly make, or cause to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits.
In addition, we do not carry any “key person” insurance policies that could offset potential loss of service under applicable circumstances. 31 Table of Contents Competition for experienced employees in the medical device industry can be intense. To attract, retain and motivate qualified employees, we may utilize equity-based incentive awards such as employee stock options.
In addition, we do not carry any “key person” insurance policies that could offset potential loss of service under applicable circumstances. Competition for experienced employees in the medical device industry can be intense. To attract, retain and motivate qualified employees, we may utilize equity-based incentive awards, including employee stock options.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThose processes include assessing the third parties’ information security practices before allowing them to access our information systems or data, requiring the third parties to implement appropriate cybersecurity controls and otherwise agree to contractual requirements designed to address cybersecurity risks in our agreements with them, and conducting ongoing monitoring of their compliance with those requirements. 66 Table of Contents Risks from Cybersecurity Threats As of the date of this Annual Report, we have not encountered any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Biggest changeThose processes include assessing the third parties’ information security practices before allowing them to access our information systems or data, requiring the third parties to implement appropriate cybersecurity controls and otherwise agree to contractual requirements designed to address cybersecurity risks in our agreements with them, and conducting ongoing monitoring of their compliance with those requirements.
As a result of the Change Healthcare incident, certain of our patient billing and collections processes have been disrupted. While we have identified an alternative claim processing intermediary and have resumed claims submissions to some payers, this event may cause delays in a portion of our claims submissions to some commercial payers thereby delaying the related cash remittances to us.
As a result of the Change Healthcare incident, certain of our patient billing and collections processes were disrupted. We have identified an alternative claim processing intermediary and have resumed claims submissions, but this incident caused delays in a portion of our claims submissions to some commercial payers thereby delaying the related cash remittances to us.
However, a third-party vendor recently informed us that Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our Exogen device to commercial payers experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems.
For example, Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our EXOGEN device to commercial payers experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems.
Our relationships with these external partners enable us to leverage their expertise with the goal of maintaining best practices. Oversight of Third-Party Risks Our third-party service providers, suppliers, and vendors face their own risks from cybersecurity threats that could impact Bioventus in certain circumstances. We have implemented processes for overseeing and managing these risks.
These include cybersecurity consultants and external auditors to review the Company’s cybersecurity posture and responsive efforts. Our relationships with these external partners enable us to leverage their expertise with the goal of maintaining best practices. Oversight of Third-Party Risks Our third-party service providers, suppliers, and vendors face their own risks from cybersecurity threats that could impact Bioventus in certain circumstances.
We do not presently believe that the Change Healthcare incident has materially affected, or is reasonably likely to materially affect the Company, including with respect to our claims collection and cash flows. We continue to evaluate the impact of the Change Health incident on our Company.
As of the date of this Annual Report, UnitedHealth Group is still investigating this incident, including any potential impact on claims and patient data. We do not presently believe that the Change Healthcare incident has materially affected, or is reasonably likely to materially affect the Company, including with respect to our claims collection and cash flows.
The Cybersecurity Program is integrated into our enterprise risk management program and framework. These programs are designed to foster a company-wide culture of appropriate cybersecurity risk management. Our IT Security team works closely with stakeholders across technology, legal, risk, and business operations to implement and monitor the effectiveness of the Cybersecurity Program.
The Cybersecurity Program is integrated into our enterprise risk management program and framework. These programs are designed to foster a company-wide culture of appropriate cybersecurity risk management.
Engagement of Third Parties in Connection with Risk Management The Company engages a range of external experts to assist in its assessment, identification, and management of risks from cybersecurity threats. These include cybersecurity consultants and external auditors to review the Company’s cybersecurity posture and responsive efforts.
Our IT Security team works closely with stakeholders across technology, legal, risk, and business operations to implement and monitor the effectiveness of the Cybersecurity Program. 64 Table of Contents Engagement of Third Parties in Connection with Risk Management The Company engages a range of external experts to assist in its assessment, identification, and management of risks from cybersecurity threats.
Removed
As of the date of this Annual Report, UnitedHealth Group is still investigating this incident, including any potential impact on claims and patient data. On March 7, 2024, UnitedHealth Group issued a statement indicating that it expects to begin testing and reestablish connectivity to the effected claims network to restore service beginning March 18, 2024.
Added
We have implemented processes for overseeing and managing these risks.
Added
Risks from Cybersecurity Threats As of the date of this Annual Report, we have not encountered any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the Company, including its business strategy, results of operations, or financial condition.
Added
However, incidents impacting data processed and systems maintained or operated by us or on our behalf, and incidents otherwise impacting our operations, can and do occur.
Added
We continue to evaluate the impact of the Change Healthcare incident on our Company.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our principal executive offices are located on leased property in Durham, North Carolina. We also occupy leased office and manufacturing space in Cordova, Tennessee, Farmingdale, New York, and Valencia, California. In addition, our international operations occupy leased office spaces in Hoofddorp, Netherlands, Mississauga, Canada and Hod Hasharon, Israel.
Biggest changeItem 2. Properties. Our principal executive offices are located on leased property in Durham, North Carolina. We also occupy leased office and manufacturing space in Cordova, Tennessee, Farmingdale, New York, and Valencia, California. In addition, our international operations occupy leased office spaces in Hoofddorp, Netherlands and Mississauga, Canada.
We believe that our facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed on acceptable terms.
We believe that our facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed on acceptable terms. 65 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Court dismissed the plaintiff’s Securities Act claims, but allowed the plaintiff’s Exchange Act claims to proceed into discovery. 67 Table of Contents On October 4, 2023, certain of the Company’s current and former directors and officers were named as defendants in a derivative shareholder lawsuit (in which the Company was a nominal defendant) filed in the United States District Court for the District of Delaware, Grogan, on behalf of Bioventus Inc., v.
Biggest changeOn October 4, 2023, certain of the Company’s current and former directors and officers were named as defendants in a derivative shareholder lawsuit (in which the Company is a nominal defendant) filed in the United States District Court for the District of Delaware, Grogan, on behalf of Bioventus Inc., v. Reali, et al. , No. 1:23-CV-01099-RGA (D. Del. 2023).
On February 9, 2024, another plaintiff filed a derivative shareholder lawsuit against certain of the Company’s current and former directors and officers (in which the Company is a nominal defendant) filed in the United States District Court for the District of Delaware, Sanderson, on behalf of Bioventus Inc., v. Reali, et.al., No. 1:24-cv-00180-RGA (D. Del. 2024).
On February 9, 2024, another plaintiff filed a derivative shareholder lawsuit against certain of the Company’s current and former directors and officers (in which the Company is a nominal defendant) in the United States District Court for the District of Delaware, Sanderson, on behalf of Bioventus Inc., v. Reali, et al. , No. 1:24-cv-00180-RGA (D. Del. 2024).
The complaint asserts violations of Sections 10(b) and 20(a) of the Exchange Act and of Sections 11 and 15 of the Securities Act and generally alleges that the Company failed to disclose certain information regarding rebate practices, its business and financial prospects, and the sufficiency of internal controls regarding financial reporting. The complaint seeks damages in an unspecified amount.
The complaint asserted violations of Sections 10(b) and 20(a) of the Exchange Act and of Sections 11 and 15 of the Securities Act and generally alleges that the Company failed to disclose certain information regarding rebate practices, its business and financial prospects, and the sufficiency of internal controls regarding financial reporting. The complaint seeks damages in an unspecified amount.
Item 3. Legal Proceedings. Bioventus stockholder litigation On January 12, 2023, the Company and certain of its current and former directors and officers were named as defendants in a putative class action lawsuit filed in the Middle District of North Carolina, Ciarciello v. Bioventus, Inc., No. 1:23– CV – 00032-CCE-JEP (M.D.N.C. 2023).
Item 3. Legal Proceedings. Bioventus shareholder litigation On January 12, 2023, the Company and certain of its current and former directors and officers were named as defendants in a putative class action lawsuit filed in the Middle District of North Carolina (the “Court”), Ciarciello v. Bioventus Inc., No. 1:23– CV – 00032-CCE-JEP (M.D.N.C. 2023).
Reali, et.al., No. 1:23-CV-01099-RGA (D. Del. 2023). The complaint asserts violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties and related state law claims, and a claim for contribution, and generally alleges the same purported misconduct as alleged in the Ciarciello case.
The complaint asserts violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties and related state law claims, and a claim for contribution, and generally alleges the same purported misconduct as alleged in the Ciarciello case. On January 12, 2024, the Court agreed to stay this case pending resolution of the Ciarciello case.
The outcome of the these matters is not presently determinable, and any loss is neither probable nor reasonably estimable.
Except as described above, the outcomes of these matters are not presently determinable, and any loss is neither probable nor reasonably estimable. Item 4. Mine Safety Disclosures. Not Applicable. PART II
Removed
On January 12, 2024, the Court agreed to stay this case pending resolution of the Ciarciello case.
Added
The Court dismissed the plaintiff’s Securities Act claims, but allowed the plaintiff’s Exchange Act claims to proceed into discovery. On July 15, 2024, a Stipulation and Agreement of Settlement (the “Settlement Agreement”) by and between the lead plaintiff and the defendants was filed with the Court and the Court preliminarily approved the Settlement Agreement on August 13, 2024.
Removed
The parties are in discussions to consolidate the two derivative matters and stay them on terms similar to those entered in the Grogan case. The Company believes the claims alleged in each of the above matters lack merit and intends to defend itself vigorously.
Added
The Court entered judgment on December 18, 2024, granting final approval of the terms of the Settlement Agreement and dismissing all claims against the defendants, including the Company. The parties settled without any admission of liability or wrongdoing by any party.
Removed
Misonix former distributor litigation On March 23, 2017, Misonix’s former distributor in China, Cicel (Beijing) Science & Technology Co., Ltd., filed a lawsuit against Misonix and certain of its officers and directors in the United States District Court for the Eastern District of New York. The complaint alleged that Misonix improperly terminated its contract with the former distributor.
Added
The settlement amount of $15.3 million, together with interest earned thereon, has been paid by the defendants and/or the defendant’s insurers.
Removed
The complaint sought various remedies, including compensatory and punitive damages, specific performance and preliminary and post judgment injunctive relief, and asserted various causes of action, including breach of contract, unfair competition, tortious interference with contract, fraudulent inducement, and conversion.
Added
The Company incurred $13.8 million of net shareholder litigation costs (including estimated settlement and reimbursement) during the year ended December 31, 2024 under the Settlement Agreement, which were recorded in selling, general and administrative expense within the consolidated condensed statements of operations and comprehensive loss.
Removed
On October 7, 2017, the court granted Misonix’s motion to dismiss each of the tort claims asserted against Misonix, and also granted the individual defendants’ motion to dismiss all claims asserted against them.
Added
On May 1, 2024, the parties filed a stipulation to consolidate the two derivative matters and stay them on terms similar to those entered in the Grogan case. On May 2, 2024, the United States District Court for the District of Delaware granted the stipulation and ordered the consolidation of the Sanderson and Grogan cases, captioned In re Bioventus Inc.
Removed
On January 23, 2020, the court granted Cicel’s motion to amend its complaint, to include claims for alleged defamation and theft of trade secrets in addition to the breach of contract claim. Discovery in the matter ended on August 5, 2021. On January 20, 2022, the court granted Misonix’s summary judgment motion on Cicel’s breach of contract and defamation claims.
Added
Derivative Litigation , Case No.: 1:23-cv-01099-RGA. The Court also stayed the consolidated case. Following resolution of the Ciarciello case, on December 30, 2024, the plaintiffs in the consolidated case filed an amended complaint asserting the same claims as in the Grogan case against certain of the Company’s current and former directors and officers.
Removed
Cicel’s motion for reconsideration of the court’s summary judgment ruling in Misonix’s favor was dismissed by the Court on April 29, 2022. On July 18, 2022, Cicel voluntarily dismissed the remaining claim for trade secret theft and later filed an appeal to the United States Court of Appeals for the Second Circuit.
Added
On January 6, 2025, the Court entered a scheduling order, under which the defendants had until March 3, 2025, to file a motion to dismiss the amended complaint.
Removed
On March 6, 2024, the Second Circuit Court of Appeals issued its ruling affirming the lower Court’s summary judgement in favor of Misonix in all respects. Bioness stockholder litigation On February 8, 2022, a minority shareholder of Bioness filed an action in the Delaware State Court of Chancery in connection with the Company’s acquisition of Bioness.
Added
On February 21, 2025, the parties submitted a joint stipulation to stay the proceedings to allow the parties time to negotiate a settlement, which the company expects to be in the form of governance reforms.
Removed
Teuza, a Fairchild Technology Venture Ltd. v. Lindon, et. al., No. 2022-0130 -SG. This action names the former Bioness directors, the Alfred E. Mann Trust (Trust), which was the former majority shareholder of Bioness, the trustees of the Trust and Bioventus as defendants.
Added
On July 31, 2024, another plaintiff filed a derivative complaint against certain of the Company’s current and former officers and directors, naming Bioventus as a nominal defendant only, in the United States District Court for the Middle District of North Carolina, captioned Vince v. Reali , No. 1:24-cv-006390CCEJEP (M.D.N.C. 2024).
Removed
The complaint alleges, among other things, that the individual directors, the Trust, and the trustees breached their fiduciary duty to the plaintiff in connection with their consideration and approval of the Company’s transaction.
Added
Like the Grogan case, the Vince case asserts violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties, unjust enrichment, contribution, and waste and generally alleges the same purported misconduct as alleged in the in the Ciarciello case.
Removed
The complaint also alleges that the Company aided and abetted the other defendants in breaching their fiduciary duties to the plaintiff and that the Company breached the Merger Agreement by failing to pay the plaintiff its pro rata share of the merger consideration.
Added
On November 11, 2024, the defendants filed a motion to transfer the Vince case to the United States District Court for the District of Delaware, pursuant to the forum selection clause in Bioventus’s certificate of incorporation. On January 14, 2025, the Court granted the motion and transferred the Vince case to the District of Delaware.
Removed
The Company believes that it is indemnified under the indemnification provisions contained in the Bioness Merger Agreement for these claims. On July 20, 2022, the Company filed a motion to dismiss all claims made against it on various grounds, as did all the other named defendants in the suit.
Added
On February 14, 2025, the plaintiff requested voluntary dismissal of the Vince case without prejudice and the Court granted the request that same day. 66 Table of Contents On February 20, 2025, plaintiff Jeffrey Vince refiled a Verified Stockholder Derivative Complaint against certain of Bioventus’ current and former officers and directors, naming Bioventus as a nominal defendant only, in Delaware Chancery Court, captioned Jeffrey Vince v.
Removed
A hearing on Bioness’ and other the defendant’s motions was held before the Court of Chancery on January 19, 2023. On April 27, 2023, the Court issued an order which, among other things, dismissed Bioventus from the case. Please refer to Part II, Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12.
Added
Kenneth M. Reali et al ., C.A. No. 2025-0192-LWW (Del. Ch.). Like his prior complaint, which he voluntarily dismissed, Vince asserts breaches of fiduciary duties, unjust enrichment, contribution, and waste, and generally alleges the same purported misconduct as alleged in the Ciarciello case. The Defendants have not yet been served.
Removed
Commitments and contingencies of this Annual Report for additional information pertaining to legal proceedings. In addition, we are party to legal proceedings incidental to our business. While our management currently believes the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our consolidated financial statements, litigation is subject to inherent uncertainties.
Added
On February 26, 2025, plaintiff James Bouchereau filed a Verified Stockholder Derivative Complaint against certain of Bioventus’s current and former officers and directors, naming Bioventus as a nominal defendant only, in Delaware Chancery Court, captioned James Bouchereau v. Kenneth M. Reali et al ., C.A. No. 2025-___-___ (Del. Ch.).
Removed
Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on our financial condition and results of operations. Item 4. Mine Safety Disclosures. Not Applicable. 68 Table of Contents PART II
Added
The complaint is identical to the Vince complaint and asserts breaches of fiduciary duties, unjust enrichment, contribution, and waste, and generally alleges the same purported misconduct as alleged in the Ciarciello case. The Defendants have not yet been served.
Added
On February 6, 2025, purported stockholder Jae Hyung Jung served a litigation demand, requesting that the Board take action against certain directors and officers for alleged breaches of fiduciary duties, gross mismanagement, unjust enrichment, waste, aiding and abetting in connection with the same conduct at issue in the litigations.
Added
On February 7, 2025, the same purported stockholder, Jung, served a settlement demand, requesting that the Company adopt certain corporate governance reforms and agree to certain monetary payments. The Company has not yet responded to either demand. The Company believes the claims alleged in the above derivative matters lack merit and intends to defend itself vigorously.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNote that historic stock price performance is not necessarily indicative of future stock price performance. 69 Table of Contents 2/11/21 3/31/21 6/30/21 9/30/21 12/31/21 3/31/22 6/30/22 9/30/22 12/31/22 3/31/23 6/30/23 9/30/23 12/31/23 Bioventus Inc. $ 100.00 $ 79.54 $ 91.62 $ 73.71 $ 75.43 $ 73.40 $ 35.50 $ 36.44 $ 13.59 $ 5.57 $ 15.04 $ 17.18 $ 27.43 NASDAQ Composite $ 100.00 $ 94.45 $ 103.41 $ 103.01 $ 111.54 $ 101.39 $ 78.63 $ 75.40 $ 74.62 $ 87.14 $ 98.30 $ 94.25 $ 107.03 S&P 500 Health Care Equipment $ 100.00 $ 96.27 $ 104.57 $ 109.55 $ 113.11 $ 106.11 $ 85.61 $ 79.47 $ 90.75 $ 93.13 $ 102.06 $ 88.00 $ 97.83 Item 6. [Reserved.]
Biggest changeNote that historic stock price performance is not necessarily indicative of future stock price performance. 2/11/21 6/30/21 12/31/21 6/30/22 12/31/22 6/30/23 12/31/23 6/30/24 12/31/24 Bioventus Inc. $ 100.00 $ 91.62 $ 75.43 $ 35.50 $ 13.59 $ 15.04 $ 27.43 $ 29.93 $ 54.66 NASDAQ Composite $ 100.00 $ 103.41 $ 111.54 $ 78.63 $ 74.62 $ 98.30 $ 107.03 $ 126.43 $ 137.68 S&P 500 Health Care Equipment $ 100.00 $ 104.57 $ 113.11 $ 85.61 $ 90.75 $ 102.06 $ 97.83 $ 103.44 $ 107.41
Subsidiaries of BV LLC are generally subject to similar legal limitations on their ability to make distributions to BV LLC. Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
Subsidiaries of BV LLC are generally subject to similar legal limitations on their ability to make distributions to BV LLC. Equity-based Compensation Plans The information required by Item 5 of Form 10-K regarding equity-based compensation plans is incorporated herein by reference to Part III, Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters .
The following performance graph compares the cumulative total return to stockholders on our Class A common stock relative to the cumulative total returns on the Nasdaq Composite Index and the S&P 500 Health Care Equipment Index for the period commencing on February 11, 2021 (the date our Class A common stock commenced trading on Nasdaq) through December 31, 2023 assuming an initial investment of $100.
The following performance graph compares the cumulative total return to stockholders on our Class A common stock relative to the cumulative total returns on the Nasdaq Composite Index and the S&P 500 Health Care Equipment Index for the period commencing on February 11, 2021 (the date our Class A common stock commenced trading on Nasdaq) through December 31, 2024 assuming an initial investment of $100.
As of February 27, 2024, we had 1 holder of record of our Class B common stock. Dividends We do not anticipate declaring or paying any cash dividends to holders of our Class A common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to finance the growth of our business.
As of February 27, 2025, we had one holder of record of our Class B common stock. Dividends We do not anticipate declaring or paying any cash dividends to holders of our Class A common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to finance the growth of our business.
As of February 27, 2024, we had approximately 167 holders of record of our Class A common stock. This amount does not take into account shareholders whose shares are held in “street name” by brokerage houses or other intermediaries. The closing price of our common stock on February 27, 2024 was $4.93.
As of February 27, 2025, we had approximately 256 holders of record of our Class A common stock. This amount does not take into account shareholders whose shares are held in “street name” by brokerage houses or other intermediaries. The closing price of our common stock on February 27, 2025 was $9.73.
If BV LLC makes such distributions to Bioventus Inc., the Class B common stock owner will also be entitled to receive the respective equivalent pro rata distributions in accordance with the percentages of their respective LLC Interests.
If BV LLC makes such distributions to Bioventus Inc., the Class B common stock owner will also be entitled to receive the respective equivalent pro rata distributions in accordance with the percentages of their respective LLC Interests. 67 Table of Contents In addition, the terms of our financing arrangements contain covenants that may restrict BV LLC and its subsidiaries from paying such distributions, subject to certain exceptions.
In addition, the terms of our financing arrangements contain covenants that may restrict BV LLC and its subsidiaries from paying such distributions, subject to certain exceptions. Any financing arrangements that we enter into in the future may include restrictive covenants that limit our ability to pay dividends.
Any financing arrangements that we enter into in the future may include restrictive covenants that limit our ability to pay dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeResults of Continuing Operations The following table sets forth components of our consolidated statements of operations as a percentage of net sales for the periods presented: Years Ended December 31, 2023 2022 Net sales 100.0 % 100.0 % Cost of sales (including depreciation and amortization) 35.9 % 35.4 % Gross profit 64.1 % 64.6 % Selling, general and administrative expense 59.4 % 64.9 % Research and development expense 2.6 % 4.7 % Restructuring costs 0.2 % 1.3 % Change in fair value of contingent consideration 0.1 % 0.2 % Depreciation and amortization 1.7 % 1.9 % Impairment of assets 15.4 % — % Impairment of goodwill — % 24.3 % Loss on disposals 0.7 % — % Operating loss (16.0 %) (32.7 %) 75 Table of Contents The following table presents a reconciliation of net loss from continuing operations to Adjusted EBITDA for the periods presented: Years Ended December 31, (in thousands) 2023 2022 Net loss from continuing operations $ (121,196) $ (144,651) Interest expense, net 40,676 12,021 Income tax expense (benefit), net 85 (44,374) Depreciation and amortization (a) 57,365 55,398 Acquisition and related costs (b) 5,694 21,731 Restructuring and succession charges (c) 2,331 7,453 Equity compensation (d) 2,722 17,585 Financial restructuring costs (e) 7,291 — Impairment of assets (f) 78,615 10,285 Impairment of goodwill (g) — 124,697 Loss on disposal of a business (h) 1,539 — Other items (i) 13,740 8,465 Adjusted EBITDA $ 88,862 $ 68,610 (a) Includes for the years ended December 31, 2023 and 2022, respectively, depreciation and amortization of $48,503 and $45,622 in cost of sales and $8,862 and $9,776 in operating expenses presented in the consolidated statements of operations and comprehensive (loss) income.
Biggest changeResults of Continuing Operations The following table sets forth components of our consolidated statements of operations as a percentage of net sales for the periods presented: Years Ended December 31, 2024 2023 Net sales 100.0 % 100.0 % Cost of sales (including depreciation and amortization) 32.3 % 35.9 % Gross profit 67.7 % 64.1 % Selling, general and administrative expense 59.5 % 59.4 % Research and development expense 2.4 % 2.6 % Restructuring costs — % 0.2 % Change in fair value of contingent consideration 0.2 % 0.1 % Depreciation and amortization 1.3 % 1.7 % Impairment of assets 6.3 % 15.4 % Loss on disposals 0.1 % 0.7 % Operating loss (2.1 %) (16.0 %) 73 Table of Contents The following table presents a reconciliation of net loss from continuing operations to Adjusted EBITDA for the periods presented: Years Ended December 31, (in thousands) 2024 2023 Net loss from continuing operations $ (43,833) $ (121,196) Interest expense, net 38,792 40,676 Income tax expense (benefit), net (5,293) 85 Depreciation and amortization (a) 49,555 57,365 Acquisition and related costs (b) 1,339 5,694 Shareholder litigation costs (c) 13,802 — Restructuring and succession charges (d) (57) 2,331 Equity-based compensation (e) 10,058 2,722 Financial restructuring costs (f) 351 7,291 Impairment of assets (g) 36,357 78,615 Loss on disposal of a business (h) 292 1,539 Other items (i) 7,519 13,740 Adjusted EBITDA $ 108,882 $ 88,862 (a) Includes for the years ended December 31, 2024 and 2023, respectively, depreciation and amortization of $41.9 million and $48.5 million in cost of sales and $7.7 million and $8.9 million in operating expenses presented in the consolidated statements of operations and comprehensive loss.
We define Adjusted EBITDA as net (loss) income from continuing operations before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance.
We define Adjusted EBITDA as net loss from continuing operations before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance.
Gains and losses are recorded with selling, general and administrative expenses within the consolidated statements of operations and comprehensive (loss) income. Impairment of goodwill and indefinite-lived intangible assets We evaluate goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
Gains and losses are recorded with selling, general and administrative expenses within the consolidated statements of operations and comprehensive loss. Impairment of goodwill and indefinite-lived intangible assets We evaluate goodwill for impairment annually during the fourth quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired.
Additionally, there are risks including, but not limited to, delay or failure to receive regulatory requirements to conduct clinical trials, required market clearances, or patent issuance, and that the research and development project does not result in a successful commercial product.
Additionally, there are risks including, but not limited to, delay or failure to receive regulatory requirements to conduct clinical trials, required market clearances, or patent issuance, and that the research and development project does not result in a successful product.
In addition, cost of sales includes depreciation related to production as well as amortization of product-related intellectual property and distribution rights associated with commercialized products. Certain products are manufactured by or obtained from third-party suppliers primarily located in Japan, Switzerland, Sweden and the United States. Gross profit and gross margin Gross profit consists of net sales less cost of sales.
In addition, cost of sales includes depreciation related to production as well as amortization of product-related intellectual property and distribution rights associated with marketed products. Certain products are manufactured by or obtained from third-party suppliers primarily located in Japan, Switzerland, Sweden and the United States. Gross profit and gross margin Gross profit consists of net sales less cost of sales.
We are focused on internal research and development to broaden our portfolio across all products and undertake clinical research to support their commercialization. As a result, we expect our research and development expenses to vary from low to the mid-single digits as a percentage of net sales as we introduce new products, extend existing product lines and expand indications.
We are focused on internal research and development to broaden our portfolio across all products and undertake clinical research to support their marketization. As a result, we expect our research and development expenses to vary from low to the mid-single digits as a percentage of net sales as we introduce new products, extend existing product lines and expand indications.
Our impairment process includes applying a quantitative impairment analysis to the fair value of the reporting unit and comparing it to its carrying value. We used independent third-party valuation specialists in 2023 and 2022 using year-to-date October data in each year to assist management in performing our annual impairment evaluation.
Our impairment process includes applying a quantitative impairment analysis to the fair value of the reporting unit and comparing it to its carrying value. We used independent third-party valuation specialists in 2024 and 2023 using year-to-date October data in each year to assist management in performing our annual impairment evaluation.
There were no significant adjustments arising from the change in estimates of variable consideration for the years ended December 31, 2023 and 2022. Accounts receivable allowances for credit losses We maintain allowances for credit losses to provide for receivables we do not expect to collect.
There were no significant adjustments arising from the change in estimates of variable consideration for the years ended December 31, 2024 and 2023. Accounts receivable allowances for credit losses We maintain allowances for credit losses to provide for receivables we do not expect to collect.
We evaluated the Wound Business for impairment prior to its sale and recorded a $78.6 million impairment within the consolidated statements of operations and comprehensive (loss) income during the year ended December 31, 2023 as a result of this evaluation to reduce the intangible assets of the Disposal Group to reflect their respective fair values, less any costs to sell.
Table of Contents We evaluated the Wound Business for impairment prior to its sale and recorded a $78.6 million impairment within the consolidated statements of operations and comprehensive loss during the year ended December 31, 2023 as a result of this evaluation to reduce the intangible assets of the Disposal Group to reflect their respective fair values less any costs to sell.
We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. 74 Table of Contents Non-GAAP Financial Measures - Adjusted EBITDA We present Adjusted EBITDA, a non-GAAP financial measure, because we believe it is a useful indicator that management uses as a measure of operating performance as well as for planning purposes, including the preparation of our annual operating budget and financial projections.
We recognize interest and penalties related to unrecognized tax benefits as a component of income tax expense. 72 Table of Contents Non-GAAP Financial Measures - Adjusted EBITDA We present Adjusted EBITDA, a non-GAAP financial measure, because we believe it is a useful indicator that management uses to measure operating performance and for planning purposes, including the preparation of our annual operating budget and financial projections.
The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities; • Level 2—Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and 83 Table of Contents • Level 3—Unobservable inputs that are supported by little or no market data.
The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities; • Level 2—Observable inputs other than quoted prices included within Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and • Level 3—Unobservable inputs that are supported by little or no market data.
We expect our selling, general and administrative expenses will increase with the continued expansion of our sales organization and commercialization of our current and pipeline products. We plan to hire more personnel to support the growth of our business.
We expect our selling, general and administrative expenses will increase with the continued expansion of our sales organization and marketization of our current and pipeline products. We plan to hire more personnel to support the growth of our business.
We see significant opportunity to develop innovative and clinically differentiated products in-house with our experienced research and development team. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. 73 Table of Contents Restructuring costs We have restructured portions of our operations and future restructuring activities are possible.
We see significant opportunity to develop innovative and clinically differentiated products in-house with our experienced research and development team. Clinical and preclinical development timelines, the probability of success and development costs can differ materially from expectations. Restructuring costs We have restructured portions of our operations and future restructuring activities are possible.
Each of these factors and assumptions can significantly affect the value of the intangible asset. Acquired in-process research and development (“IPR&D”) is the fair value of projects for which the related products have not received regulatory approval and have no alternative future use and is capitalized as an indefinite-lived intangible asset.
Each of these factors and assumptions can significantly affect the value of the intangible asset. 81 Table of Contents Acquired in-process research and development (“IPR&D”) is the fair value of projects for which the related products have not received regulatory approval and have no alternative future use and is capitalized as an indefinite-lived intangible asset.
Significant transactions Wound Business On May 22, 2023, we closed the sale of certain assets within our Wound Business, including the TheraSkin and TheraGenesis products (collectively, the “Wound Business” or the “Disposal Group”), for potential consideration of $84.7 million, including $34.7 million at closing, $5.0 million deferred for 18 months and up to $45.0 million in potential earn-out payments (“Earn-out Payments”), which are based on the achievement of certain revenue thresholds by the purchaser of the Wound Business for sales of the TheraSkin and TheraGenesis products during the 2024, 2025 and 2026 fiscal years.
Wound Business On May 22, 2023, we closed the sale of certain assets within its Wound Business, including the TheraSkin and TheraGenesis products (collectively, the “Wound Business” or the “Disposal Group”), for potential consideration of $84.7 million, including $34.7 million at closing, $5.0 million deferred for 18 months and up to $45.0 million in potential earn-out payments, which are based on the achievement of certain revenue thresholds by the purchaser of the Wound Business for sales of the TheraSkin and TheraGenesis products during the 2024, 2025 and 2026 fiscal years.
We were in compliance with the financial covenants as of December 31, 2023 as stated within the 2019 Credit Agreement then in effect.
We were in compliance with the financial covenants as of December 31, 2024 and 2023 as stated within the 2019 Credit Agreement then in effect.
The Company was not in compliance with certain of its covenants under the 2019 Credit Agreement in effect as of December 31, 2022.
The Company was not in compliance with certain financial covenants under the 2019 Credit Agreement in effect as of December 31, 2022.
We will continue to qualify as an emerging growth company until the earliest of: • The last day of our fiscal year following the fifth anniversary of the date of our IPO; • The last day of our fiscal year in which have annual gross revenues of $1.235 billion or more; • The date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; • The date on which we are deemed to be a “large accelerated filer”, which will occur at such time as we (1) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our second fiscal quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months, (3) have filed at least one annual report pursuant to the Exchange Act, and (4) are not eligible to use the requirements for smaller reporting companies as defined in Rule 12b-2 under the Exchange Act (annual revenue less than $100 million and either no public float or a public float of less than $700 million).
We will continue to qualify as an emerging growth company until the earliest of: • The last day of our fiscal year following the fifth anniversary of the date of our IPO; • The last day of our fiscal year in which have annual gross revenues of $1.235 billion or more; • The date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt; • The date on which we are deemed to be a “large accelerated filer”, which will occur at such time as we (1) have an aggregate worldwide market value of common equity securities held by non-affiliates of $700 million or more as of the last business day of our second fiscal quarter, (2) have been required to file annual and quarterly reports under the Exchange Act for a period of at least 12 months, (3) have filed at least one annual report pursuant to the Exchange Act, and (4) are not eligible to use the requirements for smaller reporting companies as defined in Rule 12b-2 under the Exchange Act (annual revenue less than $100 million and either no public float or a public float of less than $700 million). 83 Table of Contents Additionally, we are considered a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act, which was determined as of the last day of our second fiscal quarter of 2024 (a “determination date”).
However, over time, as we grow our net sales, we expect selling, general and administrative expenses to decline as a percentage of net sales. Research and development expense Research and development expense primarily consists of employee compensation, equity compensation and related expenses, as well as contract research organization service expenses related to clinical trials.
However, over time, as we grow our net sales, we expect selling, general and administrative expenses to decline as a percentage of net sales. 71 Table of Contents Research and development expense Research and development expense primarily consists of employee compensation, equity-based compensation and related expenses, as well as contract research organization service expenses related to clinical trials.
SOFR loans and base rate loans had a margin of 3.25% and 2.25%, respectively, subsequent to July 11, 2022 and prior to March 31, 2023. As of the March 2023 amendment, SOFR loans and base rate loans had a margin of 4.25% and 3.25%, respectively.
SOFR loans and base rate loans had a margin of 3.25% and 2.25%, respectively, subsequent to July 11, 2022 and prior to the Closing Date. Subsequent to the March 31, 2023 amendment, SOFR loans and base rate loans had a margin of 4.25% and 3.25%, respectively.
Investors are encouraged to review the reconciliation of the non-GAAP measure provided in this Annual Report, including in all tables referencing Adjusted EBITDA, to its most directly comparable U.S. GAAP measure.
Investors are encouraged to review the reconciliation of the non-GAAP measure provided in this Annual Report on Form 10-K, including all tables referencing Adjusted EBITDA to its most directly comparable U.S. GAAP measure.
The TRA obligates us to pay to the Continuing LLC Owner 85% of the amount of any realized tax benefits (or in some circumstances are deemed to realize) resulting from (i) increases in the tax basis of assets of BV LLC as a result of (a) any future redemptions or exchanges of LLC Interests and (b) certain distributions (or deemed distributions) by BV LLC and (ii) certain other tax benefits arising from our making payments under the TRA.
(“Continuing LLC Owner”) 85% of the amount of any realized tax benefits (or in some circumstances are deemed to realize) resulting from (i) increases in the tax basis of assets of BV LLC as a result of (a) any future redemptions or exchanges of LLC Interests and (b) certain distributions (or deemed distributions) by BV LLC and (ii) certain other tax benefits arising from our making payments under the TRA.
Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5. Financial instruments in this Annual Report for further details on the Company’s indebtedness. Information regarding cash flows Cash, cash equivalents and restricted cash as of December 31, 2023 totaled $37.0 million, compared to $30.2 million as of December 31, 2022.
Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5. Financial instruments in this Annual Report for further details on the Company’s indebtedness. Information regarding cash flows Cash and cash equivalents as of December 31, 2024 totaled $41.6 million, compared to $37.0 million as of December 31, 2023.
Financial covenant requirements include: (i) a maximum debt leverage ratio of not greater than 5.65 to 1.00 for the testing period ending March 31, 2024, 5.00 to 1.00 for the testing period ending June 30, 2024, 4.75 to 1.00 for the testing period ending September 30, 2024, 4.50 to 1.00 for the testing period ending December 31, 2024, 4.25 to 1.00 for testing period ending March 31, 2025, 4.00 to 1.00 for testing period ending June 30, 2025 and each testing period thereafter, and, beginning with the testing period ending March 31, 2025, to be subject to a temporary increase to 4.50 to 1.00 upon certain events, and (ii) an interest coverage ratio not less than 1.75 to 1.00 for the testing period ending March 31, 2024, 1.75 to 1.00 for the testing period ending June 30, 2024, 1.75 to 1.00 for the testing period ending September 30, 2024, 2.00 to 1.00 for the testing period ending December 31, 2024, 2.00 to 1.00 for the testing period ending March 31, 2025, 2.25 to 1.00 for the testing period ending June 30, 2025, 2.50 to 1.00 for the testing period ending September 20, 2025 and 3.00 to 1.00 for the testing period ending December 31, 2025 and each testing period thereafter.
Financial covenant requirements include (i) a maximum debt leverage ratio of not greater than 4.50 to 1.00 for the testing period ending December 31, 2024, 4.25 to 1.00 for the testing period ending March 31, 2025, 4.00 to 1.00 for the testing period ending June 30, 2025 and at the end of each testing period occurring thereafter, and beginning on March 31, 2025, to be subject to a temporary increase to 4.50 to 1.00 upon certain events; and (ii) an interest coverage ratio not less than 2.00 to 1.00 for the testing period ending December 31, 2024, 2.00 to 1.00 for the testing period ending March 31, 2025, 2.25 to 1.00 for the testing period ending June 30, 2025, 2.50 to 1.00 for the testing period ending September 30, 2025 and 3.00 to 1.00 for the testing period ending December 31, 2025 and each testing period thereafter.
In addition, during the period commencing on the Closing Date and ending upon the satisfaction of certain conditions occurring not prior to October 29, 2025, the Company will be subject to certain additional requirements and covenants, including a requirement to maintain Liquidity (as defined in the Amended 2019 Credit Agreement) of not less than $10.0 million as of the end of each calendar month during such period.
In addition, during the period commencing on the Closing Date and ending upon the satisfaction of certain conditions occurring not prior to October 29, 2025, the Company will be subject to certain additional requirements and covenants, including a requirement to maintain Liquidity (as defined in the Amended 2019 Credit Agreement) of not less than $10.0 million as of the end of each calendar month during such period. 79 Table of Contents The Term Loan Facilities matures on October 29, 2026 and the Revolver matures on October 29, 2025.
Payments due upon cancellation generally consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation. Certain agreements include contingent events that upon occurrence would require payment. For information regarding Commitments and Contingencies, refer to Item 8. Financial Statements and Supplementary Data in this Annual Report.
Payments due upon cancellation generally consist only of payments for services provided or expenses incurred, including non-cancellable obligations of our service providers, up to the date of cancellation. Certain agreements include contingent events that upon occurrence would require payment. For information regarding Commitments and Contingencies, refer to Item 8.
Financial instruments in this Annual Report for further information regarding long-term debt obligations. (b) Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12.
Financial instruments in this Annual Report for further information regarding long-term debt obligations. (b) Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12. Commitments and contingencies in this Annual Report for further information regarding operating and finance lease liabilities.
Bioventus Inc. is subject to U.S. federal, state and local income taxes at the prevailing corporate tax rates with respect to our taxable income. In addition to tax expenses, we are obligated to make payments under the TRA, which could be significant.
Bioventus Inc. is subject to U.S. federal, state and local income taxes at the prevailing corporate tax rates with respect to our taxable income. In addition to tax expenses, we are obligated to make payments under the tax receivable agreement (“TRA”), which could be significant. The TRA obligates us to pay to Smith & Nephew, Inc.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2. Significant accounting policies for a further description of our significant accounting policies, however, we believe that the following accounting estimates are considered critical to our business in order to obtain a full understanding and to evaluate our reported financial results.
Significant accounting policies for a further description of our significant accounting policies, however, we believe that the following accounting estimates are considered critical to our business in order to obtain a full understanding and to evaluate our reported financial results.
International Net sales increased $5.6 million, or 9.9%, due to volume growth in Pain Treatments and Surgical Solutions, partially offset with a volume decline in Restorative Therapies from advanced rehabilitation.
International Net sales increased $4.0 million, or 6.4%, due to volume growth in Pain Treatments and Surgical Solutions, partially offset with a volume decline in Restorative Therapies.
Accordingly, the members include the profits and losses of BV LLC in their income tax returns. Certain wholly-owned subsidiaries of BV LLC are taxable entities for U.S. or foreign tax purposes and file tax returns in their local jurisdictions.
Income tax expense The Company’s subsidiary, Bioventus LLC (“BV LLC”), is a partnership for U.S. federal tax purposes. Accordingly, the members include the profits and losses of BV LLC in their income tax returns. Certain wholly-owned subsidiaries of BV LLC are taxable entities for U.S. or foreign tax purposes and file tax returns in their local jurisdictions.
Tax Receivable Agreement The BV LLC Agreement provides for the payment of certain distributions to the Continuing LLC Owner in amounts sufficient to cover the income taxes imposed with respect to the allocation of taxable income from BV LLC as well as obligations within the TRA.
Financial Statements and Supplementary Data in this Annual Report. 78 Table of Contents Tax Receivable Agreement The BV LLC Agreement provides for the payment of certain distributions to the Continuing LLC Owner in amounts sufficient to cover the income taxes imposed with respect to the allocation of taxable income from BV LLC as well as obligations within the TRA.
We report sales net of contractual allowances, rebates and returns. We sell our products primarily through our direct sales team, who manage and maintain the sales relationship with healthcare providers, distribution centers or specialty pharmacies. Certain surgical products are sold through independent distributors to hospitals so our neurosurgeon and orthopedic spine surgeon customers can use them in procedures.
We sell our products primarily through our direct sales team, which manages and maintains the sales relationship with healthcare providers, distribution centers or specialty pharmacies. Certain Surgical Solutions products are sold through independent distributors to hospitals so our neurosurgeon and orthopedic spine surgeon customers can use them in procedures.
(d) Includes compensation expense resulting from awards granted under our equity-based compensation plans. The year ended December 31, 2023 includes the reversal of equity compensation expenses totaling $3.8 million related to the transition of our executive leadership. (e) Financial restructuring costs include advisory fees and debt amendment related costs.
The year ended December 31, 2023 includes the reversal of $3.8 million in equity-based compensation expenses related to the transition of our executive leadership. (f) Financial restructuring costs include advisory fees and debt amendment related costs.
Components of the reserve, if relevant, are classified as a current or noncurrent liability in the consolidated balance sheet based on when we expect each of the items to be settled.
Components of the reserve, if relevant, are classified as a current or noncurrent liability in the consolidated balance sheet based on when we expect each of the items to be settled. Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.
We use historical experience and other assumptions as the basis for our judgments in making these estimates. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in our consolidated financial statements as they occur. Refer to Item 8.
Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in these estimates will be reflected in our consolidated financial statements as they occur. Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2.
The capacity on the Revolver was reduced to $43.2 million at December 31, 2023 and will be further reduced by $5.0 million at June 30, 2024 in accordance with the Amended 2019 Credit Agreement. 81 Table of Contents The Amended 2019 Credit Agreement contains customary affirmative and negative covenants, including those related to financial reporting and notification, restrictions on the declaration or payment of certain distributions on or in respect of Bioventus LLC’s equity interests, restrictions on acquisitions, investments and certain other payments, limitations on the incurrence of new indebtedness, limitations on transfers, sales and other dispositions of assets of Bioventus LLC and its subsidiaries, as well as limitations on making changes to the business and organizational documents of Bioventus LLC and its subsidiaries.
The Amended 2019 Credit Agreement contains customary affirmative and negative covenants, including those related to financial reporting and notification, restrictions on the declaration or payment of certain distributions on or in respect of Bioventus LLC’s equity interests, restrictions on acquisitions, investments and certain other payments, limitations on the incurrence of new indebtedness, limitations on transfers, sales and other dispositions of assets of Bioventus LLC and its subsidiaries, as well as limitations on making changes to the business and organizational documents of Bioventus LLC and its subsidiaries.
All obligations under the Amended 2019 Credit Agreement are guaranteed by the Company and certain wholly owned subsidiaries where substantially all the assets of the Company collateralize the obligations. The Term Loan Facilities will mature on October 29, 2026. The Revolver will mature on October 29, 2025.
All obligations under the Amended 2019 Credit Agreement are guaranteed by the Company and certain wholly owned subsidiaries where substantially all the assets of the Company collateralize the obligations.
Commitments and contingencies in this Annual Report for further information regarding operating and finance lease liabilities. 80 Table of Contents (c) Amounts that are contractually committed to as of December 31, 2023 related to multi-year exclusive supply agreements. Generally, our purchase obligations under these supply agreements are based on forecasted requirements, subject in some cases to an annual contractual minimum.
(c) Amounts that are contractually committed to as of December 31, 2024 related to multi-year exclusive supply agreements. Generally, our purchase obligations under these supply agreements are based on forecasted requirements, subject in some cases to an annual contractual minimum.
Certain of our more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. On an ongoing basis, we evaluate our judgments, including those related to inventories and the recoverability of long-lived assets.
Certain of our more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. 80 Table of Contents We use historical experience and other assumptions as the basis for our judgments in making these estimates.
If we are a smaller reporting company at the time we cease to be an emerging growth company, we may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
We will continue to be categorized as a smaller reporting company—accelerated filer until our public float reaches $250 million at a future determination date. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may rely on exemptions from certain disclosure requirements that are available to smaller reporting companies.
Restructuring costs Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % Restructuring costs $ 840 $ 6,779 $ (5,939) (87.6 %) Restructuring costs for the year ended December 31, 2023 primarily included costs incurred as a result of an initiative to align the Company’s organizational and management cost structure to improve profitability and cash flow through headcount reduction and reducing third-party related costs.
Costs incurred for the year ended December 31, 2023 were primarily the result of an initiative to align the Company’s organizational and management cost structure to improve profitability and cash flow through reducing headcount and third-party related costs.
Future cash requirements The following table summarizes certain estimated future cash requirements under our various contractual obligations committed to as of December 31, 2023 in total and disaggregated into current and long-term obligations.
Any failure to raise capital in the future might have a negative impact on our financial condition and our ability to pursue our business strategies. Future cash requirements The following table summarizes certain estimated future cash requirements under our various contractual obligations committed to as of December 31, 2024 in total and disaggregated into current and long-term obligations.
We concluded that the carrying value of the U.S. reporting unit exceeded its fair value. We recorded a non-cash goodwill impairment charge within the U.S. reporting unit for the year ended December 31, 2022. The impairment was recorded within impairment of goodwill on the consolidated statements of operations and comprehensive (loss) income.
We recorded a non-cash goodwill impairment charge within the U.S. reporting unit for the year ended December 31, 2022. The impairment was recorded within impairment of goodwill on the consolidated statements of operations and comprehensive loss. There were no goodwill impairment charges for the years ended December 31, 2024 and 2023. Refer to Item 8.
(b) Includes acquisition and integration costs related to completed acquisitions, amortization of inventory step-up associated with acquired entities, loss on disposal of fixed assets related to acquired businesses, and changes in fair value of contingent consideration. (c) Costs incurred were the result of adopting restructuring plans to reduce headcount, contract termination, reorganize management structure and consolidate certain facilities.
(b) Includes acquisition and integration costs related to completed acquisitions and changes in fair value of contingent consideration. (c) Costs incurred as a result of certain shareholder litigation unrelated to our ongoing operations. (d) Costs incurred were the result of adopting restructuring plans to reduce headcount, contract termination, reorganize management structure and consolidate certain facilities.
International Adjusted EBITDA decreased $1.9 million primarily due to increased compensation costs and a slight decline in gross profit. 79 Liquidity and Capital Resources Sources of liquidity Our principal liquidity needs have historically been for acquisitions, working capital, research and development, clinical trials, and capital expenditures.
Adjusted EBITDA increased $16.8 million, or 21.3%, due to revenue growth and increased gross profit. International Adjusted EBITDA increased $3.3 million or 32.0%, due to increased gross profit. Liquidity and Capital Resources Sources of liquidity Our principal liquidity needs have historically been for acquisitions, working capital, research and development, clinical trials, and capital expenditures.
We incurred $3.9 million in transactional fees resulting from the sale of the Wound Business. The deconsolidation of the Disposal Group resulted in the recognition of a $1.5 million loss on disposal of a business recorded within the consolidated statements of operations and comprehensive (loss) income for the year ended December 31, 2023.
The loss resulting from the deconsolidation of the Disposal Group totaled $1.5 million for the year ended December 31, 2023 and was recorded in loss on disposals within the consolidated statements of operations and comprehensive loss. We used the proceeds from the sale of the Wound Business to prepay $30.0 million of long-term debt obligations.
Income taxes The tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, we update our estimate of our annual effective tax rate, and if the estimated annual effective tax rate changes, we make a cumulative adjustment in such period.
Each quarter, we update our estimate of our annual effective tax rate, and if the estimated annual effective tax rate changes, we make a cumulative adjustment in such period.
Interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense. 85 Table of Contents Emerging Growth Company and Smaller Reporting Company Status We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act.
Emerging Growth Company and Smaller Reporting Company Status We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act.
These items include acquisition and related costs, impairment of goodwill, impairment of assets, restructuring and succession charges, equity compensation expense, financial restructuring costs, loss on disposal of a business and other items.
These items include acquisition and divestiture related costs, certain shareholder litigation costs, impairments of assets, restructuring and succession charges, equity-based compensation expense, financial restructuring costs and other items.
Gross profit and gross margin Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % U.S. $ 294,366 $ 296,782 $ (2,416) (0.8 %) International 33,827 34,298 (471) (1.4 %) Total $ 328,193 $ 331,080 $ (2,887) (0.9 %) Years Ended December 31, 2023 2022 Change U.S. 65.4 % 65.2 % 0.2 % International 54.1 % 60.3 % (6.2 %) Total 64.1 % 64.6 % (0.5 %) U.S.
Gross profit and gross margin Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % U.S. $ 348,953 $ 294,366 $ 54,587 18.5 % International 39,273 33,827 5,446 16.1 % Total $ 388,226 $ 328,193 $ 60,033 18.3 % Years Ended December 31, 2024 2023 Change U.S. 68.9 % 65.4 % 3.5 % International 59.1 % 54.1 % 5.0 % Total 67.7 % 64.1 % 3.6 % U.S.
We recorded a $78.6 million non-cash impairment charge as a result of this evaluation to reduce the intangible assets to their fair values less costs to sell. The fair value of intangibles of the Wound Business was determined based on the consideration offered for the Wound Business.
Our decision to divest the Wound Business required us to evaluate whether certain of its assets were impaired. We recorded a $78.6 million non-cash impairment charge in 2023 as a result of this evaluation to reduce the intangible assets to their fair values less costs to sell.
Interest expense Interest expense primarily consists of interest on our indebtedness, which currently consists of our term loan and revolving credit facility, which was incurred pursuant to the Amended 2019 Credit Agreement. We have previously entered into interest rate swaps to limit our exposure to changes in the variable interest rate on our term loan.
Amortization expense primarily consists of amortization expense related to customer relationships and other intangible assets. Interest expense Interest expense primarily consists of interest on our indebtedness, which currently consists of our term loan and revolving credit facility, which was incurred pursuant to the Amended 2019 Credit Agreement.
A discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021 has been reported previously in our Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 31, 2023, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." Executive Summary We are a global medical device company focused on developing and commercializing clinically differentiated, cost efficient and minimally invasive treatments that engage and enhance the body’s natural healing process.
A discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022 has been reported previously in our Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on March 12, 2024, under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations." Executive Summary We are a global medical device company focused on helping patients recover and live life to the fullest by relieving pain and addressing musculoskeletal challenges through a diverse portfolio of high-quality, innovative, and clinically-proven solutions.
Equity-based compensation Equity-based compensation expense generated from the granting of restricted stock units represents the fair value of the stock measured at the market price on the date of grant. Restricted stock equity-based compensation expense is recognized over the vesting period.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3. Balance sheet information. Equity-based compensation Equity-based compensation expense generated from the granting of restricted stock units represents the fair value of the stock measured at the market price on the date of grant.
On January 18, 2024, we further amended our Credit and Guaranty Agreement to modify certain financial covenants. Refer to Liquidity and Capital Resources—Credit Facilities for further information.
The fair value of the Disposal Group’s intangibles was determined based on the consideration received for the Wound Business. Credit and Guaranty Agreement On January 18, 2024, we further amended the 2019 Credit Agreement to modify certain financial covenants under the 2019 Credit Agreement. Refer to Liquidity and Capital Resources—Credit Facilities for further information regarding the January 2024 amendment.
Segment Adjusted EBITDA Adjusted EBITDA for each of our reportable segments is as follows: Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % U.S. $ 78,668 $ 56,513 $ 22,155 39.2 % International $ 10,194 $ 12,097 $ (1,903) (15.7) % U.S.
Segment Adjusted EBITDA Adjusted EBITDA for each of our reportable segments is as follows: Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % U.S. $ 95,421 $ 78,668 $ 16,753 21.3 % International $ 13,461 $ 10,194 $ 3,267 32.0 % U.S.
Changes in estimates and assumptions could materially affect the determination of fair value for each reporting unit and could result in an impairment charge, which could be material to our financial position and results of operations. 84 Table of Contents On November 8, 2022, due to a significant decline in the value of our Class A common stock, circumstances became evident that a possible impairment existed as of the third quarter balance sheet date.
Changes in estimates and assumptions could materially affect the determination of fair value for each reporting unit and could result in an impairment charge, which could be material to our financial position and results of operations.
Our foreign currency transaction and remeasurement gains and losses are primarily related to foreign currency denominated cash, liabilities and intercompany receivables and payables. Other expense (income) may also include certain nonrecurring items. Income tax expense The Company’s subsidiary, Bioventus LLC (“BV LLC”), is a partnership for U.S. federal tax purposes.
Other (income) expense Other (income) expense primarily consists of foreign currency transaction and remeasurement gains and losses on transactions denominated in currencies other than our functional currency. Our foreign currency transaction and remeasurement gains and losses are primarily related to foreign currency denominated cash, liabilities and intercompany receivables and payables. Other (income) expense may also include certain nonrecurring items.
The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, net of actual forfeitures. Assumptions used in determining stock option fair value include risk-free interest rate, expected dividend yield, expected price volatility, expected life of stock options and weighted-average fair value of stock options granted.
Assumptions used in determining stock option fair value include the risk-free interest rate, expected dividend yield, expected price volatility, expected life of stock options and weighted-average fair value of stock options granted. The expected term of the options granted is estimated using the simplified method. Expected volatility is based on the historical volatility of our peers’ common stock.
These financing outflows were partially offset with $15.0 million in net additional borrowings under our revolving credit facility in 2023. Discontinued Operations Net cash flows from discontinued operations in 2023 were primarily the result of $10.2 million in fees used to settle the CartiHeal disposition and $1.4 million in cash held by the CartiHeal entity at the time of disposal.
Discontinued Operations Net cash flows from discontinued operations in 2023 were primarily the result of $10.2 million in fees used to settle the CartiHeal disposition and $1.4 million in cash held by the CartiHeal entity at the time of disposal. Recently Issued Accounting Pronouncements Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2.
Changes by major product groups were: (i) Pain Treatments—$3.1 million increase due to volume partially offset with lower reported ASP during most of 2023, thereby generating lower reimbursement levels; (ii) Restorative Therapies—$17.4 million net sales decrease due primarily to the divestiture of our Wound Business; and (iii) Surgical Solutions—$8.8 million net sales increase due to volume growth.
Changes by major product groups were: (i) Pain Treatments—$37.0 million increase due to volume growth primarily driven by Durolane; (ii) Surgical Solutions—$25.8 million net sales increase due to volume growth; and (iii) Restorative Therapies—$5.9 million net sales decrease due primarily to the divestiture of our Wound Business ($11.1 million of revenue in 2023) and lower volume from the Advanced Rehabilitation Business, partly offset by increased volumes and higher average selling price related to our EXOGEN Bone Stimulation System in 2024.
Impairment of goodwill We concluded that the carrying value of the U.S. reporting unit exceeded its fair value and recorded a non-cash goodwill impairment charge of $189.2 million during the year ended December 31, 2022, of which $124.7 million was recorded in the impairment of assets and $64.5 million in loss on discontinued operations, net of tax, respectively, within the consolidated statements of operations and comprehensive (loss) income. 78 Table of Contents Loss on disposals The loss on disposals during the year ended December 31, 2023 resulted from $1.5 million in working capital adjustments associated with the sale of our Wound Business and a $2.0 million loss on fixed assets disposed of during the integration of acquisitions.
The loss on disposals during the year ended December 31, 2023 resulted from $1.5 million in working capital adjustments associated with the sale of our Wound Business and a $2.0 million loss on fixed assets disposed of during the integration of acquisitions.
Change in fair value of contingent consideration Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % Change in fair value of contingent consideration $ 719 $ 1,102 $ (383) (34.8 %) The fair value of contingent consideration during year ended December 31, 2023 remained consistent with the prior year comparable period.
Research and development expense Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % Research and development expense $ 13,639 $ 13,446 $ 193 1.4 % Research and development expense remained consistent with the prior year comparable period.
Net sales decreased $5.4 million, or 1.2%, compared to the prior year.
Net sales increased $56.9 million, or 12.7%, compared to the prior year.
The following table sets forth total net sales, net (loss) income and Adjusted EBITDA for the periods presented: Years Ended December 31, (in thousands, except for loss per share) 2023 2022 Net sales $ 512,345 $ 512,117 Net loss from continuing operations $ (121,196) $ (144,651) Adjusted EBITDA (1) $ 88,862 $ 68,610 Loss per Class A common stock, basic and diluted Continuing operations $ (1.54) $ (1.70) Discontinued operations (0.95) (0.89) Loss per Class A common stock, basic and diluted $ (2.49) $ (2.59) (1) See below under Results of Operations-Adjusted EBITDA for a reconciliation of net (loss) income to Adjusted EBITDA.
The following table sets forth total net sales, net loss and Adjusted EBITDA for the periods presented: Years Ended December 31, (in thousands, except for loss per share) 2024 2023 Net sales $ 573,280 $ 512,345 Net loss from continuing operations $ (43,833) $ (121,196) Adjusted EBITDA (1) $ 108,882 $ 88,862 Loss per Class A common stock, basic and diluted Continuing operations $ (0.52) $ (1.54) Discontinued operations — (0.95) Loss per Class A common stock, basic and diluted $ (0.52) $ (2.49) (1) See below under Results of Operations-Adjusted EBITDA for a reconciliation of net loss to Adjusted EBITDA. 69 Table of Contents Significant developments Advanced Rehabilitation Business On September 30, 2024, we entered into a Purchase and Sale Agreement (the “Purchase Agreement”) with a third-party purchaser to sell certain products within our advanced rehabilitation business, including the L100, L300 Go, L360, H200, Vector Gait & Safety System and Bioness Integrated Therapy System (BITS) (collectively, the “Advanced Rehabilitation Business”).
The expected term of the options granted is estimated using the simplified method. Expected volatility is based on the historical volatility of our peers’ common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option.
The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option. Income taxes The tax provision for interim periods is determined using an estimate of our annual effective tax rate, adjusted for discrete items, if any, that arise during the period.
Consolidated Appropriations Act In July 2022, in connection with the Consolidated Appropriations Act, 2021 (“CAA”), the Centers for Medicare and Medicaid Services (“CMS”) began utilizing new pricing information the Company reported to it pursuant to the newly adopted reporting obligations to adjust the Medicare payment to healthcare providers using our Durolane and Gelsyn-3 products. 72 Table of Contents Components of our results of operations Net sales We generate net sales from a portfolio of active healing products that serve physicians spanning the orthopedic continuum, including sports medicine, total joint reconstruction, hand and upper extremities, foot and ankle, podiatric surgery, trauma, spine and neurosurgery.
Components of our results of operations Net sales We generate net sales from a portfolio of active healing products that serve physicians spanning the orthopedic continuum, including sports medicine, total joint reconstruction, hand and upper extremities, foot and ankle, podiatric surgery, trauma, spine and neurosurgery. We report sales net of contractual allowances, rebates and returns.
Restructuring costs recorded in 2023 and 2022 are the result of: i) aligning our organizational and management cost structure to improve profitability and cash flow; and ii) headcount reductions related to 2021 acquisitions. Restructuring costs recorded in 2021 were the result of headcount reductions related to acquisitions.
Restructuring costs recorded in 2023 and 2022 are the result of aligning our organizational and management cost structure to improve profitability and cash flow. Depreciation and amortization Depreciation expense primarily consists of depreciation of computer equipment and software as well as demonstration and consignment inventory, leasehold improvements, furniture, fixtures, machinery and equipment.
We have a majority economic interest, the sole voting interest in, and control the management of BV LLC. As a result, we consolidate the financial results of BV LLC and report a non-controlling interest representing the 20.0% that is owned by the Continuing LLC Owner.
As a result, we consolidate the financial results of BV LLC and report a noncontrolling interest representing the 19.4% that is owned by the Continuing LLC Owner. Noncontrolling interest activity during year ended December 31, 2024 was the result of losses recorded.
The activity for both periods relates to contingent consideration associated with the acquisition of Bioness in March 2021.
Change in fair value of contingent consideration Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % Change in fair value of contingent consideration $ 1,423 $ 719 $ 704 97.9 % Changes in fair value for both periods relates to contingent consideration associated with the acquisition of Bioness in March 2021.
The change in cash was primarily due to the following: Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % Cash flows from continuing operations: Net cash from operating activities $ 17,513 $ (11,407) $ 28,920 (253.5 %) Net cash from investing activities 27,313 (11,595) 38,908 (335.6 %) Net cash from financing activities (26,653) 62,076 (88,729) (142.9 %) Net cash from discontinued operations (13,675) (106,971) 93,296 (87.2 %) Effect of exchange rate changes on cash 629 521 108 20.7 % Net change in cash, cash equivalents and restricted cash $ 5,127 $ (67,376) $ 72,503 (107.6 %) Operating Activities Net cash in operating activities from continuing operations increased $28.9 million, primarily due to lower employee compensation and cost reduction efforts.
The change in cash was primarily due to the following: Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % Cash flows from continuing operations: Net cash from operating activities $ 38,795 $ 17,513 $ 21,282 121.5 % Net cash from investing activities 22,963 27,313 (4,350) (15.9 %) Net cash from financing activities (54,580) (26,653) (27,927) 104.8 % Net cash from discontinued operations — (13,675) 13,675 (100.0 %) Effect of exchange rate changes on cash (2,560) 629 (3,189) NM Net change in cash and cash equivalents $ 4,618 $ 5,127 $ (509) (9.9 %) Operating Activities Net cash in operating activities from continuing operations increased $21.3 million, due to cash collections from sales growth and the timing of working capital payments.
These inflows were partially offset with an increase in interest payments, taxes and inventory payments.
These operating inflows were partially offset with: (i) increases in employee compensation due to higher bonus payments in 2024 compared to prior year; (ii) an increase in inventory purchases; and (iii) an increase in interest payments.
We incurred $1.0 million and $4.3 million in costs during the years ended December 31, 2023 and 2022, respectively, related to MOTYS. No further costs are expected on MOTYS. 76 Table of Contents Net sales Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % U.S.
During the year ended December 31, 2023, other items mainly consisted of the following: (i) strategic transaction costs totaling $4.8 million, including divestiture costs of $1.1 million related to Advanced Rehabilitation; (ii) transformative project costs of $4.5 million; (iii) transition and severance costs of $2.8 million; and (iv) $1.0 million in costs related to the discontinuance of MOTYS. 74 Table of Contents Net sales Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % U.S.
Income tax expense (benefit), net Years Ended December 31, Change (in thousands, except for percentage) 2023 2022 $ % Income tax expense (benefit), net $ 85 $ (44,374) $ 44,459 (100.2) % Effective tax rate 0.1 % 23.5 % (23.4 %) The $44.5 million change in income taxes was driven by movement in net losses before income taxes and the implementation of a full valuation allowance during the first quarter of 2023.
Income tax (benefit) expense, net Years Ended December 31, Change (in thousands, except for percentage) 2024 2023 $ % Income tax (benefit) expense, net $ (5,293) $ 85 $ (5,378) NM Effective tax rate NM - Not Meaningful 10.8 % (0.1) % 10.9 % The $5.4 million change in income taxes was due to the recognition of deferred tax benefits resulting from the impairments recorded.
Investing Activities Net cash flows in investing activities from continuing operations increased $38.9 million, primarily due to the $34.7 million receipt of cash resulting from the sale of the Wound Business, $2.7 million less in capital expenditures and $1.5 million less in other investments and acquisitions in 2023.
Investing Activities Net cash flows in investing activities from continuing operations decreased $4.4 million, primarily due to $10.0 million less net cash received from the sale of businesses, partially offset with $6.4 million less in capital expenditures.
(h) Represents the loss on the disposal of the Wound Business. (i) Other items primarily includes charges associated with strategic transactions, such as potential acquisitions or divestitures, projects associated with improving business capabilities/efficiencies and costs attributable to MOTYS.
(i) Other items primarily include charges associated with strategic transactions, such as potential acquisitions or divestitures and a transformative project to redesign systems and information processing.
Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 10. Restructuring costs for further details regarding these cost cutting efforts. We anticipate that to the extent that we require additional liquidity, we will obtain funding through additional equity financings or the incurrence of other indebtedness or a combination of these potential sources of liquidity.
We anticipate that to the extent that we require capital, we will obtain funding through additional equity financings or the incurrence of other indebtedness or a combination of these potential sources of capital. As of December 31, 2024, we have the ability to borrow up to $40.0 million using our Revolving Credit Facility and available letters of credit.
(in thousands) Current Long-Term Total Long-term debt (a) $ 27,848 $ 354,600 $ 382,448 Interest payments on long-term debt obligations (a) 37,615 58,585 96,200 Lease liabilities (b) 4,816 20,959 25,775 Purchase commitments (c) 35,146 12,973 48,119 $ 105,425 $ 447,117 $ 552,542 (a) Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5.
(in thousands) Current Long-Term Total Long-term debt (a) $ 27,339 $ 310,525 $ 337,864 Interest payments on long-term debt obligations (a) 28,974 21,442 50,416 Lease liabilities (b) 5,104 20,104 25,208 Purchase commitments (c) 29,196 1,223 30,419 $ 90,613 $ 353,294 $ 443,907 (a) Refer to Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5.
Credit and Guaranty Agreement On July 11, 2022, we amended our Credit and Guaranty Agreement, dated as of December 6, 2019 (as previously amended on August 29, 2021 and October 29, 2021) in conjunction with the CartiHeal Acquisition to, among other things, provide for an $80.0 million term loan facility (“Term Loan Facility”).
The Company amended the 2019 Credit Agreement on August 29, 2021, and then again on October 29, 2021 in connection with the acquisition of Misonix, Inc. On July 11, 2022, the Company further amended the 2019 Credit Agreement in conjunction with the acquisition of CartiHeal.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+0 added−1 removed5 unchanged
Biggest changeIn the ordinary course of business, we may enter into contractual arrangements to reduce our exposure to interest rate risks, subject to any applicable limitations in our financing arrangements. We had an interest rate swap agreement to limit our exposure to changes in the variable interest rate on our term loan. The derivative instrument was not designated as a hedge.
Biggest changeIn the ordinary course of business, we may enter into contractual arrangements to reduce our exposure to interest rate risks, subject to any applicable limitations in our financing arrangements. Foreign exchange risk management We operate in countries other than the United States and are exposed to foreign currency risks.
We use derivative instruments to manage exposures to interest rates and foreign currencies. Derivatives are recorded on the balance sheet at fair value at each balance sheet date. We have elected the fair value method of accounting and do not designate whether the derivative instrument is an effective hedge of an asset, liability or firm commitment.
We may use derivative instruments to manage exposures to interest rates and foreign currencies. Derivatives are recorded on the balance sheet at fair value at each balance sheet date. We have elected the fair value method of accounting and do not designate whether the derivative instrument is an effective hedge of an asset, liability or firm commitment.
We are also exposed to interest rate risk in connection with borrowings under our Amended 2019 Credit Agreement, which bear interest at a floating rate based on one-month SOFR plus an applicable borrowing margin.
We are also exposed to interest rate risk in connection with borrowings under our Amended 2019 Credit Agreement, which bear interest at a floating rate based on three-month SOFR plus an applicable borrowing margin.
Effects of inflation We do not believe that inflation has had a material effect on our results of operations during the periods presented herein. 87 Table of Contents
Effects of inflation We do not believe that inflation has had a material effect on our results of operations during the periods presented herein. 84 Table of Contents
As of December 31, 2023, a 1.0% increase in interest rate would result in $9.7 million increase in total interest payable over the remaining life of the Amended 2019 Credit Agreement in the event we were to draw down the entire capacity of our revolving credit facility.
As of December 31, 2024, a 1.0% increase in interest rate would result in $5.9 million increase in total interest payable over the remaining life of the Amended 2019 Credit Agreement in the event we were to draw down the entire capacity of our revolving credit facility.
Changes in the fair values of derivative instruments are recognized in the consolidated statements of operations and comprehensive (loss) income in the period incurred. 86 Table of Contents Interest rate risk Our cash and cash equivalents balance as of December 31, 2023 consisted of demand deposits and institutional money market funds held in U.S. and foreign banks.
Changes in the fair values of derivative instruments are recognized in the consolidated statements of operations and comprehensive loss in the period incurred. Interest rate risk Our cash and cash equivalents balance as of December 31, 2024 consisted of demand deposits and institutional money market funds held in U.S. and foreign banks.
We expect that the percentage of our sales denominated in foreign currencies will increase in the foreseeable future as we continue to expand into international markets. When sales or expenses are not denominated in U.S. dollars, a fluctuation in exchange rates could affect our net income.
We bill most direct sales outside of the United States in local currencies. We expect that the percentage of our sales denominated in foreign currencies will increase in the foreseeable future as we continue to expand into international markets. When sales or expenses are not denominated in U.S. dollars, a fluctuation in exchange rates could affect our net income.
Removed
We terminated this interest rate swap agreement on October 28, 2022. Foreign exchange risk management We operate in countries other than the United States and are exposed to foreign currency risks. We bill most direct sales outside of the United States in local currencies.

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