Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, par value $0.001 per share AZYO The Nasdaq Capital Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, par value $0.001 per share AZYO The Nasdaq Capital Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the tran ...

Aziyo Biologics, Inc. (AZYO) Q2 2022 Earnings Conference Call August 11, 2022 4:30 PM ET Company Participants Leigh Salvo - IR Kevin Rakin - Executive Chairman Randy Mills - CEO Matthew Ferguson - CFO Conference Call Participants Josh Jennings - Cowen David Rescott - Truist Ross Osborn - Cantor Fitzgerald Operator Good day. And thank you for standing by. Welcome to the Aziyo Biologics Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's pr ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, par value $0.001 per share AZYO The Nasdaq Global Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the tran ...

Part I [Business](index=9&type=section&id=Item%201.%20Business) Aziyo Biologics is a commercial-stage regenerative medicine company specializing in products for implantable medical devices, navigating a major product recall and pandemic impacts - Aziyo is a commercial-stage regenerative medicine company focused on products for implantable medical devices, addressing a combined U.S. market opportunity of **$3 billion in 2020**[23](index=23&type=chunk) - The company utilizes a hybrid go-to-market strategy, including a direct sales force of **31 representatives**, commercial partners like Boston Scientific and Biotronik, and independent sales agents[31](index=31&type=chunk) - In June 2021, the company issued a voluntary recall for a single donor lot of its FiberCel product after post-surgical infections, including tuberculosis, were reported in patients. This event has led to significant litigation and the termination of a distribution agreement with Medtronic[243](index=243&type=chunk)[265](index=265&type=chunk)[331](index=331&type=chunk) Key Financial Performance (FY 2021 vs. FY 2020) | Metric | FY 2021 (in millions) | FY 2020 (in millions) | Change | |---|---|---|---| | Total Net Sales | $47.4 | $42.7 | +11% | | Core Product Net Sales | $37.6 | $36.2 | +4% | | Gross Margin | 40% | 48% | -8 p.p. | | Net Loss | $24.8 | $21.8 | +13.8% | [Our Core Products/Solutions](index=15&type=section&id=1.1%20Our%20Core%20Products%2FSolutions) The company's Core Products target three main markets: Implantable Electronic Devices/Cardiovascular, Orthopedic/Spinal Repair, and Soft Tissue Reconstruction, each supported by specific commercial strategies - The development pipeline includes a version of CanGaroo combined with antibiotics, for which a 510(k) submission was anticipated by the end of **Q1 2022**[62](index=62&type=chunk) Core Product Portfolio and Go-To-Market Strategy | Market | Product Brands | Description | Go-To-Market Strategy | |---|---|---|---| | Implantable Electronic Devices / Cardiovascular | CanGaroo®, ProxiCor®, Tyke®, VasCure® | Biological envelopes and extracellular matrices for device protection and tissue repair | Direct sales & commercial partners (Boston Scientific, Biotronik) | | Orthopedic and Spinal Repair | ViBone®, OsteGro V®, Fiber VBM | Viable bone matrices to enhance bone repair and fusion | Commercial partners (e.g., Surgalign Holdings) | | Soft Tissue Reconstruction | SimpliDerm® | Pre-hydrated human acellular dermal matrix for soft tissue repair | Independent sales agents | [Regulatory Matters](index=42&type=section&id=1.2%20Regulatory%20Matters) Aziyo's products are subject to extensive FDA and international regulations, including medical device and HCT/P classifications, with ongoing compliance for fraud, abuse, and data privacy laws - The company's products are regulated as medical devices (e.g., CanGaroo) under the FDCA or as HCT/Ps (e.g., ViBone, SimpliDerm) under the PHSA[150](index=150&type=chunk)[151](index=151&type=chunk) - Aziyo believes its HCT/P products are regulated solely under Section 361 of the PHSA, which does not require premarket approval. However, it acknowledges the risk that the FDA could reclassify them as requiring more stringent review, such as a BLA or PMA[483](index=483&type=chunk)[485](index=485&type=chunk) - The company is navigating new international regulations, including the EU's Medical Devices Regulation (MDR), which became effective in **May 2021**, and the UK's new UKCA marking requirements following Brexit[179](index=179&type=chunk)[195](index=195&type=chunk)[198](index=198&type=chunk) [FiberCel Recall](index=71&type=section&id=1.3%20FiberCel%20Recall) In June 2021, Aziyo issued a voluntary recall for FiberCel due to post-surgical infections, leading to patient deaths, enhanced safeguards, and numerous lawsuits - A voluntary recall was issued on **June 2, 2021**, for a single donor lot of FiberCel due to post-surgical infections, including tuberculosis[243](index=243&type=chunk) - Of the **136 units** implanted in **113 patients**, the CDC identified at least **75 patients** with clinical findings of tuberculosis infection and has learned of **eight patient deaths**[247](index=247&type=chunk)[248](index=248&type=chunk) - The company has implemented enhanced safeguards, including additional donor screening and a new methodology for testing tissue products for Mycobacterium tuberculosis[252](index=252&type=chunk) [Risk Factors](index=75&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including operating losses, dependence on partners, product development challenges, the FiberCel recall's impact, complex regulatory pathways, intellectual property issues, and financial instability - The company has incurred operating losses since inception, with a net loss of **$24.8 million in 2021**, and expects to continue incurring losses. It may not be able to achieve or sustain profitability[284](index=284&type=chunk)[285](index=285&type=chunk) - Significant litigation related to the FiberCel recall poses a major risk. As of **February 17, 2022**, **45 lawsuits** had been filed, and the company is unable to estimate the potential loss, which could be material[361](index=361&type=chunk)[377](index=377&type=chunk) - The company's HCT/P products (e.g., ViBone, SimpliDerm) are marketed without premarket approval under the belief they are Section 361 HCT/Ps. There is a risk the FDA could disagree and require a more stringent regulatory pathway (PMA or BLA), forcing a halt to marketing[483](index=483&type=chunk)[485](index=485&type=chunk) - The company depends on a single supplier, Cook Biotech, for the SIS ECM biomaterial used in its CanGaroo and cardiovascular products, posing a significant supply chain risk[341](index=341&type=chunk) [Properties](index=197&type=section&id=Item%202.%20Properties) Aziyo's principal facilities, including corporate headquarters, research lab, and manufacturing sites, are all leased in Maryland, Georgia, and California - The company leases its principal executive office in Silver Spring, MD, a manufacturing facility in Roswell, GA, and a manufacturing, lab, and office space in Richmond, CA[660](index=660&type=chunk) [Legal Proceedings](index=197&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in significant legal proceedings related to the June 2021 FiberCel product recall, with numerous lawsuits filed and an unestimable probable loss - The company is involved in significant litigation arising from the voluntary recall of a single donor lot of its FiberCel product. Further details are provided in **Note 16** to the consolidated financial statements[661](index=661&type=chunk)[1008](index=1008&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=197&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Aziyo's Class A common stock trades on Nasdaq, with no anticipated cash dividends due to business expansion plans and credit agreement restrictions, and a recent $14.0 million private placement - The company's Class A common stock is traded on The Nasdaq Stock Market under the symbol '**AZYO**'[665](index=665&type=chunk) - The company does not anticipate paying cash dividends in the foreseeable future and is currently restricted from doing so by its credit agreements[667](index=667&type=chunk) - On **December 8, 2021**, the company sold an aggregate of **3,301,881 shares** of Class A and Class B common stock in a private placement for gross proceeds of approximately **$14.0 million**[670](index=670&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=199&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) In FY2021, net sales increased 11.0% to $47.4 million, but gross margin declined and net loss widened to $24.8 million, with the company maintaining sufficient liquidity through a recent PIPE financing Results of Operations (in thousands) | | Year Ended December 31, 2021 | Year Ended December 31, 2020 | % Change | |---|---|---|---| | Net sales | $47,390 | $42,682 | 11.0% | | Gross profit | $19,022 | $20,561 | (7.5)% | | Loss from operations | $(23,032) | $(13,599) | 69.4% | | Net loss | $(24,832) | $(21,825) | 13.8% | - The decline in net sales of bone repair products was attributed to Medtronic ceasing purchases of FiberCel following the **June 2021** recall. Sales of FiberCel to Medtronic were **$4.9 million in 2021**, down from **$6.9 million in 2020**[707](index=707&type=chunk) - Gross margin, excluding intangible asset amortization, decreased to **47.3% in 2021** from **56.1% in 2020**, primarily due to product mix, lower yields in orthopedic/spinal products, and inventory write-downs[710](index=710&type=chunk) - The company ended 2021 with **$30.4 million** in cash and restricted cash. Net cash used in operating activities was **$15.4 million**[726](index=726&type=chunk)[732](index=732&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=229&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) The company's primary market risk is interest rate exposure on variable-rate debt, with credit risk concentrated in one financial institution and a single customer, while foreign currency and inflation risks are immaterial - The company is exposed to interest rate risk through its variable-rate Term Loan and Revolving Credit Facility[788](index=788&type=chunk) - Credit risk is present as cash balances are held at one financial institution, potentially exceeding insured limits. One customer also accounted for **10% or more** of accounts receivable as of **December 31, 2021**[789](index=789&type=chunk)[790](index=790&type=chunk) [Controls and Procedures](index=233&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of **December 31, 2021**[800](index=800&type=chunk) - Based on the COSO framework, management concluded that internal control over financial reporting was effective as of **December 31, 2021**[801](index=801&type=chunk) Part III Part III of the report, covering directors, executive compensation, security ownership, and related party transactions, incorporates information by reference from the company's definitive proxy statement for its 2022 annual meeting of stockholders, which is to be filed separately [Security Ownership of Certain Beneficial Owners and Management Related Stockholder Matters](index=235&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20Related%20Stockholder%20Matters.) This section provides information on the company's equity compensation plans as of December 31, 2021, with remaining details incorporated by reference from the 2022 proxy statement Equity Compensation Plan Information (as of Dec 31, 2021) | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | |---|---|---|---| | **Plans Approved by Stockholders** | | | | | 2015 Plan | 283,275 | $6.41 | — | | 2020 Plan | 1,339,521 | $15.05 | 756,554 | | ESPP | — | — | 186,826 | | **Total** | **1,622,796** | **$13.28** | **943,380** | Part IV [Exhibits and Financial Statement Schedules](index=237&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules.) This section lists exhibits filed with the Annual Report, including corporate governance documents and material contracts, while omitting financial statement schedules as they are not applicable or included elsewhere - The exhibits include key agreements such as the Amended and Restated Credit and Security Agreements with Midcap, the Royalty Agreement with Ligand Pharmaceuticals, and the License Agreement with Cook Biotech[829](index=829&type=chunk)[833](index=833&type=chunk) Financial Statements [Consolidated Financial Statements](index=248&type=section&id=Consolidated%20Financial%20Statements) For FY2021, Aziyo Biologics reported net sales of $47.4 million, an 11% increase, but a widened net loss of $24.8 million, with $30.4 million in cash and restricted cash at year-end Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2021 | Dec 31, 2020 | |---|---|---| | **Assets** | | | | Cash and restricted cash | $30,428 | $39,532 | | Total current assets | $47,428 | $59,707 | | Total assets | $67,170 | $82,810 | | **Liabilities & Equity** | | | | Total current liabilities | $26,001 | $26,779 | | Total liabilities | $53,649 | $61,979 | | Total stockholders' equity | $13,521 | $20,831 | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2021 | Year Ended Dec 31, 2020 | |---|---|---| | Net sales | $47,390 | $42,682 | | Gross profit | $19,022 | $20,561 | | Loss from operations | $(23,032) | $(13,599) | | Net loss | $(24,832) | $(21,825) | | Net loss per share | $(2.38) | $(8.88) | [Notes to Consolidated Financial Statements](index=252&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, going concern evaluation, 45 FiberCel recall lawsuits with unestimable probable loss, long-term debt, revenue interest obligation, stock-based compensation, and customer concentration - Management evaluated the company's ability to continue as a going concern due to recurring losses, but believes existing cash and financing will be sufficient for at least the next **12 months** (**Note 2**)[882](index=882&type=chunk)[884](index=884&type=chunk) - As of **February 18, 2022**, **45 lawsuits** had been filed against the company related to the FiberCel recall. The company states it is not possible to estimate a range of probable loss, but it could be material (**Note 16**)[1009](index=1009&type=chunk)[1015](index=1015&type=chunk) - The company has a Revenue Interest Obligation to Ligand Pharmaceuticals, requiring payment of **5%** of future sales of certain acquired products, subject to a **$2.75 million** annual minimum (**Note 9**)[966](index=966&type=chunk) - As of **Dec 31, 2021**, the company had federal net operating loss carryforwards of approximately **$65.5 million** to offset future taxable income (**Note 11**)[982](index=982&type=chunk)

Aziyo Biologics, Inc. (AZYO) Q4 2021 Earnings Conference Call March 3, 2022 4:30 PM ET Company Participants Ronald Lloyd – President and Chief Executive Officer Matthew Ferguson – Chief Financial Officer Leigh Salvo – Investor Relations, Gilmartin Group, LLC Conference Call Participants Matthew O’Brien – Piper Sandler Companies David Rescott – Truist Securities Operator Hello, and thank you for standing by. Welcome to Aziyo Biologics, Fourth Quarter and Full Year 2021 Earnings Conference Call. At this time, ...

Financial Data and Key Metrics Changes - Aziyo Biologics reported Q3 2021 revenue of $11.5 million, a 3% decrease from $11.8 million in Q3 2020 and a 5.6% decrease from $12.2 million in Q2 2021 [23] - Year-to-date total revenues exceeded $36 million, representing a 21% increase over the same period in 2020 [7] - Gross margin for Q3 2021 was 32.1%, down from 47.1% in Q3 2020 and 46.2% in Q2 2021 [27] - Total operating expenses for Q3 2021 were $10.7 million, a 30% increase from $8.2 million in Q3 2020 [28] - Net loss for Q3 2021 was $8.3 million, compared to a net loss of $6.7 million in Q3 2020 [29] Business Line Data and Key Metrics Changes - Net sales of core products were $8.6 million in Q3 2021, down from $10.3 million in Q3 2020, while non-core products saw an increase to $2.9 million from $1.4 million [24] - The decline in core products was primarily due to a decrease in the orthopedic and spinal repair business following the discontinuation of FiberCel sales by its distributor [24] - Sales of CanGaroo and SimpliDerm showed growth, offsetting some declines in other areas [25] Market Data and Key Metrics Changes - Increased sales of CanGaroo in Europe were attributed to the launch of a new expanded label allowing hydration in gentamicin solution prior to implantation [12] - The company experienced improved productivity from its U.S. direct sales force, with higher utilization in existing accounts and new account openings [11] Company Strategy and Development Direction - Aziyo plans to scale its commercial organization and advance CanGaroo RM, a next-generation product with antibiotics, with an expected FDA filing in Q1 2022 [8] - The company aims to generate clinical data and expand market access for SimpliDerm, with ongoing clinical studies and publications planned for 2022 [14] - In the orthopedic and spine business, Aziyo anticipates onboarding additional partners and launching new viable bone matrices [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating challenges posed by COVID-19 and highlighted strong performance in CanGaroo and SimpliDerm despite headwinds [36] - The outlook for Q4 2021 includes expectations for core product sales to remain similar to Q3 results, with growth anticipated in 2022 driven by CanGaroo RM and additional partnerships [31] Other Important Information - The company is participating in a patient support program related to the FiberCel recall, aiming to support affected patients [9] - Aziyo has implemented new screening and testing procedures to enhance product safety, which are expected to set new industry standards [18] Q&A Session Summary Question: Impact of COVID-19 on Q3 performance - Management noted that despite COVID-19 disruptions, CanGaroo and SimpliDerm performed well, with a larger order from a non-core customer contributing to Q3 sales [36] Question: Guidance for Q4 sales - Management indicated that Q4 sales would likely see a step down due to the non-recurrence of a large order and ongoing challenges in the viable bone matrix business [39] Question: Growth expectations for CanGaroo and SimpliDerm - Management refrained from providing specific growth percentages but expressed optimism about the potential for both products in 2022 [41] Question: M&A strategy - Management stated that while they are exploring tuck-in acquisitions, they remain focused on organic growth opportunities within their existing product lines [50] Question: FiberCel's impact on core business growth - Management confirmed that excluding FiberCel, there was sequential growth in the core business, driven by CanGaroo and SimpliDerm [54]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-39577 Aziyo Biologics, Inc. (Exact name of registrant as specified in its charter) Delaware 47-4790334 (S ...

Start Time: 16:30 January 1, 0000 5:10 PM ET Aziyo Biologics, Inc. (AZYO) Q2 2021 Earnings Conference Call August 09, 2021, 16:30 PM ET Company Participants Ronald Lloyd - President and CEO Matthew Ferguson - CFO Leigh Salvo - IR, Gilmartin Group LLC Conference Call Participants Matthew O’Brien - Piper Sandler Joshua Jennings - Cowen and Company David Rescott - Truist Securities Brandon Folkes - Cantor Fitzgerald Operator Ladies and gentlemen, thank you for standing by. Welcome to Aziyo Biologics Q2 2021 E ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, par value $0.001 per share AZYO The Nasdaq Global Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the trans ...