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MIMEDX GROUP, INC.

MIMEDX GROUP, INC.MDXGEarnings & Financial Report

Nasdaq

MiMedx is an American biomedical company based in Marietta, Georgia, founded in 2008. Using tissues from birth such as the placenta, amniotic sac, and umbilical cord, MiMedx creates skin for skin grafts for medical use.

What changed in MIMEDX GROUP, INC.'s 10-K — 2024 vs 2025

Top changes in MIMEDX GROUP, INC.'s 2025 10-K

297 paragraphs added · 273 removed · 212 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

78 edited+24 added−13 removed117 unchanged
In partnership with these facilities, we are able to obtain donated birth tissue from consenting mothers, which then are shipped to our manufacturing facilities in Marietta, Georgia, and undergo a series of testing followed by our proprietary tissue manufacturing workflow, which we refer to as the PURION® process.
In partnership with these facilities, we are able to obtain donated birth tissue from consenting mothers, which are then shipped to our manufacturing facilities in Marietta, Georgia, and undergo a series of testing followed by our proprietary tissue manufacturing workflow, which we refer to as the PURION® process.
Our Strategic Priorities We manage our business by focusing on the following strategic priorities, which we believe are paramount to the success of MIMEDX over the short- and long-term. Our first priority is to innovate and diversify our product portfolio to maximize growth.
We manage our business by focusing on the following strategic priorities, which we believe are paramount to the success of MIMEDX over the short- and long-term. Our first priority is to innovate and diversify our product portfolio to maximize growth.
We believe that we will be able to obtain an adequate supply of tissue to meet anticipated demand for the foreseeable future. Processing (Manufacturing) The Company has developed and patented a unique and proprietary technique (PURION) for processing allografts from the donated placental tissue.
We believe that we will be able to obtain an adequate supply of tissue to meet anticipated demand for the foreseeable future. Processing and Manufacturing The Company has developed and patented a unique and proprietary technique (PURION) for processing allografts from the donated placental tissue.
The FCA also allows a private individual or entity as a whistleblower to sue on behalf of the government to recover civil penalties and treble damages. FCA liability is potentially significant in the healthcare industry because the statute provides for significant damages (treble) and mandatory penalties per false claim or statement.
The FCA also allows a private individual or entity as a whistleblower to sue on behalf of the government to recover civil penalties and treble damages. FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties per false claim or statement.
Other Regulation Specific to Tissue Products 15 National Organ Transplant Act Procurement of certain human organs and tissue for transplantation is subject to the restrictions of the National Organ Transplant Act (“ NOTA ”), which prohibits the transfer of certain human organs, including skin and related tissue, for valuable consideration, but permits the reimbursement of reasonable expenses associated with the removal, transportation, implantation, processing, preservation, quality control, and storage of human tissue and skin.
Other Regulation Specific to Tissue Products National Organ Transplant Act Procurement of certain human organs and tissue for transplantation is subject to the restrictions of the National Organ Transplant Act (“ NOTA ”), which prohibits the transfer of certain human organs, including skin and related tissue, for valuable consideration, but permits the reimbursement of reasonable expenses associated with the removal, transportation, implantation, processing, preservation, quality control, and storage of human tissue and skin.
We conduct regular surveys of employees to monitor engagement levels and act on feedback received through this process. Our Diversity and Inclusion 18 MIMEDX values the diversity of perspective, experience, and background within our Company. We have stated goals to promote diversity, inclusion, and equal opportunity regardless of race, gender, nationality, ethnic origin, religion, age, or sexual orientation.
We conduct regular surveys of employees to monitor engagement levels and act on feedback received through this process. Our Diversity and Inclusion MIMEDX values the diversity of perspective, experience, and background within our Company. We have stated goals to promote diversity, inclusion, and equal opportunity regardless of race, gender, nationality, ethnic origin, religion, age, or sexual orientation.
Based on this position, the FDA inspected the facilities related to AXIOFILL production using regulations 21 CFR 210 and 211, relating to finished pharmaceutical products in addition to 21 CFR 1271, relating to HCT/Ps (as defined below). The FDA issued a Form 483, which is a list of inspectional observations, at the conclusion of each inspection.
Based on this position, the FDA inspected the facilities related to AXIOFILL production using regulations 21 CFR 210 and 211, relating to finished pharmaceutical products in addition to 21 CFR 1271, 11 relating to HCT/Ps (as defined below). The FDA issued a Form 483, which is a list of inspectional observations, at the conclusion of each inspection.
In order for our employees to do their best work, and for us to achieve our mission, everyone at MIMEDX must feel respected, valued, and included. That’s why we remain focused on cultivating a work environment that encourages healthy growth, development, and promotion of all employees while embracing and valuing everyone’s dimensions of diversity.
In order for our employees to do their best work, and for us to achieve our mission, everyone at MIMEDX must feel respected, valued, and included. That’s why we remain focused on cultivating a work 19 environment that encourages healthy growth, development, and promotion of all employees while embracing and valuing everyone’s dimensions of diversity.
HCT/Ps that do not meet these criteria are subject to more extensive regulation as drugs, medical devices, biological products, or combination products. 14 Products Regulated Solely as Section 361 HCT/Ps The FDA has specific regulations governing HCT/Ps, including some regulations specific to Section 361 HCT/Ps, which are set forth in 21 CFR Part 1271.
HCT/Ps that do not meet these criteria are subject to more extensive regulation as drugs, medical devices, biological products, or combination products. Products Regulated Solely as Section 361 HCT/Ps The FDA has specific regulations governing HCT/Ps, including some regulations specific to Section 361 HCT/Ps, which are set forth in 21 CFR Part 1271.
Each sheet allograft incorporates specialized visual markings that assist the health care practitioner with allograft placement and orientation. 10 To ensure the safety of human tissue products, the FDA enforces CGTP manufacturing regulations. We believe that MIMEDX has developed robust systems to comply with, and is in compliance with, these regulations.
Each sheet allograft incorporates specialized visual markings that assist the health care practitioner with allograft placement and orientation. To ensure the safety of human tissue products, the FDA enforces CGTP manufacturing regulations. We believe that MIMEDX has developed robust systems to comply with, and is in compliance with, these regulations.
We believe our product offering is ideally suited for applications in a growing number of surgical specialties that we are targeting and expect the utilization of our products to continue to grow over time in this market.
We believe our product offering is ideally suited for applications in a growing number of additional surgical specialties that we are targeting and expect the utilization of our products to continue to grow over time in this market.
In February 2020, the AHRQ published a technology assessment analyzing Skin Substitutes for Treating Chronic Wounds. AHRQ conducted a literature search yielding 164 studies and 81 Supplemental Evidence and Data for Systematic Reviews (“ SEADs ”) submissions.
In February 2020, the AHRQ published a technology assessment analyzing Skin Substitutes for Treating Chronic Wounds. AHRQ conducted a literature search yielding 164 studies and 81 Supplemental Evidence and Data for Systematic Reviews 14 (“ SEADs ”) submissions.
Wound 7 The unmet need for healing solutions is large and growing, with an estimated 1-2% of the population in developed countries and worldwide experiencing a chronic wound sometime in their lives 1 .
Wound The unmet need for healing solutions is large and growing, with an estimated 1-2% of the population in developed countries and worldwide experiencing a chronic wound sometime in their lives 1 .
We also make these reports available free of charge on our website, www.mimedx.com, under the heading “ Investors–SEC Filings .” In addition, our Audit Committee, Compensation Committee, Ethics and Compliance Committee, and Nominating and Corporate Governance Committee Charters as well as our Code of Business Conduct and Ethics, are on our website under the heading “ Investors–Corporate Governance .” The reference to our website does not constitute incorporation by reference of any information contained on that site. 19
We also make these reports available free of charge on our website, www.mimedx.com, under the heading “ Investors–SEC Filings .” In addition, our Audit Committee, Compensation Committee, Ethics and Compliance Committee, and Nominating and Corporate Governance Committee Charters as well as our Code of Business Conduct and Ethics, are on our website under the heading “ Investors–Corporate Governance .” The reference to our website does not constitute incorporation by reference of any information contained on that site. 20
Our product portfolio also includes products for the burn market and others. In 2024, we launched HELIOGEN, our first xenograft (animal-derived) and our first 510(k) cleared product in our portfolio.
Our product portfolio also includes products for the burn market and others. 10 In 2024, we launched HELIOGEN, our first xenograft (animal-derived) and our first 510(k) cleared product in our portfolio.
In an effort to deliver long-term value to all of our stakeholders, we incorporate environmental, social, and governance (ESG) objectives that are relevant to our business.
In an effort to deliver long-term value to all of our stakeholders, we incorporate environmental, social, and governance (“ ESG ”) objectives that are relevant to our business.
Environmental Management We have worked with a third-party to conduct an environmental, health, and safety gap assessment in order to accurately benchmark our environmental impact.
Environmental Management 18 We have worked with a third-party to conduct an environmental, health, and safety gap assessment in order to accurately benchmark our environmental impact.
We also maintain a network of independent sales agents that focus on Surgical applications leveraging the complementary products in their 11 portfolios, and provide access to certain customers, as well as sales coverage for areas where we do not have a full-time sales representative. We also sell our products through distributors.
We also maintain a network of independent sales agents that focus primarily on Surgical applications leveraging the complementary products in their portfolios, and provide access to certain customers, as well as sales coverage for areas where we do not have a full-time sales representative. We also sell our products through distributors.
Medicare Coverage The largest third-party payer in the United States is the Medicare program, which is a federally-funded program that provides healthcare coverage for senior citizens and certain disabled individuals. The Medicare program is administered by the Centers for Medicare and Medicaid Services (“ CMS ”), an agency within the U.S. Department of Health and Human Services (“HHS”).
Medicare Coverage The largest third-party payer in the United States is the Medicare program, which is a federally-funded program that provides healthcare coverage for senior citizens and certain disabled individuals. The Medicare program is administered by the Centers for Medicare and Medicaid Services (“ CMS ”), an agency within the U.S. Department of Health and Human Services (“ HHS ”).
These ESG objectives are informed by a combination of feedback from our stakeholders as well as leading ESG frameworks, such as the Sustainability Accounting Standards Board (SASB) Medical Equipment & Supplies standards, under the oversight of our Board of Directors. 17 Environmental Matters Stewardship is a core value at MIMEDX.
These ESG objectives are informed by a combination of feedback from our stakeholders as well as leading ESG frameworks, such as the Sustainability Accounting Standards Board (“ SASB ”) Medical Equipment & Supplies standards, under the oversight of our Board of Directors. Environmental Matters Stewardship is a core value at MIMEDX.
Under JMHLW guidelines, EPIFIX is classified as a Class IV Medical Device and “Specified Biological Product” and is approved for the treatment of refractory ulcers, such as DFUs and VLUs that do not respond to conventional therapy. As a condition of the final approval, MIMEDX is conducting post-market surveillance, consisting of a limited study of over 75 participants.
Under JMHLW guidelines, EPIFIX is classified as a Class IV Medical Device and “Specified Biological Product” and is approved for the treatment of refractory ulcers, such as DFUs and VLUs that do not respond to conventional therapy. As a condition of the final approval, we are conducting post-market surveillance, consisting of a limited study of over 75 participants.
Market Overview Domestic sales currently account for the vast majority of our revenue today. In the United States, our primary areas of clinical use include applications in surgical settings as well as for the treatment of wounds and burns. Additionally we continue to pursue international expansion, primarily targeting Japan, as discussed below.
Market Overview Domestic sales currently account for the vast majority of our revenue today. In the United States, our primary areas of clinical use include applications in surgical settings as well as for the treatment of wounds and to a lesser extent burns. Additionally, we continue to pursue international expansion, primarily targeting Japan, as discussed below.
Competition 13 Due to lower barriers to entry in the Section 361 HCT/P regulated market, competition is intense in the skin substitute market, particularly among human derived products and subject to new entrants and evolving market dynamics. Companies within the industry compete on the basis of price, ease of handling, logistics and efficacy.
Competition Due to lower barriers to entry in the Section 361 HCT/P regulated market, competition is intense in the skin substitute market, particularly among human-derived products and subject to new entrants and evolving market dynamics. Companies within the industry compete on the basis of price, ease of handling, logistics, customer service and efficacy.
Our strategy is to continue to deliver advanced products that serve patient needs within the Advanced Wound Care and Surgical markets and increase access to our products through clinical data generation and physician education.
Our Strategic Priorities Our strategy is to continue to deliver advanced products that serve patient needs within the Advanced Wound Care and Surgical markets and increase access to our products through clinical data generation and physician education.
In the U.S., the most recently available data indicates that chronic wounds affect 10.5 million Medicare beneficiaries and nearly 2.5% of the total population in the U.S. 22 The treatment of chronic wounds with advanced treatments is often referred to as Advanced Wound Care (“ AWC ”).
In the U.S., the most recently available data indicates that chronic wounds affect more than 10 million Medicare beneficiaries and nearly 2.5% of the total population in the U.S. 2 The treatment of chronic wounds with advanced treatments is often referred to as Advanced Wound Care (“ AWC ”).
International Regulation (Japan) In 2021, MIMEDX received regulatory approval from the Japanese Ministry of Health, Labour and Welfare (“ JMHLW ”) to market EPIFIX in Japan.
International Regulation (Japan) In 2021, we received regulatory approval from the Japanese Ministry of Health, Labour and Welfare (“ JMHLW ”) to market EPIFIX in Japan.
Generally, our products currently sold in the United States are regulated as Human Cells, Tissues, and Cellular and Tissue - Based Products ( “HCT/Ps” ), and are subject solely to Section 361 of the Public Health Service Act (“ Section 361 ”) and related regulations, which do not require pre-market clearance or approval by the FDA.
Generally, the products we currently sell in the United States are regulated as Human Cells, Tissues, and Cellular and Tissue - Based Products ( “HCT/Ps” ), and are subject solely to Section 361 of the Public Health Service Act (“ Section 361 ”) and related regulations, which do not require pre-market clearance or approval by the FDA.
As of the date of the filing of this Annual Report, in addition to international patents and patent applications, we own 81 U.S. patents related to our amniotic tissue technology and products, and 12 additional patent applications covering aspects of this technology are pending at the United States Patent and Trademark Office.
As of the date of the filing of this Annual Report, in addition to international patents and patent applications, we own 82 U.S. patents related to our amniotic tissue technology and products, and 10 additional patent applications covering aspects of this technology are pending at the United States Patent and Trademark Office.
Our Global EHS Policy can be found on our Sustainability webpage. Human Capital As of December 31, 2024, we had 837 full time employees. Generally, we consider our relationships with our employees to be good, and none of our employees are covered by a collective bargaining agreement.
Our Global EHS Policy can be found on our Sustainability webpage. Human Capital As of December 31, 2025, we had 808 full time employees. Generally, we consider our relationships with our employees to be good, and none of our employees are covered by a collective bargaining agreement.
In March 2024, the FDA issued a determination letter in connection with the RFD process for AXIOFILL, reaffirming its position that the product does not meet the regulatory classification requirements of a Human Cell, Tissue or Cellular or Tissue-based Product (“ HCT/P ”) under Section 361 of the Public Health Service Act (“ PHSA ”).
In March 2024, the FDA issued a determination letter in connection with the RFD process for AXIOFILL, reaffirming its position that the product does not meet the regulatory classification requirements of a Human Cell, Tissue or Cellular or Tissue-based Product (“ HCT/P ”) under Section 361 of the PHS Act.
The manufacturing of our human derived product offering begins with donated birth tissue, namely the human placental membrane, umbilical cord and the placental disc, which we source through a large donor network developed over multiple years with leading hospitals and clinician groups.
The manufacturing of our human-derived product offering begins with donated birth tissue, namely the human placental membrane, umbilical cord and the placental disc, which we source through a large donor network developed over more than a decade with leading hospitals and clinician groups.
District Court for the Northern District of Georgia and intends to exhaust all legal options available, given the arbitrary and capricious manner in which FDA is regulating like-kind products. Notably, while these proceedings are taking place, the Company is permitted to continue marketing AXIOFILL.The FDA has broad regulatory compliance and enforcement powers.
District Court for the Northern District of Georgia and intends to exhaust all legal options available, given the arbitrary and capricious manner in which FDA is regulating like-kind products. Notably, while these proceedings are taking place, the Company is permitted to continue marketing AXIOFILL.
Our human resource group continuously monitors and benchmarks employee turnover and other trends in our industry and on a regional level to ensure MIMEDX is competitive and responsive to changes in the broader marketplace.
Our human resource group continuously monitors and benchmarks employee turnover and other trends in our industry and on a regional level to ensure we are competitive and responsive to changes in the broader marketplace.
For our HELIOGEN product only, this law requires us (with certain exceptions) to report information to CMS related to certain payments or other transfers of value we make to U.S.-licensed physicians and teaching hospitals, and for reports submitted on or after January 1, 2022, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives.
For our HELIOGEN product only, this law requires us (with certain exceptions) to report information to CMS related to certain payments or other transfers of value we make to U.S.-licensed physicians, teaching hospitals, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists and certified nurse-midwives.
Employee Ethnic/Racial Diversity Black or African American: 26% Hispanic or Latino: 9% Other Non-White (including American Indian, Alaskan Native, Asian, Native Hawaiian, or Other Pacific Islander): 4% Two or more races: 3% White: 57% Not specified: 1% Recruiting, Retaining, and Engaging Talent Talent is our greatest asset and we are dependent on being able to recruit, develop, and retain talent that share our core values.
Employee Ethnic/Racial Diversity Black or African American: 21% Hispanic or Latino: 11% Other Non-White (including American Indian, Alaskan Native, Asian, Native Hawaiian, or Other Pacific Islander): 4% Two or more races: 2% White: 59% Not specified: 2% Recruiting, Retaining, and Engaging Talent Talent is our greatest asset and we are dependent on being able to recruit, develop, and retain talent that share our core values.
Customer Concentration For the years ended December 31, 2024, 2023, and 2022, our top ten customers accounted for 20%, 20% and 19%, r espectively, of our net sales, and net sales to all U.S. government accounts comprised approximately 1%, 2% and 2%, respectively, of our net sales.
Customer Concentration For the years ended December 31, 2025, 2024, and 2023, our top ten customers accounted for 22%, 20% and 20%, respectively, of our net sales, and net sales to all U.S. government accounts comprised approximately 1%, 1% and 2%, respectively, of our net sales.
Marketing and Sales Our direct sales team includes field sales representatives and field sales management, who call on hospitals, wound care clinics, physician offices, and federal health care facilities such as the VA and Department of Defense (“ DoD ”) hospitals. Our direct sales force primarily focuses on the Wound and Surgical categories through multiple sites of service.
Marketing and Sales Our direct sales team includes field sales representatives and field sales management, who call on hospitals, wound care clinics, physician offices, and federal health care facilities. Our direct sales force primarily focuses on the Wound and Surgical categories through multiple sites of service.
Government Regulation and Compliance The products we sell are regulated by the FDA in the United States. The majority of the products currently manufactured and processed by the Company are derived from human tissue.
Government Regulation and Compliance The products we sell are regulated by the FDA in the United States. The majority of the products we currently manufacture and process are derived from human tissue.
Our Product Portfolio & Pipeline Our product offering is comprised of tissue allografts derived from human placental membrane, umbilical cord and the placental disc. These products were developed and are manufactured using our proprietary processes. We sell our placenta-based allograft products under our own brands.
Our Product Portfolio & Pipeline Our product offering is comprised of tissue allografts derived from human placental membrane, umbilical cord, the placental disc, and, in the case of our xenograft, bovine collagen. The majority of our products are developed and manufactured using our proprietary processes. We sell many of our placenta-based allograft products under our own brands.
Our EPIFIX, EPICORD and EPIEFFECT products are all reimbursed under the high cost bundle in these settings. The national HOPD average packaged (“bundled”) rate for our EPIFIX and EPICORD allograft products was $1,715 in 2021, $1,749.26 in 2022, $1,725 in 2023, and $1,738 in 2024.
Our Wound product portfolio, including EPIFIX, EPICORD and EPIEFFECT were all reimbursed under the high cost bundle in these settings. The national HOPD average packaged (“bundled”) rate for Wound allograft products was $1,715 in 2021, $1,749 in 2022, $1,725 in 2023, $1,738 in 2024 and $1,829 in 2025.
The table below provides an overview of MIMEDX’s diversity as of December 31, 2024: Board of Directors Women and minorities hold over 40% of the seats on our Board, including the Chair of the Board. Employee Gender Diversity Female: 57% Male: 43% Women represented 56% of our new hires in 2023.
The table below provides an overview of MIMEDX’s diversity as of December 31, 2025: Board of Directors Women and minorities hold over 40% of the seats on our Board, including the Chair of the Board. Employee Gender Diversity Female: 55% Male: 45% Women represented 50% of our new hires in 2025..
There is a risk we do not report the information related to HELIOGEN accurately and that CMS or another government agency may take the position that our other products are not human cell and tissue products 16 regulated solely under Section 361, and thereby assert that we are currently subject to the Sunshine Act, which could subject us to civil penalties and the administrative burden of having to comply with the law. • Federal conflicts of interest laws, the Standards of Ethical Conduct for Employees of the Executive Branch, and local site policies for each federal institution we call upon govern our interactions with federal employees at our various government accounts ( e.g. , DoD, VA, etc .) and impose a number of limitations on such interactions. • There are state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including commercial insurers, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
There is a risk we do not report the information related to our products accurately which could subject us to civil penalties. • Federal conflicts of interest laws, the Standards of Ethical Conduct for Employees of the Executive Branch, and local site policies for each federal institution we call upon govern our interactions with federal employees at our various government accounts ( e.g. , DoD, VA, etc .) and impose a number of limitations on such interactions. • There are state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payer, including commercial insurers, many of which 17 differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts.
Wound Medicine. 2014;4:1-4. 4. Zelen CM, et al. Int Wound J. 2014;11(2):122-128. 5. Zelen CM, et al. Int Wound J. 2015;12(6):724-732. 6. Zelen CM, et al. Int Wound J. 2016;13(2):272-282. 7. Tettelbach W,et al. Int Wound J. 2019;16(1):122-130. 8. Serena TE, et al. Wound Repair Regen. 2014;22(6):688-693. 9. Bianchi C, et al. Int Wound J. 2018;15(1):114-122. 10.
J Wound Care. 2013;22(7):347-351. 3. Zelen CM, et al. Wound Medicine. 2014;4:1-4. 4. Zelen CM, et al. Int Wound J. 2014;11(2):122-128. 5. Zelen CM, et al. Int Wound J. 2015;12(6):724-732. 6. Zelen CM, et al. Int Wound J. 2016;13(2):272-282. 7. Tettelbach W,et al. Int Wound J. 2019;16(1):122-130. 8. Serena TE, et al. Wound Repair Regen. 2014;22(6):688-693. 9.
Currently, within the HOPD and ASC places of service, skin substitutes are reimbursed under a “packaged” or “bundled” methodology that provides a single payment for both the application of the product as well as the product itself. CMS classifies skin substitutes into low cost or high cost groups.
Within the HOPD and ASC sites of service, skin substitutes were reimbursed under a “packaged” or “bundled” methodology that provided a single payment for both the application of the product as well as the product itself. CMS classified skin substitutes into low cost or high cost groups.
Research and Development Our research and development group has extensive experience in developing products for our target markets, and works to design products that are intended to improve patient outcomes, simplify techniques, shorten procedures, reduce hospitalization and rehabilitation times and, as a result, reduce costs.
Research and Development Our research and development group has extensive experience in developing products for our target markets, and works to design products that are intended to improve patient outcomes, simplify techniques, shorten procedures, reduce hospitalization and rehabilitation times and, as a result, reduce costs. They also work to establish scientific evidence in support of the use of our products.
Our wholly-owned subsidiary, MiMedx Tissue Services, LLC, is registered with the FDA as an establishment that manufactures human cells, tissues, and cellular and tissue- based products and is involved with the recovery and storage of donated human placental tissues. We reimburse tissue banks, hospitals, and physicians for their services associated with the recovery and storage of donated human tissue.
Our wholly owned subsidiary, MiMedx Tissue Services, LLC, is registered with the FDA as an establishment that manufactures human cells, tissues, and cellular and tissue- 16 based products and is involved with the recovery and storage of donated human placental tissues.
Item 1. Business Overview MIMEDX is a pioneer and leader in placental biologics focused on helping humans heal. With more than a decade of helping clinicians manage chronic and other hard-to-heal wounds, MIMEDX is dedicated to providing a leading portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare.
Item 1. Business Overview MIMEDX is a pioneer and leader focused on helping humans heal. With nearly two decades of helping clinicians manage chronic and other hard-to-heal wounds, MIMEDX provides a leading portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare.
Greenhouse Gas (GHG) Emissions MIMEDX has established a baseline of environmental metrics for our business operations as of 2023: • Scope 1 emissions: 1,025 MT CO 2 e • Scope 2 emissions: 3,685 MT CO 2 e (MT CO 2 e = metric tons of carbon dioxide equivalent) We remain committed to monitoring these insights and minimizing our environmental impact as we continue to grow our business.
Greenhouse Gas (GHG) Emissions MIMEDX environmental metrics for business operations in 2025: • Scope 1 emissions: 1,070 MT CO 2 e • Scope 2 emissions: 3,010 MT CO 2 e (MT CO 2 e = metric tons of carbon dioxide equivalent) We remain committed to monitoring these insights and minimizing our environmental impact as we continue to grow our business.
If the FDA determines that the Company has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, such as issuing an FDA Form 483 notice of inspectional observations; sending a warning letter or untitled letter; issuing an order of retention, destruction, or cessation of marketing; imposing civil money penalties; suspending or delaying issuance of approvals; requiring product recalls; imposing a total or partial shutdown of production; withdrawing approvals or clearances already granted; pursuing product seizures, consent decrees or other injunctive relief; and criminal prosecution through the Department of Justice (“ DOJ ”).
If the FDA determines that the Company has failed to comply with applicable regulatory requirements, it can take a variety of compliance or enforcement actions, such as issuing an FDA Form 483 notice of inspectional observations; sending a warning letter or untitled letter; issuing an order of retention, destruction, or cessation of marketing; imposing civil money penalties; suspending or delaying issuance of approvals; requiring product recalls; imposing a total or partial shutdown of production; withdrawing approvals or clearances already granted; pursuing product seizures, consent decrees or other injunctive relief; and criminal prosecution through the Department of Justice (“ DOJ ”). 2017 FDA Guidance and Transition Policy for HCT/Ps In November 2017, the FDA released four guidance documents that, collectively, the agency described as a “comprehensive policy framework” for applying existing laws and regulations governing regenerative medicine products, including HCT/Ps.
Int Wound J. 2019;16(3):761-767 9 online product ordering and account management portal available to our customers designed to streamline ordering, payment processing and reimbursement submissions, We believe execution of these strategic priorities can and will differentiate the value of our portfolio, address multiple areas of significant unmet clinical need, and support our continued growth in both new and existing segments of the market.
To that end, in March 2024 we launched MIMEDX Connect, an online product ordering and account management portal available to our customers designed to streamline ordering, payment processing and reimbursement submissions, We believe execution of these strategic priorities can and will differentiate the value of our portfolio, address multiple areas of significant unmet clinical need, and support our continued growth in both new and existing segments of the market.
The vast majority of our domestic patents covering our core amniotic tissue technology and products will not begin to expire until August 2027. Globally, the Company has over 200 issued and pending patents, and from time to time seeks to enforce its intellectual property rights.
The vast majority of our domestic patents covering our core amniotic tissue technology and products and aspects of this technology will expire between August 2027 and May 2039. Globally, the Company has nearly 300 issued and pending patents, and from time to time seeks to enforce its intellectual property rights.
Achievement of this priority is measured by our ability to maximize our commercial opportunities in the markets we serve with existing and future products, continue to introduce new products from our organic pipeline, such as the late-2023 launch of EPIEFFECT as well as the 2024 launch of HELIOGEN and accelerate market expansion internationally with a particular focus on continuing to grow our presence in Japan.
Achievement of this priority is measured by our ability to maximize our commercial opportunities in the markets we serve with existing and future products, continue to introduce new products from our organic pipeline, such as the late-2025 launch of EPIXPRESS, as well as distribution agreements for RegenKit Wound Gel, Hydrelix Collagen Matrix, NovaForm Wound Matrix and G4Derm Plus and accelerate market expansion internationally with a particular focus on continuing to grow our presence in Japan.
With broad commercial payor coverage, Medicare coverage under the Local Coverage Determinations (“ LCDs ”) scheduled for implementation in April 2025, the largest body of Level 1 clinical evidence among placental allograft products and a dedicated sales team calling on each of the major sites-of-service, we expect to continue to expand our presence in the AWC market, driving future growth of our business 7 .
With broad commercial payor coverage, the largest body of Level 1 clinical evidence among placental allograft products, a growing compendium of additional evidence, including our EPIEFFECT randomized controlled clinical trial (“RCT”) currently in process, and a dedicated sales team calling on each of the major sites-of-service, we expect to continue to expand our presence in the AWC market, driving future growth of our business 7 .
MIMEDX also secured reimbursement approval from JMHLW in September 2022 with an awarded rate of 35,100 Yen/cm 2 , and subsequently entered into an exclusive distribution agreement with Gunze Medical for sales of EPIFIX in Japan. Insurance coverage for EPIFIX provides doctors and patients in Japan with new treatment options and optimal wound care.
The JMHLW reimburses EPIFIX at a rate of 35,100 Yen/cm 2 , Subsequent to obtaining this reimbursement rate in 2022, we entered into an exclusive distribution agreement with Gunze Medical for sales of EPIFIX in Japan, and renewed this agreement in 2025. Insurance coverage for EPIFIX provides doctors and patients in Japan with new treatment options and optimal wound care.
Food & Drug Administration (“ FDA ”) 510(k)-cleared product, HELIOGEN™ Fibrillar Collagen Matrix, a particulate product aimed at addressing complex wounds primarily in the surgical setting. HELIOGEN is manufactured by Regenity Biosciences, a developer and manufacturer of bioresorbable technologies. We employ Current Good Tissue Practices (“ CGTP ”) and terminal sterilization to produce our allografts.
In 2024, we obtained the exclusive rights for and launched our first xenograft product and first U.S. Food & Drug Administration (“ FDA ”) 510(k)-cleared product, HELIOGEN® Fibrillar Collagen Matrix, a particulate product aimed at addressing complex wounds primarily in the surgical setting. HELIOGEN is manufactured by Regenity Biosciences, a developer and manufacturer of bioresorbable technologies.
These wounds require intervention and active management by clinicians and are treated in a variety of sites-of-service, with numerous products aimed at achieving healing for the patient. The costs associated with treatment and management of patients with acute and chronic wounds is also high, with some estimates of the Medicare spend associated with such wounds approaching $100 billion annually.
These wounds require intervention and active management by clinicians and are treated in a variety of sites-of-service, with numerous products aimed at achieving healing for the patient.
Our mission, vision, and core values guide our commitment to leading the category in research and clinical evidence, helping clinicians elevate the standard of care, and providing a safe and healthy environment for our employees.
Our leading portfolio of placental allografts and xenograft products are used by healthcare professionals to treat patients suffering from both acute and chronic, hard-to-heal wounds. Our mission, vision, and core values guide our commitment to leading the category in research and clinical evidence, helping clinicians elevate the standard of care, and providing a safe and healthy environment for our employees.
In addition, establishments are required to update their registration annually in December or within 30 days of certain changes and submit changes in HCT/P listing at the time of or within six months of such change.
In addition, establishments are required to update their registration annually in December or within 30 days of certain changes and submit changes in HCT/P listing at the time of or within six months of such change. 15 The regulations in 21 CFR Part 1271 also require establishments to comply with donor screening, eligibility and testing requirements, and CGTP to prevent the introduction, transmission and spread of communicable diseases.
In addition, in the U.S., an increasing percentage of insured individuals are receiving their medical care through managed care programs (including managed federal healthcare programs) which monitor and may require pre-approval of the products and services that a member receives.
In addition, in the U.S., an increasing percentage of insured individuals are receiving their medical care through managed care programs (including managed federal healthcare programs) which monitor and may require pre-approval of the products and services that a member receives. 12 Ultimately, however, each third-party payer determines whether and on what conditions they will provide coverage for our products, and such decisions often include each payer’s assessment of the science and efficacy of the applicable product.
For Medicare reimbursement purposes, our EPIFIX, EPICORD and EPIEFFECT allografts are classified as “skin substitutes.” Current reimbursement methodology varies between the hospital outpatient department (“ HOPD ”) and ASC setting versus the physician office.
For Medicare reimbursement purposes, products in our Wound portfolio, including our EPIFIX, EPICORD, EPIEFFECT and EPIXPRESS allografts, as well as the CELERA and EMERGE products we acquired from a third party and sold in 2025, are classified as “skin substitutes.” In 2025, the Medicare reimbursement methodology varied between the hospital outpatient department (“ HOPD ”) and ASC setting versus the physician office and associated care settings.
Our research and development group also works to establish scientific evidence in support of the use of our products. Clinical trials that demonstrate the safety, efficacy and cost effectiveness of our products are key to obtaining broader third-party reimbursement for our products.
Clinical trials that demonstrate the safety, efficacy and cost effectiveness of our products are key to obtaining broader third-party reimbursement for our products. In addition to our internal staff, we contract with outside laboratories and physicians who aid us in our research and development process.
Tissue Bank Laws, Regulations, and Related Accreditation As discussed above, we are required to register with the FDA as an establishment that manufactures human cells, tissues, and cellular and tissue-based products. We are licensed, registered, or permitted as a tissue bank in California, New York, Delaware, Illinois, Oregon, and Maryland. Additionally, we received and actively maintain AATB accreditation.
We are licensed, registered, or permitted as a tissue bank in California, New York, Delaware, Illinois, Oregon, and Maryland. Additionally, we received and actively maintain AATB accreditation. The AATB has issued operating standards for tissue banking. Compliance with these standards is required in order to become an AATB-accredited tissue establishment.
Amputation is a catastrophic event for patients, with significant impacts to their quality of life, the lives of their caretakers and the expense burden on the healthcare system. Today, up to one-fifth of diabetic patients who develop a DFU will require some form of amputation.
Ineffective wound management is linked to numerous poor outcomes for patients, up to and including the potential for amputation of the extremity where the wound is present. Amputation is a catastrophic event for patients, with significant impacts to their quality of life, the lives of their caretakers and the expense burden on the healthcare system.
If the FDA were to find serious non-compliant manufacturing or processing practices during such an inspection, it could take regulatory actions that could adversely affect our business, results of operations, financial condition, and cash flows. 2017 FDA Guidance and Transition Policy for HCT/Ps In November 2017, the FDA released four guidance documents that, collectively, the agency described as a “comprehensive policy framework” for applying existing laws and regulations governing regenerative medicine products, including HCT/Ps.
If the FDA were to find serious non-compliant manufacturing or processing practices during such an inspection, it could take regulatory actions that could adversely affect our business, results of operations, financial condition, and cash flows. The FDA has broad regulatory compliance and enforcement powers.
These wounds can be slow to respond or unresponsive to conventional treatments and may benefit from advanced treatments, such as through the use of our products, in order to support the healing process. Our placental allografts are human tissues that are derived from one person (the donor) and used to process products that treat multiple people (the recipients).
Our placental allografts are human tissues that are derived from one person (the donor) and used to process products that treat multiple people (the recipients).
The national HOPD average packaged (“bundled”) rate for our EPIFIX, EPICORD and EPIEFFECT products in 2025 is $1,829.23. CMS assigns lower national rates to the ASC to reflect a less resource-intensive place of service. Revenue in the ASC setting constitutes less than 1% of the Company’s annual net sales.
CMS assigned lower national rates to the ASC to reflect a less resource-intensive place of service. Revenue in the ASC setting constitutes less than 1% of the Company’s annual net sales. Medicare payments for most items and services, including EPIFIX and EPICORD sheet products, have been subject to sequestration reductions of approximately 2% periodically from 2013.
To the extent we sell our products outside of the United States, we also are subject to laws and regulations of foreign countries.
AATB standards include specific requirements for recovery, screening, testing, labeling, processing, and storing of birth tissue. We maintain compliance with AATB standards and our state licensure requirements. To the extent we sell our products outside of the United States, we also are subject to laws and regulations of foreign countries.
Updated May 2022 4 Chronic Wounds: Economic Impact & Costs to Medicare, https://www.woundcarestakeholders.org/news/studies-and-publications/chronic-wounds-economic-impact-costs-to-medicare 5 Five year mortality and direct costs of care for people with diabetic foot complications are comparable to cancer, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7092527/#CR1 6 Epidemiology and Risk of Amputation in Patients With Diabetes Mellitus and Peripheral Artery Disease, https://www.ahajournals.org/doi/10.1161/ATVBAHA.120.314595 8 Traditional dressings such as bandages, gauzes and ointments, along with treatment of active infection and debridement, currently represent the “standard of care” for treating chronic wounds such as DFUs and VLUs.
Updated May 2022 4 Chronic Wounds: Economic Impact & Costs to Medicare, https://www.woundcarestakeholders.org/news/studies-and-publications/chronic-wounds-economic-impact-costs-to-medicare 5 Five year mortality and direct costs of care for people with diabetic foot complications are comparable to cancer, https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7092527/#CR1 8 major lower extremity amputation have an increased five-year mortality rate that is comparable to, and in some cases higher than, patients with many forms of cancer 6 .
We are working to develop additional health economic data to support this effort. As noted above, the ability to sell products in a hospital is dependent upon demonstrating to the hospital the product’s efficacy and cost effectiveness.
As noted above, the ability to sell products in a hospital is dependent upon demonstrating to the hospital the product’s efficacy and cost effectiveness. Our Surgical product portfolio is typically reimbursed under the DRG as are our Wound products, to a much lesser degree.
Over the last several years, a combination of rapidly escalating prices and volumes in the industry has resulted in Medicare spending on skin substitutes to increase dramatically, with annual spending in 2020 of about $500 million to a monthly run-rate of over $1 billion per month by the end of 2024.
Under the rules that were in place through the end of 2025, skin substitute products sold in the physician office and associated care settings were reimbursed at “ASP+6%.” By way of background, over the last several years, a combination of rapidly escalating prices and volumes in the industry resulted in Medicare spending on skin substitutes increasing dramatically, with annual spending rising from about $500 million in 2020 to ~$15 billion in 2025.
The large and increasing number of patients requiring advanced treatment represents a significant cost burden on the healthcare system. The overall cost of treating chronic wounds is rising sharply, and the annual estimated cost in the United States has recently been estimated to exceed $28 billion 4 .
The total costs associated with treatment and management of patients with acute and chronic wounds is also high, as worldwide spend associated with such wounds has historically been estimated to be approximately $150 billion annually. The large and increasing number of patients requiring advanced treatment represents a significant cost burden on the healthcare system.
It is estimated that up to 85% of amputations are avoidable with a holistic, multispecialty team approach that incorporates innovative treatments, such as MIMEDX’s products, and adherence to treatment parameters. MIMEDX is a leader in the cellular tissue products/skin substitute segment of the AWC category and the amniotic tissue allograft sub-category.
Advances in managing chronic and hard-to-heal wounds with solutions such as our EPIFIX® product have been shown to help contribute to improved outcomes for these patients. It is estimated that up to 85% of amputations are avoidable with a holistic, multispecialty team approach that incorporates innovative treatments, such as MIMEDX’s products, and adherence to treatment parameters.
Our third priority is to enhance our customer intimacy, which is a company-wide effort intended to implement programs and introduce offerings in support of lowering customer turnover. To that end, in March 2024 we launched MIMEDX Connect, an 7 Zelen CM, et al. Int Wound J. 2013;10(5):502-507. 2. Zelen CM. J Wound Care. 2013;22(7):347-351. 3. Zelen CM, et al.
Our third priority is to enhance our customer intimacy, which is a company-wide effort intended to implement programs and introduce offerings in support of lowering customer turnover.
Complications from non-healing chronic wounds can ultimately result in significant, life-altering adverse outcomes, such as limb amputation 5 . Ineffective wound management is linked to numerous poor outcomes for patients, up to and including the potential for amputation of the extremity where the wound is present.
The overall cost of treating chronic wounds is rising sharply, and the annual estimated cost in the United States has recently been estimated to exceed $28 billion 4 . Complications from non-healing chronic wounds can ultimately result in significant, life-altering adverse outcomes, such as limb amputation 5 .
In addition to our internal staff, we contract with outside laboratories and physicians who aid us in our research and development process. See Part II, Item 7, below, for information regarding expenditures for research and development in each of the last three fiscal years.
See Part II, Item 7, below, for information regarding expenditures for research and development in each of the last three fiscal years. Environmental, Social & Governance Matters (“ESG”) We focus on providing best-in-class solutions for the AWC and surgical markets.
We believe our first-mover advantage, favorable reimbursement rate, and strong distribution partner set us up for long-term success in this large and growing market. 1 Chronic Wounds Primer, https://pmc.ncbi.nlm.nih.gov/articles/PMC10352385/ 2 Human Wound and Its Burden: Updated 2022 Compendium of Estimates, https://pmc.ncbi.nlm.nih.gov/articles/PMC10615092/ 3 GlobalData: 2022 Wound Care Management- Tissue Engineered Skin Subs U.S.
Adv Wound Care (New Rochelle). 2025;14(9):429-438 2 Human Wound and Its Burden: Updated 2022 Compendium of Estimates, https://pmc.ncbi.nlm.nih.gov/articles/PMC10615092/ 3 GlobalData: 2022 Wound Care Management- Tissue Engineered Skin Subs U.S.
Additionally, we began offering animal-derived products, or xenografts, in 2024 and have plans to further expand our product offering to serve our large and growing customer base. Today, our product offering is comprised of solutions designed to help clinicians treat patients suffering from chronic and other hard-to-heal wounds, primarily in the wound care, burn, and surgical sectors of healthcare.
Historically, our sole focus has been on placental biologics. However, in 2024, we broadened our portfolio and began offering animal-derived products, or xenografts, and in 2025 and early 2026, we entered into agreements with manufacturers of other wound care modalities to further expand our product offering to serve our large and growing customer base.
The Company’s vision is to be the leading global provider of healing solutions through relentless innovation to restore quality of life.
The Company’s vision is to be the leading global provider of healing solutions through relentless innovation to restore quality of life. Since its inception, MIMEDX has focused on leading the industry with its deep expertise, unmatched peer-reviewed scientific and clinical data, robust intellectual property portfolio and an expansive library of real-world evidence supporting the use of our products.
Removed
With deep expertise, leading peer-reviewed data and an expansive library of additional scientific and real-world evidence in the field of placental biologics, MIMEDX develops and distributes placental tissue allografts that are manufactured using patent-protected, proprietary processes for multiple sectors of healthcare.
Added
We continue to look for ways to broaden our portfolio, both inorganically and through our internal research and development efforts. Today, our product portfolio is routinely used to help clinicians treat patients suffering from chronic and other hard-to-heal wounds, in wound care and in an increasing number of surgical specialties.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Physicians may be hesitant to change their existing medical treatment practices for the following reasons, among others: • their lack of experience with advanced therapeutics, such as our placenta-based allografts or xenografts; • lack of evidence supporting additional patient benefits of advanced therapeutics, such as our placenta-based allografts or xenografts, over conventional methods in certain therapeutic applications; • perceived liability risks generally associated with the use of new products and procedures; • limited availability of reimbursement from third-party payers; • more favorable reimbursement for other market-available products; and • the time that must be dedicated to physician training in the use of our products.
Physicians may be hesitant to change their existing medical treatment practices for the following reasons, among others: • their lack of experience with advanced therapeutics, such as our placenta-based allografts, xenografts or other advanced therapies; • lack of evidence supporting additional patient benefits of advanced therapeutics, such as our placenta-based allografts, xenografts or other advanced therapies, over conventional methods in certain therapeutic applications; • perceived liability risks generally associated with the use of new products and procedures; • limited availability of reimbursement from third-party payers; • more favorable reimbursement for other market-available products; and • the time that must be dedicated to physician training in the use of our products.
Furthermore, we believe that substantial uncertainty remains regarding the net effect of the PPACA, or its repeal and potential replacement, on our business, including uncertainty over how benefit plans purchased on exchanges will cover our products, how the expansion or contraction of the Medicaid program will affect access to our products, the effect of risk-sharing payment models such as Accountable Care Organizations and other value-based purchasing programs on coverage for our 30 products, and the effect of the general increase or decrease in federal oversight of healthcare payers.
Furthermore, we believe that substantial uncertainty remains regarding the net effect of the PPACA, or its repeal and potential replacement, on our business, including uncertainty over how benefit plans purchased on exchanges will cover our products, how the expansion or contraction of the Medicaid program will affect access to our products, the effect of risk-sharing payment models such as Accountable Care Organizations and other value-based purchasing programs on coverage for our products, and the effect of the general increase or decrease in federal oversight of healthcare payers.
Nevertheless, while we believe we are fully in compliance with the FDA's Guidance on HCT/Ps, there can be no assurance that we have correctly interpreted the FDA Guidance, or that we will not need to discontinue marketing a product and/or may be subject to fines, penalties, injunctions, and other sanctions if we are deemed to be promoting the use of our products for unapproved uses.
Nevertheless, while we believe we are fully in compliance with the FDA's Guidance on HCT/Ps, there can be no assurance that we have correctly interpreted the FDA’s Guidance, or that we will not need to discontinue marketing a product and/or may be subject to fines, penalties, injunctions, and other sanctions if we are deemed to be promoting the use of our products for unapproved uses.
Adoption of our products in new geographic regions could take longer and cost more than we anticipate. Risks inherent in international operations also include, among others, potential adverse tax consequences, greater difficulty in enforcing intellectual property rights, risks associated with the Foreign Corrupt Practices Act and local anti-bribery law compliance, and other international regulations.
Adoption of our products in new geographic regions could take longer and cost more than we anticipate. Risks inherent in international operations also include, among others, potential 27 adverse tax consequences, greater difficulty in enforcing intellectual property rights, risks associated with the Foreign Corrupt Practices Act and local anti-bribery law compliance, and other international regulations.
Furthermore, many foreign jurisdictions operate under socialized medical care, and obtaining reimbursement for our products under that construct may also prove difficult. If we fail to receive necessary approvals, certifications, or reimbursements necessary to commercialize our products in foreign jurisdictions on a timely basis, or at all, our business, results of operations and financial condition could be adversely affected.
Furthermore, many foreign jurisdictions operate under socialized medical care, and obtaining reimbursement for our products under that construct may 32 also prove difficult. If we fail to receive necessary approvals, certifications, or reimbursements necessary to commercialize our products in foreign jurisdictions on a timely basis, or at all, our business, results of operations and financial condition could be adversely affected.
Attacks are made by individuals or groups that have varying levels of expertise, some of which are technologically advanced and well-funded including, without limitation, nation states, organized criminal groups and hacktivists organizations. 24 To ensure protection of our information, we have invested in cybersecurity and have implemented processes and procedural controls to maintain the confidentiality and integrity of such information.
Attacks are made by individuals or groups that have varying levels of expertise, some of which are technologically advanced and well-funded including, without limitation, nation states, organized criminal groups and hacktivists organizations. To ensure protection of our information, we have invested in cybersecurity and have implemented processes and procedural controls to maintain the confidentiality and integrity of such information.
If we are not successful in obtaining adequate coverage and reimbursement for our products from these third-party payers in one or more of the sites of service where our products are used, it could have an adverse effect on market acceptance of our products. Inadequate reimbursement levels would likely also create downward price pressure on our products.
If we are not successful in obtaining adequate coverage and reimbursement for our products from these third-party payers in one or more of the sites of service where our products are used, it could have an adverse effect on market acceptance of our products. 22 Inadequate reimbursement levels would likely also create downward price pressure on our products.
If we are unable to obtain required FDA clearance or approval for a product or are unduly delayed in doing so, or the uses of that product were limited, our business could suffer. Obtaining and maintaining the necessary regulatory approvals, including conducting clinical trials, for certain of our products or potential products could be expensive and time consuming .
If we are unable to obtain required FDA clearance or approval for a product or are unduly delayed in doing so, or the uses of that product were limited, our business could suffer. 28 Obtaining and maintaining the necessary regulatory approvals, including conducting clinical trials, for certain of our products or potential products could be expensive and time consuming .
Although we have established internal procedures to minimize risks that may arise from quality issues, we may not be able to eliminate or mitigate occurrences of these issues and associated liabilities. If the quality of our products does not meet the expectations of physicians or patients, then our brand reputation could suffer and our business could be adversely impacted.
Although we have established internal procedures to minimize risks that may arise from quality issues, we may not be able to eliminate or mitigate occurrences of these issues and associated liabilities. If the quality of our products does not meet the expectations of physicians or patients, then our brand reputation could suffer and our business could be 24 adversely impacted.
There also may be existing patents or pending patent applications of which we are unaware that our products or processes may inadvertently infringe. 32 Any infringement claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation.
There also may be existing patents or pending patent applications of which we are unaware that our products or processes may inadvertently infringe. Any infringement claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation.
The Citizens Credit Agreement also contains certain customary events of default, including, without limitation, (i) failure to pay interest or principal when due, (i) failure to provide notice of certain material events and (iii) failure to perform or observe certain covenants under the Citizens Credit Agreement or any related loan documents (subject to a 30-day grace period in certain circumstances).
The Citizens Credit Agreement also contains certain customary events of default, including, without limitation, (i) failure to pay interest or principal when due, (ii) failure to provide notice of certain material events and (iii) failure to perform or observe certain covenants under the Citizens Credit Agreement or any related loan documents (subject to a 30-day grace period in certain circumstances).
Compliance with such covenants may restrict our operating flexibility, and in the event that we were unable to comply with such covenants, leading to default and acceleration, this could adversely affect our business, results of operations and financial condition. EW Healthcare Partners and its interests may conflict with those of our other shareholders.
Compliance with such covenants may restrict our operating flexibility, and in the event that we were unable to comply with such covenants, leading to default and acceleration, this could adversely affect our business, results of operations and financial condition. 35 EW Healthcare Partners and its interests may conflict with those of our other shareholders.
Additionally, the Sunshine Act, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (such as 29 physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually to CMS certain ownership and investment interests held by physicians and their immediate family members.
Additionally, the Sunshine Act, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (such as 31 physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually to CMS certain ownership and investment interests held by physicians and their immediate family members.
If we are unable to establish new independent sales representative and distribution relationships or renew current sales agency and distribution agreements on commercially acceptable terms, our business, financial condition, and results of operations could be materially and adversely affected. 22 Disruption of our processing facilities could adversely affect our business, financial condition and results of operations.
If we are unable to establish new independent sales representative and distribution relationships or renew current sales agency and distribution agreements on commercially acceptable terms, our business, financial condition, and results of operations could be materially and adversely affected. Disruption of our processing facilities could adversely affect our business, financial condition and results of operations.
We may also hire additional employees who are currently employed at other medical device, pharmaceutical or tissue companies, including our competitors. Additionally, consultants or other independent agents with which we may contract may be or have been in a contractual arrangement with one or more of our competitors.
We may also hire additional employees who are currently employed at other medical device, pharmaceutical or tissue companies, including 34 our competitors. Additionally, consultants or other independent agents with which we may contract may be or have been in a contractual arrangement with one or more of our competitors.
Whether a patent claim is valid is a complex matter of science, facts and law, and therefore we cannot be certain that, if challenged in a court of law, or through an administrative proceeding, our patent claims would be upheld.
Whether a patent claim is valid is a complex matter of science, facts and law, and therefore we cannot be certain that, if challenged in a court of law, or through an administrative proceeding, our 33 patent claims would be upheld.
As a general rule, FDA regulations require that the marketing of 361 HCT/Ps only be for appropriate homologous uses, and that the promotion of pre-approved biological products or devices only be for FDA-approved indications.
As a general rule, FDA regulations require that the marketing of Section 361 HCT/Ps only be for appropriate homologous uses, and that the promotion of pre-approved biological products or devices only be for FDA-approved indications.
Many of our products depend on the availability of tissue from human donors, and any disruption in supply could adversely affect our business. The success of our human tissue products depends upon, among other factors, the availability of tissue from human donors.
Many of our products depend on the availability of tissue from human donors, and any disruption in supply could adversely affect our business. The commercial success of our human tissue products depends upon, among other factors, the availability of tissue from human donors.
Furthermore, even if we are granted 26 regulatory clearances or approvals, they may include significant limitations on the indicated uses of the product, which may limit the potential customers for the product.
Furthermore, even if we are granted regulatory clearances or approvals, they may include significant limitations on the indicated uses of the product, which may limit the potential customers for the product.
We may be subject 23 to such claims if our products cause, or appear to have caused, an injury. Claims may be made by patients, healthcare providers or others selling our products.
We may be subject to such claims if our products cause, or appear to have caused, an injury. Claims may be made by patients, healthcare providers or others selling our products.
These provisions of Florida law and our articles of incorporation and bylaws could negatively affect our share price, prevent attempts by shareholders to remove current management, prohibit or delay mergers or other takeovers or changes of control of the Company and discourage attempts by other companies to acquire us, even if such a transaction would be beneficial to our shareholders. 35 Item 1B.
These provisions of Florida law and our articles of incorporation and bylaws could negatively affect our share price, prevent attempts by shareholders to remove current management, prohibit or delay mergers or other takeovers or changes of control of the Company and discourage attempts by other companies to acquire us, even if such a transaction would be beneficial to our shareholders. 37 Item 1B.
We may fail to obtain or maintain foreign regulatory approvals to market our products in other countries. We currently market our products in a small number of foreign countries, including in Japan. Foreign jurisdictions require separate regulatory approvals and compliance with numerous and varying regulatory requirements. The approval procedures vary among countries and may involve requirements for additional testing.
We may fail to obtain or maintain foreign regulatory approvals to market our products in other countries. We currently market our products in a limited number of foreign countries, including in Japan. Foreign jurisdictions require separate regulatory approvals and compliance with numerous and varying regulatory requirements. The approval procedures vary among countries and may involve requirements for additional testing.
Further, they may copy our products outside the United States. The presence of this competition may lead to pricing pressure, which could have an adverse effect on our business, results of operations and financial condition.
Further, they may copy our products inside or outside the United States. The presence of this competition may lead to pricing pressure, which could have an adverse effect on our business, results of operations and financial condition.
The market price of our Common Stock could be impacted by a variety of factors, including: • Fluctuations in stock market prices and trading volumes of similar companies or of the markets generally; • Our ability to successfully launch, market and earn significant revenue from our products; • Our ability to obtain additional financing to support our continuing operations; • Disclosure of the details and results of our clinical trials and our regulatory applications and proceedings; • Developments in and disclosure or publicity regarding existing or new litigation or contingent liabilities; • Changes in government regulations or our failure to comply with any such regulations; • Additions or departures of key personnel; • Our investments in research and development or other corporate resources; • Announcements of technological innovations or new commercial products by us or our competitors; • Developments in the patents or other proprietary rights owned or licensed by us or our competitors; • The timing of new product introductions; • Actual or anticipated fluctuations in our operating results, including as a result of seasonality in our business, as well as any restatements of previously reported results; • Our ability to effectively and consistently process or manufacture our products and avoid costs associated with the recall of defective or potentially defective products; • Our ability and the ability of our distribution partners to market and sell our products; • Changes in reimbursement for our products or the price for our products to our customers; • Removal of our products from the FSS, or changes in how government accounts purchase products such as ours or in the price for our products to government accounts; • Activities of market participants and investors, including analysts and MIMEDX shareholders; • Material amounts of short-selling of our Common Stock; and • The other risks detailed in this Item 1A. 34 Any unanticipated shortfall in our revenue in any fiscal quarter could have an adverse effect on our results of operations in that quarter.
The market price of our Common Stock could be impacted by a variety of factors, including: • Fluctuations in stock market prices and trading volumes of similar companies or of the markets generally; • Our ability to successfully launch, market and earn significant revenue from our products; • Our ability to obtain additional financing to support our continuing operations; • Disclosure of the details and results of our clinical trials and our regulatory applications and proceedings; • Developments in and disclosure or publicity regarding existing or new litigation or contingent liabilities; • Changes in government regulations or our failure to comply with any such regulations; • Additions or departures of key personnel; • Our investments in research and development or other corporate resources; • Announcements of technological innovations or new commercial products by us or our competitors; • Developments in the patents or other proprietary rights owned or licensed by us or our competitors; • The timing of new product introductions; • Actual or anticipated fluctuations in our operating results, including as a result of seasonality in our business, as well as any restatements of previously reported results; • Our ability to effectively and consistently process or manufacture our products and avoid costs associated with the recall of defective or potentially defective products; • Our ability and the ability of our distribution partners to market and sell our products; • Changes in reimbursement for our products or the price for our products to our customers; • Removal of our products from the FSS, or changes in how government accounts purchase products such as ours or in the price for our products to government accounts; • Activities of market participants and investors, including analysts and MIMEDX shareholders; • Material amounts of short-selling of our Common Stock; and • The other risks detailed in this Item 1A.
The process of obtaining formal FDA clearance or approval, such as a 510(k), BLA, or equivalent, including clinical trial development and execution as well as manufacturing processes, requires the expenditure of substantial time, effort and financial resources and may take years to complete, including costs incurred on top of those fees incurred as part of conducting various clinical studies.
The process of obtaining formal FDA clearance or approval, such as a 510(k), Biological License Application (“ BLA ”), or equivalent, including clinical trial development and execution as well as manufacturing processes, requires the expenditure of substantial time, effort and financial resources and may take years to complete, including costs incurred on top of those fees incurred as part of conducting various clinical studies.
In 2024, approximately 24% of our sales were through our relationships with independent agents, and we also use a small number of distributors, primarily outside the United States, and may use more in the future. Sales agents act directly on behalf of MIMEDX to arrange sales, while distributors take title to product and may set their own prices.
In 2025, approximately 26% of our sales were through our relationships with independent agents, and we also use a small number of distributors, primarily outside the United States, and may use more in the future. Sales agents act directly on behalf of MIMEDX to arrange sales, while distributors take title to product and may set their own prices.
In addition, if the benefits of any proposed acquisition do not meet the expectations of investors and analysts, our stock price may decline. A portion of our revenues and accounts receivable come from government accounts. Some of our revenues are derived from sales, both direct and through a distributor, to the government.
In addition, if the benefits of any proposed acquisition do not meet the expectations of investors and analysts, our stock price may decline. A portion of our revenues and accounts receivable come from government accounts. Some of our revenues are derived from sales to the government.
If we fail to comply with the FDA regulations regarding our tissue products, the FDA could take enforcement action, including, without limitation, any of the following sanctions and the manufacture of our products or processing of our tissue could be delayed or terminated: • untitled letters, warning letters, cease and desist orders, fines, injunctions, and civil penalties; • recall or seizure of our products; • operating restrictions, partial suspension or total shutdown of production; • refusing our requests for clearance or approval of new products; • withdrawing or suspending current applications for approval or approvals already granted; • refusal to grant export approval for our products; and • criminal prosecution. 27 The FDA’s regulation of HCT/Ps may continue to evolve.
If we fail to comply with the FDA regulations regarding our tissue products, the FDA could take enforcement action, including, without limitation, any of the following sanctions and the manufacture of our products or processing of our tissue could be delayed or terminated: • untitled letters, warning letters, cease and desist orders, fines, injunctions, and civil penalties; • recall or seizure of our products; • operating restrictions, partial suspension or total shutdown of production; • refusing our requests for clearance or approval of new products; • withdrawing or suspending current applications for approval or approvals already granted; • refusal to grant export approval for our products; and • criminal prosecution.
Approximately 76% of our sales in the year ended December 31, 2024 came from customers that are members of our primary GPOs or IDNs. Our agreements with GPOs and IDNs allow us to sell our products efficiently to large groups of customers.
Approximately 43% of our sales in the year ended December 31, 2025 came from customers that are members of our primary GPOs or IDNs. Our agreements with GPOs and IDNs allow us to sell our products efficiently to large groups of customers.
We measure these controls and their success through a cybersecurity framework that is based on industry standards. While we have invested in the protection of our data and technology, there can be no guarantees that our efforts will prevent all service interruptions or security breaches.
We measure these controls and their success through a cybersecurity framework that is based on industry standards. Refer to Item 1C, Cybersecurity , for additional discussion. While we have invested in the protection of our data and technology, there can be no guarantees that our efforts will prevent all service interruptions or security breaches.
If our agreement with any GPO or IDN is terminated or expires without being extended, renewed or renegotiated, this could adversely affect our revenue, results of operations and cash flows. We contract with and are dependent upon independent sales agents and distributors.
If, as a result of competition, pricing, or any other reason, our agreement with any GPO or IDN is terminated or expires without being extended, renewed or renegotiated, this could adversely affect our revenue, results of operations and cash flows. We contract with and are dependent upon independent sales agents and distributors.
Further, we have experienced some reluctance by payers to cover our products under certain circumstances, including for applications other than those for which we have published clinical efficacy data.
In the past, we have also experienced some reluctance by payers to cover our products under certain circumstances, including for applications other than those for which we have published clinical efficacy data.
Our revenues depend on adequate reimbursement from public and private insurers and health systems and changes to the ways in which our products are reimbursed in various sites of service could adversely impact our financial results.
Our revenues depend on adequate reimbursement from public and private insurers and health systems and changes to the ways in which our products are reimbursed in various sites of service could adversely impact our financial results. The reimbursement landscape for our products varies depending upon the site in which the products are administered.
If one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause our stock price to decline. Fluctuations in revenue or results of operations could cause additional volatility in our stock price.
If one or more of these analysts cease coverage of us, we could lose visibility in the market, which in turn could cause our stock price to decline.
Many of the products we manufacture and process are derived from human tissue.
Currently, all of the products we manufacture and process are derived from human tissue.
The Citizens Credit Agreement imposes operating and financial restrictions and covenants. The Company must comply with certain financial covenants, including, a maximum total net leverage ratio and a minimum consolidated fixed charge coverage ratio.
The Company must comply with certain financial covenants, including, a maximum total net leverage ratio and a minimum consolidated fixed charge coverage ratio.
As of December 2024, the Company had aggregate borrowings outstanding of $19.0 million under its Term Loan Facility, pursuant to its Citizens Credit Agreement (as defined below in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations ).
As of December 2025, we had aggregate borrowings outstanding of $18.0 million under our Term Loan Facility, pursuant to our Citizens Credit Agreement (as defined below in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations ).
Finally, we and other manufacturers of skin substitutes are required to provide average sales price (“ ASP ”) information to CMS on a quarterly basis. The Medicare payment rates are updated quarterly based on this ASP information.
Finally, we and other manufacturers of skin substitutes are required to provide average sales price (“ ASP ”) information to CMS on a quarterly basis.
Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the stock price. If we fail to attract the coverage of securities analysts, or if securities analysts discontinue covering our common stock, the lack of research coverage may adversely affect the actual and potential market price of our common stock.
If we fail to attract the coverage of securities analysts, or if securities analysts discontinue covering our common stock, the lack of research coverage may adversely affect the actual and potential market price of our common stock.
The success of any new product offering or enhancement to an existing product will depend on numerous factors, including our ability to: • properly identify and anticipate physician and patient needs; • acquire, through licensing, co-development or outright purchase, new technology developed outside of MIMEDX; • develop and introduce new products or product enhancements in a timely manner; • adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third parties; • demonstrate the safety and efficacy of new products; and • obtain the necessary regulatory clearances or approvals for new products or product enhancements. 20 If we do not develop and, when necessary, obtain regulatory clearance or approval for new products or product enhancements in time to meet market demand, or if there is insufficient demand for these products or enhancements, our results of operations and financial condition will suffer.
The success of any new product offering or enhancement to an existing product will depend on numerous factors, including our ability to: • properly identify and anticipate physician and patient needs; • acquire, through licensing, co-development or outright purchase, new technology developed outside of MIMEDX; • develop and introduce new products or product enhancements in a timely manner; • adequately protect our intellectual property and avoid infringing upon the intellectual property rights of third parties; • demonstrate the safety and efficacy of new products; and 21 • obtain the necessary regulatory clearances or approvals for new products or product enhancements.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have an adverse effect on our business, results of operations and financial condition.
Failure to successfully manage these risks in the development and implementation of new lines of business or new products or services could have an adverse effect on our business, results of operations and financial condition. Our international expansion and operations outside the U.S. expose us to risks associated with international sales and operations.
These fluctuations could cause the trading price of our stock to be negatively affected. Our quarterly operating results have varied substantially in the past and may vary substantially in the future. We do not intend to pay cash dividends on our Common Stock. We have never declared or paid cash dividends on our Common Stock.
Our quarterly operating results have varied substantially in the past and may vary substantially in the future. We do not intend to pay cash dividends on our Common Stock. We have never declared or paid cash dividends on our Common Stock.
Item 1A. Risk Factors An investment in our Common Stock involves a substantial risk of loss. Set forth below is a summary of the risks and uncertainties affecting our business that we currently believe to be material.
Item 1A. Risk Factors An investment in our Common Stock involves a substantial risk of loss. Set forth below is a summary of the risks and uncertainties affecting our business that we currently believe to be material. Our future operating results could differ materially from the results described in this Annual Report due to the risks and uncertainties described below.
FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of between $13,946 and $27,894 per false claim or statement for penalties assessed after February 12, 2024, with respect to violations occurring after November 2, 2015.
FCA liability is potentially significant in the healthcare industry because the statute provides for treble damages and mandatory penalties of between $14,308 and $28,619 per false claim or statement for penalties assessed after July 3, 2025, with respect to violations occurring after November 2, 2015.
Consequently, the effects of a default under other debt may be amplified by the lenders exercising the remedies available to it in the Citizens Credit Agreement for events of default, including foreclosure on the collateral securing our obligations and the declaration that all amounts outstanding under the Citizens Credit Agreement are immediately due and payable. 33 The restrictive covenants in the Citizens Credit Agreement, and the Company’s obligation to make payments under the Citizens Credit Agreement, limit our operating and financial flexibility and may adversely affect our business, results of operations and financial condition.
Consequently, the effects of a default under other debt may be amplified by the lenders exercising the remedies available to it in the Citizens Credit Agreement for events of default, including foreclosure on the collateral securing our obligations and the declaration that all amounts outstanding under the Citizens Credit Agreement are immediately due and payable.
A finding of a violation of one or more 28 of these laws, or even a government investigation or inquiry into the same, would likely result in a material adverse effect on the market price of our Common Stock, as well as on our business, results of operations, and financial condition.
A finding of a violation of one or more of these laws, or even a government investigation or inquiry into the same, would likely result in a material adverse effect on the market price of our Common Stock, as well as on our business, results of operations, and financial condition. 30 We are subject to the AKS as amended by the Patient Protection and Affordable Care Act (the “ PPACA ”).
Complying with any such new regulatory requirements may entail significant time delays and expense, which could have an adverse effect on our business, results of operations and financial condition. The AATB has issued operating standards for tissue banking. Compliance with these standards is a requirement in order to become an accredited tissue bank.
The FDA’s regulation of HCT/Ps may continue to evolve. Complying with any such new regulatory requirements may entail significant time delays and expense, which could have an adverse effect on our business, results of operations and financial condition. 29 The AATB has issued operating standards for tissue banking.
Even if we do succeed in obtaining widespread coverage and reimbursement rates or policies for our products, future changes in coverage or reimbursement rates or policies could have a negative impact on our business, financial condition and results of operations.
Even if we do succeed in obtaining widespread coverage and reimbursement rates or policies for our products, future changes in coverage or reimbursement rates or policies could have a negative impact on our business, financial condition and results of operations. At the end of 2025, CMS announced sweeping changes related to the reimbursement of skin substitutes, beginning January 1, 2026.
Our international expansion and operations outside the U.S. expose us to risks associated with international sales and operations. 25 We are pursuing further expansion outside the U.S., including in Japan. Managing a global organization is difficult, time consuming and expensive.
We are pursuing further expansion outside the U.S., including in Japan. Managing a global organization is difficult, time consuming and expensive.
We currently expect to use available funds and any future earnings; in the development, operation and expansion of our business; to repay debt; and, to the extent authorized by our Board, repurchasing our Common Stock. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future.
We currently expect to deploy our capital toward various goals, including the development, operation and expansion of our business, the repayment of debt, and, to the extent authorized by our Board, potential repurchases of our Common Stock. We do not anticipate paying any cash dividends on our Common Stock in the foreseeable future.
Furthermore, if we fail to maintain relationships with our key independent agents, or fail to ensure that our independent agents adhere to our sales processes, compliance safeguards and related policies, there could be an adverse effect on our business, results of operations, and financial condition.
Furthermore, if we fail to maintain relationships with our key independent agents, or fail to ensure that our independent agents adhere to our sales processes, compliance safeguards and related policies, there could be an adverse effect on our business, results of operations, and financial condition. 23 We may obtain the assistance of additional distributors and independent sales representatives to sell products in certain sales channels, particularly in territories and fields where agents are commonly used.
If we cannot successfully address quality issues that may arise with our products, our brand reputation could suffer, and our business, financial condition, and results of operations could be adversely impacted.
If we are unsuccessful in educating physicians to maintain or increase adoption of our products, it could have an adverse effect on our business and results of operations. If we cannot successfully address quality issues that may arise with our products, our brand reputation could suffer, and our business, financial condition, and results of operations could be adversely impacted.
These legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. In addition, our pending patent applications include claims to material aspects of our products and procedures that may not be protected by issued patents. The patent application process can be time consuming and expensive.
In addition, our pending patent applications include claims to material aspects of our products and procedures that may not be protected by issued patents. The patent application process can be time consuming and expensive.
We believe that substantial uncertainty remains regarding the specific reform measures and proposed legislation that could impact our industry. Any changes will likely take time to unfold and could have an impact on coverage and reimbursement for healthcare items and services, including our products.
Any changes will likely take time to unfold and could have an impact on coverage and reimbursement for healthcare items and services, including our products.
We are subject to the AKS as amended by the Patient Protection and Affordable Care Act (the “ PPACA ”). A conviction for violation of the AKS results in criminal fines and requires mandatory exclusion from participation in federal health care programs.
A conviction for violation of the AKS results in criminal fines and requires mandatory exclusion from participation in federal health care programs.
As a result, growth in federal government spending on healthcare increased 36% in 2020. Within our industry, Medicare expenditures on skin substitute products have increased dramatically from 2019, when annual spending on these products administered in private physician offices and associated care settings was approximately $0.5 billion.
Within our industry, Medicare expenditures on skin substitute products have increased dramatically from 2019, when annual spending on these products administered in private physician offices and associated care settings was approximately $0.5 billion. By 2024, annual expenditures for this class of products totaled approximately $10 billion, and more recently, spending by Medicare approached a $15 billion annual run rate.
Our quarterly operating results have varied substantially in the past and may vary substantially in the future, including as a result of seasonality in our business. Price volatility or a decrease in the market price of our Common Stock could have an adverse effect on our ability to raise capital, liquidity, business, financial condition and results of operations.
Price volatility or a decrease in the market price of our Common Stock could have an adverse effect on our ability to raise capital, liquidity, business, financial condition and results of operations. Securities analysts may elect not to report on our common stock or may issue negative reports that adversely affect the stock price.
However, risks exist with any human tissue implantation. Also, negative publicity concerning disease transmission from other companies’ improperly processed donated tissue could have a negative impact on the demand for our products and adversely affect our business, financial condition and results of operations.
Also, negative publicity concerning disease transmission from other companies’ improperly processed donated tissue could have a negative impact on the demand for our products and adversely affect our business, financial condition and results of operations. 25 We may implement a product recall or voluntary market withdrawal, which could significantly increase our costs, damage our reputation, disrupt our business and adversely affect our business, results of operations and financial condition.
If we are alleged to have not complied with existing or new laws, rules and regulations related to personal information, we could be subject to litigation and to sanctions that include monetary fines, civil or administrative penalties, civil damage awards or criminal penalties. 31 Risks Related to Our Intellectual Property Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain and may be inadequate, which could have an adverse effect on our business, results of operations and financial condition.
If we are alleged to have not complied with existing or new laws, rules and regulations related to personal information, we could be subject to litigation and to sanctions that include monetary fines, civil or administrative penalties, civil damage awards or criminal penalties.
To be commercially successful, we must educate physicians, where appropriate, how and when our products are proper alternatives to existing treatments and that our products should be used in their procedures.
If we were unable to renew our leases or relocate on favorable terms, this could have a material adverse effect on our business, financial condition and results of operations. To be commercially successful, we must educate physicians, where appropriate, how and when our products are proper alternatives to existing treatments and that our products should be used in their procedures.
Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We rely on patent protection, as well as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology, including our licensed technology.
We rely on patent protection, as well as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology, including our licensed technology. These legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage.
Changes in the coverage and reimbursement environment as described above could result in declines in our revenue that would adversely affect our business, financial condition and results of operation. Our revenue, results of operations and cash flows may suffer upon the loss of a Group Purchasing Organization or Integrated Delivery Network.
Our revenue, results of operations and cash flows may suffer upon the loss of a Group Purchasing Organization or Integrated Delivery Network.
We may implement a product recall or voluntary market withdrawal, which could significantly increase our costs, damage our reputation, disrupt our business and adversely affect our business, results of operations and financial condition. The processing and marketing of our tissue products involves an inherent risk that our tissue products or processes may not meet applicable quality standards and requirements.
The processing and marketing of our tissue products involves an inherent risk that our tissue products or processes may not meet applicable quality standards and requirements.
As of December 31, 2024, EW Healthcare Partners and their affiliates owned approximately 19.3% of our Common Stock (calculated on the basis described in Item 12, “ Security Ownership Of Certain Beneficial Owners And Management” below).
As of December 31, 2025, EW Healthcare Partners and their affiliates beneficially owned approximately 19% of our Common Stock.
In addition, some states have their own tissue banking regulations.
Compliance with these standards is a requirement in order to become an accredited tissue bank. In addition, some states have their own tissue banking regulations.
By 2023, annual expenditures for this class of products totaled over $4 billion, and more recently, spending by Medicare has reached an excess of $1 billion per month in the category. As a result, CMS”) and the MACs have sought ways to implement coverage and payment reform in order to curb the dramatically increasing expenditures in our industry.
As a result, CMS and the MACs have sought ways to implement coverage and payment reform in order to curb the dramatically increasing expenditures in our industry. At the end of 2025, CMS announced sweeping changes related to the reimbursement of skin substitutes, beginning January 1, 2026.
These LCDs are scheduled to become effective on April 13, 2025. In the past, LCDs have been delayed or terminated. If these LCDs were to be delayed or terminated, they may not go into effect in April 2025. Changes to the manner and amounts Medicare reimburses for our products could have an impact on their utilization.
The specific policies were put into effect in the PFS and OPPS. Changes to the manner and amounts Medicare reimburses for our products could have an impact on their utilization. We believe that substantial uncertainty and unknowns remain regarding the specific reform measures and proposed legislation that could impact our industry.
Removed
Our success depends on the extent to which our customers receive adequate reimbursement for the costs of our products and related treatments from third-party payers, including government healthcare programs, such as Medicare and Medicaid, as well as private insurers and health systems.
Added
If we do not develop and, when necessary, obtain regulatory clearance or approval for new products or product enhancements in time to meet market demand, or if there is insufficient demand for these products or enhancements, our results of operations and financial condition will suffer.
Removed
Government and other third-party payers attempt to contain healthcare costs by limiting both coverage and the level of reimbursement of medical products, particularly new products. Therefore, significant 21 uncertainty may exist as to the reimbursement status of new healthcare products by third-party payers.
Added
These changes include: 1) reimbursing skin substitute products uniformly across the HOPD and physician office and associated care settings and 2) changing the reimbursement rate for skin substitutes from the “ASP+6%” methodology to a flat rate at $127.14 per square centimeter in these care settings, subject to geographic adjustments.
Removed
Although EPIFIX and EPICORD have coverage with the majority of large payers, a significant number of public and private insurers currently do not cover or reimburse our other products. The reimbursement landscape for our products varies depending upon the site in which the products are administered.
Added
The specific policies were put into effect in the PFS and OPPS. Historically, third-party payors often rely on the coverage policies and payment limitations imposed by Medicare and other government payors, in setting their own coverage policies and reimbursement rates.
Removed
Since 2022, several wide-ranging proposals have been published for public comment, including relating to payment methodology within the physician office, with potential to change how CMS reimburses for skin substitute products at a national level.
Added
Our inability to promptly obtain coverage and profitable payment rates from hospital budget, government-funded and private payors, could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
Removed
We may obtain the assistance of additional distributors and independent sales representatives to sell products in certain sales channels, particularly in territories and fields where agents are commonly used.
Added
Healthcare reform measures such as the 2026 reimbursement changes may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product.
Removed
Notably, the COVID-19 pandemic had a significant impact on the nation’s health sector expenditures, beginning in 2020, primarily driven by increased federal spending, including financial assistance to providers to make up for lost revenue through the Provider Relief Fund, the Paycheck Protection Program, and increased federal public health spending such as spending for vaccine development, COVID testing, and health facility preparedness.
Added
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our product offerings.
Removed
CMS could alter the reimbursement dynamics in outpatient care settings through the Physician Fee Schedule (“PFS”), which is published on an annual basis and regulates payments to healthcare providers for services furnished in these settings.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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We impose security requirements upon our suppliers, including: maintaining an effective security management program and abiding by information handling and asset management requirements. These processes and response mechanisms are continually assessed for effectiveness, and any new security mechanisms, including several in 2024, are integrated when business needs arise or industry best practices shift.
We impose security requirements upon our suppliers, including: maintaining an effective security management program and abiding by information handling and asset management requirements. These processes and response mechanisms are continually assessed for effectiveness, and any new security mechanisms are integrated when business needs arise or industry best practices shift.

Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Our corporate headquarters are located in Marietta, Georgia, where we lease office, laboratory, tissue processing and warehouse space. We also lease a facility in Kennesaw, Georgia, which primarily consists of laboratory, tissue processing and warehouse space. Our properties are used for the design, manufacture and marketing of Wound & Surgical product portfolio.
Item 2. Properties Our corporate headquarters are located in Marietta, Georgia, where we lease office, laboratory, tissue processing and warehouse space. We also lease a facility in Kennesaw, Georgia, which primarily consists of laboratory, tissue processing and warehouse space.
We believe that such properties are suitable and adequate to meet the needs of our business.
Our properties are used for the manufacture of most of the product lines that we sell, as well as office space for operations, quality, and shared service functions. We believe that such properties are suitable and adequate to meet the needs of our business.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Dividends We have not paid any dividends since our inception and do not anticipate declaring or paying any cash dividends on our Common Stock in the foreseeable future.
Dividends We have not paid any dividends on our Common Stock since our inception and do not anticipate declaring or paying any cash dividends on our Common Stock in the foreseeable future.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our Common Stock with the cumulative total s tockholder return of the Nasdaq Composite Index and the Russell 2000 Index, for the five year period that commenced on December 31, 2019 and ended December 31, 2024, assuming an investment of $100.00 on December 31, 2019.
Stock Performance Graph The following graph compares the cumulative total stockholder return on our Common Stock with the cumulative total s tockholder return of the Nasdaq Composite Index and the Russell 2000 Index, for the five year period that commenced on December 31, 2020 and ended December 31, 2025, assuming an investment of $100.00 on December 31, 2020.
ASSUMES $100 INVESTED ON DEC. 31, 2019 ASSUMES DIVIDEND REINVESTMENT; NO DIVIDENDS ISSUED BY MIMEDX FISCAL YEAR ENDED DEC. 31, 2024 37 Securities Authorized for Issuance Under Equity Compensation Plans Information about securities authorized for issuance under our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
ASSUMES $100 INVESTED ON DEC. 31, 2020 ASSUMES DIVIDEND REINVESTMENT; NO DIVIDENDS ISSUED BY MIMEDX FISCAL YEAR ENDED DEC. 31, 2025 39 Securities Authorized for Issuance Under Equity Compensation Plans Information about securities authorized for issuance under our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our Common Stock trades on The Nasdaq Stock Market under the trading symbol “MDXG.” Holders Based upon information supplied from our transfer agent, there were approximately 770 shareholders of record of our Common Stock as of February 25, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our Common Stock trades on The Nasdaq Stock Market under the trading symbol “MDXG.” Holders Based upon information supplied from our transfer agent, there were 760 shareholders of record of our Common Stock as of February 19, 2026.
Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers The following table sets forth information regarding purchases of the Company’s equity securities made by or on behalf of the Company or any affiliated purchaser (as defined in Rule 10b-18 under the Exchange Act) during the three-month period ended December 31, 2024.
Recent Sales of Unregistered Securities None. Purchases of Equity Securities by the Issuer and Affiliated Purchasers There were no purchases of the Company’s equity securities made by or on behalf of the Company or any affiliated purchaser (as defined in Rule 10b-18 under the Exchange Act) during the three-month period ended December 31, 2025. 40 Item 6. [Reserved]
Removed
Total number of shares purchased Average price paid per share Total number of shares purchased under publicly announced plan Approximate dollar value of shares that may yet be purchased under plans or programs October 1 - October 31, 2024 13,349 $ 5.76 $ — November 1 - November 30, 2024 — — — — December 1 - December 31, 2024 722 9.53 — — Total for the quarter 14,071 $ 5.95 — $ — 38 Item 6. [Reserved]

Item 7. Management's Discussion & Analysis

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

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S&M includes costs to execute our sales strategy, which includes personnel costs pertaining to our sales force and sales support functions, including salaries, commissions and other incentive compensation, commissions to sales agents, customer support, travel expenses, and bad debt expense.
S&M expense includes costs to execute our sales strategy, which includes personnel costs pertaining to our sales force and sales support functions, including salaries, commissions and other incentive compensation, commissions to sales agents, customer support, travel expenses, and bad debt expense.
Net sales Our net sales are derived from selling to a wide range of customers, including hospitals, wound care centers and private physician offices that have clinicians using our suite of products to aid in the management of patients with chronic or hard-to-heal wounds.
Net sales Our net sales are derived from selling our Wound and Surgical products to a wide range of customers, including hospitals, wound care centers and private physician offices that have clinicians using our suite of products to aid in the management of patients with chronic or hard-to-heal wounds.
We recognize revenue as performance obligations are fulfilled, which generally occurs upon the shipment of product to customers for ship and bill sales or upon implantation for consignment sales. We recognize revenue based on consideration we expect to receive from the sale.
We recognize revenue as performance obligations are fulfilled, which generally occurs upon the shipment of product to customers for ship and bill sales or upon implantation for consignment sales. We recognize revenue based on net consideration we expect to receive from the sale.
Citizens Loan Facilities 43 On January 19, 2024, we entered into a Credit Agreement (the “ Citizens Credit Agreement ”) with a syndicate of banks comprised of Citizens Bank, N.A. as administrative agent (the “ Agent ”), and Bank of America, N.A.
Citizens Loan Facilities On January 19, 2024, we entered into a Credit Agreement (the “ Citizens Credit Agreement ”) with a syndicate of banks comprised of Citizens Bank, N.A. as administrative agent (the “ Agent ”), and Bank of America, N.A.
Recently Adopted Accounting Pronouncements See Item 8, Note 2, Significant Accounting Policies , in the Consolidated Financial Statements for recently adopted accounting pronouncements. 46
Recently Adopted Accounting Pronouncements See Item 8, Note 2, Significant Accounting Policies , in the Consolidated Financial Statements for recently adopted accounting pronouncements.
Contractual Obligations Contractual obligations associated with ongoing business activities are expected to result in cash payments in future periods. See Item 8, Note 18, Commitments and Contingencies , in the Consolidated Financial Statements for more information regarding our contractual commitments.
Contractual Obligations Contractual obligations associated with ongoing business activities are expected to result in cash payments in future periods. See Item 8, Note 14, Commitments and Contingencies , in the Consolidated Financial Statements for more information regarding our contractual commitments.
Our Annual Report for the year ended December 31, 2023 (the “ 2023 Annual Report ”) includes a discussion and analysis of our total company financial condition and results of operations for 2023 compared to 2022 in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations .
Our Annual Report for the year ended December 31, 2024 (the “ 2024 Annual Report ”) includes a discussion and analysis of our total company financial condition and results of operations for 2024 compared to 2023 in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations .
We derive an expectation for product returns based on historical return patterns and other discrete factors which influence return activity, such as changes in our regulatory environment, product recalls, changes in reimbursement rates, changes in reimbursement eligibility and rules, and other factors also impact return patterns.
We derive an expectation for product returns based on historical return patterns and other discrete factors which influence return activity, such as changes in our regulatory environment, product recalls, changes in reimbursement rates, changes in reimbursement eligibility and rules, and other factors.
The increase in cash provided by operating activities was primarily as a result of year-over-year increases in net sales, which drove increases in collections from customers. Investing Activities During the year ended December 31, 2024, net cash used in investing activities was $9.6 million, a increase of $7.4 million, compared to $2.2 million for the year ended December 31, 2023.
The increase in cash provided by operating activities was primarily as a result of year-over-year increases in net sales, which drove increases in collections from customers. Investing Activities During the year ended December 31, 2025, net cash used in investing activities was $6.9 million, a decrease of $2.7 million compared to $9.6 million for the year ended December 31, 2024.
Investigation, restatement and related (benefit) expense Investigation, restatement and related expense primarily related to legal fees that were advanced to certain former officers and directors of the Company under certain indemnification agreements and our liability from legal proceedings that were taken against us. These costs ceased during the year ended December 31, 2024 and are not expected to reoccur.
Investigation, restatement and related (benefit) expense Investigation, restatement and related expense primarily related to legal fees that were advanced to certain former officers and directors of the Company under certain indemnification agreements and our liability from certain legal proceedings that were taken against us. These costs ended during the year ended December 31, 2024.
We had no borrowings outstanding and $75 million of availability under our Revolving Credit Facility (as defined below). The Company is currently paying its obligations in the ordinary course of business.
We had no borrowings outstanding and $75 million of availability under our Revolving Credit Facility (as defined below). We are currently paying our obligations in the ordinary course of business.
We re-evaluate our probability assessments at least quarterly, with any revisions reflected as a cumulative adjustment to expense. Because of the cumulative nature of adjustments, during any period in which we re-evaluate probability, the adjustments could significantly impact our results of operations.
We re-evaluate our probability assessments at least quarterly, with any revisions reflected as a cumulative adjustment to expense. Because of the cumulative nature of adjustments, they could significantly impact our results of operations.
Sensitivity of Estimate to Change As of December 31, 2024, all outstanding performance stock unit awards vest on the basis of stipulated revenue targets in addition to continued employment. Cumulative expense recognized for unvested performance stock unit awards was $5.9 million as of December 31, 2024.
Sensitivity of Estimate to Change As of December 31, 2025, all outstanding performance stock unit awards vest on the basis of stipulated revenue targets in addition to continued employment. Cumulative expense recognized for unvested performance stock unit awards was $7.6 million as of December 31, 2025.
The amount and extent of the valuation allowance necessary to reflect the extent of realization of these deferred tax assets being more likely than not may change due to changes in tax law, a revision to our expectation regarding taxable income in the future, taxable income generated in a period in which we had not previously anticipated taxable income, a change in scheduled reversals of deferred tax liabilities, and other changes.
The amount and extent of the valuation allowance may change due to changes in tax law, a revision to our expectation regarding taxable income in the future, taxable income generated in a period in which we had not previously anticipated taxable income, a change in scheduled reversals of deferred tax liabilities, and other changes.
Our research and development costs also include expenses such as salaries and benefits related to our research department, consulting costs and advisory costs, and regulatory costs. 40 We expense research and development costs as incurred. Fluctuations in research and development expenses can be impacted by the timing and cadence of our clinical trials.
Our research and development costs also include expenses such as salaries and benefits related to our research departments, consulting costs, advisory costs, and regulatory costs. We expense research and development costs as incurred. Fluctuations in research and development expenses are driven by the timing and cadence of our clinical trials.
Income Tax Provision Our effective tax rates for 2024 and 2023 was 26.7% and (120.2)%, respectively, on income from continuing operations before income tax provision of $57.3 million and $30.6 million for 2024 and 2023, respectively. Our effective tax rate in 2024 was favorably impacted by vestings of restricted stock, offset by executive compensation deduction limitations.
Income Tax Provision Our effective tax rates for 2025 and 2024 were 26.7% and 26.7%, respectively, on income from continuing operations before income tax provision of $66.3 million and $57.3 million for 2025 and 2024, respectively. The effective tax rate in each period was favorably impacted by vestings of restricted stock, offset by executive compensation deduction limitations.
Discussion of Cash Flows for 2024 Compared to 2023 Operating Activities from Continuing Operations During the year ended December 31, 2024, net cash provided by operating activities of continuing operations increased $32.2 million to $67.1 million compared to cash provided of $34.9 million for the year ended December 31, 2023.
Discussion of Cash Flows for 2025 Compared to 2024 Operating Activities from Continuing Operations 46 During the year ended December 31, 2025, net cash provided by operating activities of continuing operations increased $6.9 million to $74.0 million compared to cash provided of $67.1 million for the year ended December 31, 2024.
GAAP requires that the net balance of deferred tax assets reflect the extent of utilization which is ‘more likely than not’. This is accomplished through a valuation allowance recorded against gross deferred tax assets.
Transactions which result in lower taxable income in the future give rise to deferred tax assets. GAAP requires that the net balance of deferred tax assets reflect the extent of utilization which is ‘more likely than not’. This is accomplished through a valuation allowance recorded against gross deferred tax assets.
As of December 31, 2024, we had $104.4 million of cash and cash equivalents. Our net working capital at December 31, 2024 was $146.3 million, an increase of $28.0 million from $118.3 million at December 31, 2023. Our current ratio was 4.2 to 1 and 3.6 to 1 as of as of December 31, 2024 and 2023, respectively.
As of December 31, 2025, we had $166.1 million of cash and cash equivalents. Our net working capital at December 31, 2025 was $213.2 million, an increase of $66.9 million from $146.3 million at December 31, 2024. Our current ratio was 4.3 to 1 and 4.2 to 1 as of as of December 31, 2025 and 2024, respectively.
The fair value of restricted stock units and performance stock units are generally measured at the last trading price on the grant date. Options are measured using an appropriate option pricing model using applicable inputs as of the grant date. In each case, the grant date fair value is adjusted for the presence of any market conditions.
Options are measured using an appropriate option pricing model using inputs applicable as of the grant date. In each case, the grant date fair value is adjusted for the presence of any market conditions.
The increase was offset by the repurchase of our historical Series B Preferred Stock of $9.5 million during 2023. Critical Accounting Estimates This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP ”).
Critical Accounting Estimates This Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP ”).
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Summary During 2024, we delivered 8.5% growth in net sales, with broad-based contributions by customer type.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Executive Summary During 2025, we delivered 20.0% growth in net sales, with broad-based contributions across Wound and Surgical.
Judgments and Uncertainties We sell our products to individual customers and independent distributors (collectively referred to as “ customers ”). Customers obtain and use products either through ship and bill sales or consignment arrangements.
Net Sales Description We record estimates for returns and allowances as a reduction to net sales based on our expectation for such returns. Judgments and Uncertainties We sell our products to individual customers and independent distributors (collectively referred to as “ customers ”). Customers obtain and use products either through ship and bill sales or consignment arrangements.
Investigation, Restatement and Related Expense Investigation, restatement, and related expenses for the year ended December 31, 2024 was a benefit of $8.7 million, compared to expense of $5.2 million for the year ended December 31, 2023. The benefit was resulted from various settlements related to former officers and other related matters during 2024.
The increase was driven by on-going clinical trials and research studies aimed at strengthening clinical and economic evidence. Investigation, Restatement and Related Expense Investigation, restatement, and related expenses for the year ended December 31, 2024 was a benefit of $8.7 million. The benefit resulted from various settlements related to former officers and other related matters during 2024.
With more than a decade of experience helping clinicians manage acute and chronic wounds, MIMEDX has been dedicated to providing a leading portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare. All of our products sold in the United States are regulated by the FDA.
With nearly two decades of experience helping clinicians manage chronic and other hard-to-heal wounds, MIMEDX provides a leading portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare. All of our products sold in the United States are regulated by the U.S. Food and Drug Administration (“ FDA ”).
Sensitivity of Estimate to Change We have accrued $2.0 million for sales returns as of December 31, 2024. Changes in return patterns or unforeseen changes in regulations or identified product recalls could cause returns significantly in excess of this estimate.
Sensitivity of Estimate to Change We have accrued $2.4 million for sales returns as of December 31, 2025. Changes in return patterns or unforeseen changes in reimbursement policy, regulations or product recalls could cause returns significantly in excess of this estimate. Income Taxes Description We have $19.9 million of net deferred tax assets to defray future tax liability.
If it is subsequently determined that the performance conditions associated with the performance stock unit awards are no longer probable of being met, or performance conditions which were determined to be probable of occurring do not actually occur, we could reverse up to this amount of expense in the period such determination is made.
This was based on the grant-date fair value of each award, the portion of the relevant vesting period that has elapsed and our assessment of the extent to which the vesting conditions are considered probable for each award. 47 If it is subsequently determined that the performance conditions associated with the performance stock unit awards are no longer probable of being met, or performance conditions which were determined to be probable of occurring do not actually occur, we could reflect a benefit of up to this amount in the period such determination is made.
Liquidity and Capital Resources We require capital for our operating activities, including costs associated with the sale of product through direct and indirect sales channels, research and development activities, compliance costs, costs to sell and market our products, regulatory fees, and legal and consulting fees in connection with ongoing litigation and other matters.
OB3 resulted in a current tax benefit resulting from the utilization of deferred tax assets, primarily relating to the utilization of capitalized research and development expenses, and did not affect our effective tax rate in the year ended December 31, 2025. 45 Liquidity and Capital Resources We require capital for our operating activities, including costs associated with the sale of product through direct and indirect sales channels, research and development activities, compliance costs, costs to sell and market our products, regulatory fees, and legal and consulting fees in connection with ongoing litigation and other matters.
This was offset by the last material payment towards the resolution of matters stemming from the findings of our historical Audit Committee investigation during the year ended December 31, 2024.
This was offset by the last material payment towards the resolution of matters stemming from the findings of our historical Audit Committee investigation. These expenses ceased in 2024. Amortization of Intangible Assets Amortization expense related to intangible assets for the year ended December 31, 2025 was $0.4 million, compared to $0.8 million for the year ended December 31, 2024.
For example, we pay sales agents a greater commission than our internal sales force, meaning that we could incur greater commission expenses if a greater proportion of our sales are through sales agents. We expect our G&A expense to fluctuate based on headcount.
For example, we pay sales agents a greater commission than our internal sales force, meaning that we could incur greater commission expenses if a greater proportion of our sales are through sales agents. G&A expense reflects costs related to functions which support our business, such as legal, finance, human resources, and other such functions.
Results of Continuing Operations for 2024 Compared to 2023 Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Net sales $ 348,879 $ 321,477 $ 27,402 8.5 % Cost of sales 60,073 54,634 5,439 10.0 % Gross profit 288,806 266,843 21,963 8.2 % Selling, general and administrative 225,087 211,124 13,963 6.6 % Research and development 12,341 12,665 (324) (2.6) % Investigation, restatement and related (8,698) 5,176 (13,874) nm Amortization of intangible assets 765 762 3 0.4 % Impairment of intangible assets 446 — 446 100.0 % Interest expense, net (1,006) (6,457) 5,451 (84.4) % Other expense, net (565) (26) (539) nm Income tax provision benefit (expense) (15,296) 36,806 (52,102) nm Net income (loss) from continuing operations $ 41,998 $ 67,439 $ (25,441) (37.7) % Net Sales We recorded net sales for the year ended December 31, 2024 of $348.9 million, an increase of $27.4 million, or 8.5%, over net sales for the year ended December 31, 2023 net sales of $321.5 million.
Results of Continuing Operations for 2025 Compared to 2024 Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Net sales $ 418,630 $ 348,879 $ 69,751 20.0 % Cost of sales 73,013 60,073 12,940 21.5 % Gross profit 345,617 288,806 56,811 19.7 % Selling, general and administrative 266,194 225,087 41,107 18.3 % Research and development 15,097 12,341 2,756 22.3 % Investigation, restatement and related — (8,698) 8,698 (100.0) % Amortization of intangible assets 439 765 (326) (42.6) % Impairment of intangible assets — 446 (446) (100.0) % Interest income (expense), net 2,933 (1,006) 3,939 nm Other expense, net (558) (565) 7 (1.2) % Income tax provision expense (17,684) (15,296) (2,388) 15.6 % Net income from continuing operations $ 48,578 $ 41,998 $ 6,580 15.7 % Net Sales We recorded net sales for the year ended December 31, 2025 of $418.6 million, an increase of $69.8 million, or 20.0%, over net sales for the year ended December 31, 2024 net sales of $348.9 million.
Share-Based Compensation Description We measure the fair value of stock options and other stock-based awards granted to employees on the grant date and recognize the assessed fair value as share-based compensation expense, straight-line, over the requisite service period to achieve the award based on the vesting requirements to the extent that the achievement of performance conditions associated with such awards, as applicable, are determined to be “probable.” Judgments and Uncertainties Share-based payment arrangements are measured at fair value on the grant date.
Share-Based Compensation Description We measure the fair value of stock options and other stock-based awards granted to employees on the grant date and recognize the assessed fair value as share-based compensation expense over the requisite service period based on the award’s vesting conditions.
The following table shows the composition of this expense between selling and marketing (“ S&M ”) and general and administrative (“ G&A ”) components (amounts in thousands): Year Ended December 31, Change 2024 2023 $ % Selling and marketing $ 175,562 $ 161,833 $ 13,729 8.5 % General and administrative 49,525 49,291 234 0.5 % Selling, general and administrative $ 225,087 $ 211,124 $ 13,963 6.6 % Sales and marketing expenses increased $13.7 million, or 8.5%, year over year, which was driven by increases in commissions due to higher sales and higher effective commission rates.
The following table shows the composition of this expense between S&M and general G&A components (amounts in thousands): Year Ended December 31, Change 2025 2024 $ % Selling and marketing $ 209,681 $ 175,562 $ 34,119 19.4 % General and administrative 56,513 49,525 6,988 14.1 % Selling, general and administrative $ 266,194 $ 225,087 $ 41,107 18.3 % Sales and marketing expenses increased $34.1 million, or 19.4%, year over year, primarily due to higher commissions driven by increased sales and elevated effective commission rates, along with higher bad debt expense.
Our sales by product category were as follows (amounts in thousands): 41 Year Ended December 31, % of net sales Change 2024 2023 2024 2023 $ % Wound $ 231,004 $ 205,660 66 % 64 % $ 25,344 12.3 % Surgical 117,875 115,817 34 % 36 % $ 2,058 1.8 % Net sales $ 348,879 $ 321,477 100 % 100 % $ 27,402 8.5 % Net sales in the Wound category were $231.0 million for the year ended December 31, 2024, a $25.3 million, or 12.3% increase, compared to $205.7 million for the year ended December 31, 2023.
Our sales by product category were as follows (amounts in thousands): Year Ended December 31, % of net sales Change 2025 2024 2025 2024 $ % Wound $ 276,326 $ 231,004 66 % 66 % $ 45,322 19.6 % Surgical 142,304 117,875 34 % 34 % 24,429 20.7 % Net sales $ 418,630 $ 348,879 100 % 100 % $ 69,751 20.0 % Net sales in the Wound category were $276.3 million for the year ended December 31, 2025, a $45.3 million, or 19.6% increase, compared to $231.0 million for the year ended December 31, 2024.
The increase in cost of sales was driven by the increase in sales volume and the changes in margins noted above. Selling, General and Administrative Expense SG&A expense increased $14.0 million, or 6.6%, to $225.1 million for December 31, 2024, compared to $211.1 million for December 31, 2023.
The increase was driven by higher sales volume, and increased manufacturing inefficiencies. 44 Selling, General and Administrative Expense SG&A expense increased $41.1 million, or 18.3%, to $266.2 million for December 31, 2025, compared to $225.1 million for December 31, 2024.
Interest expense, net We incur interest expense primarily through stated interest on our outstanding term and revolving loans, to the extent that they are outstanding. The interest on our term and revolving loans are currently tied to applicable Secured Overnight Financing Rates (“ SOFR ”). Increases in SOFR could cause our interest expense to increase.
Interest income (expense), net We incur interest expense primarily from stated interest on our outstanding term loan and revolving credit facilities, to the extent such borrowings are outstanding. Interest on these facilities is currently based on the applicable term Secured Overnight Financing Rate (“ SOFR ”), and fluctuations in SOFR may cause our interest expense to vary.
Other activity influencing interest expense relates to the amortization of deferred financing costs and original issue discount associated with credit facilities outstanding. This amount is presented net of interest income, which we generate from our treasury management. Income Tax Provision We generate tax liability primarily in the United States and in various states in which we have nexus.
We generate interest income from amounts held in various money market accounts. In addition, interest expense includes the amortization of deferred financing costs and original issue discounts associated with our credit facilities. This amount is presented net of interest income earned through our treasury management activities.
Gross profit is calculated as net sales less cost of goods sold. Gross margin is calculated as gross profit divided by net sales. Our gross margin is affected by product and geographic sales mix, realized pricing of our products, the efficiency of our manufacturing operations and the costs of materials used to make our products.
Our gross margin is affected by product and geographic sales mix, realized pricing of our products, the efficiency of our manufacturing operations and the costs of materials used to make our products. Regulatory actions, including with respect to reimbursement for our products, may require costly expenditures or result in pricing pressure, and may decrease our gross profit and gross margin.
Research and development expense Research and development expense relates to our investments to expand our product pipeline and platforms, including historically through clinical trials, as well as expenditures in improvements to our manufacturing process and the enhancement of existing products.
This includes personnel costs associated with these functions, insurance, and certain professional fees. We expect our G&A expense to fluctuate based on headcount. Research and development expense Research and development expense relates to our investments to expand our product pipeline and platforms, including clinical trials as well as improvements to our manufacturing process and the enhancement of existing products.
HELIOGEN is a shelf-stable offering that contains Type I and Type III collagen and mimics the native composition of structural connective tissue, HELIOGEN is manufactured by Regenity Biosciences. 39 This discussion, which presents our results for the fiscal years ended December 31, 2024 and 2023, should be read in conjunction with our Consolidated Financial Statements and the accompanying notes.
This discussion, which presents our results for the fiscal years ended December 31, 2025 and 2024, should be read in conjunction with our Consolidated Financial Statements and the accompanying notes.
Improvements in our treasury management further aided the decrease. This decrease was partially offset by a $1.4 million loss on extinguishment of debt due to repaying and terminating a previous loan agreement during the first quarter of 2024.
Additionally, we recorded a $1.4 million loss on extinguishment of debt in the first quarter of 2024 due to the repayment and termination of a previous loan agreement.
We must also comply with certain financial covenants, including a maximum total net leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as other customary restrictive covenants. In addition, on January 19, 2024, we borrowed $30.0 million under the Revolving Credit Facility and $20.0 million under the Term Loan Facility.
All obligations are required to be paid in full on January 19, 2029 (the “ Maturity Date ”). The Citizens Credit Agreement requires that we comply with certain financial covenants, including a maximum total net leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as other customary restrictive covenants.
These customers choose products like ours based upon a variety of factors, including clinical efficacy, availability, handling characteristics, and reimbursement coverage and payer sources.
These customers choose products like ours based upon a variety of factors, including clinical efficacy, customer engagement programs, availability, handling characteristics, reimbursement coverage and payer sources. Net sales are recognized based on the consideration we expect to receive from the sale at the point in time when control of the goods is transferred to the customer.
Judgments and Uncertainties Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements. Transactions which result in lower taxable income in the future give rise to deferred tax assets.
We record a valuation allowance to offset our gross deferred tax asset to the extent that realization of these assets is not “more likely than not.” Judgments and Uncertainties Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements.
Sensitivity of Estimate to Change As of December 31, 2024, we had $0.5 million in valuation allowances recorded against our deferred tax assets balance of $28.8 million.
Any changes to the valuation allowance are reflected in the period identified as a component of income tax provision expense. Sensitivity of Estimate to Change 48 As of December 31, 2025, we had $0.3 million in valuation allowance recorded against our gross deferred tax assets balance of $19.9 million.
This was offset by a decrease in capital expenditures, year over year. 44 Financing Activities During the year ended December 31, 2024, net cash used in financing activities was $34.2 million, an increase of $25.6 million compared to $8.6 million for the year ended December 31, 2023. During 2024, we entered into the Citizens Credit Agreement, as described above.
The decline was primarily driven by lower product acquisition costs and reduced capital expenditures in 2025. Financing Activities During the year ended December 31, 2025, net cash used in financing activities was $5.4 million, a decrease of $28.8 million compared to $34.2 million for the year ended December 31, 2024.
Cost of goods sold and gross profit Cost of goods sold includes product testing costs, quality assurance costs, personnel costs, manufacturing costs, raw materials and product costs, depreciation and facility costs associated with our manufacturing and warehouse facilities. Fluctuations in our cost of goods sold correspond with the fluctuations in these costs as well as sales volume.
Net sales consists of the gross selling price of the product less any discounts, rebates and other customer incentives, fees paid to GPOs, and estimates for sales returns. 42 Cost of goods sold and gross profit Cost of goods sold includes product testing costs, quality assurance costs, personnel costs, manufacturing costs, raw materials and product costs, depreciation, amortization of certain purchased assets and facility costs associated with our manufacturing and warehouse facilities.
The amount of any incremental expense recognition or reversal will depend on the magnitude and timing of such change in estimate.
As of December 31, 2025, a revision of expense to reflect the maximum hypothetical attainment of all unvested performance stock units would result in a $17.1 million increase to expense. The amount of any incremental expense recognition or reversal will depend on the magnitude and timing of such change in estimate.
We do not expect activity to be material in future periods. 42 Amortization of Intangible Assets Amortization expense related to intangible assets were $0.8 million for each of the years ended December 31, 2024 and 2023. Impairment of Intangible Assets Impairment for the year ended December 31, 2024 was $0.4 million, which relates to abandoned patents.
Impairment of Intangible Assets There was no impairment for the year ended December 31, 2025, compared to $0.4 million for the year ended December 31, 2024. The impairment of intangible assets in 2024 related to abandoned patents.
Research and Development Expense Our research and development (“ R&D ”) expense was $12.3 million for the year ended December 31, 2024, compared to $12.7 million for the year ended December 31, 2023. The decrease in R&D expense related to the timing of our product development activities, which primarily related to EPIEFFECT in 2023.
General and administrative expense increased $7.0 million, or 14.1%, year-over-year, driven by ongoing legal and regulatory disputes, transaction-related costs, and severance costs. Research and Development Expense Our research and development (“ R&D ”) expense was $15.1 million for the year ended December 31, 2025, compared to $12.3 million for the year ended December 31, 2024.
Within Surgical and Other, our product offering includes AMNIOFIX and AMNIOEFFECT, which are positioned for use in a variety of applications and surgical settings, including lower extremity repair, plastic surgery, vascular surgery and multiple orthopedic repairs and reconstructions.
Our Surgical portfolio includes AMNIOFIX®, AMNIOEFFECT®, AMNIOBURN®, AMNIOCORD®, AXIOFILL®, and HELIOGEN™, which are marketed for use in diverse surgical applications, including lower extremity repair, plastic and reconstructive surgery, vascular procedures, and multiple orthopedic repairs. HELIOGEN™ is manufactured by third-party supplier Regenity Biosciences, Inc.
In February 2024, we repaid the initial $30.0 million drawing under the Revolving Credit Facility. There were no borrowings on the Revolving Credit Facility outstanding as of December 31, 2024.
As of December 31, 2025 , we have $18.0 million of principal outstanding on the Term Loan Facility that bears interest at 6.1% and no borrowings outstanding under the Revolving Credit Facility.
This effect was offset by a favorable product mix and our continued execution on scrap improvement projects, partially offset by throughput pressures. Cost of sales for the year ended December 31, 2024 was $60.1 million, an increase of $5.4 million, or 10.0%, compared to $54.6 million for the year ended December 31, 2023.
Cost of sales for the year ended December 31, 2025 was $73.0 million, an increase of $12.9 million, or 21.5%, compared to $60.1 million for the year ended December 31, 2024.
Regulatory actions, including with respect to reimbursement for our products, may require costly expenditures or result in pricing pressure, and may decrease our gross profit and gross margin. Selling, general and administrative expense Selling, general and administrative expense consists of both selling and marketing (“ S&M ”) and general and administrative (“ G&A ”) expenses.
Selling, general and administrative expense Selling, general and administrative expense consists of both selling and marketing (“ S&M ”) and general and administrative (“ G&A ”) expenses.
Interest Expense, Net Interest expense decreased $5.5 million to $1.0 million for the year ended December 31, 2024 from $6.5 million for the year ended December 31, 2023. The decrease was the result of a decrease in outstanding debt and lower rates under the Citizens Credit Facilities after the Debt Refinancing Transactions (as defined below) was completed in January 2024.
Interest Income (Expense), Net Net interest income (expense) was $2.9 million for the year ended December 31, 2025, compared to $(1.0) million for the year ended December 31, 2024. The favorable increase was primarily driven by improved treasury management. a reduction in outstanding debt, and lower interest rates.
Net sales in the Surgical category grew by $2.1 million, or 1.8%, to $117.9 million for the year ended December 31, 2024, compared to $115.8 million for the year ended December 31, 2023. The increase reflects growing sales volume contributions from AMNIOEFFECT, partially offset by lower AXIOFILL compared to the prior year due to regulatory headwinds.
Net sales in the Surgical category grew by $24.4 million, or 20.7%, to $142.3 million for the year ended December 31, 2025, compared to $117.9 million for the year ended December 31, 2024. The increase was primarily driven by sales of AMNIOFIX®, AMNIOEFFECT®, and HELIOGEN® across a range of surgical procedures.
Our effective tax rate is also impacted by other permanent items, primarily executive compensation limitations and windfall or shortfall on the vesting of stock awards.
Material deviations from this effective tax rate in each period is generally the result of the periodic effects 43 of certain permanent differences between the book and tax treatment of certain transactions, including windfall or shortfall on vestings of restricted stock awards and limitations on the deduction of executive compensation.
From time to time, we will also acquire, manufacture and market other products in the wound care, surgical or other products in response to market demands or to maintain our competitive position. In 2024, we also launched HELIOGEN, a particulate xenograft product aimed at addressing complex wounds primarily in the surgical setting.
Additionally, in early 2026 we began distributing three additional Surgical Products: G4Derm Plus, NovaForm and Hydrelix to further expand our Surgical product offering. From time to time, we may acquire, manufacture, or market additional Wound or Surgical products in response to market demand or to maintain our competitive position.
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This growth was driven by a combination of commercial execution and demand for newer products, despite ongoing Medicare reimbursement uncertainty for the private office and associated care settings as well as a higher than normal level of customer and employee turnover in the middle of the year.
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This growth was driven by a combination of demand for newer Wound products (CELERA™, EMERGE™ and EPIXPRESS®), increasing adoption of Surgical products across a growing number of use cases in the operating room and commercial execution.
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Operating and financial highlights during the year include: • Fourth quarter and full year 2024 net sales of $92.9 million and $348.9 million, respectively, reflecting 7.0% and 8.5% growth over the fourth quarter and full year 2023, respectively. • GAAP net income for the fourth quarter and full year 2024 of $7.4 million and $42.0 million, respectively. • Announced improved capital structure with new credit facilities that provide substantial interest savings over the Company’s prior indebtedness and access to additional capital in support of the Company’s strategic priorities • Introduced e-commerce and account management platform, MIMEDX Connect, designed to streamline ordering, payment processing, and reimbursement submissions for our customers, • Entered into an exclusive agreement providing the Company with rights to commercialize HELIOGEN, a 510(k) cleared, bovine-derived collagen matrix particulate that is indicated for the management of exudating wounds, which launched commercially during the second half of 2024 • Announced publication focused on surgical applications using MIMEDX placental-based allografts in Nature - Scientific Reports.
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Operating and financial highlights during the year include: • Fourth quarter and full year 2025 net sales of $118.1 million and $418.6 million, respectively, reflecting 27.1% and 20.0% growth over the fourth quarter and full year 2024, respectively. • GAAP net income for the fourth quarter and full year 2025 of $15.2 million and $48.6 million, respectively. • Featured the Company’s growing body of clinical and scientific evidence at Wound & Surgical-focused industry conferences, including MedStar Georgetown University Hospital’s Diabetic Limb Salvage Conference, Symposium on Advanced Wound Care Spring and Fall meetings, and Digestive Disease Week 2025, among others. • Announced publication of health economics data in Mohs micrographic surgery • Entered into a strategic collaboration with Vaporox, Inc., establishing the ability for the Company to co-promote and co-market its leading placental allograft portfolio alongside Vaporox’s Vaporous Hyperoxia Treatment device • Launched EPIXPRESS® the Company’s next-generation, lyophilized human placental allograft, further expanding the Company’s broad portfolio of advanced wound care products • Announced interim results of its EPIEFFECT® randomized clinical trial, which were published and presented, demonstrating clinical benefit associated with use of EPIEFFECT® when compared to Standard of Care. • Announced publication in the Journal of Inflammation focused on the immunomodulatory effects of Purion® processed human amniotic membrane allografts in vitro.
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The study adds to the Company’s growing body of evidence and expands the understanding of the regulatory capabilities of its DHACM and LHACM allografts on the fibrotic process • Highlighted the publication of a feature article on placental allografts for patients with hard-to-heal, acute and chronic wounds, which was published in the New York Times: “Her Face Was Unrecognizable After an Explosion.
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The study, which investigated the influence of MIMEDX DHACM and LHACM products on inflammatory response, demonstrated support of the healing cascade and tissue repair. • Entered into an exclusive U.S. distribution agreement for RegenKit®-Wound Gel with Regen Lab USA, LLC, continuing to broaden the Company’s leading Wound product offering beyond placental allografts.
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A Placenta Restored It” On April 13, 2025, new LCDs are currently scheduled to go into effect which will modify the reimbursement of skin substitutes in physician office settings. Among other changes, many allografts that have been covered will no longer be reimbursed for DFUs and/or VLUs.
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Additionally, at the end of 2025, CMS finalized sweeping changes related to the reimbursement of skin substitutes, which were implemented on January 1, 2026.
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While EPIFIX and EPICORD continue to be covered under the new LCD, certain of our other products are not currently included.
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These changes include: 1) reimbursing skin substitute products uniformly across the HOPD and physician office and associated care settings and 2) capping the reimbursement rate for skin substitutes at $127.14 per square centimeter in these care settings, subject to geographic adjustments.
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In the past LCDs have been delayed or terminated so there is no guarantee they will go into effect in April 2025 Overview MIMEDX is a pioneer and leader in placental biologics focused on delivering innovative solutions to patients and the healthcare professionals who treat them.
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The specific policies were put into effect in the Physician Fee Schedule (“PFS”) and Hospital Outpatient Prospective Payment System (“OPPS”). Overview MIMEDX is a pioneer and leader focused on helping humans heal.
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We apply Current Good Tissue Practices ( “CGTP” ) and other applicable quality standards in addition to terminal sterilization to produce our allografts. Our Products Our product portfolio is divided into two categories (1) Wound Care Products and (2) Surgical and Other Products.
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We apply Current Good Tissue Practices (“ CGTP ”) and other applicable quality standards in addition to terminal sterilization to produce our allografts. Recent Developments On October 31, 2025, CMS issued the final update to Medicare reimbursement for skin substitutes, which was broadly in line with the initial proposed rate (the “ 2026 Rules ”).
Removed
The Wound Care products we manufacture include EPIFIX and EPIEFFECT, which are marketed for external use, such as in Advanced Wound Care applications.
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Effective January 1, 2026, the 2026 Rules revolutionize skin substitute reimbursement by moving away from “Average Sales Price (ASP) +6%” model to a flat, standardized rate of $127.14 per square centimeter, cutting costs by nearly 90%.
Removed
Net sales are recognized based on the consideration we expect to receive from the sale at the point in time when control of the goods is transferred to the customer, which generally occurs upon our delivery to a third-party carrier or implantation for consignment arrangements.
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The change in policy to a flat rate is primarily driven to address skyrocketing expenditures – rising from ~$500 million in 2020 to ~$15 billion in 2025 (a nearly 40-fold increase) and to combat potential fraudulent billing, such as using larger-than-necessary grafts to maximize reimbursement.
Removed
Net sales consists of the gross selling price of the product, less any discounts, rebates and other customer incentives, fees paid to GPOs, and returns.
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The increased spending, proliferation of Q-coded skin substitute products, and higher ASPs for these products have been under increased regulatory scrutiny over the last couple of years. In response to these market dynamics, CMS announced the 2026 Rules related to the reimbursement of skin substitutes.
Removed
G&A expense reflects costs related to functions which support our business, such as legal, finance, human resources, and other such functions, including personnel costs associated with these functions, insurance, and certain professional fees.
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The changes under the 2026 Rules include: 1) reimbursing skin 41 substitute products uniformly across the HOPD and physician office and associated care settings, 2) moving the reimbursement rate for skin substitutes from the “ASP+6%” methodology to a flat rate at $127.14 per square centimeter in these care settings, subject to geographic adjustments, and 3) reclassifying some products as “incident-to” supplies under the physician fee schedule and subject to a flat payment rate.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to risks associated with changes in interest rates that could adversely affect our results of operations and financial condition. We do not hedge against interest rate risk. Interest Rate Risk The interest rate on our Term Loan Facility is currently determined quarterly based on the 1-month SOFR.
We do not hedge against interest rate risk. As part of our treasury management strategy, we hold non-operating cash in money market accounts to generate interest income. The interest on these accounts fluctuates with the general market for interest rates. The interest rate on our Term Loan Facility is currently determined quarterly based on the applicable Term SOFR.
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As of December 31, 2024, the interest rate on our Term Loan Facility was 6.7%. A 100-basis point change in SOFR would change interest expense by $0.2 million on an annualized basis. 47
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk The Company is primarily exposed to fluctuations in U.S. interest rates and their impact on the Company’s money market accounts and Term Loan Facility. Increases in interest rates will negatively affect the fair value of the Company’s money market accounts and increase the interest expense on the Company’s Term Loan Facility.
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The following table sets forth annualized impacts on the Company’s interest income or expense that a 100 basis point change in the relevant interest rate would have on each of the Company’s material interest-bearing financial instruments as of December 31, 2025 (in thousands): Financial Instrument Prevailing Rate Hypothetical Rate Change Impact of Rate Change Money market accounts Market interest rates 100 basis points decrease $ (1,507) Term Loan Facility Term SOFR 100 basis points increase (180) 49

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