Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) 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: 001-40518 Miromatrix Medical Inc. (Exact name of registrant as specified in its charter) Delaware 27-1285782 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification Number) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF ...

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 June 30, 2023 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: 001-40518 Miromatrix Medical Inc. (Exact name of registrant as specified in its charter) Delaware 27-1285782 (Stat ...

Revenue and Loss - Revenue for the three months ended March 31, 2023, was $7,981, an increase of $1,213 or 17.9% compared to $6,768 for the same period in 2022[88]. - Net loss for the three months ended March 31, 2023, was $7,480,152, compared to a net loss of $7,203,749 for the same period in 2022, representing an increase in loss of $276,403 or 3.8%[99]. - The company reported a net loss of $7,480,152 for the three months ended March 31, 2023, compared to a net loss of $7,203,749 for the same period in 2022[112][113]. Expenses - Research and development expenses increased to $4,392,118 for the three months ended March 31, 2023, up by $385,452 or 9.6% from $4,006,666 in the same period in 2022[92]. - Regulatory and clinical expenses rose to $406,315 for the three months ended March 31, 2023, an increase of $51,077 or 14.4% compared to $355,238 for the same period in 2022[93]. - Quality expenses increased to $583,342 for the three months ended March 31, 2023, up by $142,407 or 32.3% from $440,935 in the same period in 2022[94]. - General and administrative expenses were $2,600,235 for the three months ended March 31, 2023, an increase of $327,678 or 14.4% compared to $2,272,557 for the same period in 2022[95]. Cash Flow and Investments - Net cash used in operating activities was $8,616,406 for Q1 2023, an increase from $7,428,039 in Q1 2022[109][112]. - The company generated net cash provided by investing activities of $7,984,460 in Q1 2023, primarily from the maturity of investments[114]. - Financing activities resulted in net cash provided of $9,043,839 in Q1 2023, mainly due to proceeds from the sale of common stock[115]. - The company completed a public offering in March 2023, selling 6,250,000 shares at a price of $1.60 per share, resulting in net proceeds of approximately $8.8 million[107]. - The company has an Equity Distribution Agreement allowing for the issuance of up to $50 million in common stock, although no shares were sold under this agreement in Q1 2023[105]. Financial Position and Future Outlook - Cash and cash equivalents as of March 31, 2023, were $13,619,898, with short-term investments of $11,984,842, expected to fund operations through the second quarter of 2024[101]. - The company expects to incur additional losses in the near future as it continues to develop bioengineered organs and conduct clinical trials[100]. - The company expects existing cash resources to meet capital requirements through Q2 2024, but will require substantial additional funds for ongoing development[108]. - The company issued a promissory note of $385,997 to the University, with an interest rate of 6% per annum, due January 31, 2025[104]. - The company may seek additional equity or debt financing, which could lead to dilution of existing stockholders' interests[108]. Operational Plans - The company plans to expand operational, financial, and management systems, and hire additional personnel to support clinical development and commercialization efforts[108]. - Interest income significantly increased to $101,977 for the three months ended March 31, 2023, compared to $770 for the same period in 2022, marking an increase of $101,207[96]. - As of March 31, 2023, the accumulated deficit was $111,492,063[99].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 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: 001-40518 Miromatrix Medical Inc. (Exact name of registrant as specified in its charter) Delaware 27-1285782 (State or other juri ...

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, 2022 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: 001-40518 Miromatrix Medical Inc. (Exact name of registrant as specified in its charter) (State or other juri ...

[PART I — FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20%E2%80%94FINANCIAL%20INFORMATION) This section provides Miromatrix Medical Inc.'s unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Miromatrix Medical Inc.'s unaudited condensed financial statements, including balance sheets, statements of operations, changes in shareholders' equity, and cash flows, along with detailed notes explaining significant accounting policies, investments, debt, equity, and other financial commitments for the periods ended June 30, 2022, and December 31, 2021 [Condensed Balance Sheets (Unaudited)](index=3&type=section&id=Condensed%20Balance%20Sheets%20(Unaudited)) This section presents the Company's unaudited condensed balance sheets, detailing assets, liabilities, and equity for the specified periods Condensed Balance Sheet Highlights | Metric | June 30, 2022 | December 31, 2021 | Change (Absolute) | Change (%) | | :-------------------------------- | :------------ | :---------------- | :---------------- | :--------- | | Cash and cash equivalents | $12,593,315 | $52,811,531 | $(40,218,216) | -76.15% | | Short-term investments | $20,080,428 | $0 | $20,080,428 | N/A | | Total current assets | $33,959,377 | $55,337,273 | $(21,377,896) | -38.63% | | Total assets | $47,654,180 | $60,928,999 | $(13,274,819) | -21.79% | | Total current liabilities | $3,735,839 | $4,564,192 | $(828,353) | -18.15% | | Total liabilities | $7,642,882 | $6,803,115 | $839,767 | 12.34% | | Total shareholders' equity | $40,011,298 | $54,125,884 | $(14,114,586) | -26.08% | | Accumulated deficit | $(89,437,852) | $(74,051,914) | $(15,385,938) | 20.78% | [Condensed Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Statements%20of%20Operations%20(Unaudited)) This section provides the Company's unaudited condensed statements of operations, outlining revenues, expenses, and net loss for the periods presented Condensed Statements of Operations Highlights (Three Months Ended June 30) | Metric | Q2 2022 | Q2 2021 | Change (Absolute) | Change (%) | | :-------------------------- | :------------ | :------------ | :---------------- | :--------- | | Licensing revenue | $3,952 | $9,139 | $(5,187) | -56.8% | | Cost of goods sold | $125,000 | $125,000 | $0 | 0.0% | | Gross loss | $(121,048) | $(115,861) | $(5,187) | 4.5% | | Research and development | $4,988,233 | $2,480,887 | $2,507,346 | 101.1% | | Regulatory and clinical | $419,394 | $103,256 | $316,138 | 306.2% | | Quality | $517,333 | $86,257 | $431,076 | 499.8% | | General and administration | $2,188,460 | $786,322 | $1,402,138 | 178.3% | | Total operating expenses | $8,113,420 | $3,456,722 | $4,656,698 | 134.7% | | Operating loss | $(8,234,468) | $(3,572,583) | $(4,661,885) | 130.5% | | Net loss | $(8,182,189) | $(3,702,834) | $(4,479,355) | 121.0% | | Net loss per share (basic & diluted) | $(0.40) | $(1.27) | $0.87 | -68.5% | Condensed Statements of Operations Highlights (Six Months Ended June 30) | Metric | YTD 2022 | YTD 2021 | Change (Absolute) | Change (%) | | :-------------------------- | :------------ | :------------ | :---------------- | :--------- | | Licensing revenue | $10,720 | $15,247 | $(4,527) | -29.7% | | Cost of goods sold | $250,000 | $250,000 | $0 | 0.0% | | Gross loss | $(239,280) | $(234,753) | $(4,527) | 1.9% | | Research and development | $8,994,141 | $4,348,888 | $4,645,253 | 106.8% | | Regulatory and clinical | $774,632 | $186,961 | $587,671 | 314.3% | | Quality | $958,268 | $172,044 | $786,224 | 457.0% | | General and administration | $4,461,775 | $1,349,196 | $3,112,579 | 230.7% | | Total operating expenses | $15,188,816 | $6,057,089 | $9,131,727 | 150.8% | | Operating loss | $(15,428,096) | $(6,291,842) | $(9,136,254) | 145.2% | | Net loss | $(15,385,938) | $(4,137,176) | $(11,248,762) | 271.9% | | Net loss per share (basic & diluted) | $(0.75) | $(1.60) | $0.85 | -53.1% | [Condensed Statements of Changes in Shareholders' Equity (Deficit) (Unaudited)](index=6&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity%20(Deficit)%20(Unaudited)) This section details unaudited condensed statements of changes in shareholders' equity, showing movements in common stock, paid-in capital, and accumulated deficit Shareholders' Equity Changes (Six Months Ended June 30, 2022) | Item | Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total Shareholders' Equity | | :-------------------------- | :----- | :------------------ | :------------------------- | :------------------ | :------------------------- | | Balance at Dec 31, 2021 | 20,385,645 | $204 | $128,177,594 | $(74,051,914) | $54,125,884 | | Stock-based compensation | — | — | $600,371 | — | $600,371 | | Exercise of stock options | 205,507 | $2 | $256,881 | — | $256,883 | | Exercise of stock warrants | 191,559 | $2 | $414,096 | — | $414,098 | | Issuance of restricted shares | 31,030 | — | — | — | — | | Net loss | — | — | — | $(15,385,938) | $(15,385,938) | | Balance at June 30, 2022 | 20,813,741 | $208 | $129,448,942 | $(89,437,852) | $40,011,298 | Shareholders' Equity Changes (Six Months Ended June 30, 2021) | Item | Shares | Common Stock Amount | Additional Paid-In Capital | Accumulated Deficit | Total Shareholders' Equity | | :-------------------------- | :----- | :------------------ | :------------------------- | :------------------ | :------------------------- | | Balance at Dec 31, 2020 | 2,185,822 | $22 | $8,346,943 | $(59,381,158) | $(51,034,193) | | Stock-based compensation | — | — | $239,330 | — | $239,330 | | Exercise of stock options | 163,750 | $2 | $34,623 | — | $34,625 | | Exercise of stock warrants | 65,909 | — | $6,250 | — | $6,250 | | Conversion of preferred stock to common stock | 11,092,314 | $111 | $66,553,049 | — | $66,553,160 | | Note payable and accrued interest converted to common stock | 996,757 | $10 | $7,152,389 | — | $7,152,399 | | Sales of common stock, net of expenses | 5,520,000 | $55 | $44,593,631 | — | $44,593,686 | | Net loss | — | — | — | $(4,137,176) | $(4,137,176) | | Balance at June 30, 2021 | 20,024,552 | $200 | $126,926,215 | $(63,518,334) | $63,408,081 | [Condensed Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the Company's unaudited condensed statements of cash flows, categorizing cash movements from operating, investing, and financing activities Condensed Statements of Cash Flows Highlights (Six Months Ended June 30) | Cash Flow Activity | YTD 2022 | YTD 2021 | Change (Absolute) | | :----------------- | :-------------- | :-------------- | :---------------- | | Operating activities | $(13,790,978) | $(5,390,815) | $(8,400,163) | | Investing activities | $(26,757,741) | $1,913,888 | $(28,671,629) | | Financing activities | $330,503 | $65,558,289 | $(65,227,786) | | Net (decrease) increase in cash and cash equivalents | $(40,218,216) | $62,081,362 | $(102,300,000) | | Cash, cash equivalents and restricted cash at end of period | $13,393,415 | $66,525,757 | $(53,132,342) | [Notes to Condensed Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) This section provides detailed notes to the unaudited condensed financial statements, explaining significant accounting policies, financial instruments, and other commitments [NOTE 1 — DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20BUSINESS%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Miromatrix Medical Inc. is a life sciences company focused on bioengineering transplantable organs using a decellularization and recellularization technology. The company is an emerging growth company and has elected to use the extended transition period for new accounting standards. It adopted ASC 842 (Leases) effective January 1, 2022, recognizing right-of-use assets and lease liabilities on the balance sheet - Miromatrix Medical Inc. is a life sciences company pioneering a novel technology for bioengineering fully transplantable organs, focusing initially on livers and kidneys, using a two-step method of decellularization and recellularization to replace porcine cells with unmodified human cells[19](index=19&type=chunk)[85](index=85&type=chunk) - The Company is an **emerging growth company** and has elected to use the extended transition period for complying with new or revised accounting standards[25](index=25&type=chunk) - Effective January 1, 2022, the Company adopted ASU No. 2016-02, Leases (Topic 842), resulting in the recognition of **right-of-use assets of $1,882,696** and **lease liabilities of $2,020,839** on the balance sheet as of the adoption date[26](index=26&type=chunk)[29](index=29&type=chunk) [NOTE 2 — INVESTMENTS](index=13&type=section&id=NOTE%202%20%E2%80%94%20INVESTMENTS) The Company invests its excess cash in U.S. Treasury securities, classified as held-to-maturity and recorded at amortized cost. As of June 30, 2022, total investments amounted to $26,019,391, with the majority maturing in less than one year - The Company invests its excess cash in **U.S. Treasury securities**, which are reported as held-to-maturity investments at amortized cost[23](index=23&type=chunk)[32](index=32&type=chunk) Investments as of June 30, 2022 | Category | Amortized Cost | Unrealized Holding Losses | Fair Value | | :--------- | :------------- | :------------------------ | :--------- | | Short-term: U.S. treasury notes | $20,080,428 | $112,408 | $19,968,020 | | Long-term: U.S. treasury notes | $5,938,963 | $46,783 | $5,892,180 | | Total | $26,019,391 | $159,191 | $25,860,200 | Investment Maturity Dates as of June 30, 2022 | Maturity Period | Amount | | :-------------- | :----- | | Less than one year | $20,080,428 | | 1-2 years | $5,938,963 | | Total | $26,019,391 | [NOTE 3 — PROPERTY AND EQUIPMENT](index=13&type=section&id=NOTE%203%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT) The Company's property and equipment, net, increased to $5,792,166 as of June 30, 2022, from $5,591,726 at December 31, 2021, primarily due to additions in lab equipment, leasehold improvements, and furniture, fixtures, and computers. Depreciation and amortization expense significantly increased in 2022 compared to 2021 Property and Equipment, Net | Category | June 30, 2022 | December 31, 2021 | | :-------------------------- | :------------ | :---------------- | | Lab equipment | $1,706,468 | $1,549,416 | | Leasehold improvements | $3,366,458 | $3,239,307 | | Furniture, fixtures and computers | $1,994,172 | $1,671,793 | | Total gross property and equipment | $7,067,098 | $6,460,516 | | Less accumulated depreciation and amortization | $(1,274,932) | $(868,790) | | Total property and equipment, net | $5,792,166 | $5,591,726 | - Depreciation and amortization expense increased significantly: **$273,610 for Q2 2022** versus **$29,145 for Q2 2021**, and **$536,507 for YTD 2022** versus **$59,174 for YTD 2021**[34](index=34&type=chunk) [NOTE 4 — EQUITY METHOD INVESTMENT](index=15&type=section&id=NOTE%204%20%E2%80%94%20EQUITY%20METHOD%20INVESTMENT) The Company previously held an equity interest in Reprise Biomedical, Inc., which was spun out in 2019. Miromatrix sold its remaining 1,800,000 shares of Reprise in March 2021 for $2,000,000, resulting in a gain on sale of equity investment and eliminating future equity losses in the affiliate - The Company sold its remaining **1,800,000 shares of Reprise Biomedical, Inc.** in March 2021 for **$2,000,000**, after previously reducing its ownership from 45% to 18%[35](index=35&type=chunk) - For the period ended March 15, 2021, the Company recorded an equity method share of net loss from Reprise of **$(223,633)**[36](index=36&type=chunk) [NOTE 5 — ACCRUED EXPENSES](index=15&type=section&id=NOTE%205%20%E2%80%94%20ACCRUED%20EXPENSES) Accrued expenses increased slightly to $1,450,934 as of June 30, 2022, from $1,428,622 at December 31, 2021, primarily driven by an increase in accrued wages, partially offset by decreases in legal, taxes, facility costs, and supplies Accrued Expenses | Category | June 30, 2022 | December 31, 2021 | | :-------------------------- | :------------ | :---------------- | | Wages | $923,423 | $704,502 | | Legal | $145,191 | $37,000 | | Taxes | $56,163 | $101,221 | | Insurance | $25,540 | — | | Key opinion leader compensation | $14,025 | $25,500 | | Royalties | $988 | $2,000 | | Facility costs | — | $242,892 | | Supplies | — | $127,505 | | Other | $285,604 | $188,002 | | Total Accrued expenses | $1,450,934 | $1,428,622 | [NOTE 6 — FAIR VALUE MEASUREMENT](index=15&type=section&id=NOTE%206%20%E2%80%94%20FAIR%20VALUE%20MEASUREMENT) The Company classifies its cash, cash equivalents, restricted cash, and investments in U.S. Treasury notes as Level 1 in the fair value hierarchy, indicating they are valued using quoted prices in active markets or observable inputs - The Company uses a **three-tier valuation hierarchy** (Level 1, 2, 3) for fair value measurement, based on observable and non-observable inputs[38](index=38&type=chunk)[39](index=39&type=chunk) - Cash, cash equivalents, restricted cash, and investments in U.S. Treasury notes are classified as **Level 1** in the fair value hierarchy[40](index=40&type=chunk)[41](index=41&type=chunk) [NOTE 7 — DEBT](index=17&type=section&id=NOTE%207%20%E2%80%94%20DEBT) The Company has several promissory notes, including one with the University of Minnesota maturing in December 2022 with an outstanding principal of $38,399, and another with the University maturing in January 2025 with an outstanding principal of $385,997. A $250,000 loan from the Minnesota Department of Employment & Economic Development was fully repaid by June 30, 2022 - A promissory note with the University of Minnesota, originally for $405,559, had an outstanding principal of **$38,399** as of June 30, 2022, and is due to mature on **December 31, 2022**[42](index=42&type=chunk) - A **$250,000 loan** from the Minnesota Department of Employment & Economic Development was fully repaid, with a **$0 balance outstanding** as of June 30, 2022, down from $250,000 at December 31, 2021[43](index=43&type=chunk) - Another promissory note with the University, for **$385,997**, bears **6% annual interest** and is due on **January 31, 2025**, with the full principal outstanding as of June 30, 2022[44](index=44&type=chunk) Future Principal Maturities for Debt (as of June 30, 2022) | Fiscal Year Ending | Amount | | :----------------- | :----- | | 2023 | $38,399 | | 2024 | — | | 2025 | $385,997 | | Total future maturities payments | $424,396 | | Less current portion | $(38,399) | | Long-term debt | $385,997 | [NOTE 8 — EQUITY](index=17&type=section&id=NOTE%208%20%E2%80%94%20EQUITY) The Company's common stock outstanding increased to 20,813,741 shares as of June 30, 2022. The 2021 Equity Incentive Plan saw an automatic increase of 600,000 shares for issuance in January 2022. Stock option and restricted stock unit activity resulted in increased stock-based compensation expenses for the six months ended June 30, 2022 - As of June 30, 2022, there were **20,813,741 shares of common stock** issued and outstanding, an increase from 20,385,645 shares at December 31, 2021[47](index=47&type=chunk) - The 2021 Equity Incentive Plan automatically increased by **600,000 shares** on January 1, 2022, for a total of **923,257 shares available for issuance** as of June 30, 2022[52](index=52&type=chunk)[53](index=53&type=chunk) Stock Option Activity (Six Months Ended June 30, 2022) | Item | Shares | Weighted Average Exercise Price | | :-------------------------- | :----- | :------------------------------ | | Options outstanding at beginning of period | 3,526,138 | $3.99 | | Granted | 754,000 | $4.05 | | Exercised | (205,507) | $1.25 | | Canceled or expired | (119,875) | $6.98 | | Options outstanding at end of period | 3,954,756 | $4.03 | | Options exercisable | 2,869,631 | $3.61 | - Stock-based compensation expense related to stock options was **$332,589** for the six months ended June 30, 2022, up from $239,330 in the prior year[55](index=55&type=chunk) Restricted Stock Unit (RSU) Activity (Six Months Ended June 30, 2022) | Item | Shares | Weighted Average Grant Date Fair Value | | :-------------------------- | :----- | :------------------------------------- | | Unvested at beginning of period | 51,331 | $8.29 | | Granted | 172,234 | $4.42 | | Vested | (31,030) | $7.38 | | Canceled | — | — | | Unvested at end of period | 192,535 | $4.78 | - Stock-based compensation expense related to RSUs was **$256,307** for the six months ended June 30, 2022, with no comparable expense in the prior year[60](index=60&type=chunk) Stock Warrant Activity (Six Months Ended June 30, 2022) | Item | Common warrants | | :-------------------------- | :-------------- | | Warrants outstanding at beginning of period | 795,379 | | Granted | — | | Exercised | (191,559) | | Expired | (4,629) | | Warrants outstanding at end of period | 599,191 | [NOTE 9 — SIGNIFICANT CUSTOMERS](index=21&type=section&id=NOTE%209%20%E2%80%94%20SIGNIFICANT%20CUSTOMERS) For the periods presented, 100% of the Company's revenue came from a single customer, Reprise Biomedical, Inc. Due to collectability uncertainty, the Company has fully reserved against the long-term minimum royalty receivable from this customer - The Company had one customer, Reprise Biomedical, Inc., that accounted for **100% of total revenue** for the three and six months ended June 30, 2022 and 2021[64](index=64&type=chunk) - Due to uncertainty regarding collectability, the Company has **fully reserved** against the long-term receivable related to minimum royalties from Reprise[64](index=64&type=chunk) [NOTE 10 — COMMITMENTS AND CONTINGENCIES](index=23&type=section&id=NOTE%2010%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) The Company is committed to annual minimum royalty payments of $500,000 to the University of Minnesota under an exclusive patent license agreement. Reprise Biomedical, Inc. also has a corresponding minimum royalty obligation to the Company - Under an Exclusive Patent License Agreement with the University of Minnesota, the Company is required to make minimum royalty payments of **$500,000 per year**[65](index=65&type=chunk) - Reprise Biomedical, Inc. has a minimum royalty obligation of **$500,000 per year** to the Company under a separate license agreement[65](index=65&type=chunk) [NOTE 11 — LEASES](index=23&type=section&id=NOTE%2011%20%E2%80%94%20LEASES) The Company leases its corporate headquarters as an operating lease and various equipment as financing leases. As of June 30, 2022, operating lease assets were $1,772,441 and liabilities were $3,291,908 (net), while financing lease assets were $100,285 and liabilities were $26,469 (net). Lease costs for the six months ended June 30, 2022, included $163,569 for operating leases and $18,959 for financing lease amortization - The Company leases its corporate headquarters (operating lease) and equipment (financing leases); the operating lease term began in August 2021 and terminates in May 2029, with a tenant improvement allowance of **$1,256,950** received[66](index=66&type=chunk) Lease Assets and Liabilities (June 30, 2022) | Category | Classification | Amount | | :-------------------------- | :----------------------------------- | :----- | | Operating lease assets | Right of use asset | $1,772,441 | | Financing lease assets | Property and equipment, net of accumulated depreciation | $100,285 | | Current Operating liabilities | Current portion of lease liability | $374,280 | | Current Financing liabilities | Current portion of financing lease obligations | $57,848 | | Noncurrent Operating liabilities | Lease liability, net | $2,917,628 | | Noncurrent Financing liabilities | Financing lease obligations, net | $26,469 | Lease Costs (Six Months Ended June 30, 2022) | Lease Cost Type | Classification | Amount | | :-------------------------- | :----------------------------------- | :----- | | Operating lease cost | Operating expenses: General and administrative | $163,569 | | Financing lease cost (Amortization) | Depreciation and amortization | $18,959 | | Financing lease cost (Interest) | Interest expense | $2,943 | | Variable lease cost | Operating expenses: General and administrative | $96,319 | Future Lease Payments (as of June 30, 2022) | Fiscal Year Ending | Operating Leases | Financing Leases | Total | | :----------------- | :--------------- | :--------------- | :---- | | Remainder of 2022 | $248,383 | $30,847 | $279,230 | | 2023 | $511,669 | $46,298 | $557,967 | | 2024 | $527,020 | $12,030 | $539,050 | | 2025 | $542,830 | — | $542,830 | | 2026 | $559,115 | — | $559,115 | | Thereafter | $1,423,621 | — | $1,423,621 | | Total lease payments | $3,812,638 | $89,175 | $3,901,813 | | Less imputed interest | $(520,730) | $(4,858) | $(525,588) | | Present value of lease liabilities | $3,291,908 | $84,317 | $3,376,225 | [NOTE 12 — RELATED PARTY TRANSACTIONS](index=24&type=section&id=NOTE%2012%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) The Company received licensing revenue from Reprise Biomedical, Inc., a related party, of $10,720 for the six months ended June 30, 2022, a decrease from $15,247 in the prior year. The Company has deferred royalty liabilities to the University of Minnesota totaling $1,227,421 as of June 30, 2022, and has fully reserved against long-term receivables from Reprise due to collectability uncertainty - The Company received **$10,720 in royalties** from Reprise Biomedical, Inc. for the six months ended June 30, 2022, a decrease from $15,247 in the same period of 2021[77](index=77&type=chunk) - As of June 30, 2022, the Company had a current deferred royalty liability of **$735,688** and a long-term deferred royalty liability of **$491,733** related to its minimum royalty obligation to the University[77](index=77&type=chunk) - The Company has **fully reserved** against long-term receivables from Reprise Biomedical, Inc. (**$1,159,684** as of June 30, 2022) due to uncertainty regarding collectability[78](index=78&type=chunk) [NOTE 13 — NET LOSS PER SHARE](index=26&type=section&id=NOTE%2013%20%E2%80%94%20NET%20LOSS%20PER%20SHARE) Due to net losses for the periods presented, basic and diluted net loss per share were identical, as the effect of potentially dilutive securities would have been anti-dilutive. As of June 30, 2022, there were 4,746,482 common stock equivalents excluded from diluted EPS calculations - Basic and diluted net loss per share were the same for the three and six months ended June 30, 2022 and 2021, because the effect of potentially dilutive securities would have been **anti-dilutive** due to net losses[79](index=79&type=chunk) Potentially Dilutive Securities Excluded from Diluted EPS | Security Type | June 30, 2022 | June 30, 2021 | | :-------------------------- | :------------ | :------------ | | Common stock options outstanding | 3,954,756 | 3,630,255 | | Common stock warrants | 599,191 | 965,619 | | Restricted stock units | 192,535 | — | | Total common stock equivalents | 4,746,482 | 4,595,874 | [NOTE 14 — SUBSEQUENT EVENTS](index=26&type=section&id=NOTE%2014%20%E2%80%94%20SUBSEQUENT%20EVENTS) Subsequent to June 30, 2022, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co. on July 1, 2022, allowing for the sale of up to $50.0 million in common stock. A Shelf Registration Statement on Form S-3 was also declared effective on July 11, 2022, registering up to $200.0 million in various securities - On July 1, 2022, the Company entered into an Equity Distribution Agreement with Piper Sandler & Co. to potentially issue and sell up to **$50.0 million of common stock**[81](index=81&type=chunk) - A Shelf Registration Statement on Form S-3, filed July 1, 2022, and declared effective July 11, 2022, registered the offer and sale of an indeterminate number of securities with an aggregate initial offering price of **$200.0 million**[24](index=24&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting significant increases in operating expenses, particularly R&D, regulatory, quality, and G&A, leading to a substantial increase in net losses. It also discusses the Company's liquidity, capital resources, and future funding needs for its bioengineering organ development [Overview](index=27&type=section&id=Overview) This overview introduces Miromatrix Medical Inc.'s core business of bioengineering transplantable organs and its key collaborations - Miromatrix Medical Inc. is a life sciences company pioneering a novel technology for bioengineering fully transplantable organs, focusing on livers and kidneys, using a two-step decellularization and recellularization method[85](index=85&type=chunk) - The Company collaborates with Mayo Clinic, Mount Sinai Health System, and the Texas Heart Institute, and has received strategic investments from Baxter International, Inc., CareDx, Inc., and DaVita, Inc.[85](index=85&type=chunk) [Components of Our Results of Operations](index=27&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section describes the key components influencing the Company's results of operations, including revenue, cost of goods sold, and various operating expenses - Licensing revenue is solely from an agreement with Reprise Biomedical, Inc., recognized when related sales occur or performance obligations are met, with an allowance set up for uncertain minimum royalty collectability[86](index=86&type=chunk) - Cost of goods sold relates to minimum royalty payments owed to the University of Minnesota under a license agreement[87](index=87&type=chunk) - Research and development expenses, including payroll, consulting, and lab supplies, are expected to **increase in absolute dollars** as product candidates are developed[88](index=88&type=chunk)[89](index=89&type=chunk) - Regulatory and clinical expenses are anticipated to **increase in absolute dollars** as product candidates advance through regulatory processes[90](index=90&type=chunk)[91](index=91&type=chunk) - Quality expenses are expected to **increase in absolute dollars** to develop GMP-compliant manufacturing processes and systems[92](index=92&type=chunk) - General and administrative expenses are projected to **increase in absolute dollars** due to headcount expansion and costs associated with operating as a public company[93](index=93&type=chunk) [Results of Operations](index=31&type=section&id=Results%20of%20Operations) This section analyzes the Company's financial performance, comparing results for the three and six months ended June 30, 2022, against the prior year [Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021](index=31&type=section&id=Three%20Months%20Ended%20June%2030%2C%202022%20Compared%20with%20Three%20Months%20Ended%20June%2030%2C%202021) Q2 2022 saw a **56.8%** decline in licensing revenue and a **121.0%** increase in net loss, driven by higher operating expenses Key Financial Changes (Q2 2022 vs. Q2 2021) | Metric | Q2 2022 | Q2 2021 | Change (Absolute) | Change (%) | | :-------------------------- | :------------ | :------------ | :---------------- | :--------- | | Licensing revenue | $3,952 | $9,139 | $(5,187) | -56.8% | | Research and development | $4,988,233 | $2,480,887 | $2,507,346 | 101.1% | | Regulatory and clinical | $419,394 | $103,256 | $316,138 | 306.2% | | Quality | $517,333 | $86,257 | $431,076 | 499.8% | | General and administration | $2,188,460 | $786,322 | $1,402,138 | 178.3% | | Operating loss | $(8,234,468) | $(3,572,583) | $(4,661,885) | 130.5% | | Interest income | $61,078 | $45 | $61,033 | 135,628.9% | | Interest expense | $(8,799) | $(280,663) | $271,864 | -96.9% | | Net loss | $(8,182,189) | $(3,702,834) | $(4,479,355) | 121.0% | - The increase in Research and Development expenses was primarily due to a **$1,154,178 increase in lab supplies**, a **$514,899 increase in payroll expenses** due to headcount, a **$331,207 increase in contract pre-clinical costs**, and a **$321,820 increase in consulting expenses**[99](index=99&type=chunk) - General and Administrative expenses increased due to a **$670,081 increase in payroll expenses**, a **$276,623 increase in insurance expense**, a **$190,538 increase in office expense**, and costs associated with being a public company[103](index=103&type=chunk) - Interest expense decreased significantly due to the conversion of the **$6,000,000 convertible promissory note** (Cheshire Note) to equity in June 2021[105](index=105&type=chunk) [Six Months Ended June 30, 2022 Compared with Six Months Ended June 30, 2021](index=34&type=section&id=Six%20Months%20Ended%20June%2030%2C%202022%20Compared%20with%20Six%20Months%20Ended%20June%2030%2C%202021) YTD 2022 net loss surged **271.9%** to **$(15.4 million)**, driven by increased operating expenses and the absence of prior year non-operating gains Key Financial Changes (YTD 2022 vs. YTD 2021) | Metric | YTD 2022 | YTD 2021 | Change (Absolute) | Change (%) | | :-------------------------- | :------------ | :------------ | :---------------- | :--------- | | Licensing revenue | $10,720 | $15,247 | $(4,527) | -29.7% | | Research and development | $8,994,141 | $4,348,888 | $4,645,253 | 106.8% | | Regulatory and clinical | $774,632 | $186,961 | $587,671 | 314.3% | | Quality | $958,268 | $172,044 | $786,224 | 457.0% | | General and administration | $4,461,775 | $1,349,196 | $3,112,579 | 230.7% | | Operating loss | $(15,428,096) | $(6,291,842) | $(9,136,254) | 145.2% | | Interest income | $61,848 | $85 | $61,763 | 72,662.4% | | Interest expense | $(19,690) | $(586,037) | $566,347 | -96.6% | | Net loss | $(15,385,938) | $(4,137,176) | $(11,248,762) | 271.9% | - Research and Development expenses increased due to a **$2,152,553 increase in lab supplies**, a **$1,213,414 increase in payroll expenses**, a **$632,495 increase in contract pre-clinical costs**, and a **$377,826 increase in consulting expenses**[113](index=113&type=chunk) - General and Administrative expenses increased due to a **$1,378,467 increase in payroll expenses**, a **$576,081 increase in insurance expense**, a **$349,382 increase in office expense**, and overall costs associated with being a public company[117](index=117&type=chunk) - The Company recognized a **gain of $1,983,912** on the sale of its equity investment in Reprise and a **gain of $518,050** on debt extinguishment (PPP loan forgiveness) in the six months ended June 30, 2021, which did not recur in 2022[124](index=124&type=chunk)[125](index=125&type=chunk) [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The Company has incurred significant net losses since inception, with an accumulated deficit of $89,437,852 as of June 30, 2022. It expects to incur additional losses and increased expenses for developing bioengineered organs, conducting clinical trials, and operating as a public company. Current cash and investments are projected to fund operations through 2023, with future needs expected to be met through equity offerings and debt financings. The Company completed an IPO in June 2021, raising $44.5 million, and entered into an Equity Distribution Agreement in July 2022 for up to $50.0 million in common stock sales - The Company has incurred net losses since its inception, with an accumulated deficit of **$89,437,852** as of June 30, 2022[126](index=126&type=chunk) - The Company expects to incur additional losses and substantially increased expenses for developing bioengineered organs, conducting clinical trials, seeking regulatory approvals, and operating as a public company[127](index=127&type=chunk) - Existing cash and cash equivalents (**$12,593,315**), short-term investments (**$20,080,428**), and long-term investments (**$5,938,693**) are expected to fund operating expenses and capital expenditure requirements through **2023**[128](index=128&type=chunk) - Future cash needs are expected to be financed through a combination of **equity offerings and debt financings**[129](index=129&type=chunk) - In June 2021, the Company completed its IPO, issuing 5,520,000 shares of common stock at $9.00 per share, raising **$44,528,060 net proceeds**[136](index=136&type=chunk) - On July 1, 2022, the Company entered into an Equity Distribution Agreement to sell up to **$50.0 million of common stock** through Piper Sandler & Co[137](index=137&type=chunk) - A Registration Statement on Form S-3, declared effective July 11, 2022, registered the offer and sale of various securities with an aggregate initial offering price of **$200.0 million**[138](index=138&type=chunk) [Cash Flows](index=41&type=section&id=Cash%20Flows) For the six months ended June 30, 2022, net cash used in operating activities increased to $(13,790,978) from $(5,390,815) in 2021, primarily due to higher net losses. Investing activities shifted from providing $1,913,888 in 2021 to using $(26,757,741) in 2022, driven by significant purchases of investments. Financing activities provided $330,503 in 2022, a substantial decrease from $65,558,289 in 2021, which included IPO proceeds Summary of Cash Flows (Six Months Ended June 30) | Cash Flow Activity | YTD 2022 | YTD 2021 | Change (Absolute) | | :----------------- | :-------------- | :-------------- | :---------------- | | Operating activities | $(13,790,978) | $(5,390,815) | $(8,400,163) | | Investing activities | $(26,757,741) | $1,913,888 | $(28,671,629) | | Financing activities | $330,503 | $65,558,289 | $(65,227,786) | | Net (decrease) increase in cash and cash equivalents | $(40,218,216) | $62,081,362 | $(102,300,000) | - Net cash used in operating activities increased due to a higher net loss of **$(15,385,938)** in 2022 compared to **$(4,137,176)** in 2021[141](index=141&type=chunk)[142](index=142&type=chunk) - Investing activities in 2022 were primarily a use of cash due to **$26,026,125 in purchases of investments** and **$731,616 in property and equipment purchases**, contrasting with 2021's cash inflow from the sale of equity-method investment[143](index=143&type=chunk) - Financing activities in 2022 were mainly from stock warrant and option exercises, significantly lower than 2021, which included **$45,679,111 from the IPO** and **$19,891,670 from preferred stock sales**[144](index=144&type=chunk)[145](index=145&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, Miromatrix Medical Inc. is not required to provide quantitative and qualitative disclosures about market risk - The Company is not required to provide quantitative and qualitative disclosures about market risk as it is a **smaller reporting company**[147](index=147&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) The Company's management, including its principal executive and financial officers, concluded that its disclosure controls and procedures were effective as of June 30, 2022. There were no material changes in internal control over financial reporting during the fiscal quarter [Evaluation of Disclosure Controls and Procedures](index=43&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures by management - The Company's principal executive officer and principal financial officer concluded that **disclosure controls and procedures were effective** as of June 30, 2022[149](index=149&type=chunk) [Changes in Internal Control over Financial Reporting](index=43&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section reports on any material changes in the Company's internal control over financial reporting during the quarter - There were **no material changes** in the Company's internal control over financial reporting during the fiscal quarter of 2022[150](index=150&type=chunk) [PART II — OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) This section covers other information including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any litigation that is believed to have a material adverse effect on its business, operating results, cash flows, or financial condition - The Company is **not currently involved in any legal proceedings** that are expected to have a material adverse effect on its business, operating results, cash flows, or financial condition[153](index=153&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - **No material changes** to the risk factors disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021[154](index=154&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the three months ended June 30, 2022, the Company issued 191,559 shares of common stock through unregistered sales related to stock warrant exercises. The net proceeds from the June 2021 IPO, approximately $44.5 million, are being used to fund R&D activities, construct a new facility, and for general corporate purposes [Unregistered Sales of Equity Securities](index=44&type=section&id=Unregistered%20Sales%20of%20Equity%20Securities) This section details the Company's unregistered sales of equity securities, specifically common stock issued from stock warrant exercises - During the three months ended June 30, 2022, the Company issued **191,559 shares of common stock** for cash related to stock warrant exercises, relying on an exemption from registration under Section 4(a)(2) of the Securities Act[155](index=155&type=chunk) [Use of Proceeds](index=44&type=section&id=Use%20of%20Proceeds) This section outlines the allocation and investment strategy for the net proceeds received from the Company's June 2021 IPO - The Company received approximately **$44.5 million in net proceeds** from its June 2021 IPO[157](index=157&type=chunk) - IPO proceeds are allocated as follows: **$34.8 million to $40.0 million for R&D activities** (including Phase I trial for MiroliverELAP and pre-clinical trials), **$3.0 million to $4.0 million for constructing a new facility**, and the remainder for working capital and general corporate purposes[159](index=159&type=chunk) - Pending use, proceeds are invested in capital preservation instruments such as short-term, interest-bearing obligations, investment-grade instruments, certificates of deposit, or U.S. government obligations[157](index=157&type=chunk) [Item 3. Defaults Upon Senior Securities](index=44&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The Company reported no defaults upon senior securities - There were **no defaults upon senior securities**[158](index=158&type=chunk) [Item 4. Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Mine Safety Disclosures are **not applicable** to the Company[159](index=159&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) The Company reported no other information - **No other information** was reported[160](index=160&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, CEO and CFO certifications under Sarbanes-Oxley Act, and various Inline XBRL documents - The exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, CEO and CFO certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and various Inline XBRL documents[162](index=162&type=chunk) [Signatures](index=48&type=section&id=Signatures) The report is duly signed on August 15, 2022, by Jeffrey Ross, Chief Executive Officer, and James Douglas, Chief Financial Officer (Principal Financial and Accounting Officer) of Miromatrix Medical Inc - The report was signed on **August 15, 2022**, by Jeffrey Ross, Chief Executive Officer, and James Douglas, Chief Financial Officer[166](index=166&type=chunk)

[PART I — FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20%E2%80%94FINANCIAL%20INFORMATION) This section presents the company's unaudited financial information, including statements, management analysis, and internal controls [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Miromatrix Medical Inc.'s unaudited condensed financial statements and comprehensive notes on accounting policies and financial details [Condensed Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Balance%20Sheets%20(Unaudited)) This section provides a snapshot of the company's financial position at specific points in time, detailing assets, liabilities, and equity Condensed Balance Sheet Highlights (March 31, 2022 vs. December 31, 2021) | Metric | March 31, 2022 ($) | December 31, 2021 ($) | Change (Absolute) ($) | Change (%) | | :--------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Total Assets | $53,956,908 | $60,928,999 | $(6,972,091) | -11.44% | | Cash and cash equivalents | $44,684,677 | $52,811,531 | $(8,126,854) | -15.39% | | Total Current Liabilities | $2,489,028 | $4,564,192 | $(2,075,164) | -45.47% | | Total Liabilities | $6,499,619 | $6,803,115 | $(303,496) | -4.46% | | Total Shareholders' Equity | $47,457,289 | $54,125,884 | $(6,668,595) | -12.32% | | Accumulated Deficit | $(81,255,663) | $(74,051,914) | $(7,203,749) | +9.73% | [Condensed Statements of Operations (Unaudited)](index=6&type=section&id=Condensed%20Statements%20of%20Operations%20(Unaudited)) This section outlines the company's financial performance over a period, detailing revenues, expenses, and net loss Condensed Statements of Operations Highlights (Three Months Ended March 31, 2022 vs. 2021) | Metric | 3 Months Ended Mar 31, 2022 ($) | 3 Months Ended Mar 31, 2021 ($) | Change (Absolute) ($) | Change (%) | | :--------------------------- | :-------------------------- | :-------------------------- | :---------------- | :--------- | | Licensing revenue | $6,768 | $6,108 | $660 | 10.8% | | Cost of goods sold | $125,000 | $125,000 | $0 | 0.0% | | Gross loss | $(118,232) | $(118,892) | $660 | -0.6% | | Total operating expenses | $7,074,638 | $2,600,367 | $4,474,271 | 172.1% | | Operating loss | $(7,192,870) | $(2,719,259) | $(4,473,611) | 164.5% | | Net loss | $(7,203,749) | $(434,342) | $(6,769,407) | 1558.5% | | Net loss per share (basic & diluted) | $(0.35) | $(0.19) | $(0.16) | 84.2% | [Condensed Statements of Changes in Shareholders' Equity (Deficit) (Unaudited)](index=7&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20(Deficit)%20(Unaudited)) This section details the changes in the company's equity over a period, including stock transactions and net loss impact Changes in Shareholders' Equity (Deficit) (Three Months Ended March 31, 2022) | Item | Balance at Dec 31, 2021 | Stock-based Compensation | Exercise of Stock Options | Net Loss | Balance at Mar 31, 2022 | | :------------------------- | :---------------------- | :----------------------- | :------------------------ | :-------------- | :---------------------- | | Common Stock (Shares) | 20,385,645 | — | 160,938 | — | 20,546,583 | | Common Stock (Amounts) ($) | $204 | — | $2 | — | $206 | | Additional Paid-In Capital ($) | $128,177,594 | $333,981 | $201,171 | — | $128,712,746 | | Accumulated Deficit ($) | $(74,051,914) | — | — | $(7,203,749) | $(81,255,663) | | Total Shareholders' Equity ($) | $54,125,884 | $333,981 | $201,173 | $(7,203,749) | $47,457,289 | [Condensed Statements of Cash Flows (Unaudited)](index=8&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over a period Condensed Statements of Cash Flows Highlights (Three Months Ended March 31, 2022 vs. 2021) | Cash Flow Activity | 3 Months Ended Mar 31, 2022 ($) | 3 Months Ended Mar 31, 2021 ($) | | :--------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(7,428,039) | $(2,177,127) | | Net cash (used in) provided by investing activities | $(613,641) | $1,994,070 | | Net cash (used in) provided by financing activities | $(85,174) | $2,190 | | Net decrease in cash and cash equivalents | $(8,126,854) | $(180,867) | | Cash, cash equivalents and restricted cash at end of period | $45,484,777 | $4,263,528 | [Notes to Condensed Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations and disclosures supporting the condensed financial statements, clarifying accounting policies and specific financial items - The company is an emerging growth company and has elected to use the extended transition period for new accounting standards, which may affect comparability[22](index=22&type=chunk) - The company adopted ASC 842 (Leases) effective January 1, 2022, recognizing right-of-use assets of **$1,882,696** and lease liabilities of **$2,020,839**, with no material impact on income or cash flows[23](index=23&type=chunk)[26](index=26&type=chunk) [NOTE 1 — DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20BUSINESS%20AND%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes the company's core business, its innovative organ bioengineering technology, and key accounting policies - Miromatrix Medical Inc. is a life sciences company pioneering a novel technology for bioengineering fully transplantable organs, focusing on livers and kidneys, using a two-step decellularization and recellularization method[18](index=18&type=chunk) - The company is an emerging growth company and has elected to use the extended transition period for new or revised accounting standards, which may impact comparability with other public companies[22](index=22&type=chunk) - The company adopted ASC 842 (Leases) effective January 1, 2022, recognizing right of use assets of **$1,882,696** and lease liabilities of **$2,020,839**, and reclassified certain prior year amounts for presentation, with no material impact on income or cash flows[23](index=23&type=chunk)[26](index=26&type=chunk) [NOTE 2 — PROPERTY AND EQUIPMENT](index=13&type=section&id=NOTE%202%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT) This note details the company's property and equipment, including categories, gross values, accumulated depreciation, and net book values Property and Equipment, Net (March 31, 2022 vs. December 31, 2021) | Category | March 31, 2022 ($) | December 31, 2021 ($) | Change (Absolute) ($) | Change (%) | | :--------------------------- | :------------- | :---------------- | :---------------- | :--------- | | Lab equipment | $1,632,929 | $1,549,416 | $83,513 | 5.39% | | Leasehold improvements | $3,366,458 | $3,239,307 | $127,151 | 3.93% | | Furniture, fixtures & computers | $1,994,172 | $1,671,793 | $322,379 | 19.28% | | Total Gross | $6,993,559 | $6,460,516 | $533,043 | 8.25% | | Less accumulated depreciation & amortization | $(1,001,322) | $(868,790) | $(132,532) | 15.25% | | Net Property and Equipment | $5,992,237 | $5,591,726 | $400,511 | 7.16% | - Depreciation and amortization expense significantly increased to **$262,897** for the three months ended March 31, 2022, from **$30,029** in the prior year period[28](index=28&type=chunk) [NOTE 3 — EQUITY METHOD INVESTMENT](index=13&type=section&id=NOTE%203%20%E2%80%94%20EQUITY%20METHOD%20INVESTMENT) This note explains the company's past equity method investment in Reprise Biomedical, Inc. and its subsequent divestment - The Company previously spun out its Acellular Business to Reprise Biomedical, Inc. in June 2019 and fully divested its ownership interest in Reprise by March 2021[29](index=29&type=chunk) - For the period ended March 15, 2021, the Company recorded an equity method share of net loss from Reprise of **$223,633**[30](index=30&type=chunk) [NOTE 4 — ACCRUED EXPENSES](index=13&type=section&id=NOTE%204%20%E2%80%94%20ACCURED%20EXPENSES) This note provides a breakdown of the company's accrued expenses, including wages, legal, taxes, and other operational costs Accrued Expenses (March 31, 2022 vs. December 31, 2021) | Category | March 31, 2022 ($) | December 31, 2021 ($) | Change (Absolute) ($) | Change (%) | | :----------------------- | :------------- | :---------------- | :---------------- | :--------- | | Wages | $627,354 | $704,502 | $(77,148) | -10.95% | | Legal | $62,000 | $37,000 | $25,000 | 67.57% | | Taxes | $50,000 | $101,221 | $(51,221) | -50.60% | | Key opinion leader compensation | $12,625 | $25,500 | $(12,875) | -50.49% | | Royalties | $1,692 | $2,000 | $(308) | -15.40% | | Facility costs | — | $242,892 | $(242,892) | -100.00% | | Supplies | — | $127,505 | $(127,505) | -100.00% | | Other | $242,229 | $188,002 | $54,227 | 28.84% | | Total Accrued Expenses | $995,900 | $1,428,622 | $(432,722) | -30.29% | [NOTE 5 — FAIR VALUE MEASUREMENT](index=15&type=section&id=NOTE%205%20%E2%80%94%20FAIR%20VALUE%20MEASUREMENT) This note describes the company's methodology for fair value measurements, utilizing a three-tier valuation hierarchy - The Company uses a three-tier valuation hierarchy (Level 1, 2, 3) for fair value measurements, classifying cash and cash equivalents, as well as restricted cash, as Level 1[32](index=32&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) [NOTE 6 — DEBT](index=15&type=section&id=NOTE%206%20%E2%80%94%20DEBT) This note details the company's outstanding debt obligations, including promissory notes and their maturity schedules - The Company has a promissory note with the University of Minnesota, with an outstanding principal of **$61,209** as of March 31, 2022, maturing December 31, 2022[35](index=35&type=chunk) - A **$250,000** loan from the Minnesota Department of Employment & Economic Development was fully repaid as of March 31, 2022[36](index=36&type=chunk) - Another promissory note to the University for **$385,997**, related to minimum royalty obligations, is outstanding as of March 31, 2022, and due January 31, 2025[37](index=37&type=chunk) Future Principal Maturities for Debt (as of March 31, 2022) | Fiscal Year Ending | Amount Due ($) | | :----------------- | :--------- | | 2023 | $61,209 | | 2024 | — | | 2025 | $385,997 | | Total | $447,206 | [NOTE 7 — CAPITAL STOCK](index=17&type=section&id=NOTE%207%20%E2%80%94%20CAPITAL%20STOCK) This note outlines the company's capital stock structure, including common stock, equity incentive plans, and stock option activity - As of March 31, 2022, there were **20,546,583** shares of common stock issued and outstanding, an increase from **20,385,645** shares at December 31, 2021[41](index=41&type=chunk) - The 2021 Equity Incentive Plan automatically increased by **600,000** shares on January 1, 2022, with **879,602** shares available for issuance as of March 31, 2022[44](index=44&type=chunk)[45](index=45&type=chunk) Stock Option Activity (Three Months Ended March 31, 2022) | Activity | Shares | Weighted Average Exercise Price ($) | | :--------------------------- | :---------- | :------------------------------ | | Options outstanding at beginning | 3,526,138 | $3.99 | | Granted | 655,000 | $4.07 | | Exercised | (160,938) | $1.25 | | Canceled or expired | (14,500) | $6.36 | | Options outstanding at end | 4,005,700 | $4.09 | | Options exercisable | 2,842,151 | $3.52 | - Stock-based compensation expense for stock options increased to **$190,816** for Q1 2022 from **$133,451** for Q1 2021, and RSU compensation expense was **$130,290** for Q1 2022 (none in Q1 2021)[49](index=49&type=chunk)[51](index=51&type=chunk) [NOTE 8 — SIGNIFICANT CUSTOMERS](index=19&type=section&id=NOTE%208%20%E2%80%94%20SIGNIFICANT%20CUSTOMERS) This note identifies the company's significant customers and discusses related revenue and receivable considerations - One customer, Reprise Biomedical, Inc., accounted for **100%** of total revenue for the three months ended March 31, 2022 and 2021[55](index=55&type=chunk) - The Company has fully reserved against long-term receivables from Reprise due to uncertainty regarding collectability of minimum royalties[55](index=55&type=chunk) [NOTE 9 — COMMITMENTS AND CONTINGENCIES](index=19&type=section&id=NOTE%209%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note details the company's contractual commitments and potential contingent liabilities, including royalty obligations - The Company is required to make minimum annual royalty payments of **$500,000** to the University of Minnesota under an Exclusive Patent License Agreement[56](index=56&type=chunk) - Reprise Biomedical, Inc. has a corresponding minimum royalty obligation of **$500,000** per year to the Company[56](index=56&type=chunk) [NOTE 10 — LEASES](index=21&type=section&id=NOTE%2010%20%E2%80%94%20LEASES) This note provides information on the company's lease arrangements, including operating and financing leases, assets, liabilities, and associated costs - The Company leases its corporate headquarters (operating lease) and equipment (financing leases), with the headquarters lease term ending May 2029 and a tenant improvement allowance of **$1,256,950** received in Q1 2022[57](index=57&type=chunk)[58](index=58&type=chunk) Lease Liabilities and Assets (March 31, 2022) | Category | Classification | Amount ($) | | :--------------------------- | :------------------------------------------- | :------------ | | Operating lease assets | Right of use asset | $1,820,900 | | Financing lease assets | Property and equipment, net of depreciation | $109,764 | | Current Operating Lease Liability | Current portion of lease liability | $284,348 | | Current Financing Lease Obligation | Current portion of financing lease obligations | $57,029 | | Noncurrent Operating Lease Liability | Lease liability, net | $3,014,530 | | Noncurrent Financing Lease Obligation | Financing lease obligations, net | $40,069 | Lease Costs (Three Months Ended March 31, 2022) | Lease Cost Category | Classification | Amount ($) | | :-------------------------- | :--------------------------------- | :-------- | | Operating lease cost | Operating expenses: G&A | $80,684 | | Amortization of leased assets | Depreciation and amortization | $9,480 | | Interest on lease liabilities | Interest expense | $1,715 | | Variable lease cost | Operating expenses: G&A | $39,229 | [NOTE 11 — RELATED PARTY TRANSACTIONS](index=23&type=section&id=NOTE%2011%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions with related parties, specifically royalties and receivables from Reprise Biomedical, Inc - The Company received **$6,768** in royalties from Reprise Biomedical, Inc. for the three months ended March 31, 2022, an increase from **$6,108** in the prior year[68](index=68&type=chunk) - Long-term receivables from Reprise (**$1,038,636** as of March 31, 2022) are fully reserved due to collectability uncertainty[68](index=68&type=chunk) [NOTE 12 — NET LOSS PER SHARE](index=23&type=section&id=NOTE%2012%20%E2%80%94%20NET%20LOSS%20PER%20SHARE) This note explains the calculation of net loss per share, including the treatment of potentially dilutive securities - Basic and diluted net loss per share were the same for the three months ended March 31, 2022 and 2021, due to net losses making potentially dilutive securities anti-dilutive[69](index=69&type=chunk) Potentially Dilutive Securities Excluded from EPS Calculation (Three Months Ended March 31) | Security Type | 2022 (Shares) | 2021 (Shares) | | :---------------------------- | :---------- | :------------ | | Convertible preferred stock | — | 8,314,536 | | Common stock options | 4,005,700 | 3,552,505 | | Common stock warrants | 795,379 | 707,669 | | Restricted stock units | 223,565 | — | | Total common stock equivalents | 5,024,644 | 12,574,710 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, operational results, liquidity, and capital resources for the three months ended March 31, 2022 [Overview](index=26&type=section&id=Overview) This section provides a high-level summary of the company's business, revenue sources, and recent financial performance - Miromatrix Medical Inc. is a life sciences company pioneering bioengineered transplantable organs (livers, kidneys, hearts, lungs, pancreases) using a two-step decellularization and recellularization technology[74](index=74&type=chunk) - The company's revenue primarily comes from royalties on sales of Miromesh and Miroderm by Reprise Biomedical, Inc., following a spin-out in 2019 and full divestment of ownership in March 2021[75](index=75&type=chunk) - The company completed an IPO on June 28, 2021, raising approximately **$44.5 million**, but has incurred significant operating losses since inception, with a net loss of **$7.2 million** in Q1 2022 and an accumulated deficit of **$81.3 million**[76](index=76&type=chunk)[77](index=77&type=chunk) [Components of Our Results of Operations](index=28&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section explains the key drivers and expected trends for the company's revenue and various expense categories - Licensing revenue is recognized from a license agreement with Reprise, based on sales after minimum guarantees are met[79](index=79&type=chunk) - Cost of goods sold relates to minimum royalty payments owed to the University of Minnesota[80](index=80&type=chunk) - Research and development, regulatory and clinical, and quality expenses are expected to increase in absolute dollars as product candidates are developed and regulatory processes are navigated[82](index=82&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - General and administrative expenses are expected to increase with headcount expansion to support growth[86](index=86&type=chunk) [Results of Operations (Comparison of the three months ended March 31, 2022 and 2021)](index=30&type=section&id=Results%20of%20Operations%20(Comparison%20of%20the%20three%20months%20ended%20March%2031%2C%202022%20and%202021)) This section provides a detailed comparative analysis of the company's financial performance for the three months ended March 31, 2022 and 2021 Key Financial Performance Comparison (Three Months Ended March 31, 2022 vs. 2021) | Metric | 3 Months Ended Mar 31, 2022 ($) | 3 Months Ended Mar 31, 2021 ($) | Change (Absolute) ($) | Change (%) | | :--------------------------- | :-------------------------- | :-------------------------- | :---------------- | :--------- | | Licensing revenue | $6,768 | $6,108 | $660 | 10.8% | | Gross loss | $(118,232) | $(118,892) | $660 | -0.6% | | Research and development | $4,005,908 | $1,868,001 | $2,137,907 | 114.4% | | Regulatory and clinical | $355,238 | $83,705 | $271,533 | 324.4% | | Quality | $440,935 | $85,787 | $355,148 | 414.0% | | General and administrative | $2,272,557 | $562,874 | $1,709,683 | 303.7% | | Operating loss | $(7,192,870) | $(2,719,259) | $(4,473,611) | 164.5% | | Net loss | $(7,203,749) | $(434,342) | $(6,769,407) | 1558.5% | - The significant increase in operating expenses (**172.1%**) was driven by higher R&D (**114.4%** increase due to lab supplies, headcount, pre-clinical costs), regulatory and clinical (**324.4%** increase due to headcount, consulting), quality (**414.0%** increase due to headcount, consulting, lab supplies), and general and administrative (**303.7%** increase due to headcount, insurance, public company costs)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - Interest expense decreased by **96.4%** due to the conversion of the Cheshire Note to equity in June 2021, eliminating associated interest and derivative fair value changes[97](index=97&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) - The company recognized a **$1,983,912** gain on the sale of its equity investment in Reprise and a **$518,050** gain on debt extinguishment (PPP loan forgiveness) in Q1 2021, which did not recur in Q1 2022[104](index=104&type=chunk)[105](index=105&type=chunk) [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to meet its short-term and long-term financial obligations and its funding strategies - The company has incurred significant net losses since inception, with an accumulated deficit of **$81,255,663** as of March 31, 2022, and expects additional losses due to ongoing development and public company costs[106](index=106&type=chunk)[107](index=107&type=chunk) - Existing cash and cash equivalents of **$44,684,677** as of March 31, 2022, are estimated to fund operations and capital expenditures through 2023[109](index=109&type=chunk) - Future cash needs are expected to be financed through equity offerings and debt financings, with potential for dilution or restrictive covenants[110](index=110&type=chunk) - The company completed an IPO in June 2021, raising **$44.5 million** in net proceeds, allocated primarily to R&D activities (**$34.8M-$40.0M**) and new facility construction (**$3.0M-$4.0M**)[114](index=114&type=chunk)[135](index=135&type=chunk) [Cash Flows](index=36&type=section&id=Cash%20Flows) This section analyzes the company's cash generation and usage across operating, investing, and financing activities Summary of Cash Flows (Three Months Ended March 31, 2022 vs. 2021) | Cash Flow Activity | 3 Months Ended Mar 31, 2022 ($) | 3 Months Ended Mar 31, 2021 ($) | | :--------------------------- | :-------------------------- | :-------------------------- | | Operating activities | $(7,428,039) | $(2,177,127) | | Investing activities | $(613,641) | $1,994,070 | | Financing activities | $(85,174) | $2,190 | | Net decrease in cash and cash equivalents | $(8,126,854) | $(180,867) | | Cash, cash equivalents and restricted cash at end of period | $45,484,777 | $4,263,528 | - Net cash used in operating activities significantly increased to **$7.4 million** in Q1 2022 from **$2.2 million** in Q1 2021, primarily due to higher net loss and changes in operating assets and liabilities[118](index=118&type=chunk)[119](index=119&type=chunk) - Investing activities shifted from a net cash inflow of **$2.0 million** in Q1 2021 (due to sale of Reprise stock) to a net cash outflow of **$0.6 million** in Q1 2022 (due to property and equipment purchases)[120](index=120&type=chunk) - Financing activities resulted in a net cash outflow of **$85,174** in Q1 2022, mainly from debt and lease payments, partially offset by stock option exercises[121](index=121&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that quantitative and qualitative disclosures about market risk are not required for smaller reporting companies - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[123](index=123&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the company's disclosure controls and procedures, concluding their effectiveness as of March 31, 2022, and reporting no material changes in internal control over financial reporting - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2022[125](index=125&type=chunk) - There were no material changes in internal control over financial reporting during the fiscal quarter ended March 31, 2022[127](index=127&type=chunk) [PART II — OTHER INFORMATION](index=41&type=section&id=Part%20II%20%E2%80%94%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any litigation that would have a material adverse effect on its business, operating results, cash flows, or financial condition - The company is not involved in any legal proceedings that are expected to have a material adverse effect on its business or financial condition[129](index=129&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) This section refers readers to the risk factors disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021, noting no material changes - There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[130](index=130&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section states there were no unregistered sales of equity securities and details the use of net proceeds from the June 2021 IPO, primarily for research and development and new facility construction - No unregistered sales of equity securities occurred during the period[131](index=131&type=chunk) - Net proceeds of approximately **$44.5 million** from the June 2021 IPO are being used for research and development activities (**$34.8M-$40.0M**), new facility construction (**$3.0M-$4.0M**), and working capital/general corporate purposes[133](index=133&type=chunk)[135](index=135&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section states there were no defaults upon senior securities - The company reported no defaults upon senior securities[133](index=133&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to the company[134](index=134&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) This section states there is no other information to report - No other information is reported in this section[135](index=135&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, encompassing corporate documents, agreements, and certifications - The report includes various exhibits such as the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, an Employment Agreement, a Tenth Amendment to the License Agreement with Mayo Foundation, and CEO/CFO certifications[136](index=136&type=chunk)

PART I [Item 1. Business.](index=6&type=section&id=Item%201.%20Business.) Miromatrix Medical Inc. is a life sciences company focused on bioengineering fully transplantable organs using a proprietary two-step decellularization and recellularization technology [Overview](index=6&type=section&id=Overview) Miromatrix Medical Inc. pioneers alternatives to human-donor organ transplants, leveraging a scalable technology for bioengineering various organs - Miromatrix Medical Inc. was founded in 2009 and is at the forefront of developing alternatives to human-donor organ transplants[23](index=23&type=chunk) - The company's technology platform is scalable and applicable to bioengineering hearts, lungs, and pancreases, in addition to its initial focus on livers and kidneys[23](index=23&type=chunk) - Key benefits of their technology include reduced risk of organ rejection, preservation of natural organ structures, proven safety profile (not classified as xenotransplants), utilization of existing supply chains, and in-house manufacturing capabilities[24](index=24&type=chunk) [Our Strategy](index=7&type=section&id=Our%20Strategy) The company aims to be first to market with bioengineered organs, advancing lead candidates into clinical trials and fostering partnerships - The company's goal is to develop bioengineered organs and be the first to market with alternatives to human-donor organ transplants[25](index=25&type=chunk) - Strategic elements include advancing MiroliverELAP into Phase 1 clinical trials, progressing Miroliver and Mirokidney preclinical development, leveraging in-house manufacturing, increasing company awareness, and fostering partnerships[28](index=28&type=chunk) [Our Bioengineered Organ Technology Platform](index=7&type=section&id=Our%20Bioengineered%20Organ%20Technology%20Platform) The technology platform consists of two proprietary steps: decellularization and recellularization, exclusively licensed from the University of Minnesota - The technology platform consists of two proprietary steps: decellularization and recellularization, licensed exclusively from the University of Minnesota[25](index=25&type=chunk) [Decellularization](index=7&type=section&id=Decellularization) Decellularization removes porcine cells to create a purified acellular extracellular matrix (ECM) in less than 24 hours, preserving organ structures - Decellularization removes porcine cells from organs to create a purified acellular extracellular matrix (ECM) in less than 24 hours, preserving mechanical structures and vascular networks[26](index=26&type=chunk) - The resulting native scaffold can be stored for up to 12 months and provides the microenvironment for human cell introduction[26](index=26&type=chunk) [Recellularization](index=9&type=section&id=Recellularization) Recellularization re-seeds the ECM with unmodified human cells, completing the process in two to four weeks for transplantable organs - Recellularization re-seeds the ECM with unmodified human cells, sourced from human kidneys and livers not used for transplant, within individual bioreactors[30](index=30&type=chunk) - The process can be completed in two to four weeks, depending on the organ type, and the finished bioengineered organs can be transplanted using existing surgical techniques[30](index=30&type=chunk) - Third-party studies using the company's technology have demonstrated the creation of functional cellular phenotypes and increased cellular viability on ECMs[31](index=31&type=chunk) [Our Bioengineered Organ Pipeline](index=9&type=section&id=Our%20Bioengineered%20Organ%20Pipeline) The company's pipeline leverages its decellularization technology, with bioengineered organs expected to be regulated as biologics, not xenotransplants - The company's pipeline leverages data from commercialized products Miromesh and Miroderm (licensed to Reprise Biomedical) which utilize the decellularization process and are not regulated as xenotransplants[32](index=32&type=chunk)[33](index=33&type=chunk) - The company believes its bioengineered organs, using unmodified human cells, should be regulated as biologics or combination products, not xenotransplants, leading to a more efficient regulatory pathway[33](index=33&type=chunk)[34](index=34&type=chunk) [Bioengineered External Liver Assist Product (MiroliverELAP)](index=11&type=section&id=Bioengineered%20External%20Liver%20Assist%20Product) MiroliverELAP is an External Liver Assist Product for acute liver failure, with preclinical studies demonstrating liver functionality and an IND filing anticipated in 2022 - MiroliverELAP is an External Liver Assist Product (ELAP) designed for acute liver failure (ALF) patients, providing temporary liver support outside the human body[38](index=38&type=chunk) - Preclinical studies demonstrated revascularization of decellularized liver scaffolds with human vascular cells and sustained perfusion, as well as liver functionality (albumin production, urea synthesis, ammonia clearance) with over 10 billion seeded hepatocytes[39](index=39&type=chunk)[42](index=42&type=chunk) - The company anticipates filing an IND application in the second half of 2022, followed by a Phase 1 clinical trial[44](index=44&type=chunk) [Bioengineered Liver Program (Miroliver)](index=13&type=section&id=Bioengineered%20Liver%20Program) Miroliver is a fully implantable bioengineered liver for acute and chronic liver failure, developed in collaboration with the Mayo Clinic - Miroliver is a fully implantable bioengineered liver for acute and chronic liver failure, developed in collaboration with the Mayo Clinic since 2011[45](index=45&type=chunk) - It involves recellularizing a decellularized porcine liver with human endothelial, hepatocyte, accessory, and cholangiocyte cells[45](index=45&type=chunk) - Key milestones include sustained vascular patency in large animal models, non-destructive monitoring of revascularization, and successful seeding and phenotypic expression of bile duct cells (cholangiocytes)[47](index=47&type=chunk)[52](index=52&type=chunk) - The company anticipates submitting a pre-IND request in 2023, followed by an IND application and Phase 1 clinical trial[53](index=53&type=chunk) [Bioengineered Kidney Program (Mirokidney)](index=15&type=section&id=Bioengineered%20Kidney%20Program) Mirokidney is a fully implantable bioengineered kidney for end-stage renal disease, with preclinical studies showing vascular patency and early function - Mirokidney is a fully implantable bioengineered kidney for end-stage renal disease (ESRD), awarded the Kidney X prize in 2019[54](index=54&type=chunk) - It is bioengineered by recellularizing a decellularized porcine kidney with human endothelial and renal-specific cells, including glomerular and nephron cells[54](index=54&type=chunk) - Preclinical studies demonstrated long-term vascular patency in large animal models, successful heterotopic transplantation, and early kidney function (creatinine clearance)[58](index=58&type=chunk) - Successful nephron recellularization was achieved, with isolated tubule epithelial cells showing proliferation, E-cadherin expression, and ciliated brush border formation[59](index=59&type=chunk)[61](index=61&type=chunk) - The company anticipates submitting a pre-IND request in 2023, followed by an IND application and Phase 1 clinical trial[63](index=63&type=chunk) [Potential Future Programs](index=19&type=section&id=Potential%20Future%20Programs) Future programs may include bioengineering other organs and exploring stem cell use for recellularization to improve efficiency and reduce immunosuppression - Future programs may include bioengineering other organs like hearts, lungs, and pancreases, or exploring the use of stem cells (iPSCs) for recellularization to potentially eliminate immunosuppression and improve manufacturing efficiency[64](index=64&type=chunk)[65](index=65&type=chunk) - The technology also has applicability to bioengineered partial organs, heart valves, glands, tissues, and bones[66](index=66&type=chunk) Bioengineered Organ Pipeline Milestones | Program | Indication | Next Anticipated Milestone | | :------------ | :--------- | :------------------------- | | miroliverELAP | ALF | Submit IND 2H 2022 | | miroliver | ESLD | Submit Pre-IND 2023 | | mirokidney | ESRD | Submit Pre-IND 2023 | [Market](index=21&type=section&id=Market) Organ transplantation represents a significant global unmet medical need, with kidney and liver transplants accounting for over 80% of procedures - Organ transplantation represents a significant unmet medical need globally, with kidney and liver transplants accounting for over **80% of procedures**[67](index=67&type=chunk)[68](index=68&type=chunk) - The U.S. organ transplant waitlist was **116,388** as of March 24, 2022, with kidneys and livers making up nearly **95% of the total**[68](index=68&type=chunk) Organ Transplants and Waitlist (2019/2022) | Organ Type | 2019 Worldwide Transplants | 2019 U.S. Transplants | March 24, 2022 U.S. Waitlist | | :--------- | :------------------------- | :-------------------- | :--------------------------- | | Kidney | 102,403 (65%) | 24,273 (60%) | 97,522 (84%) | | Liver | 36,745 (23%) | 8,896 (22%) | 11,525 (10%) | | Heart | 8,848 (6%) | 3,597 (9%) | 3,443 (3%) | | Lung | 6,807 (4%) | 2,759 (7%) | 1,127 (1%) | | Pancreas | 2,352 (2%) | 1,015 (2%) | 2,771 (2%) | | Total | 157,155 (100%) | 40,540 (100%) | 116,388 (100%) | [Kidney Market](index=21&type=section&id=Kidney) The kidney market faces high demand and long wait times, with transplants offering significant cost savings and improved patient outcomes over dialysis - An estimated **37 million people** in the U.S. have kidney disease, with over **550,000 patients** on dialysis[69](index=69&type=chunk) - The median wait time for a kidney transplant is **49.2 months**, and five-year survival rates for dialysis patients are less than **50%**, compared to over **80%** for transplant recipients[69](index=69&type=chunk) - Kidney transplants offer significant cost savings (over **$1.5 million per transplant**) and improved patient outcomes compared to dialysis[70](index=70&type=chunk) [Liver Market](index=23&type=section&id=Liver) Unlike kidney disease, there is no effective long-term solution for end-stage liver disease, as current dialysis technologies fail to replicate complex liver functions - Unlike kidney disease, there is no similarly effective long-term solution for end-stage liver disease (ESLD) patients, as liver dialysis technologies have not successfully replicated the liver's complex functions[73](index=73&type=chunk) [Chronic Liver Failure](index=23&type=section&id=Chronic%20Liver%20Failure) Chronic liver disease affects millions in the U.S., with Miroliver aiming to provide a viable transplant treatment for end-stage patients - An estimated **30 million people** in the U.S. have some form of liver disease, with **5.5 million** suffering from chronic liver disease or cirrhosis[74](index=74&type=chunk) - Miroliver is intended to provide a viable treatment for ESLD patients requiring a transplant[75](index=75&type=chunk) [Acute Liver Failure](index=23&type=section&id=Acute%20Liver%20Failure) Acute liver failure affects approximately 80,000 U.S. patients annually, with MiroliverELAP and Miroliver aiming to improve outcomes by replicating liver functions - Approximately **80,000 patients** are hospitalized annually in the U.S. with acute liver failure (ALF), which has outcomes of **45% spontaneous recovery**, **25% liver transplantation**, and **30% death** without transplant[76](index=76&type=chunk) - MiroliverELAP aims to better replicate liver functions than current dialysis, potentially increasing spontaneous recoveries, while Miroliver could treat ALF patients needing transplants[77](index=77&type=chunk) [Competition](index=23&type=section&id=Competition) The life sciences industry is highly competitive, with Miromatrix competing in External Liver Assist and Whole Organ Transplant segments - The life sciences industry is highly competitive, characterized by rapid technological development and a strong emphasis on intellectual property[78](index=78&type=chunk) - The company competes in two primary market segments: External Liver Assist and Whole Organ Transplant[78](index=78&type=chunk) [External Liver Assist Technologies](index=23&type=section&id=External%20Liver%20Assist%20Technologies) Miromatrix believes its MiroliverELAP, utilizing bioengineered organs, could offer superior function compared to existing liver dialysis products - The company is unaware of any commercialized or in-development external liver assist systems utilizing bioengineered organs, believing MiroliverELAP could offer superior function compared to existing liver dialysis products[79](index=79&type=chunk)[80](index=80&type=chunk) [Whole Organ Transplant Technologies](index=25&type=section&id=Whole%20Organ%20Transplant%20Technologies) The whole organ transplant market includes bioengineering, xenotransplantation, and 3D printing, with Miromatrix differentiating through its human cell recellularization approach - The whole organ transplant market is segmented into bioengineering (Miromatrix's focus), xenotransplantation (e.g., Revivicor, eGenesis), and 3D printing (e.g., Organovo, BICO Group)[81](index=81&type=chunk)[84](index=84&type=chunk) - Miromatrix believes its bioengineering approach, using perfusion decellularization and recellularization with unmodified human cells, offers significant differentiation[84](index=84&type=chunk) - Competitors often have greater financial resources and expertise in R&D, manufacturing, and regulatory approvals[82](index=82&type=chunk) [Collaborations and Partnerships](index=25&type=section&id=Collaborations%20and%20Partnerships) Miromatrix engages in collaborations with leading transplant institutions and strategic partners to advance its bioengineered organ development - Miromatrix engages in collaborations with leading transplant institutions and strategic partners to advance its bioengineered organ development[24](index=24&type=chunk) [Mayo Clinic](index=25&type=section&id=Mayo%20Clinic) Since 2011, Miromatrix has collaborated with the Mayo Clinic to evaluate recellularized liver transplantation viability, holding exclusive licensing rights for related inventions - Since 2011, Miromatrix has collaborated with the Mayo Clinic to test and evaluate recellularized liver transplantation viability, with Mayo Clinic surgeons responsible for transplantation and evaluation[83](index=83&type=chunk) - Miromatrix has exclusive licensing rights to any inventions or discoveries solely developed under the Mayo Agreement[83](index=83&type=chunk) [Mount Sinai](index=25&type=section&id=Mount%20Sinai) Since 2015, Miromatrix has collaborated with Mount Sinai Hospital to develop a large animal kidney transplantation model, demonstrating continuous blood flow in transplanted kidneys - Since 2015, Miromatrix has collaborated with Mount Sinai Hospital to develop a large animal kidney transplantation model, demonstrating continuous blood flow through decellularized and recellularized transplanted kidneys[84](index=84&type=chunk) - Inventions conceived solely by Mount Sinai employees are licensed to Miromatrix for non-commercial research, and vice-versa for Miromatrix employees' inventions[86](index=86&type=chunk) [Texas Heart Institute (THI)](index=27&type=section&id=Texas%20Heart%20Institute) Miromatrix granted THI an exclusive sub-license for heart organ transplantation IP, with rights reverting to Miromatrix upon first-in-human trial completion - Miromatrix granted THI an exclusive sub-license for intellectual property related to heart organ transplantation using perfusion decellularization/recellularization[87](index=87&type=chunk) - THI must achieve milestones, including developing the cardiac process, completing preclinical studies, and filing an IND for a Phase 1 trial. Upon completion of the first-in-human trial, licensing rights revert to Miromatrix, with THI receiving a **5.0% royalty** on commercial sales[87](index=87&type=chunk) [University of Minnesota](index=27&type=section&id=University%20of%20Minnesota) Miromatrix holds an exclusive license from the University of Minnesota for organ and tissue decellularization and recellularization, with annual minimum royalty payments of **$500,000** - Miromatrix holds an exclusive license from the University of Minnesota (EPLA) for decellularization and recellularization of organs and tissues, with patents providing exclusivity in multiple jurisdictions[88](index=88&type=chunk) - The company is required to make annual minimum royalty payments of **$500,000** or **6.5% of net sales**, whichever is greater, to the University[88](index=88&type=chunk) - As of December 31, 2021, Miromatrix had paid **$1,125,081** under the EPLA[88](index=88&type=chunk) [Reprise Biomedical, Inc.](index=29&type=section&id=Reprise%20Biomedical,%20Inc.) Miromatrix spun out its Miromesh and Miroderm products to Reprise Biomedical, Inc., retaining an exclusive license for acellular products and an annual payment entitlement - In June 2019, Miromatrix spun out its Miromesh and Miroderm products to Reprise Biomedical, Inc., retaining an exclusive license for acellular products derived from perfusion decellularization technology[90](index=90&type=chunk) - Miromatrix is entitled to an annual payment from Reprise equal to the greater of **$500,000** or **6.5% of sales**[90](index=90&type=chunk) - A long-term receivable for minimum royalties from Reprise (**$920,404** in 2021 and **$453,470** in 2020) was fully reserved due to collectability uncertainty[90](index=90&type=chunk) Royalties from Reprise Biomedical, Inc. | Year Ended December 31, | Royalty Payments | | :---------------------- | :--------------- | | 2021 | $33,066 | | 2020 | $46,530 | [Intellectual Property](index=29&type=section&id=Intellectual%20Property) Miromatrix protects its proprietary technologies through patents, data exclusivity, market exclusivity, and patent term extensions - Miromatrix protects its proprietary technologies through patents, data exclusivity, market exclusivity, and patent term extensions[91](index=91&type=chunk) [Patents](index=29&type=section&id=Patents) The company owns or licenses numerous U.S. and foreign patents and applications, with expected expiration dates between 2026 and 2040 - As of December 31, 2021, the company wholly owns or exclusively licenses **8 issued U.S. patents** and **14 pending U.S. patent applications**, expected to expire between 2026 and 2036 (issued) or 2026 and 2040 (pending, if issued)[92](index=92&type=chunk)[93](index=93&type=chunk) - Additionally, it owns or licenses **115 foreign patents** and **24 pending foreign patent applications**, with patents expected to expire between 2026 and 2036[92](index=92&type=chunk) - The company expects to seek 5-year patent term extensions (PTE) under the Hatch-Waxman Act and may seek FDA exclusivity under Orphan Drug Exclusivity (7 years) or the Patient Protection and Affordable Care Act (12 years)[94](index=94&type=chunk)[96](index=96&type=chunk) [Employees](index=31&type=section&id=Employees) As of February 28, 2022, Miromatrix had 61 employees worldwide, none of whom are represented by a collective bargaining agreement - As of February 28, 2022, Miromatrix had **61 employees** worldwide, none of whom are represented by a collective bargaining agreement[97](index=97&type=chunk) [Properties](index=31&type=section&id=Properties) The company leases a 42,000 square foot corporate headquarters in Eden Prairie, Minnesota, including 11,000 square feet for in-house manufacturing - The company leases its corporate headquarters in Eden Prairie, Minnesota, a **42,000 square foot facility** that includes **11,000 square feet** dedicated to in-house manufacturing[98](index=98&type=chunk) - This facility is believed to provide adequate capacity for manufacturing bioengineered organs through clinical trials[98](index=98&type=chunk) [Manufacturing and Suppliers](index=31&type=section&id=Manufacturing%20and%20Suppliers) Miromatrix maintains 11,000 square feet of in-house manufacturing for bioengineered organs, sourcing porcine materials and human cells from specialized suppliers - Miromatrix maintains **11,000 square feet** of in-house manufacturing capabilities at its headquarters for producing bioengineered organs, adhering to standards similar to cGMP manufacturing[99](index=99&type=chunk) - Porcine raw materials are sourced from two long-term suppliers, and human kidneys and livers (not placed for transplant) are obtained from Organ Procurement Organizations (OPOs) to isolate cells for recellularization[100](index=100&type=chunk) [Government Regulation](index=31&type=section&id=Government%20Regulation) The company's activities are subject to extensive U.S. and international governmental regulations, with bioengineered organs expected to be classified as biologics or combination products - The company's activities are subject to extensive U.S. and international governmental regulations, including those from the FDA for drugs, biologics, and medical devices[101](index=101&type=chunk) - The regulatory classification of MiroliverELAP and bioengineered organ transplant products is not yet established but is expected to be biologics or combination products, requiring BLA approval[102](index=102&type=chunk)[103](index=103&type=chunk) - Commercial production must comply with cGMP requirements for biologics, and potentially additional requirements for medical devices or xenotransplants depending on FDA classification[103](index=103&type=chunk)[104](index=104&type=chunk) [Regulatory Process](index=33&type=section&id=Regulatory%20Process) Obtaining BLA approval for biological products is a lengthy, expensive, and uncertain process, with noncompliance leading to severe penalties - Obtaining BLA approval for biological products is a lengthy, expensive, and uncertain process involving extensive preclinical and clinical testing[105](index=105&type=chunk) - Noncompliance with regulations can lead to severe penalties, including civil penalties, product recalls, injunctions, and criminal prosecution[106](index=106&type=chunk) [Product Approval](index=33&type=section&id=Product%20Approval) FDA approval requires proof of safety, purity, and potency through nonclinical studies and multi-phase human clinical trials, preceded by an Investigational New Drug (IND) application - FDA approval requires proof of safety, purity, and potency through nonclinical studies and well-controlled human clinical trials, which are typically conducted in three phases (Phase 1, 2, and 3)[107](index=107&type=chunk)[111](index=111&type=chunk) - An Investigational New Drug (IND) application must be submitted and become effective before human clinical trials can commence[108](index=108&type=chunk) - Post-approval clinical trials (Phase 4) may be required by the FDA to gather additional safety and efficacy data[113](index=113&type=chunk) [Regulation of Combination Products in the U.S.](index=39&type=section&id=Regulation%20of%20Combination%20Products%20in%20the%20U.S.) Combination products, comprising components regulated under different authorities, are assigned a lead FDA center based on their primary mode of action - Combination products, comprising components regulated under different authorities (e.g., device-biologic), are assigned a lead FDA center based on the 'primary mode of action'[127](index=127&type=chunk) - The FDA's Office of Combination Products addresses related issues and provides guidance[127](index=127&type=chunk) [Regenerative Advanced Therapies](index=39&type=section&id=Regenerative%20Advanced%20Therapies) The 21st Century Cures Act created a pathway for Regenerative Advanced Therapies (RMATs) to facilitate development and expedite review for serious or life-threatening conditions - The 21st Century Cures Act created a pathway for Regenerative Advanced Therapies (RMATs) to facilitate development and expedite review for serious or life-threatening conditions[128](index=128&type=chunk) - RMAT designation allows for priority review, accelerated approval via surrogate endpoints, and meeting post-approval requirements through real-world evidence or patient registries[130](index=130&type=chunk)[131](index=131&type=chunk) [FDA Post-Approval Requirements](index=41&type=section&id=FDA%20Post-Approval%20Requirements) Post-approval, biological and combination products are subject to rigorous FDA regulation, including cGMP compliance, quality control, and adverse event reporting - Post-approval, biological products and combination products are subject to rigorous and extensive FDA regulation, including cGMP compliance, quality control, and adverse event reporting[132](index=132&type=chunk) - Changes to approved products (e.g., indications, manufacturing) require submission and FDA approval of new BLAs or supplements[135](index=135&type=chunk)[136](index=136&type=chunk) - Non-compliance can lead to severe sanctions, including marketing restrictions, product withdrawal, refusal of applications, and civil or criminal penalties[137](index=137&type=chunk) [Pediatric Research Equity Act (PREA)](index=43&type=section&id=Pediatric%20Research%20Equity%20Act) PREA requires BLAs for new indications to include pediatric safety and effectiveness data, with exemptions for orphan-designated products - PREA requires BLAs for new indications to include data on safety and effectiveness in relevant pediatric subpopulations, though exemptions exist for orphan-designated products[139](index=139&type=chunk) [U.S. Patent Term Restoration and Marketing Exclusivity](index=43&type=section&id=U.S.%20Patent%20Term%20Restoration%20and%20Marketing%20Exclusivity) U.S. patents may be eligible for up to five years of Patent Term Extension (PTE) to compensate for regulatory review time, not exceeding 14 years from product approval - U.S. patents may be eligible for up to five years of Patent Term Extension (PTE) under the Hatch-Waxman Amendments to compensate for regulatory review time, not exceeding **14 years** from product approval[140](index=140&type=chunk) - Biological products can also obtain six-month pediatric market exclusivity based on voluntary pediatric studies[141](index=141&type=chunk) [Biosimilars](index=45&type=section&id=Biosimilars) The Biologics Price Competition and Innovation Act created an approval pathway for biosimilars, which could increase competition for Miromatrix's products - The Biologics Price Competition and Innovation Act created an approval pathway for biosimilars, which are 'highly similar' to approved biologics and could increase competition for Miromatrix's products[142](index=142&type=chunk) - Reference biologics are granted **12 years of exclusivity** from first licensure, but this could be shortened[142](index=142&type=chunk) [Advertising and Promotion](index=45&type=section&id=Advertising%20and%20Promotion) The FDA and FTC strictly regulate post-approval marketing and promotion of biologics, prohibiting off-label promotion and requiring balanced safety information - The FDA and FTC strictly regulate post-approval marketing and promotion of biologics, prohibiting off-label promotion and requiring claims to be balanced with safety information[143](index=143&type=chunk)[144](index=144&type=chunk) - Violations can lead to adverse publicity, significant penalties, and corrective actions[143](index=143&type=chunk) [Orphan Drug](index=45&type=section&id=Orphan%20Drug) Orphan drug designation is granted for products treating rare diseases, offering benefits like tax credits, user fee waivers, and seven years of exclusive marketing - Orphan drug designation is granted for products treating rare diseases (fewer than **200,000 U.S. individuals**) and offers benefits like tax credits and BLA user fee waivers[145](index=145&type=chunk) - The first applicant to receive FDA approval for an orphan-designated product for a specific indication receives **seven years of exclusive marketing**[145](index=145&type=chunk) [Anti-Kickback and False Claims Laws](index=47&type=section&id=Anti-Kickback%20and%20False%20Claims%20Laws) The company's operations are subject to federal and state anti-kickback, fraud and abuse, and false claims laws, with potential for substantial penalties - The company's operations are subject to federal and state anti-kickback, fraud and abuse, and false claims laws (e.g., Anti-Kickback Statute, False Claims Act, HIPAA)[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) - Violations can result in substantial penalties, including fines, imprisonment, exclusion from federal healthcare programs, and reputational harm[148](index=148&type=chunk)[149](index=149&type=chunk) - The Sunshine Act requires reporting of payments to physicians and teaching hospitals, with expanded reporting obligations starting in 2022[150](index=150&type=chunk) [International Regulation](index=49&type=section&id=International%20Regulation) Foreign regulations for clinical trials and commercial sales vary by country, with potentially unclear pathways for regenerative medicines, and the company currently focuses on U.S. development - Foreign regulations for clinical trials, development, and commercial sales vary by country, with potentially unclear pathways for regenerative medicines[152](index=152&type=chunk) - The company is currently focused on product development in the U.S.[152](index=152&type=chunk) [Pharmaceutical Coverage, Pricing, and Reimbursement](index=49&type=section&id=Pharmaceutical%20Coverage,%20Pricing,%20and%20Reimbursement) Commercial success depends on reimbursement availability from third-party payers, who increasingly scrutinize medical necessity and cost-effectiveness, potentially impacting return on investment - Commercial success depends on reimbursement availability from third-party payers, who increasingly scrutinize medical necessity and cost-effectiveness[153](index=153&type=chunk) - Inadequate reimbursement could negatively impact the company's return on investment[153](index=153&type=chunk) [Environmental Matters](index=49&type=section&id=Environmental%20Matters) Operations involving hazardous materials subject the company to environmental and safety laws, with non-compliance potentially leading to substantial liabilities and operational restrictions - Operations involve hazardous materials, subjecting the company to federal, state, and local environmental and safety laws[154](index=154&type=chunk) - Non-compliance could result in substantial liabilities, fines, and operational restrictions[154](index=154&type=chunk) [Legal Proceedings](index=49&type=section&id=Legal%20Proceedings) The company may be subject to legal proceedings in the ordinary course of business, which could have an adverse material impact due to diversion of management time and financial costs - The company may be subject to legal proceedings in the ordinary course of business, which could have an adverse material impact due to diversion of management time and financial costs[155](index=155&type=chunk) [Corporate Information](index=49&type=section&id=Corporate%20Information) The company's website, www.miromatrix.com, provides access to its SEC filings - The company's website is www.miromatrix.com, where SEC filings are made available[156](index=156&type=chunk)[157](index=157&type=chunk) - Miromatrix Medical Inc. is a life sciences company pioneering a novel technology for bioengineering fully transplantable organs, focusing initially on livers and kidneys[23](index=23&type=chunk) - The proprietary technology involves a two-step method of decellularization (removing porcine cells) and recellularization (replacing with unmodified human cells) to create bioengineered organs[23](index=23&type=chunk)[25](index=25&type=chunk) - The company has collaborations with Mayo Clinic, Mount Sinai, and Texas Heart Institute, and strategic investments from Baxter, CareDx, and DaVita[23](index=23&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks that could materially and adversely affect Miromatrix's business, financial condition, results of operations, and stock price - Investors should carefully consider the outlined risks before investing in Miromatrix common stock, as their realization could materially harm the business[158](index=158&type=chunk) [Risks Related to Our Limited Operating History, Financial Position and Capital Requirements](index=51&type=section&id=Risks%20Related%20to%20Our%20Limited%20Operating%20History,%20Financial%20Position%20and%20Capital%20Requirements) Miromatrix has incurred significant net losses and expects future losses, requiring substantial additional capital for R&D and commercialization - Miromatrix has incurred significant net losses since inception (**$14,670,756** in 2021, **$10,309,568** in 2020) and expects future losses, with an accumulated deficit of **$74,051,914** as of December 31, 2021[171](index=171&type=chunk) - The company has a limited operating history, especially with commercialized whole organ products, making future success difficult to evaluate[172](index=172&type=chunk) - Substantial additional capital will be required for R&D and commercialization, and inability to secure financing could delay or discontinue product development[173](index=173&type=chunk)[176](index=176&type=chunk) [Risks Related to the Development and Commercialization of our Products](index=57&type=section&id=Risks%20Related%20to%20the%20Development%20and%20Commercialization%20of%20our%20Products) The company faces challenges in product development and commercialization, including regulatory complexities, manufacturing issues, and competition, with no FDA-approved whole organ products yet - The company currently lacks FDA-approved or commercialized whole organ products, with lead candidates still in preclinical development and not yet tested in humans[177](index=177&type=chunk)[178](index=178&type=chunk) - Successful development, manufacturing, and sale of biologics is a long, expensive, and uncertain process with unique risks, including regulatory complexities and manufacturing challenges[181](index=181&type=chunk) - Delays in clinical trials are possible due to various factors, including demonstrating sufficient safety/purity/potency, manufacturing issues, regulatory approvals, and patient enrollment difficulties[183](index=183&type=chunk)[184](index=184&type=chunk)[189](index=189&type=chunk) - Product candidates use animal-derived biological components, raising concerns about xenotransplantation classification and associated complex regulatory processes[187](index=187&type=chunk) - Bioengineered organs may be classified as combination products, potentially requiring multiple marketing applications and increasing regulatory risks[188](index=188&type=chunk) - The company may face competition from biosimilars and larger competitors with greater resources, and commercial success depends on significant market acceptance[196](index=196&type=chunk)[203](index=203&type=chunk) - Reliance on third parties for preclinical and clinical development activities reduces control and poses risks if they fail to meet obligations or regulatory standards[205](index=205&type=chunk)[208](index=208&type=chunk) [Risks Related to Intellectual Property and Information Technology Matters](index=67&type=section&id=Risks%20Related%20to%20Intellectual%20Property%20and%20Information%20Technology%20Matters) Inability to obtain and maintain broad patent protection could allow competitors to commercialize similar products, adversely affecting the company's market position - Inability to obtain and maintain broad patent and intellectual property protection could allow competitors to commercialize similar products, adversely affecting the company's market position[209](index=209&type=chunk)[211](index=211&type=chunk) - Patent prosecution is expensive, time-consuming, and complex, with uncertainties regarding issuance, validity, enforceability, and scope of patents[212](index=212&type=chunk)[214](index=214&type=chunk) - The intellectual property landscape for new organs is constantly evolving, increasing the risk of litigation and challenges to patent rights[232](index=232&type=chunk)[233](index=233&type=chunk) - Litigation to protect or enforce patents can be expensive, time-consuming, and may result in patents being invalidated or narrowed[237](index=237&type=chunk)[240](index=240&type=chunk) - Non-compliance with patent agency requirements could lead to partial or complete loss of patent rights[241](index=241&type=chunk)[243](index=243&type=chunk) - Changes in patent law (e.g., America Invents Act, Supreme Court rulings) could diminish patent value and increase uncertainties[244](index=244&type=chunk)[246](index=246&type=chunk)[248](index=248&type=chunk) - Patent terms may be inadequate to protect competitive position, and failure to obtain Patent Term Extensions (PTE) could allow earlier competitor entry[249](index=249&type=chunk)[250](index=250&type=chunk) - Inability to protect trade secrets through confidentiality agreements and security measures could harm business and competitive position[251](index=251&type=chunk)[255](index=255&type=chunk) - Risks exist from third parties asserting wrongful use or disclosure of confidential information by employees, consultants, or advisors[257](index=257&type=chunk) - Inadequate protection of trademarks and trade names could hinder brand recognition and adversely affect business[258](index=258&type=chunk)[260](index=260&type=chunk) - Intellectual property rights have limitations and may not address all potential threats, such as biosimilar products or independent development by competitors[261](index=261&type=chunk) [Risks Related to Governmental Regulations](index=87&type=section&id=Risks%20Related%20to%20Governmental%20Regulations) The company faces lengthy and unpredictable regulatory approval processes, ongoing compliance obligations, and risks from healthcare legislation and data protection laws - The regulatory approval process for biopharmaceutical products is lengthy, time-consuming, and unpredictable, with no guarantee of obtaining FDA approval for product candidates[264](index=264&type=chunk)[266](index=266&type=chunk) - Even with approval, products are subject to ongoing regulatory obligations, including cGMPs, cGTPs, and GCPs, which entail significant expense and potential restrictions[271](index=271&type=chunk)[272](index=272&type=chunk) - Disruptions at government agencies (e.g., FDA funding shortages, global health concerns like COVID-19) could delay product development and approval[280](index=280&type=chunk)[284](index=284&type=chunk) - Compliance with animal treatment regulations in research could increase operating costs or impact technology commercialization[285](index=285&type=chunk)[286](index=286&type=chunk) - Business operations are subject to anti-kickback, fraud and abuse, false claims, and physician payment transparency laws, with potential for substantial penalties and reputational harm[287](index=287&type=chunk)[291](index=291&type=chunk) - Employee misconduct or noncompliance with regulatory standards could lead to investigations, sanctions, and adverse effects on business[292](index=292&type=chunk)[293](index=293&type=chunk) - Current and future healthcare legislation (e.g., ACA) may increase costs and difficulty in obtaining marketing approval and commercializing products[295](index=295&type=chunk)[297](index=297&type=chunk) - Coverage and adequate reimbursement from third-party payers may not be available or could be subject to unfavorable pricing regulations, harming business[302](index=302&type=chunk)[303](index=303&type=chunk)[307](index=307&type=chunk) - Potential liability related to protecting personal and health information under federal, state, and international data protection laws (e.g., HIPAA, GDPR) could result in litigation, fines, and reputational damage[308](index=308&type=chunk)[310](index=310&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - Use of hazardous materials necessitates compliance with environmental laws, which can be expensive and lead to liabilities for non-compliance[317](index=317&type=chunk)[319](index=319&type=chunk) [Risks Related to Our Business](index=107&type=section&id=Risks%20Related%20to%20Our%20Business) Financial results may fluctuate significantly due to clinical trial outcomes, new product introductions, regulatory clearances, pricing pressures, and changes in reimbursement policies - Financial results may fluctuate significantly due to factors like clinical trial outcomes, new product introductions, regulatory clearances, pricing pressures, and changes in reimbursement policies[322](index=322&type=chunk)[323](index=323&type=chunk) - All operations are currently conducted at one facility, making the business vulnerable to disruptions from natural or man-made disasters[324](index=324&type=chunk) - The company faces product liability claims inherent in testing, manufacturing, and marketing medical products, especially for permanently implanted biological materials, with potential for patient injury, disease transmission, and substantial liabilities[325](index=325&type=chunk)[327](index=327&type=chunk)[328](index=328&type=chunk) - Estimates of addressable markets for future products may be smaller than anticipated, impacting revenue generation and inventory management[332](index=332&type=chunk) - Maintaining a competitive position depends on attracting and retaining highly qualified senior management and personnel, with intense competition for skilled individuals[335](index=335&type=chunk) - The company currently lacks a marketing and sales organization, and failure to establish one or secure third-party agreements could hinder future product revenue[336](index=336&type=chunk) - Adverse worldwide economic conditions, including the COVID-19 pandemic, may negatively impact business operations, supply chains, and access to capital[338](index=338&type=chunk)[339](index=339&type=chunk)[340](index=340&type=chunk)[341](index=341&type=chunk) - Changes in U.S. tax law could adversely affect financial condition and results of operations[342](index=342&type=chunk) - Ability to use net operating loss carryforwards (NOLs) and other tax attributes may be limited by future ownership changes or tax law provisions[343](index=343&type=chunk)[345](index=345&type=chunk)[346](index=346&type=chunk)[347](index=347&type=chunk) [Risks Related to Our Common Stock](index=115&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) A significant deficiency in internal control over financial reporting was identified, primarily due to small accounting staff and lack of segregation of duties, which could adversely affect financial reporting accuracy and stock price - A significant deficiency in internal control over financial reporting was identified, primarily due to small accounting staff and lack of segregation of duties, which could adversely affect financial reporting accuracy and stock price[348](index=348&type=chunk)[349](index=349&type=chunk)[351](index=351&type=chunk)[352](index=352&type=chunk) - An active trading market for common stock may not develop or be sustained, impairing share value and ability to raise capital[353](index=353&type=chunk) - The price of common stock is likely to be highly volatile due to various factors, including clinical trial results, regulatory clearances, and market conditions[354](index=354&type=chunk) - The company does not intend to pay dividends, so returns will depend solely on stock value appreciation[356](index=356&type=chunk) - As an emerging growth company, reduced disclosure requirements may make common stock less attractive to investors, potentially leading to lower trading activity and increased volatility[357](index=357&type=chunk)[361](index=361&type=chunk) - Significant additional costs are expected as a public company due to compliance with SEC, Sarbanes-Oxley, and Nasdaq rules[362](index=362&type=chunk) - Disclosure controls and procedures may not prevent or detect all errors or fraud due to inherent limitations[363](index=363&type=chunk)[364](index=364&type=chunk) - The company is at risk of securities class action litigation, which could result in substantial costs and divert management attention[365](index=365&type=chunk) - Inaccurate or unfavorable research by securities analysts could cause stock price and trading volume to decline[367](index=367&type=chunk) - Provisions in corporate charter documents and Delaware law could discourage acquisitions and prevent stockholders from replacing management[368](index=368&type=chunk)[370](index=370&type=chunk) - The exclusive forum provision in the certificate of incorporation for disputes with the company or its directors/officers could limit stockholders' ability to obtain a favorable judicial forum[371](index=371&type=chunk) [Item 1B. Unresolved Staff Comments.](index=123&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) There are no unresolved staff comments to report - The company has no unresolved staff comments[372](index=372&type=chunk) [Item 2. Properties.](index=123&type=section&id=Item%202.%20Properties.) Miromatrix leases its corporate headquarters in Eden Prairie, Minnesota, which serves as its research and development operations and office space - The company leases a **42,000 square foot** corporate headquarters in Eden Prairie, Minnesota, for R&D and office space[373](index=373&type=chunk) - Current facilities are deemed adequate for needs through clinical trials, and additional space is expected to be available on commercially reasonable terms[373](index=373&type=chunk) [Item 3. Legal Proceedings.](index=125&type=section&id=Item%203.%20Legal%20Proceedings.) Miromatrix is not currently involved in any material legal proceedings - The company is not currently party to any material legal proceedings[375](index=375&type=chunk) - Potential ordinary course legal proceedings could divert management time and incur financial costs, but the company believes it has adequate insurance or indemnification[375](index=375&type=chunk) [Item 4. Mine Safety Disclosures.](index=125&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) The company has no disclosures related to mine safety - There are no mine safety disclosures[376](index=376&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.](index=126&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities.) Miromatrix's common stock has been listed on the Nasdaq Capital Market under 'MIRO' since June 24, 2021, with IPO proceeds allocated to R&D and a new facility - Miromatrix common stock (MIRO) has been listed on the Nasdaq Capital Market since June 24, 2021[379](index=379&type=chunk) - As of March 24, 2022, there were **215 holders of record** of the company's common stock[379](index=379&type=chunk) - The company does not intend to pay cash dividends in the foreseeable future, prioritizing reinvestment in business development[380](index=380&type=chunk) - The IPO in June 2021 raised approximately **$44.5 million** in net proceeds[382](index=382&type=chunk) IPO Net Proceeds Allocation | Allocation | Amount (approx.) | | :---------------------------------------------------------------------- | :--------------- | | Research and development (Phase I MiroliverELAP, preclinical bioengineered organs) | $34.8M - $40.0M | | New facility construction | $3.0M - $4.0M | | Working capital and general corporate purposes | Remaining funds | [Item 6. [Reserved]](index=126&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no information [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=127&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides an overview of Miromatrix's financial condition and operational results, highlighting its focus on bioengineered organs and consistent net losses - Miromatrix is a life sciences company pioneering bioengineering fully transplantable organs, with a focus on livers and kidneys[384](index=384&type=chunk) - The company has not been profitable since inception, reporting net losses of **$14,670,756** in 2021 and **$10,309,568** in 2020, with an accumulated deficit of **$74,051,914** as of December 31, 2021[385](index=385&type=chunk) - Revenue primarily consists of licensing royalties from the sale of Miromesh and Miroderm products by Reprise Biomedical, Inc.[385](index=385&type=chunk) [Overview](index=127&type=section&id=Overview) The company's proprietary technology uses a two-step method of decellularization and recellularization to create bioengineered organs, supported by collaborations and strategic investments - The company's proprietary technology uses a two-step method of decellularization and recellularization to remove porcine cells and replace them with unmodified human cells[384](index=384&type=chunk) - Collaborations include Mayo Clinic, Mount Sinai, and Texas Heart Institute, with strategic investments from Baxter, CareDx, and DaVita[384](index=384&type=chunk) [Components of Our Results of Operations](index=127&type=section&id=Components%20of%20Our%20Results%20of%20Operations) Licensing revenue is recognized from the Reprise License Agreement, while R&D, regulatory, clinical, quality, and G&A expenses are expected to increase - Licensing revenue is recognized from the Reprise License Agreement, based on sales after minimum guarantees are met and performance obligations are satisfied[386](index=386&type=chunk) - Cost of goods sold primarily relates to minimum royalty payments due to the University of Minnesota under the licensing agreement[387](index=387&type=chunk) - Research and development expenses are expected to increase as product candidates advance, while regulatory, clinical, and quality expenses will also rise in absolute dollars[390](index=390&type=chunk)[392](index=392&type=chunk)[393](index=393&type=chunk) - General and administrative expenses are projected to increase due to headcount expansion and costs associated with operating as a public company[395](index=395&type=chunk) [Results of Operations](index=129&type=section&id=Results%20of%20Operations) The company experienced a net loss of **$14,670,756** in 2021, an increase of **42.3%** from 2020, driven by higher operating expenses Key Financial Data (Years Ended December 31) | Metric | 2021 | 2020 | Change (Dollar) | Change (%) | | :-------------------------- | :------------- | :------------- | :-------------- | :--------- | | Licensing revenue | $33,066 | $46,530 | $(13,464) | (28.9)% | | Cost of goods sold | $500,000 | $500,000 | $0 | 0% | | Gross loss | $(466,934) | $(453,470) | $(13,464) | (3.0)% | | Research and development | $10,750,500 | $7,280,798 | $3,469,702 | 47.7% | | Regulatory and clinical | $551,494 | $265,885 | $285,609 | 107.4% | | Quality | $547,129 | $149,199 | $397,930 | 266.7% | | General and administrative | $4,643,473 | $2,109,196 | $2,534,277 | 120.2% | | Total operating expenses | $16,492,596 | $9,805,078 | $6,687,518 | 68.2% | | Operating loss | $(16,959,530) | $(10,258,548) | $(6,700,982) | (65.3)% | | Net loss | $(14,670,756) | $(10,309,568) | $(4,361,188) | (42.3)% | | Net loss per share (basic & diluted) | $(1.28) | $(4.76) | | | | Weighted average shares | 11,484,598 | 2,165,105 | | | [Licensing Revenue](index=129&type=section&id=Licensing%20Revenue) Licensing revenue decreased by **$13,464 (28.9%)** in 2021, primarily due to deferred minimum royalties from Reprise Biomedical, Inc. and a full reservation against the receivable - Licensing revenue decreased by **$13,464 (28.9%)** from **$46,530** in 2020 to **$33,066** in 2021, primarily due to deferred minimum royalties from Reprise Biomedical, Inc. and a full reservation against the receivable[399](index=399&type=chunk) [Cost of Goods Sold](index=129&type=section&id=Cost%20of%20Goods%20Sold) Cost of goods sold remained constant at **$500,000** for both 2021 and 2020, representing the minimum royalty due to the University of Minnesota - Cost of goods sold remained constant at **$500,000** for both 2021 and 2020, representing the minimum royalty due to the University of Minnesota[400](index=400&type=chunk) [Gross Loss](index=129&type=section&id=Gross%20Loss) Gross loss increased by **$13,464 (3.0%)** in 2021, mainly due to the uncertainty of collecting deferred minimum royalties from Reprise - Gross loss increased by **$13,464 (3.0%)** from **$453,470** in 2020 to **$466,934** in 2021, mainly due to the uncertainty of collecting deferred minimum royalties from Reprise[401](index=401&type=chunk) [Research and Development](index=129&type=section&id=Research%20and%20Development) Research and development expenses increased by **$3,469,702 (47.7%)** in 2021, driven by higher lab supplies, additional employee hiring, and increased consulting expenses - Research and development expenses increased by **$3,469,702 (47.7%)** to **$10,750,500** in 2021, driven by higher lab supplies (**$2,045,138**), additional employee hiring (**$1,101,760**), and increased consulting expenses (**$331,808**)[402](index=402&type=chunk) [Regulatory and Clinical](index=131&type=section&id=Regulatory%20and%20Clinical) Regulatory and clinical expenses increased by **$285,609 (107.4%)** in 2021, primarily due to additional employee hiring and increased regulatory consulting expenses - Regulatory and clinical expenses increased by **$285,609 (107.4%)** to **$551,494** in 2021, primarily due to additional employee hiring (**$212,427**) and increased regulatory consulting expenses (**$50,720**)[404](index=404&type=chunk) [Quality Expenses](index=131&type=section&id=Quality%20Expenses) Quality expenses increased by **$397,930 (266.7%)** in 2021, mainly due to the hiring of additional employees - Quality expenses increased by **$397,930 (266.7%)** to **$547,129** in 2021, mainly due to the hiring of additional employees[405](index=405&type=chunk) [General and Administrative](index=131&type=section&id=General%20and%20Administrative) General and administrative expenses increased by **$2,534,277 (120.2%)** in 2021, largely attributable to costs of being a public company, including insurance and additional employees - General and administrative expenses increased by **$2,534,277 (120.2%)** to **$4,643,473** in 2021, largely attributable to costs of being a public company, including insurance (**$688,390**), additional employees (**$644,545**), and public company expenses (**$491,705**)[406](index=406&type=chunk) [Interest Income](index=131&type=section&id=Interest%20Income) Interest income decreased by **$6,760 (77.4%)** in 2021, primarily due to lower interest rates on cash balances - Interest income decreased by **$6,760 (77.4%)** to **$1,973** in 2021, primarily due to lower interest rates on cash balances[407](index=407&type=chunk) [Interest Expense](index=131&type=section&id=Interest%20Expense) Interest expense decreased by **$42,670 (6.5%)** in 2021, mainly because the Cheshire Note was converted to equity in June 2021 - Interest expense decreased by **$42,670 (6.5%)** to **$613,882** in 2021, mainly because the Cheshire Note was converted to equity in June 2021[408](index=408&type=chunk) [Loss on Disposal of Property and Equipment](index=131&type=section&id=Loss%20on%20Disposal%20of%20Property%20and%20Equipment) A loss of **$5,459** was recognized in 2021 from the disposal of lab equipment no longer in use, compared to no loss in 2020 - A loss of **$5,459** was recognized in 2021 from the disposal of lab equipment no longer in use, compared to no loss in 2020[409](index=409&type=chunk) [Amortization of Discount on Note](index=131&type=section&id=Amortization%20of%20Discount%20on%20Note) Amortization expense on the Cheshire Note discount decreased by **$45,982 (42.3%)** in 2021, due to the note's conversion to equity in June 2021 - Amortization expense on the Cheshire Note discount decreased by **$45,982 (42.3%)** to **$62,638** in 2021, due to the note's conversion to equity in June 2021[410](index=410&type=chunk) [Change in Fair Value of Derivative](index=131&type=section&id=Change%20in%20Fair%20Value%20of%20Derivative) The change in fair value of the embedded derivative related to the Cheshire Note resulted in a gain of **$246,962** in 2021, compared to a loss of **$51,446** in 2020, due to the note's conversion to equity - The change in fair value of the embedded derivative related to the Cheshire Note resulted in a gain of **$246,962** in 2021, compared to a loss of **$51,446** in 2020, due to the note's conversion to equity[411](index=411&type=chunk) [Research Grants](index=133&type=section&id=Research%20Grants) Research grants decreased by **$599,110 (60.4%)** in 2021, primarily due to decreases in preclinical contracting - Research grants decreased by **$599,110 (60.4%)** to **$393,034** in 2021, primarily due to decreases in preclinical contracting[412](index=412&type=chunk) [Equity Loss in Affiliate](index=133&type=section&id=Equity%20Loss%20in%20Affiliate) Equity loss in affiliate decreased by **$2,134,759 (90.5%)** in 2021, due to the company owning a smaller percentage of Reprise and selling its remaining ownership in March 2021 - Equity loss in affiliate decreased by **$2,134,759 (90.5%)** to **$223,633** in 2021, due to the company owning a smaller percentage of Reprise and selling its remaining ownership in March 2021[413](index=413&type=chunk) [Gain on Sale of Equity Investment](index=133&type=section&id=Gain%20on%20Sale%20of%20Equity%20Investment) A gain of **$1,983,912** was recognized in 2021 from the sale of remaining Reprise shares, compared to **$2,123,113** in 2020 from an earlier sale - A gain of **$1,983,912** was recognized in 2021 from the sale of remaining Reprise shares, compared to **$2,123,113** in 2020 from an earlier sale[414](index=414&type=chunk) [Gain on Debt Extinguishment](index=133&type=section&id=Gain%20on%20Debt%20Extinguishment) A gain of **$568,505** was recognized in 2021 due to the forgiveness of the Paycheck Protection Program loan - A gain of **$568,505** was recognized in 2021 due to the forgiveness of the Paycheck Protection Program loan[415](index=415&type=chunk) [Liquidity and Capital Resources](index=133&type=section&id=Liquidity%20and%20Capital%20Resources) Miromatrix has incurred net losses since inception and expects increased expenses, with cash and cash equivalents of **$52,811,531** as of December 31, 2021, expected to fund operations for at least the next twelve months - Miromatrix has incurred net losses since inception, with an accumulated deficit of **$74,051,914** as of December 31, 2021[416](index=416&type=chunk) - The company expects increased expenses for developing bioengineered organs, conducting clinical trials, seeking regulatory approvals, and operating as a public company[417](index=417&type=chunk) - As of December 31, 2021, cash and cash equivalents totaled **$52,811,531**, estimated to fund operations for at least the next twelve months[419](index=419&type=chunk) - Future cash needs are expected to be financed through equity offerings and debt financings, with risks of dilution or restrictive covenants[420](index=420&type=chunk) - The Cheshire Note (**$6,000,000**) and accrued interest were converted to Series C Convertible Preferred Stock in June 2021[426](index=426&type=chunk)[428](index=428&type=chunk) - The Paycheck Protection Program loan (**$563,397**) was fully forgiven in March and August 2021[429](index=429&type=chunk) - The IPO in June 2021 generated **$44,528,060** in net proceeds[430](index=430&type=chunk) Debt and Capital Lease Obligations (as of December 31, 2021) | Type of Obligation | Principal Outstanding | | :----------------------------------------------- | :-------------------- | | Promissory note (University of Minnesota, 2012) | $83,849 | | Loan (Minnesota Dept. of Employment & Economic Development, 2015) | $250,000 | | Capitalized lease (equipment, 2018) | $38,271 | | Promissory note (University, 2019) | $385,997 | | Capitalized lease (equipment, 2021) | $33,597 | | Capitalized lease (equipment, 2021) | $38,937 | [Cash Flows](index=137&type=section&id=Cash%20Flows) Net cash used in operating activities increased significantly in 2021, while financing activities provided substantial cash from stock sales Summary of Cash Flows (Years Ended December 31) | Cash Flow Activity | 2021 | 2020 | | :------------------------ | :------------- | :------------- | | Operating activities | $(14,809,229) | $(8,037,751) | | Investing activities | $(1,383,116) | $2,876,834 | | Financing activities | $65,359,581 | $6,355,298 | | Net increase in cash | $49,167,236 | $1,194,381 | | Cash, cash equivalents and restricted cash at end of period | $53,611,631 | $4,444,395 | [Operating Activities](index=139&type=section&id=Operating%20Activities) Net cash used in operating activities increased from **$8,037,751** in 2020 to **$14,809,229** in 2021, primarily due to the net loss and non-cash adjustments - Net cash used in operating activities increased from **$8,037,751** in 2020 to **$14,809,229** in 2021, primarily due to the net loss and non-cash adjustments[437](index=437&type=chunk)[438](index=438&type=chunk) - In 2021, significant non-cash items included a gain on stock sale (**$1,983,912**) and PPP loan forgiveness (**$563,397**), partially offset by stock-based compensation (**$622,159**) and equity loss in affiliate (**$223,633**)[437](index=437&type=chunk) [Investing Activities](index=139&type=section&id=Investing%20Activities) Net cash used in investing activities was **$1,383,116** in 2021, driven by property and equipment purchases partially offset by Reprise stock sale proceeds - Net cash used in investing activities was **$1,383,116** in 2021, driven by property and equipment purchases (**$3,383,116**) partially offset by Reprise stock sale proceeds (**$2,000,000**)[439](index=439&type=chunk) - In 2020, net cash provided by investing activities was **$2,876,834**, mainly from Reprise stock sale proceeds (**$3,000,000**) offset by equipment purchases (**$123,166**)[439](index=439&type=chunk) [Financing Activities](index=139&type=section&id=Financing%20Activities) Net cash provided by financing activities significantly increased to **$65,359,581** in 2021, primarily from the sale of common and preferred stock - Net cash provided by financing activities significantly increased to **$65,359,581** in 2021, primarily from the sale of common and preferred stock[440](index=440&type=chunk) - In 2020, net cash provided by financing activities was **$6,355,298**, mainly from long-term debt issuance[440](index=440&type=chunk) [Critical Accounting Policies and Estimates](index=139&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The preparation of financial statements requires management to make significant estimates and assumptions, particularly for stock-based compensation, equity method investments, and revenue recognition - The preparation of financial statements requires management to make significant estimates and assumptions, particularly for stock-based compensation, equity method investments, and revenue recognition[441](index=441&type=chunk)[442](index=442&type=chunk) [Stock-Based Compensation](index=141&type=section&id=Stock-Based%20Compensation) Stock options and restricted stock units are recognized as compensation costs based on estimated fair value at grant date, expensed over the vesting period - Stock options and restricted stock units are recognized as compensation costs based on estimated fair value at grant date, expensed over the vesting period[444](index=444&type=chunk)[453](index=453&type=chunk) - The Black-Scholes option-pricing model is used, requiring subjective assumptions for expected term, volatility, risk-free interest rate, and expected dividends[446](index=446&type=chunk) Stock-Based Compensation Expense | Year Ended December 31, | St

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Table of Contents 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: 001-40518 Miromatrix Medical Inc. (Exact name of registrant as specified in its charter) (State or other juri ...

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 June 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: 001-40518 Miromatrix Medical Inc. (Exact name of registrant as specified in its charter) (State or other jurisdict ...