Financial Data and Key Metrics Changes - In Q2 2021, net sales increased by 27% year-over-year to $68.2 million, primarily driven by the Advanced Wound Care business [6][32] - Adjusted net sales, excluding the impact of revenue recognition changes, grew by 31% [6][33] - Gross profit margin was 81.3%, down from 84.7% in the same period last year, impacted by inventory reserves and increased manufacturing costs [35][36] - Net loss for Q2 2021 was $1.8 million, compared to a net loss of $8.5 million in the same period a year ago [41] Business Line Data and Key Metrics Changes - Advanced Wound Care products saw a 29% growth, driven by EPICORD Expandable and the EPIFIX portfolio [34] - Sales of Section 351 products increased by 44% compared to the prior year, which were significantly impacted by the pandemic [34] Market Data and Key Metrics Changes - The company achieved its goal of increasing the sales force by 10%, now totaling 289 customer-facing sales professionals [8] - The easing of COVID restrictions allowed for more effective sales and medical education programs [9][10] Company Strategy and Development Direction - The company is focused on expanding its Advanced Wound Care business and enhancing its product offerings [5][12] - A collaboration with Wake Forest University Institute for Regenerative Medicine aims to advance scientific evidence for clinical therapies [11] - Regulatory approval for EPIFIX in Japan is underway, with potential to reach 100,000 patients annually once reimbursement is established [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to potential COVID spikes and maintain sales momentum [10][73] - The company is optimistic about its pipeline, with key milestones expected in the coming months for clinical trials [22][26] Other Important Information - The company was added to the Russell 3000 and Russell 2000 indexes and anticipates being added to the NASDAQ Biotech Index in Q4 2021 [42] - The company is preparing for a potential BLA filing for its amniotic tissue products, which would be a significant milestone [24][27] Q&A Session Summary Question: Concerns about core products and 351 classification - Management does not believe EPICORD products will be affected by Enforcement Discretion due to their manufacturing and promotional methods [49][50] Question: Status of CGMP for processing facilities - One facility received a VAI, and the company is awaiting further updates from the FDA [51][52] Question: Drivers for EPICORD revenue growth - EPICORD Expandable allows targeting deeper wounds, providing a unique treatment option [58][59] Question: Impact of Enforcement Discretion on demand - The company is educating customers on viable alternatives and believes it can capture market share from competitors affected by Enforcement Discretion [62][65] Question: International product approvals beyond Japan - Current focus is on EPIFIX for wound applications in Japan, with future assessments for AMNIOFIX [74] Question: Timing for R&D day - Late fall is anticipated for the R&D day, depending on FDA meeting outcomes [67][68] Question: Processing time for trial results - The company is being thorough in its analysis, which may take longer due to the size of the studies [81][82] Question: Evidence of AMNIOFIX's regenerative properties - Preclinical studies show growth factors in AMNIOFIX that may modulate wound healing processes [89][90]

Part I [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201%20Financial%20Statements%20(Unaudited)) The unaudited financial statements for Q2 2021 show decreased total assets, improved net sales, and a reduced net loss, impacted by a $1.0 million inventory write-down [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets decreased to $187.1 million, driven by lower cash, while total liabilities also decreased, resulting in an increased stockholders' deficit Condensed Consolidated Balance Sheet Highlights | Account | June 30, 2021 ($ thousands) | December 31, 2020 ($ thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $85,007 | $95,812 | | Total current assets | $147,691 | $160,617 | | Total assets | $187,147 | $202,032 | | **Liabilities & Equity** | | | | Total current liabilities | $50,571 | $59,162 | | Long term debt, net | $47,905 | $47,697 | | Total liabilities | $101,790 | $110,614 | | Total stockholders' deficit | $(7,137) | $(150) | [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2021, net sales increased 27.1% to $68.2 million, and net loss significantly narrowed to $1.8 million, primarily due to reduced investigation-related expenses Q2 and H1 2021 vs 2020 Performance | Metric | Q2 2021 ($ thousands) | Q2 2020 ($ thousands) | Six Months 2021 ($ thousands) | Six Months 2020 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $68,165 | $53,647 | $128,132 | $115,383 | | Gross profit | $55,405 | $45,449 | $105,731 | $97,160 | | Operating loss | $(410) | $(5,856) | $(7,262) | $(19,600) | | Investigation, restatement and related | $(2,062) | $11,446 | $5,134 | $27,038 | | Net loss | $(1,779) | $(8,466) | $(10,161) | $(13,287) | | Net loss per share - basic/diluted | $(0.03) | $(0.08) | $(0.12) | $(0.12) | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2021, net cash used in operating activities significantly improved to $5.1 million, with overall cash and equivalents decreasing by $10.8 million to $85.0 million Six Months Ended June 30 Cash Flow Summary | Activity | 2021 ($ thousands) | 2020 ($ thousands) | | :--- | :--- | :--- | | Net cash flows used in operating activities | $(5,080) | $(15,378) | | Net cash flows used in investing activities | $(2,501) | $(1,572) | | Net cash flows used in financing activities | $(3,224) | $(3,930) | | **Net change in cash** | **$(10,805)** | **$(20,880)** | | Cash and cash equivalents, end of period | $85,007 | $48,189 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the cessation of Section 351 product marketing, a $1.0 million inventory write-down, significant debt and preferred stock obligations, and legal accruals - The FDA's period of enforcement discretion for Section 351 products ended on May 31, 2021. The company stopped marketing these products, which accounted for **$8.6 million** in sales for Q2 2021 and **$16.7 million** for H1 2021[27](index=27&type=chunk) - The company fully reserved **$1.0 million** of its Section 351 product inventory during Q2 2021 due to the end of the FDA's enforcement discretion[65](index=65&type=chunk) - The company has a **$50 million** senior secured term loan with Hayfin, maturing in 2025, with an interest rate of **8.3%** as of June 30, 2021[70](index=70&type=chunk)[72](index=72&type=chunk) - The company has **$100 million** of Series B Convertible Preferred Stock outstanding, which pays a cumulative dividend (**6.0%** per annum after June 30, 2021) and is convertible at **$3.85** per common share. As of June 30, 2021, accumulated but unpaid dividends were **$4.1 million**[92](index=92&type=chunk)[93](index=93&type=chunk)[99](index=99&type=chunk) - As of June 30, 2021, the company has accrued **$4.5 million** related to legal proceedings and paid **$6.5 million** toward legal matters in the first six months of 2021[111](index=111&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 2021 net sales growth driven by volume and Advanced Wound Care, the impact of Section 351 product cessation, increased operating expenses, and sufficient liquidity for the next 12 months [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Q2 2021 net sales increased 27.1%, but gross margin declined due to an inventory write-down, while SG&A and R&D expenses rose significantly Q2 2021 vs Q2 2020 Results of Operations | Line Item | Q2 2021 ($ thousands) | Q2 2020 ($ thousands) | $ Change ($ thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Net sales | $68,165 | $53,647 | $14,518 | 27.1% | | Gross profit | $55,405 | $45,449 | $9,956 | 21.9% | | Selling, general and administrative | $53,599 | $37,329 | $16,270 | 43.6% | | Investigation, restatement and related | $(2,062) | $11,446 | $(13,508) | (118.0)% | | Research and development | $4,063 | $2,259 | $1,804 | 79.9% | | Net loss | $(1,779) | $(8,466) | $6,687 | (79.0)% | - Adjusted Net Sales (excluding revenue from 'Remaining Contracts') increased **30.6%** in Q2 2021 year-over-year, driven by **29.5%** growth in Advanced Wound Care products[144](index=144&type=chunk)[145](index=145&type=chunk) - The increase in SG&A for Q2 2021 was driven by the restoration of full salaries, reduced travel costs in the prior period due to COVID-19, **$3.8 million** in proxy contest costs, and higher sales commissions[148](index=148&type=chunk)[149](index=149&type=chunk) [Non-GAAP Financial Measures](index=38&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures show Q2 2021 Adjusted Net Sales increased to $67.9 million, while Adjusted EBITDA decreased to $2.8 million due to higher operating expenses Reconciliation of GAAP Net Loss to Adjusted EBITDA | Metric | Q2 2021 ($ thousands) | Q2 2020 ($ thousands) | Six Months 2021 ($ thousands) | Six Months 2020 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(1,779) | $(8,466) | $(10,161) | $(13,287) | | EBITDA | $1,108 | $(4,172) | $(4,343) | $(16,133) | | **Adjusted EBITDA** | **$2,837** | **$10,241** | **$7,570** | **$13,355** | | Adjusted EBITDA margin | 4.2% | 19.1% | 5.9% | 11.6% | Reconciliation of GAAP Net Sales to Adjusted Net Sales | Metric | Q2 2021 ($ thousands) | Q2 2020 ($ thousands) | Six Months 2021 ($ thousands) | Six Months 2020 ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Net sales | $68,165 | $53,647 | $128,132 | $115,383 | | Effect of change in revenue recognition | $(313) | $(1,706) | $(611) | $(6,201) | | **Adjusted net sales** | **$67,852** | **$51,941** | **$127,521** | **$109,182** | [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2021, the company had $85.0 million in cash, deemed sufficient for 12 months, and was in compliance with its $50 million term loan covenants, while preferred stock dividends accumulated - The company had **$85.0 million** of cash and cash equivalents as of June 30, 2021, and believes this is sufficient to meet operational needs for the next 12 months[191](index=191&type=chunk)[192](index=192&type=chunk) - The Hayfin Term Loan has financial covenants requiring a Maximum Total Net Leverage Ratio (**4.5x** through Q2 2021, **4.0x** thereafter) and Minimum Liquidity of **$10 million**. The company was in compliance as of June 30, 2021[198](index=198&type=chunk) - The Series B Preferred Stock dividend rate increased from **4.0%** to **6.0%** per annum after June 30, 2021. As of June 30, 2021, accumulated but unpaid dividends were approximately **$4.1 million**[202](index=202&type=chunk)[205](index=205&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As of June 30, 2021, the company reported no material market risk exposure due to the absence of market risk sensitive instruments - The company states it had no material market risk exposure as of June 30, 2021[211](index=211&type=chunk) [Item 4. Controls and Procedures](index=42&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of June 30, 2021, due to unremediated material weaknesses in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2021, due to previously identified and unremediated material weaknesses in internal control over financial reporting[213](index=213&type=chunk)[214](index=214&type=chunk) Part II [Item 1. Legal Proceedings](index=44&type=section&id=Item%201%20Legal%20Proceedings) The company is involved in numerous legal proceedings, including a securities class action, ongoing government investigations, and litigation with former executives - The company is party to numerous claims and lawsuits arising from its business activities. For detailed information, refer to Note 12 of the financial statements[218](index=218&type=chunk)[110](index=110&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A%20Risk%20Factors) The company has amended and added several risk factors, including challenges in international expansion, potential FDA reclassification of products, and risks associated with clinical trials and manufacturing capacity - New Risk: Clinical trials are lengthy, expensive, and have uncertain outcomes. Delays or failures could prevent commercialization of new products[236](index=236&type=chunk) - New Risk: The ability to consistently manufacture biologic products is critical. Current facilities may be inadequate if the planned BLA for knee osteoarthritis is approved, requiring significant capital investment and expertise[239](index=239&type=chunk)[241](index=241&type=chunk) - Amended Risk: The company's umbilical cord-derived products (EPICORD, AMNIOCORD) could be determined by the FDA to not meet the requirements for regulation solely under Section 361, which would require pre-market approval and adversely impact revenue[229](index=229&type=chunk) - Amended Risk: International expansion, such as the recent EPIFIX approval in Japan, faces risks including difficulty in obtaining acceptable reimbursement pricing from government bodies like the JMHLW[220](index=220&type=chunk)[223](index=223&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2021, the company repurchased 127,046 common shares at an average price of $10.59, solely for tax withholding obligations on restricted stock vesting Q2 2021 Share Repurchases | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | April 2021 | 121,613 | $10.63 | | May 2021 | 5,433 | $9.70 | | June 2021 | 0 | $— | | **Total for Quarter** | **127,046** | **$10.59** | [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203%20Defaults%20upon%20Senior%20Securities) As of June 30, 2021, the company had accumulated $4,054,921 in unpaid dividends on its Series B Preferred Stock, electing accumulation over cash payment - As of June 30, 2021, the company had accumulated unpaid dividends of **$4,054,921** on its Series B Preferred Stock[245](index=245&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205%20Other%20Information) On May 27, 2021, shareholders approved a bylaw amendment to implement proxy access, allowing eligible shareholders to nominate directors under specific conditions - The company amended its bylaws to provide for proxy access, allowing eligible shareholders (owning at least **3%** for **3 years**) to nominate directors[247](index=247&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate documents, agreements, and certifications

Financial Data and Key Metrics Changes - MiMedx reported a 4% growth in adjusted net sales for Q1 2021, driven by the Wound Care business, with adjusted net sales reaching $59.7 million, an increase of 4.2% from the previous year [11][45] - Net sales for Q1 2021 were $60.0 million, compared to $61.7 million for the same period in 2020, reflecting a decline due to changes in revenue recognition methodology [44][45] - Gross margin improved slightly to 83.9% in Q1 2021 from 83.8% in Q1 2020 [46] - Net loss increased to $8.4 million in Q1 2021 from a net loss of $4.8 million in Q1 2020 [50] Business Line Data and Key Metrics Changes - The Wound Care business was a significant contributor to the growth, particularly due to the recently launched EpiCord Expandable product [11][12] - Selling, general and administrative expenses decreased by 3.8% to $45.2 million, attributed to lower travel expenses due to COVID-19 restrictions [46] - Research and development expenses increased to $4.3 million in Q1 2021 from $2.8 million in the same period last year, reflecting planned investments in clinical research [47] Market Data and Key Metrics Changes - The company noted that sales of marginized and particulate products represented approximately 14% of net sales for the three months ended March 31, 2021 [53] - The FDA's end of enforcement discretion is expected to impact sales, with the company anticipating adjusted net sales for 2021 to be consistent with the previous year [54] Company Strategy and Development Direction - MiMedx is focused on pipeline acceleration, expanding patient access to wound care products, and advancing its innovative pipeline of musculoskeletal therapies [58] - The company is exploring inorganic growth opportunities but emphasizes a focus on organic growth at this time [41][42] - The addition of Dirk Stevens as Senior Vice President of Quality Assurance and Regulatory Affairs is aimed at enhancing quality standards and regulatory compliance [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to achieve above-market growth rates despite the challenges posed by the end of enforcement discretion [71] - The company is committed to ensuring patient access to its products and is working with the FDA on expanded access under a cost recovery model [82] - Management highlighted the importance of ongoing dialogue with the FDA and the positive feedback received regarding their compliance efforts [75][86] Other Important Information - The company has completed the final patient visits for its Phase III studies on AmnioFix injectable for plantar fasciitis and Achilles tendonitis, with top-line results expected in the summer [19][22] - MiMedx is planning to file its first Biologics License Application (BLA) in the first half of 2022 for plantar fasciitis [27][75] Q&A Session Summary Question: Clarification on Year-over-Year Sales Decline - The decline in year-over-year sales was due to a change in revenue recognition methodology, not lost contracts [66][68] Question: Mitigation Strategies for Sales Loss - The company is focusing on expanding its sheet products and deploying its medical education team to communicate value propositions effectively [70][71] Question: FDA Approval Requirements for AmnioFix Injectable - Key steps include completing the analysis of the Phase III trial, meeting with the FDA, and ensuring the manufacturing facility meets GMP standards [73][75] Question: Impact of Enforcement Discretion Ending - Sales will continue until May 31, 2021, after which normal sales will stop without an approved BLA [79][81] Question: Market Size for Chronic Cutaneous Ulcers - The market for chronic cutaneous ulcers is expected to be significant, potentially larger than existing markets for diabetic foot ulcers and venous leg ulcers [93][96]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 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 001-35887 MIMEDX GROUP, INC. (Exact name of registrant as specified in its charter) Florida 26-27925 ...

| --- | --- | --- | |------------------------------------------------------------|-------------------------------|-------| | | | | | | | | | MiMedx | | | | ADVANCED PLACENTAL SCIENCE March 9-10, 2021 | INNOVATING TREATMENTS THROUGH | | | 2021 H.C. Wainwright & Co. Global Life Sciences Conference | | | IMPORTANT CAUTIONARY STATEMENT This presentation contains forward-looking statements. Actual results may differ materially. Investors are cautioned against placing undue reliance on these statements, All state ...

MiMedx Group, Inc. (NASDAQ:MDXG) Q4 2020 Earnings Conference Call March 8, 2021 9:30 AM ET Company Participants Jack Howarth - VP of IR and Corporate Communications Tim Wright - CEO Pete Carlson - CFO Robert Stein - EVP, Research & Development Rohit Kashyap - EVP and Chief Commercial Officer Conference Call Participants Sean Kang - H.C. Wainwright John Vandermosten - SIC Zacks Eiad Asbahi - Prescience Point Operator Ladies and gentlemen, thank you for standing by, and welcome to the MiMedx Fourth Quarter 20 ...

Part I [Business](index=8&type=section&id=Item%201.%20Business) MiMedx specializes in placental tissue allografts for wound care and musculoskeletal conditions, navigating FDA reclassification of key products to Section 351 biologics requiring BLA approval - MiMedx is a leader in placental biologics, with a core business in advanced wound care and a late-stage pipeline for degenerative musculoskeletal conditions[21](index=21&type=chunk)[43](index=43&type=chunk) - The company's products are derived from human placental tissues using the proprietary PURION® process, and include platform technologies like AmnioFix®, EpiFix®, and EpiCord®[21](index=21&type=chunk)[23](index=23&type=chunk) - A 2017 FDA guidance reclassified certain products, such as micronized AmnioFix Injectable, as Section 351 biologics requiring BLA approval, moving away from the less stringent Section 361 HCT/P regulation[24](index=24&type=chunk)[25](index=25&type=chunk) - The FDA has granted an enforcement discretion period until May 31, 2021, allowing MiMedx to continue marketing these products while pursuing the necessary BLA approvals[26](index=26&type=chunk)[28](index=28&type=chunk) Revenue from Products Potentially Affected by End of FDA Enforcement Discretion | Product Category | 2020 Revenue | Percentage of Total Revenue | | :--- | :--- | :--- | | Micronized Products & AmnioFill | $32.8 million | ~13% | | Umbilical Cord-Derived Products | $16.6 million | N/A | - The company is actively conducting late-stage clinical trials for AmnioFix Injectable under three Investigational New Drug (IND) applications for plantar fasciitis (Phase 3), Achilles tendonitis (Phase 3), and knee osteoarthritis (Phase 2B)[29](index=29&type=chunk)[52](index=52&type=chunk)[70](index=70&type=chunk) [Risk Factors](index=37&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including regulatory reclassification of products, material weaknesses in financial controls, ongoing litigation, and intense market competition - A primary regulatory risk is that products like micronized and umbilical cord-derived tissues may not qualify for regulation solely under Section 361, potentially requiring their removal from the market after the FDA's enforcement discretion period expires, which would materially impact revenue[192](index=192&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk) - The company has identified and is remediating material weaknesses in its internal control over financial reporting, which could lead to misstatements and affect investor confidence[243](index=243&type=chunk)[244](index=244&type=chunk) - MiMedx faces substantial litigation and investigation risks related to a prior Audit Committee investigation and financial restatement, which could result in significant legal expenses and harm to the business[248](index=248&type=chunk)[249](index=249&type=chunk) - The business is highly competitive, faces risks from rapid technological change, and depends on the availability of human donor tissue, which could be disrupted[150](index=150&type=chunk)[151](index=151&type=chunk)[154](index=154&type=chunk) - The company's substantial indebtedness under the Hayfin Loan Agreement includes restrictive covenants that limit operational and financial flexibility[251](index=251&type=chunk)[252](index=252&type=chunk) - Holders of Series B Preferred Stock have preferential rights to dividends and liquidation distributions, voting rights, and conversion features that could dilute the value of common stock[257](index=257&type=chunk)[259](index=259&type=chunk)[266](index=266&type=chunk) [Unresolved Staff Comments](index=67&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved comments from the SEC Staff regarding its filings - As of the filing date, MiMedx has no unresolved staff comments from the Securities and Exchange Commission (SEC)[274](index=274&type=chunk) [Properties](index=67&type=section&id=Item%202.%20Properties) The company's primary operations are in leased facilities in Georgia, with ongoing investments to enhance manufacturing capacity and CGMP compliance - The company's corporate headquarters and primary operations are located in leased facilities in Marietta and Kennesaw, Georgia[275](index=275&type=chunk) - MiMedx is investing in its manufacturing capacity to enhance compliance with CGMP standards for its products[276](index=276&type=chunk) [Legal Proceedings](index=68&type=section&id=Item%203.%20Legal%20Proceedings) Details on legal proceedings, regulatory matters, and contingencies are incorporated by reference from Note 14 of the financial statements - For details on legal proceedings, the company refers to Note 14, "Commitments and Contingencies," in its financial statements[277](index=277&type=chunk) [Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business operations - The company has no mine safety disclosures to report[278](index=278&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=68&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, has not paid dividends, and repurchased shares in Q4 2020 primarily for tax withholding obligations - The company's common stock is traded on the Nasdaq under the symbol "MDXG"[280](index=280&type=chunk) - MiMedx has never paid cash dividends on its common stock and does not plan to in the foreseeable future[280](index=280&type=chunk) Q4 2020 Equity Repurchases | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Oct 2020 | 15,031 | $6.04 | | Nov 2020 | 56,543 | $5.78 | | Dec 2020 | 36,833 | $7.68 | | **Total Q4** | **108,407** | **$6.46** | [Selected Financial Data](index=70&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected consolidated financial data shows declining net sales and recurring net losses over the past three years, alongside growth in total assets and a shift to a stockholders' deficit Selected Statement of Operations Data (in thousands, except per share data) | Year | Net Sales | Gross Profit | Operating (Loss) Income | Net (Loss) Income | Diluted EPS | | :--- | :--- | :--- | :--- | :--- | :--- | | **2020** | $248,234 | $208,904 | $(45,398) | $(49,284) | $(0.77) | | **2019** | $299,255 | $256,174 | $(21,160) | $(25,580) | $(0.24) | | **2018** | $359,111 | $322,725 | $(3,924) | $(29,979) | $(0.28) | | **2017** | $321,139 | $285,920 | $46,223 | $64,727 | $0.56 | | **2016** | $221,712 | $190,774 | $884 | $390 | $0.00 | Selected Balance Sheet Data (in thousands) | As of Dec 31 | Total Assets | Total Liabilities | Total Stockholders' (Deficit) Equity | | :--- | :--- | :--- | :--- | | **2020** | $202,032 | $110,614 | $(150) | | **2019** | $167,166 | $132,768 | $34,398 | | **2018** | $122,844 | $73,189 | $49,655 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=72&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a 17.0% decrease in 2020 net sales due to revenue recognition changes and COVID-19, a $49.3 million net loss, significant legal expenses, and improved liquidity from recent financing Results of Operations Comparison (2020 vs. 2019, in thousands) | Metric | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $248,234 | $299,255 | $(51,021) | (17.0)% | | **Gross Profit** | $208,904 | $256,174 | $(47,270) | (18.5)% | | **Operating Loss** | $(45,398) | $(21,160) | $(24,238) | 114.5% | | **Net Loss** | $(49,284) | $(25,580) | $(23,704) | 92.7% | - The decrease in 2020 net sales was primarily due to a change in revenue recognition policy and the impacts of the COVID-19 pandemic, which restricted facility access and reduced elective procedures[379](index=379&type=chunk) - The company changed its revenue recognition pattern effective October 1, 2019, moving from recognizing revenue upon cash receipt (due to control environment weaknesses) to recognizing it upon shipment or implantation for new contracts[333](index=333&type=chunk)[343](index=343&type=chunk) - In July 2020, the company completed major financing transactions, including a **$50 million** term loan and a **$100 million** issuance of Series B Preferred Stock, which significantly improved its liquidity and was used to refinance existing debt[309](index=309&type=chunk)[320](index=320&type=chunk) - Investigation, restatement, and related expenses were significant, totaling **$59.5 million** in 2020 and **$66.5 million** in 2019, primarily for legal fees and indemnification costs for former management[384](index=384&type=chunk) - The company expects adjusted net sales to increase by at least **10%** in 2021, contingent on the ability to continue selling its micronized, particulate, and umbilical cord products for the full year[381](index=381&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=98&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reported no material market risk exposure as of December 31, 2020, due to the absence of market risk sensitive instruments - The company determined it had no material market risk exposure as of December 31, 2020[447](index=447&type=chunk) [Financial Statements and Supplementary Data](index=99&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2018-2020, with the auditor issuing an unqualified opinion on financials but an adverse opinion on internal control over financial reporting - The independent auditor, BDO USA, LLP, issued an unqualified opinion on the consolidated financial statements[451](index=451&type=chunk) - The independent auditor issued an adverse opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2020, citing identified material weaknesses[452](index=452&type=chunk)[462](index=462&type=chunk) Key Financial Statement Data (as of Dec 31, 2020, in thousands) | Metric | Amount | | :--- | :--- | | **Assets** | | | Cash and cash equivalents | $95,812 | | Total Assets | $202,032 | | **Liabilities & Equity** | | | Total Liabilities | $110,614 | | Convertible preferred stock | $91,568 | | Total Stockholders' (Deficit) | $(150) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=153&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants regarding accounting principles, financial disclosure, or auditing scope - The company reported no disagreements with its accountants on accounting and financial disclosure[690](index=690&type=chunk) [Controls and Procedures](index=153&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2020, due to ongoing material weaknesses in internal control over financial reporting, particularly in Control Activities - Management concluded that disclosure controls and procedures were not effective as of December 31, 2020, due to material weaknesses in internal control over financial reporting[692](index=692&type=chunk)[695](index=695&type=chunk) - Material weaknesses were identified in the Control Activities component of the COSO framework, affecting processes such as revenue recognition, inventory, income taxes, segregation of duties, and financial forecasting[698](index=698&type=chunk)[699](index=699&type=chunk) - The company has remediated the previously disclosed material weaknesses related to the Control Environment by restructuring the board, enhancing compliance training, and improving accountability[701](index=701&type=chunk) - Remediation plans for the remaining material weaknesses are underway, including enhancing the financial close process, improving controls over income tax accounting, and strengthening oversight of sales activities[700](index=700&type=chunk)[710](index=710&type=chunk)[711](index=711&type=chunk) [Other Information](index=158&type=section&id=Item%209B.%20Other%20Information) The Board of Directors appointed a new Class II director and adopted restated articles of incorporation in early March 2021 - Dr. Phyllis Gardner was appointed to the Board of Directors, effective immediately following the filing of this annual report[721](index=721&type=chunk) - The company adopted restated articles of incorporation, effective March 5, 2021[725](index=725&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=159&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 proxy statement - Information regarding directors, executive officers, and corporate governance will be provided in the forthcoming 2021 proxy statement[728](index=728&type=chunk) [Executive Compensation](index=159&type=section&id=Item%2011.%20Executive%20Compensation) Details on executive compensation are incorporated by reference from the 2021 proxy statement - Details on executive compensation will be provided in the forthcoming 2021 proxy statement[729](index=729&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=159&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2021 proxy statement - Information on security ownership and related matters will be provided in the forthcoming 2021 proxy statement[730](index=730&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=159&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Details on certain relationships, related transactions, and director independence are incorporated by reference from the 2021 proxy statement - Details on certain relationships, related transactions, and director independence will be provided in the forthcoming 2021 proxy statement[731](index=731&type=chunk) [Principal Accounting Fees and Services](index=159&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the 2021 proxy statement - Information on principal accounting fees and services will be provided in the forthcoming 2021 proxy statement[732](index=732&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=160&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statement schedules and exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and required certifications - This section contains a comprehensive list of all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and required certifications[735](index=735&type=chunk)[736](index=736&type=chunk) [Form 10-K Summary](index=165&type=section&id=Item%2016.%20Form%2010-K%20Summary) A Form 10-K summary is not provided as it is not applicable - A Form 10-K summary is not provided as it is not applicable[742](index=742&type=chunk)

| --- | --- | --- | |-------------------------------------------------------------------------------|-------|-------| | | | | | INNOVATING TREATMENTS THROUGH ADVANCED PLACENTAL SCIENCE January 11-14, 2021 | | | | 2021 J.P. Morgan 39th Annual Healthcare Conference | | | IMPORTANT CAUTIONARY STATEMENT This presentation contains forward-looking statements. Investors are cautioned against placing undue reliance on these statements. All statements relating to events or results that may occur in the future are fo ...

Financial Data and Key Metrics Changes - Net sales for Q3 2020 were $64.3 million, a decrease of 27.7% from $88.9 million in Q3 2019, but a sequential increase of 22% from Q2 2020 [44][45][46] - Adjusted net sales for Q3 2020 were $63.3 million, down 6.2% from the same period in 2019 [45] - Gross margin for Q3 2020 was 84.0%, compared to 85.1% in Q3 2019 [50] - Net loss for Q3 2020 was $19.4 million, compared to a net income of $12.4 million in Q3 2019 [57][58] - Adjusted EBITDA was $6.9 million in Q3 2020, or 10.8% of net sales, compared to $7.6 million or 8.5% of net sales in Q3 2019 [59] Business Line Data and Key Metrics Changes - The company reported a strong rebound in sequential sales growth, with a 22% increase over the prior quarter [11] - Research and Development expenses increased to $3.4 million in Q3 2020 from $2.7 million in Q3 2019, driven by clinical research efforts [55] Market Data and Key Metrics Changes - The company is positioned to benefit from new payer coverage for its flagship product EpiFix, which will begin on December 1, 2020 [17][19] - The coverage is expected to provide a competitive advantage in the diabetic foot ulcer market [19] Company Strategy and Development Direction - The company aims to enhance portfolio value by highlighting clinical and economic benefits and expanding into new applications [28] - Plans for international expansion are being pursued in a controlled manner [29] - The company is focused on operationalizing its strategy and leveraging recent wins, particularly with payer coverage and new product innovations [41][96] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery from the pandemic but remains cautious due to ongoing uncertainties [47][49] - The company is committed to maintaining high-quality standards and operational efficiencies [60] Other Important Information - The company had approximately $109.6 million in cash and cash equivalents as of September 30, 2020, compared to $69.1 million at the end of 2019 [61][62] - The company is actively engaging with investors and analysts following its NASDAQ listing [63] Q&A Session Summary Question: Market potential for AmnioFix in Knee OA - Management acknowledged the potential of AmnioFix as a treatment for Knee OA and emphasized the importance of demonstrating clinical efficacy and safety in ongoing trials [66][67][70] Question: Details on contract wins - Management confirmed successful contract wins but did not disclose specific details at this time, highlighting the significance of coverage from a major U.S. commercial payer [72] Question: Expansion of salesforce - Management indicated the need to increase the salesforce but did not provide specific numbers, emphasizing the importance of having the right people in the right places [76][78] Question: Investigation expenses - Management clarified that investigation expenses are variable and related to indemnification agreements with former management, with no cap on those expenses [81] Question: Coverage and additional wins - Management discussed the importance of expanding covered lives and indications, emphasizing the validation of clinical data [84][85]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2020 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 001-35887 MIMEDX GROUP, INC. (Exact name of registrant as specified in its charter) Florida 26-2 ...