What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-03-17 compared with 2024-03-15 · 144 added, 87 removed, 360 unchanged (39% of the section changed)

4 unchanged sentences

Risks Related to Our Business and Industry

Our financial performance depends on sales growth and increasing demand for our legacy and acquired product portfolios, and we may not be able to successfully manage the recent, and future, expansion of our operations.

Through our acquisitions of Parcus Medical and Arthrosurface in early 2020, we significantly broadened our technology and development platforms and commercialization infrastructure and expanded our addressable market from the global OA pain management market to the substantially larger global joint preservation market.

Our future success depends on growth in sales of both our legacy and acquired products.

Our financial performance depends on sales growth and increasing demand for our product portfolios, and we may not be able to successfully manage the current, and future, expansion of our operations.

Our future success depends on growth in sales of our products.

There can be no assurance that such growth can be achieved or, if achieved, sustained.

There can be no assurance that, even if substantial growth in product sales and the demand for our products is achieved, we will be able to:

Gain acceptance of our broadened portfolio of existing products, as well as future products, by the medical community, hospitals, physicians, other health care providers, third-party payers, and end-users, which acceptance may depend upon the extent to which the medical community and end-users perceive our products as safer, more effective or more cost-competitive than other similar products.

Gain acceptance of our expanding portfolio of existing products, as well as future products, by the medical community, hospitals, physicians, other health care providers, third-party payers, and end-users, which acceptance may depend upon the extent to which the medical community and end-users perceive our products as safer, more effective or more cost-competitive than other similar products.

Maintain, manage, and develop the necessary manufacturing capabilities and inventory management practices;

Develop, implement, and integrate the mix of appropriate sales channels needed to generate increased sales across our expanded product platform and to develop marketing partners and viable commercial strategies for the distribution of our expanded mix of products;

Attract, retain, and integrate required key personnel;

Implement the financial, accounting, and management systems needed to manage our expanded business and growing demand for our products.

Develop, implement, and integrate the mix of appropriate sales channels needed to generate increased sales across our product platform and to develop marketing partners and viable commercial strategies for the distribution of our growing mix of products;

Attract and retain required key personnel;

Maintain the financial, accounting, and management systems needed to manage our growing business and the associated demand for our products.

There can be no assurance that our current and future products will achieve significant market acceptance on a timely basis, or at all.

1 unchanged sentence

Substantial competition could materially affect our financial performance.

We compete with many companies, including large pharmaceutical companies and large and specialized medical devices companies, across all our product lines.

For our OA Pain Management products, our principal competitors include Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus Inc., Avanos Medical, Inc., and Ferring Pharmaceuticals, as well as other companies that are commercializing or developing competitive products.

Our key competitors for our Joint Preservation and Restoration products include Arthrex, Inc., the DePuy Synthes Companies of Johnson & Johnson, Smith & Nephew PLC., Stryker Corporation, and Zimmer Biomet, Inc., as well as certain smaller organizations that focus on subsets of the larger industry, such as Catalyst OrthoScience, Enovis Corporation and Shoulder Innovations.

We compete with numerous companies, including large pharmaceutical firms and specialized medical device companies, across our product lines.

For our OA Pain Management products, our main competitors include Sanofi Genzyme, Zimmer Biomet, Inc., Bioventus Inc., Avanos Medical, Inc., Pacira BioSciences, Conmed Corporation and Ferring Pharmaceuticals, among others.

With respect to our Regenerative Solutions products, our key competitors are Arthrex, Inc., Smith & Nephew PLC, Stryker Corporation, and Zimmer Biomet, Inc., as well as smaller organizations like Atreon Orthopedics and Bone Support AB.

Many of these companies have substantially greater financial resources, larger research and development staffs, more extensive marketing and manufacturing organizations, and more experience in the regulatory process than us.

16 unchanged sentences

Many of these customers are significantly larger companies than us.

In 2023, Mitek, accounted for 45% of our revenue.

While we have started to diversify our sales channels, including through the implementation of a direct commercial model in the United States for our Joint Preservation and Restoration products, we expect to continue to be dependent on a small number of large customers for a substantial portion of our business.

In 2024, J&J MedTech accounted for 57% of our revenue.

While we have started to diversify our sales channels, including through the implementation of a direct commercial model in the United States for our Regenerative Solutions products, we expect to continue to be dependent on a small number of large customers for a substantial portion of our business.

The failure of key customers to purchase our products in the amounts they historically have or in amounts that we expect would seriously harm our business.

5 unchanged sentences

We experience quarterly sales volume variation, which makes our future results difficult to predict and makes period-to-period comparisons potentially not meaningful.

We experience quarterly fluctuations in our product sales as a result of multiple factors, many of which are outside of our control including our arrangements with Mitek which performs most of the downstream sales and marketing activities to customers and end-users for Monovisc and Orthovisc in the United States.

Therefore, we are subject to fluctuations in our customers’ sales patterns and corresponding ordering patterns, including Mitek.

We experience quarterly fluctuations in our product sales as a result of multiple factors, many of which are outside of our control including our arrangements with J&J MedTech which performs most of the downstream sales and marketing activities to customers and end-users for Monovisc and Orthovisc in the United States.

Therefore, we are subject to fluctuations in our customers’ sales patterns and corresponding ordering patterns, including J&J MedTech.

These quarterly fluctuations create uncertainty as to the volume of sales that we may achieve in a given period.

6 unchanged sentences

We continue to see impacts on our supply chain as the companies that produce our products, product components or otherwise support our manufacturing processes, the distribution centers where we manage our inventory, or the operations of our logistics and other service providers, including third parties that sterilize and store our products, were disrupted, temporarily closed or experienced worker shortages for a sustained period of time during and following the global pandemic or due to other supply chain disruptions.

For example, for the manufacture of Arthrosurface joint solutions products, we engage a single third-party organization as a contract manufacturer.

This contract manufacturer has noted that there could be lead times up to a year or more to deliver product.

We also have to enter into longer term purchase commitments with these key suppliers that could lead impacts on cost and volatility of supply.

Any supply interruption could harm our ability to manufacture our products until a new source of supply is identified and qualified.

3 unchanged sentences

Such occurrences could have a material adverse effect on our business, financial condition, and results of operations during the period of such operational difficulties and beyond.

In addition, governmental agencies of the United States or other countries may impose new requirements regarding registration, labeling or prohibited materials that may require us to modify or re-register our devices once they are already on the market or otherwise impact our ability to market the devices in the United States or other countries.

For example, on February 2, 2024, the FDA published a final rule to amend its QSR requirements to align more closely with the international consensus standards for medical devices by converging with quality management system requirements used by other regulatory authorities from other countries.

Specifically, the final rule does so primarily by incorporating by reference the 2016 edition of the ISO 13485 standard is effective February 2, 2026.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing authorization that we may have obtained, which could have a material adverse effect on our business, prospects, results of operations, financial condition and our ability to achieve or sustain profitability.

The process of complying with these governmental regulations can be costly and time consuming, and could delay or prevent the production, manufacturing or sale of our products.

We could become subject to product liability claims, which, if successful, could materially adversely affect our business, financial condition, and results of operations.

5 unchanged sentences

We and our third-party providers are subject to national, international, federal or state laws and regulations, regulatory guidance and industry standards relating to data protection, privacy and information security.

This includes the European Union, or EU, GDPR, and the United Kingdom, or UK, equivalent of the same (the UK GDPR, together with the EU GDPR, referred to as the GDPR), as well as other national data protection legislation in force in relevant European Economic Area, or EEA, Member States and the UK (including the UK Data Protection Act 2018), which governs the collection, use, storage, disclosure, transfer, or other processing of personal data (including health data processed in the context of clinical trials):

This includes the European Union (“EU”), GDPR, and the United Kingdom (“UK”) equivalent of the same (the “UK GDPR” together with the EU GDPR, the “GDPR”), as well as other national data protection legislation in force in relevant European Economic Area (“EEA”) Member States and the UK (including the UK Data Protection Act 2018), which governs the collection, use, storage, disclosure, transfer, or other processing of personal data (including health data processed in the context of clinical trials):

(i) regarding individuals in the EEA and UK;

and/or (ii) carried out in the context of the activities of our establishment in any EEA Member State or the UK.

The GDPR is wide-ranging in scope and imposes numerous additional requirements on companies that process personal data, including imposing special requirements in respect of the processing of health and other sensitive data, requiring that consent of individuals to whom the personal data relates is obtained in certain circumstances, requiring additional disclosures to individuals regarding data processing activities, requiring that safeguards are implemented to protect the security and confidentiality of personal data, creating mandatory data breach notification requirements in certain circumstances, requiring data protection impact assessments for high risk processing and requiring that certain measures (including contractual requirements) are put in place when engaging third-party processors.

The GDPR is wide-ranging in scope and imposes numerous additional requirements on companies that process personal data, including imposing special requirements in respect of the processing of special categories of personal data (such as health and data), relying on a legal basis or condition for processing personal data, where required, requiring that consent of individuals to whom the personal data relates, requiring information disclosures to individuals regarding data processing activities, requiring that safeguards are implemented to protect the security and confidentiality of personal data, creating mandatory data breach notification requirements in certain circumstances, requiring data protection impact assessments for high risk processing and requiring that certain measures (including contractual requirements) are put in place when engaging third-party processors.

The GDPR also provide individuals with various rights in respect of their personal data.

The GDPR defines personal data to include pseudonymized or coded data and requires different informed consent practices and more detailed notices for clinical trial participants and investigators than applies to clinical trials conducted in the United States.

The definition of personal data under GDPR is defined broadly and includes pseudonymized or coded data;

GDPR will, therefore, apply in the context of data collected and processed about clinical trial participants and investigators in the EU and UK.

We are required to apply GDPR standards to any clinical trials that our EEA and UK established businesses carry out anywhere in the world.

Significantly, the GDPR impose strict rules on the transfer of personal data out of the EEA or the UK to the U.S.

or other regions that have not been deemed to offer “adequate” privacy protections.

Currently, we rely mainly on Standard Contractual Clauses approved by the European Commission, or SCCs, to legitimize transfers of personal data out of the EEA and International Transfer Agreements approved the UK for transfers of personal data out of the UK, however, there continue to be concerns about whether the SCCs and other international transfer mechanisms will face additional legal challenges.

Significantly, the GDPR imposes strict rules on the transfer of personal data out of the EEA or the UK to the United States or other regions that have not been deemed to offer “adequate” privacy protections.

Currently, we rely mainly on Standard Contractual Clauses approved by the European Commission (“SCCs”) to legitimize transfers of personal data out of the EEA.

On June 4, 2021, the European Commission issued new forms of SCCs for data transfers from controllers or processors in the EEA (or otherwise subject to the EU GDPR) to controllers or processors established outside the EEA (and not subject to the EU GDPR).

The new SCCs replace the SCCs that were adopted previously under the Data Protection Directive.

The UK is not subject to the EC’s new SCCs but has published its own standard clauses, the International Data Transfer Agreement, which enables transfers from the UK.

We will be required to implement these new safeguards in the event these safeguards are used as our basis for conducting restricted data transfers under the EU GDPR and UK GDPR and doing so may require significant effort and cost.

If relying on the SCCs or UK IDTA for data transfers, we may also be required to carry out transfer impact assessments to assess whether the recipient is subject to local laws which allow public authority access to personal data.

There continue to be concerns about whether the SCCs and other international transfer mechanisms will face additional legal challenges.

Any inability to transfer personal data from the EEA to the U.S.

3 unchanged sentences

Given the breadth and depth of changes in data protection obligations, complying with the GDPR and similar laws’ requirements are rigorous and time intensive and require significant resources and a review of our technologies, systems and practices, as well as those of any third-party service providers, contractors or consultants that process or transfer personal data.

Although the EU GDPR and the UK GDPR currently impose substantially similar obligations, it is possible that over time the UK GDPR could become less aligned with the EU GDPR, particularly with the UK plans to reform the country’s data protection legal framework in its Data Reform Bill introduced into the UK legislative process.

Although the EU GDPR and the UK GDPR currently impose substantially similar obligations, it is possible that over time the UK GDPR could become less aligned with the EU GDPR, particularly with the UK plans to reform the country’s data protection legal framework in the new Data (Use and Access) Bill introduced into the UK legislative process.

In addition, EEA Member States have adopted implementing national laws to implement the GDPR which may partially deviate from the GDPR and the competent authorities in the EEA Member States may interpret GDPR obligations slightly differently from country to country, so that we do not expect to operate in a uniform legal landscape in the EEA and UK with respect to data protection regulations.

2 unchanged sentences

In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators and third-party providers.

For example, California enacted the California Consumer Privacy Act, or the CCPA.

For example, California enacted the California Consumer Privacy Act (“CCPA”).

This law, which became effective on January 1, 2020 gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used.

1 unchanged sentence

At this time, we do not collect personal data on residents of California but should we begin to do so, and in the context of doing so, become subject to the CCPA, the CCPA will impose new and burdensome privacy compliance obligations on our business and will raise new risks for potential fines and class actions.

In addition, the California Privacy Rights Act, or CPRA, which became effective on January 1, 2023, imposes additional obligations on companies covered by the legislation and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.

In addition, the California Privacy Rights Act (“CPRA”) which became effective on January 1, 2023, imposes additional obligations on companies covered by the legislation and significantly modifies the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information.

The CPRA also created a new state agency that was vested with authority to implement and enforce the CCPA.

The effects of the CCPA are potentially significant and, should we begin to process personal information concerning California residents may require us to modify our data collection or processing practices and policies and to incur substantial costs and expenses in an effort to comply and increase our potential exposure to regulatory enforcement and/or litigation.

Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent privacy legislation in the United States, which could increase our potential liability and adversely affect our business.

New consumer privacy laws similar to the CCPA have been passed in a number of states and many other states have proposed new privacy laws.

That the CCPA marked the beginning of a trend toward more stringent privacy legislation in the United States, which has increased our potential liability and may adversely affect our business.

New consumer privacy laws similar to the CCPA have been passed and proposed in numerous other states.

Such proposed legislation, if enacted, may add additional complexity, variation in requirements, restrictions and potential legal risk, require additional investment of resources in compliance programs, impact strategies and the availability of previously useful data and could result in increased compliance costs and/or changes in business practices and policies.

1 unchanged sentence

In addition to these comprehensive laws and proposals, several other states have passed or proposed more limited privacy laws focused on particular privacy issues.

For example, Washington’s My Health My Data Act, which became effective on March 31, 2024, regulates the collection and sharing of health information and has a private right of action, further increasing relevant compliance risk.

Connecticut and Nevada have also passed similar laws regulating consumer health data.

In addition, a small number of states have also passed laws that regulate biometric data specifically.

These various privacy and security laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.

State laws are changing rapidly and there is discussion in the U.S.

Congress of a new comprehensive federal data privacy law to which we may likely become subject, if enacted.

In addition, many jurisdictions around the world have adopted legislation that regulates how businesses operate online and enforces information security, including measures relating to privacy, data security and data breaches.

12 unchanged sentences

It could also require us to change our business practices and put in place additional compliance mechanisms, which may interrupt or delay our development, regulatory and commercialization activities and increase our cost of doing business.

Failure by us or our and third-party providers to comply with data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties and orders preventing us from processing personal data), private litigation and result in significant fines and penalties against us.

Failure by us or our third-party providers to comply with data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties and orders preventing us from processing personal data), private litigation and result in significant fines and penalties against us.

Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws or breached our contractual obligations, even if we are not found liable, could be expensive and time-consuming to defend, could result in adverse publicity and could have a material adverse effect on our business, financial condition, results of operations and prospects.

We are increasingly dependent on sophisticated information technology and if we fail to effectively maintain or protect our information systems or data, including from data breaches, our business could be adversely affected.

The use of new and evolving technologies, such as artificial intelligence, in our business may result in spending material resources and presents risks and challenges that can impact our business including by posing security and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability.

We may use and integrate artificial intelligence into our business processes, and this innovation presents risks and challenges that could affect its adoption, and therefore our business.

If we enable or offer solutions that draw controversy due to perceived or actual negative societal impact, we may experience brand or reputational harm, competitive harm or legal liability.

The use of certain artificial intelligence technology can give rise to intellectual property risks, including compromises to proprietary intellectual property and intellectual property infringement.

Additionally, we expect to see increasing government and supranational regulation related to artificial intelligence use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area.

For example, the EU’s Artificial Intelligence Act (“AI Act”) — the world’s first comprehensive AI law — which has entered into force on August 1, 2024 and most provisions of which will become effective on August 2, 2026.

This legislation imposes significant obligations on providers and deployers of high-risk artificial intelligence systems and encourages providers and deployers of artificial intelligence systems to account for EU ethical principles in their development and use of these systems.

If we develop or use AI systems that are governed by the AI Act, it may necessitate ensuring higher standards of data quality, transparency, and human oversight, as well as adhering to specific and potentially burdensome and costly ethical, accountability, and administrative requirements.

The rapid evolution of artificial intelligence will require the application of significant resources to design, develop, test and maintain our products and services to help ensure that artificial intelligence is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.

Our vendors may in turn incorporate artificial intelligence tools into their offerings, and the providers of these artificial intelligence tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security.

Further, bad actors around the world use increasingly sophisticated methods, including the use of artificial intelligence, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property.

Any of these effects could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business.

We are increasingly dependent on sophisticated information technology and if we fail to effectively maintain or protect our information systems or data, including from data security incidents or breaches, our business could be adversely affected.

We are increasingly dependent on sophisticated information technology for our products and infrastructure.

2 unchanged sentences

Our information systems, and those of third-party suppliers with whom we contract, require an ongoing commitment of significant resources to maintain, protect and enhance existing systems and develop new systems to keep pace with continuing changes in information technology, evolving systems and regulatory standards and the increasing need to protect patient and customer information.

In addition, given their size and complexity, these systems could be vulnerable to service interruptions or to security breaches from inadvertent or intentional actions by our employees, third-party suppliers and/or business partners, or from cyber-attacks by malicious third parties attempting to gain unauthorized access to our products, systems or Confidential Information.

The risk of a security breach or disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Cyberattacks could include wrongful conduct by hostile foreign governments, industrial espionage, wire fraud and other forms of cyber fraud, the deployment of harmful malware, denial-of-service, social engineering fraud or other means to threaten data security, confidentiality, integrity and availability.

In addition, given their size and complexity, these systems could be vulnerable to service interruptions or to data security incidents, breaches, other interruptions from inadvertent or intentional actions by our employees, third-party suppliers and/or business partners, or from cyber-attacks by malicious third parties attempting to gain unauthorized access to our products, systems or Confidential Information.

The risk of a data security incident, breach or other disruption, particularly through cyberattacks or cyber intrusion, including by computer hackers, foreign governments, and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.

Cyberattacks could include wrongful conduct by hostile foreign governments, industrial espionage, wire fraud and other forms of cyber fraud, the deployment of harmful malware, ransomware, denial-of-service, social engineering fraud (including phishing attacks) or other means to threaten data security, confidentiality, integrity and availability.

If such an event were to occur, it could result in the theft or destruction of intellectual property, data or other misappropriation of assets, or otherwise compromise our confidential or proprietary information and result in a material disruption of our development programs and our business operations.

Although we devote resources to protect our information systems, we realize that cyberattacks are a threat, and there can be no assurance that our efforts will prevent information security breaches that would result in business, legal, financial or reputational harm to us, or would have a material adverse effect on our business, financial condition, results of operations and prospects.

Although we devote resources to protect our information systems, we realize that cyberattacks, cyber intrusions and other disruptions are a threat, and there can be no assurance that our efforts will prevent information security incidents or breaches that would result in business, legal, financial or reputational harm to us, or would have a material adverse effect on our business, financial condition, results of operations and prospects.

We may not be able to anticipate all types of security threats, nor may we be able to implement preventive measures effective against all such security threats.

The techniques used by cyber criminals change frequently, may not be recognized until launched and can originate from a wide variety of sources, including insider threats and outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments or agencies, or generated using artificial intelligence.

Likewise, we rely on third parties for various operations, including the manufacture of our products and to conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business.

We rely on our third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or breaches.

Any breach in our or our third-party providers’ information technology systems could lead to the unauthorized access, disclosure and use of non-public information, including protected health information and other personally identifiable information which is protected by HIPAA, and other laws.

We rely on our third-party providers to implement effective security measures and identify and correct for any such failures, deficiencies or data security incidents or breaches.

Any data security incident or breach in our or our third-party providers’ information technology systems could lead to the unauthorized access, disclosure and use of non-public information, including protected health information and other personally identifiable information which is protected by HIPAA, and other laws.

Any such access, disclosure, or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, damage to our reputation and the further development and commercialization of our products could be delayed.

If we or our third-party providers fail to maintain or protect our information technology systems and data integrity effectively or fail to anticipate, plan for or manage significant disruptions to our information technology systems, we or our third-party providers could have difficulty preventing, detecting and controlling such cyberattacks and any such attacks could result in losses described above as well as disputes with physicians, participants and our partners, regulatory sanctions or penalties, increases in operating expenses, expenses or lost revenues or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cash flows.

If we are unable to prevent or mitigate the impact of such security or data privacy breaches, we could be exposed to litigation and governmental investigations, which could lead to a potential disruption to our business.

Any compromise to our information security or that of our third-party service providers or contractors could result in an interruption in our operations, the unauthorized publication of our confidential business or proprietary information, the unauthorized release, use, disclosure and/or dissemination of customer, vendor, or employee data, the violation of privacy and/or data protection laws, including under the GDPR, in the European Union or the United Kingdom, or other laws and exposure to litigation, any of which could harm our business and operating results.

While we have not directly experienced any material system failure, accident or data security incident or breach to date, we have, from time to time experienced and may in the future continue to experience, threats and cybersecurity incidents relating to our and our third-party vendors’ information systems.

If we or our third-party providers fail to maintain or protect our information technology systems and data integrity effectively or fail to anticipate, plan for or manage significant disruptions to our information technology systems, we or our third-party providers could have difficulty preventing, detecting and controlling such data security incidents, breaches or other cyberattacks and any such attacks could result in losses described above as well as disputes with physicians, participants and our partners, regulatory sanctions or penalties, increases in operating expenses, expenses or lost revenues or other adverse consequences, any of which could have a material adverse effect on our business, results of operations, financial condition, prospects and cash flows.

If we are unable to prevent or mitigate the impact of such data security incidents or data privacy breaches, we could be exposed to litigation and governmental investigations, which could lead to a potential disruption to our business.

While we maintain insurance at levels that we believe are appropriate for our business, this coverage may not be sufficient in type or amount to cover us against all claims related to data security incidents, breaches or other interruptions.

Any compromise to our information security or that of our third-party service providers or contractors could result in an interruption in our operations, the unauthorized publication of our confidential business or proprietary information, the unauthorized release, use, disclosure and/or dissemination of customer, vendor, or employee data, the violation of privacy and/or data protection laws, including under the GDPR, in the European Union or the UK, or other laws and exposure to litigation, any of which could harm our business and operating results.

Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations.

Further, applicable privacy and data security obligations may require us to notify relevant stakeholders of a data security incident, breach, or other interruptions.

Such disclosures are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.

In addition, cyberattacks, cyber intrusions, or other interruptions may cause stakeholders (including investors and potential customers) to stop supporting our business, deter new customers from using our products, and negatively impact our ability to grow and operate our business.

We may face circumstances in the future that will result in impairment charges, including, but not limited to, goodwill impairment, intangible assets impairment and in-process research and development charges.

As of December 31, 2023, we had long-lived assets in the amount of $58.4 million, including property and equipment of $46.2 million, intangible assets of $4.6 million and goodwill of $7.6 million.

If the fair value of any of our long-lived assets, including those that we acquired in the acquisitions of Arthrosurface and Parcus Medical, decrease as a result of an economic slowdown, a downturn in the markets where we sell products and services, a downturn in our stock price, financial performance or future outlook, or other reasons, we may be required to record an impairment charge on such assets.

If the fair value of any of our long-lived assets decrease as a result of an economic slowdown, a downturn in the markets where we sell products and services, a downturn in our stock price, financial performance or future outlook, or other reasons, we may be required to record an impairment charge on such assets.

We are required to test intangible assets with indefinite life periods for potential impairment annually and on an interim basis if there are indicators of a potential impairment.

1 unchanged sentence

Impairment charges could have a negative impact on our results of operations and financial position, as well as on the market price of our common stock.

During the year ended December 31, 2023, we recorded an impairment charge of $62.2 million on intangible assets related to the acquisitions of Arthrosurface and Parcus Medical.

Our business is dependent upon hiring and retaining qualified management, operations and technical personnel.

39 unchanged sentences

These changes could subject us to additional income-based taxes and non-income taxes (such as payroll, sales, use, value-added, net worth, property, and goods and services taxes), which in turn could materially affect our financial position and results of operations.

For example, under Section 174 of the Code, in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the U.S.

will be capitalized and amortized, which may have an adverse effect on our cash flow.

Additionally, new, changed, modified, or newly interpreted or applied tax laws could increase our customers’ and our compliance, operating and other costs, as well as the costs of our products.

In recent years, many such changes have been made, and changes are likely to continue to occur in the future.

As we expand the scale of our business activities, any changes in the U.S.

As we expand the scale of our business activities, any changes in the United States and non-U.S.

taxation of such activities may impact our effective tax rate, result in higher tax payments and harm our business, financial condition, cash flows and results of operations.

13 unchanged sentences

Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.

The impact of the Russian invasion of Ukraine and the conflict in the Middle East on the global economy, energy supplies and raw materials is uncertain, but may prove to negatively impact our business and operations.

The short and long-term implications of Russia’s invasion of Ukraine and the conflict in the Middle East are difficult to predict at this time.

We continue to monitor any adverse impact that the outbreak of war in Ukraine, the subsequent institution of sanctions against Russia by the United States and several European and Asian countries, and the conflict in the Middle East may have on the global economy in general, on our business and operations and on the businesses and operations of our suppliers and other third parties with which we conduct business.

For example, a prolonged conflict in Ukraine or the Middle East may result in increased inflation, escalating energy prices and constrained availability, and thus increasing costs, of raw materials.

We also have suppliers and customers in and around those areas that we periodically do business with that could be disrupted by these events.

We will continue to monitor this fluid situation and develop contingency plans as necessary to address any disruptions to our business operations as they develop.

To the extent these conflicts may adversely affect our business as discussed above, it may also have the effect of heightening many of the other risks described herein.

Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation;

disruptions to our global technology infrastructure, including through cyberattack, ransom attack, or cyber-intrusion;

adverse changes in international trade policies and relations;

disruptions in global supply chains;

and constraints, volatility, or disruption in the capital markets, any of which could negatively affect our business and financial condition.

Congress, the Trump administration, or any new administration may make substantial changes to fiscal, tax and other federal policies that may adversely affect our business.

In 2017, the U.S.

Congress and the Trump administration made substantial changes to U.S.

policies, which included comprehensive corporate and individual tax reform.

In addition, the Trump administration called for significant changes to U.S.

trade, healthcare, immigration and government regulatory policy.

With the transition to the Biden administration in early 2021, changes to U.S.

policy occurred and since the start of the Trump Administration in 2025, U.S.

policy changes have been implemented at a rapid pace and additional changes are likely.

Changes to U.S.

policy implemented by the U.S.

Congress, the Trump administration or any new administration have impacted and may in the future impact, among other things, the U.S.

and global economy, international trade relations, unemployment, immigration, healthcare, taxation, the U.S.

regulatory environment, inflation and other areas.

Although we cannot predict the impact, if any, of these changes to our business, they could adversely affect our business.

Until we know what policy changes are made, whether those policy changes are challenged and subsequently upheld by the court system and how those changes impact our business and the business of our competitors over the long term, we will not know if, overall, we will benefit from them or be negatively affected by them.

Risks Related to Our Commercialization Activities

Our license agreements with Mitek provide substantial control of Monovisc and Orthovisc in the United States to Mitek, and Mitek ’ s actions could have a material impact on our business, financial condition and results of operations.

Our license and distribution agreements with Mitek related to Monovisc and Orthovisc provide Mitek with, among other things, the exclusive right to market and sell Monovisc and Orthovisc in the United States, unilateral decision-making authority over the sale, price, and promotion of Monovisc and Orthovisc in the United States, substantial control over the future development of Monovisc and Orthovisc related to the treatment of pain associated with osteoarthritis, a license to manufacture and have manufactured such products in the event that we are unable to supply Mitek with Monovisc or Orthovisc in accordance with the terms of the relevant agreement, and certain rights of first refusal with respect to future products we develop for the treatment of pain associated with osteoarthritis.

In exchange, Mitek pays us a transfer price calculated with reference to historical end-user prices in the market and a fixed royalty rate per product on their net product sales.

As Mitek accounts for a large percentage of our revenue and has unilateral decision-making authority over in-market activities, including end-user pricing and discounts, reimbursement strategy, and overall promotion strategy, actions taken by Mitek could impact our ability to predict and generate revenue and have a material impact on our business, financial condition, and results of operations.

We may not succeed in our integration and buildout of our direct sales channel in the United States, and our failure to do so could negatively impact our business and financial results.

Beginning in 2019, and with our expanded commercial infrastructure, as a result of the Parcus Medical and Arthrosurface acquisitions, we sold and marketed our Joint Preservation and Restoration family of products directly to customers, including hospitals and ASCs, through our direct Anika sales team and large network of independent third-party distributors.

Our license agreements with J&J MedTech provide substantial control of Monovisc and Orthovisc in the United States to J&J MedTech and J&J MedTech ’ s actions could have a material impact on our business, financial condition and results of operations.

Our license and distribution agreements with J&J MedTech related to Monovisc and Orthovisc provide J&J MedTech with, among other things, the exclusive right to market and sell Monovisc and Orthovisc in the United States, unilateral decision-making authority over the sale, price, and promotion of Monovisc and Orthovisc in the United States, substantial control over the future development of Monovisc and Orthovisc related to the treatment of pain associated with osteoarthritis, a license to manufacture and have manufactured such products in the event that we are unable to supply J&J MedTech with Monovisc or Orthovisc in accordance with the terms of the relevant agreement, and certain rights of first refusal with respect to future products we develop for the treatment of pain associated with osteoarthritis.

In exchange, J&J MedTech pays us a transfer price calculated with reference to historical end-user prices in the market and a fixed royalty rate per product on their net product sales.

As J&J MedTech accounts for a large percentage of our revenue and has unilateral decision-making authority over in-market activities, including end-user pricing and discounts, reimbursement strategy, and overall promotion strategy, actions taken by J&J MedTech impact our ability to predict and generate revenue and have a material impact on our business, financial condition, and results of operations.

We may not succeed in our buildout of our direct sales channel in the United States, and our failure to do so could negatively impact our business and financial results.

Beginning in 2019, we started selling and marketing many of our products directly to customers, including hospitals and ASCs, through our direct Anika sales team and large network of independent third-party distributors.

This approach was a departure from our historical distribution model in the United States, and we cannot be certain that we will be successful in implementing and executing on this commercial approach or that, even if we are able to implement it, the approach will be successful at scale.

3 unchanged sentences

Our success is dependent, in part, upon the efforts of our marketing, distribution, and logistics partners, including our sales agent partners in the United States, and the terms and conditions of our relationships with such partners.

We cannot assure you that our commercial partners, including Mitek, will not seek to renegotiate their current agreements on terms less favorable to us or terminate such agreements.

We cannot assure you that our commercial partners, including J&J MedTech, will not seek to renegotiate their current agreements on terms less favorable to us or terminate such agreements.

A failure to maintain relationships with our commercial partners on terms satisfactory to us, or at all, could result in a material adverse effect on our operating results.

14 unchanged sentences

There may be uncertainties that result from modification or repeal of any of the provisions of the ACA, including as a result of current and future executive orders and legislative actions.

We cannot predict what other health care programs and regulations will ultimately be implemented at the federal or state level or the effect that any future legislation or regulation in the United States may have on our business There can be no assurance that third-party coverage will be available or that reimbursement will be adequate for any products or services developed by us or procedures using our products or services.

There can be no assurance that third-party coverage will be available or that reimbursement will be adequate for any products or services developed by us or procedures using our products or services.

Outside the United States, the success of our products is also dependent in part upon the availability of reimbursement and health care payment systems.

2 unchanged sentences

Risks Related to Our Product Development and Regulatory Compliance

We are facing a longer than expected pathway to commercialize our Cingal product in the United States, and we may face other unforeseen difficulties in achieving regulatory approval for Cingal, which could affect our business and financial results.

We are facing a longer than expected pathway to commercialize our Cingal product in the United States, and we may face other unforeseen difficulties in achieving regulatory approval for Cingal and Hyalofast, which could affect our business and financial results.

In 2018, we received and analyzed the results of our second Phase III clinical trial for Cingal and found that the data did not meet the primary study endpoint of demonstrating a statistically significant difference in pain reduction between Cingal and the approved steroid component of Cingal at the six-month time point.

6 unchanged sentences

regulatory approval.

We acquired the Aristospan NDA s in September 2024 to assist with our Cingal regulatory filing with the FDA.

In parallel, we are exploring the potential to advance Cingal through commercial partnerships in the U.S.

and select Asian markets.

These efforts will inform next steps, including if and how to proceed with another clinical trial in the United States.

We cannot guarantee the success of any additional future clinical trials for Cingal.

Because the results of any additional clinical trials, or other unforeseen future developments, could have a substantial negative impact on the timeline for and the cost associated with a potential Cingal regulatory approval, our overall business condition, financial results, and competitive position could be affected.

Other unforeseen future developments could have a substantial negative impact on the timeline for and the cost associated with a potential Cingal regulatory approval, our overall business condition, financial results, and competitive position could be affected.

We also are conducting our clinical trial to support approval in the United States for Hyalofast, our single-stage, off-the-shelf, cartilage repair therapy, currently sold only outside the United States.

1 unchanged sentence

This pivotal trial has a two-year follow-up protocol expected to be achieved in early 2025 before regulatory submission is completed.

We are targeting to file the first module as part of a modular PMA in 2024 which is the first step in seeking FDA approval for Hyalofast in the U.S.

We have filed the first two modules as part of a modular PMA which is the first step in seeking FDA approval for Hyalofast in the United States.

The final module of the PMA will be filed in 2025 once the clinical data becomes available to be submitted to the FDA.

Any unforeseen developments or delays could have a substantial negative impact on the timeline for and the cost associated with a potential Hyalofast regulatory approval, and our overall business condition, financial results, and competitive position could be affected.

Failure to obtain, or any delay in obtaining, FDA or other U.S.

33 unchanged sentences

There exists uncertainty with respect to the final interpretation, implementation, and consequences of this development, and this or any other potential regulatory changes in approach or interpretation similar in substance to those mentioned in this paragraph and affecting our products could materially impact our competitive position, business, and financial results.

Additionally, the implementation of the new EU MDR which was put into effect in 2021, has changed several aspects of the medical device regulatory framework in the EU.

Specifically, the EU MDR requires (i) changes in the clinical evidence required for medical devices, (ii) post-market clinical follow-up evidence, (iii) annual reporting of safety information for Class III and Class IIb products, and reporting every two years for Class IIa products, (iv) Unique Device Identification, or UDI, for all products and submission of core data elements to an EU UDI database prior to placement of a device on the market, (v) reclassification of some medical devices, and (vi) multiple other labeling changes.

Additionally, the implementation of the EU MDR which was put into effect in 2021, has changed several aspects of the medical device regulatory framework in the EU.

Specifically, the EU MDR requires (i) changes in the clinical evidence required for medical devices, (ii) post-market clinical follow-up evidence, (iii) annual reporting of safety information for Class III and Class IIb products, and reporting every two years for Class IIa products, (iv) Unique Device Identification (“UDI”) for all products and submission of core data elements to an EU UDI database prior to placement of a device on the market, (v) reclassification of some medical devices, and (vi) multiple other labeling changes.

Approvals for certain of our currently marketed products could be curtailed or withdrawn as a result of the implementation of the EU MDR, and acquiring approvals for new products could be more challenging and costly.

The EU MDR requires all devices to undergo review and approval for compliance to EU MDR by the expiry of a transitional period.

The original expiry date of May 26, 2024 has been extended to December 2027 or December 2028 for certain devices, depending on the risk class of the device, in response to concerns raised about notified body capacity and the ability for devices to be re-certified within the original time period.

The original expiry date of May 26, 2024 has been extended to May 26, 2026 or December 31, 2027 or December 31, 2028 for certain devices, depending on the risk classification of the device, in response to concerns raised about notified body capacity and the ability for devices to be re-certified within the original time period.

We have reviewed our products that are sold in the EU market and have completed the product rationalization exercise to identify the products that we will continue to market in the EU.

Products we intend to continue marketing will require substantial submissions to be made to the notified bodies for a conformity assessment under the EU MDR no later than May 26, 2024, for the MDR extension timelines to apply.

Products we intend to continue marketing require substantial submissions to be made to the notified bodies for a conformity assessment under the EU MDR.

We secured certification extensions for several products in accordance with EU MDR transitional guidance.

We have achieved MDR certification for Monovisc and Hyalofast, and have other products’ submissions either under review, or planned to meet updated certification deadlines.

Compliance with this and any other requirements is time consuming and costly, and our failure to comply may subject us to significant liabilities, which could have a material adverse effect on our business, financial condition, and results of operations.

14 unchanged sentences

The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about medical devices and drugs.

For example, devices cleared under section 510(k) cannot be marketed for any intended use that is outside of the FDA’s substantial equivalence determination for such devices.

For example, devices cleared under section 510(k) of the FDCA cannot be marketed for any intended use that is outside of the FDA’s substantial equivalence determination for such devices.

Physicians nevertheless may use our products on their patients in a manner that is inconsistent with the intended use cleared by the FDA.

5 unchanged sentences

Our industry is subject to various laws and regulations pertaining to healthcare fraud and abuse, as well as other laws that impose extensive tracking and reporting related to all transfers of value provided to certain health care providers and others.

These laws include the False Claims Act, the Anti-Kickback Statute, the Stark law, the Physician Payments Sunshine Act, the FDCA, and similar laws and regulations in the U.S.

and around the world.

These laws include the False Claims Act, the Anti-Kickback Statute, the Stark law, the Physician Payments Sunshine Act, the FDCA, and similar laws and regulations in the United States and around the world.

These laws and regulations are broad in scope and are subject to evolving interpretation.

12 unchanged sentences

We may have difficulty managing our growth.

As a result of our activities, we have experienced substantial growth in the number of our employees, the scope of our product portfolio and pipeline, the size of our operating and financial systems, and the geographic area of our operations.

As a result of our activities, we have experienced growth in the number of our employees, the scope of our product portfolio and pipeline, the size of our operating and financial systems, and the geographic area of our operations in recent years.

This growth has resulted in increased responsibilities for our management.

To manage our growth effectively, we must continue to expand our management team, attract, motivate and retain employees, and improve our operating and financial systems.

To manage our growth effectively, we must continue to manage, attract, motivate and retain employees, and improve our operating and financial systems.

There can be no assurance that our current management systems will be adequate or that we will be able to manage our recent or future growth successfully.

Any failure to do so could have a material adverse effect on our business, operating results and financial condition.

We may not generate the expected benefits of our acquisitions, and the ongoing integration of those acquisitions could disrupt our ongoing business, distract our management and increase our expenses.

Through our acquisitions of Parcus Medical and Arthrosurface, we expanded our product portfolio and pipeline, diversified our business, expanded our commercial infrastructure, entered new markets, and increased the scope of our operations and the number of our employees.

The continued successful integration of these other companies into our operations is critical to our future financial performance.

This will require that we continue to integrate more closely the companies’ product offerings and research and development capabilities, retain key employees, assimilate diverse corporate cultures, further integrate management and financial information systems, consolidate the acquired operations and manage geographically dispersed operations, among other things, each of which could pose significant challenges.

The difficulty of combining the acquired companies with our company may be increased by the need to integrate personnel, and changes effected in the combination may cause key employees to leave.

To succeed in the market for joint preservation and restoration, we must also invest additional resources, primarily in the areas of sales and marketing, to extend name recognition and increase market share.

The integration of the two acquired companies into our operations has taken longer than originally anticipated and has required more effort and expense than was originally planned.

This has resulted, and may continue to result, in the loss of valuable employees, additional expenses, the disruption of our ongoing business, processes and systems, or inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements, any of which could adversely affect our ability to achieve the anticipated benefits of the acquisitions.

There may be increased risk due to the ongoing integration of financial reporting and internal control systems.

Any diversion of the attention of management created by the integration process, any disruptions or other difficulties encountered in the integration process, and unforeseen liabilities or unanticipated problems with the acquired businesses could have a material adverse effect on our business, operating results and financial condition.

We are working diligently to complete integration activities, minimize employee disruptions and improve production and communication as we continue to integrate Arthrosurface and Parcus Medical.

It has been more challenging than anticipated to effectively and timely complete our integration goals.

We may not generate the expected benefits of our acquisitions, and the actions associated with the divestiture of those acquisitions could disrupt our ongoing business, distract our management and increase our expenses.

In early 2020, we completed the acquisitions of Parcus Medical and Arthrosurface Incorporated, in which we expanded our product portfolio and pipeline, diversified our business, expanded our commercial infrastructure, entered new markets, and increased the scope of our operations and the number of our employees.

In October 2024, we sold the Arthrosurface asset group and in March 2025, we sold the Parcus Medical asset group.

This decision was made as the cost to manage these product lines impacted our profitability and took focus away from our core HA related business.

The integration of the two acquired companies into our operations required more effort and expense than was originally planned.

This resulted in additional expenses, the disruption of our ongoing business, processes and systems, or inconsistencies in standards, controls, procedures, practices, policies and compensation arrangements, which adversely affected our ability to achieve the anticipated benefits of the acquisitions.

There may be increased risk with the divestitures of these businesses due to diversion of the attention of management created by the divestiture process, disruptions or other difficulties encountered in the divestiture process, and unforeseen liabilities or unanticipated problems with the businesses being sold, which could have a material adverse effect on our business, operating results and financial condition.

We are working diligently to complete divestiture associated activities to minimize employee, supplier, distributor, and customer disruptions.

The acquisition of these two companies and the related investment in the business have contributed to our net loss in recent years.

We recorded an impairment to goodwill in 2020 and to intangible assets in 2023 and a reduction in the fair value of contingent consideration in connection with the acquisitions that was driven in part by slower than expected revenue growth with these businesses that have impacted near-term cash flows.

There can be no assurance that these acquisitions will provide the benefits we expect or that we will be able to integrate and develop the operations of Parcus Medical and Arthrosurface successfully.

Any failure to do so could have a material adverse effect on our business, operating results and financial condition.

We expect to continue to actively explore inorganic growth as a part of our future growth strategy, which exposes us to a variety of risks that could adversely affect our business operations.

3 unchanged sentences

Whether or not completed, transactions may result in diversion of management resources otherwise available for ongoing development of our business and significant expenditures.

Customer and employee uncertainty about the effects of any acquisitions could harm us.

Customers of any companies we acquire may, in response to the consummation of the acquisitions, delay or defer purchasing decisions, which could adversely affect the success of our acquired businesses.

Similarly, employees of acquired companies may experience uncertainty about their future roles, which may adversely affect our ability to attract and retain key management, sales, marketing, and technical personnel following an acquisition.

Customer and employee uncertainty about the effects of any acquisitions or divestitures could harm us.

Customers of any companies we acquire or divest may, in response to the consummation of the acquisitions, delay or defer purchasing decisions, which could adversely affect the success of our business.

Similarly, our employees may experience uncertainty about their future roles, which may adversely affect our ability to attract and retain key management, sales, marketing, and technical personnel.

As our international sales and operations grow, we could become increasingly subject to additional economic, political, and other risks that could harm our business.

67 unchanged sentences

From time to time, we may be subject to proposals by activist stockholders urging us to take certain corporate actions or to nominate certain individuals to our board of directors.

In February 2023, Caligan Partners LP, or Caligan, indicated that it intended to consider all available options, including nominating a slate of directors for election to the board of directors at our 2023 annual meeting of stockholders.

In February 2023, Caligan Partners LP (“Caligan”) indicated that it intended to consider all available options, including nominating a slate of directors for election to the board of directors at our 2023 annual meeting of stockholders.

In April 2023, we entered into a Cooperation Agreement (the “2023 Cooperation Agreement”) with Caligan.

Pursuant to the 2023 Cooperation Agreement, we agreed to increase the size of our board of directors to eight directors and appointed Mr.

Gary Fischetti as an independent Class III director.

Gary Fischetti as an independent Class III director, among other things.

On March 6, 2024, Caligan nominated two directors for election to our board of directors at our 2024 annual meeting of stockholders.

If Caligan solicits proxies for its candidates or proceeds with other similar types of actions, our business could be adversely affected.

In May 2024, we entered into another Cooperation Agreement (the “2024 Cooperation Agreement”) with Caligan pursuant to which we agreed to increase the size of our board of directors to ten directors and appointed William R.

Jellison as an independent Class I director and Joseph H.

Capper as an independent Class II director, among other things.

If Caligan, or another activist stockholder, solicits proxies for its candidates or proceeds with other similar types of actions, our business could be adversely affected.

Responding to such actions by activist stockholders can be costly and time-consuming, disrupt our operations and divert the attention of management and our board of directors.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors