What changed in this filing

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Item 1A. Risk Factors

2025-03-11 compared with 2024-03-12 · 173 added, 212 removed, 998 unchanged (28% of the section changed)

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These risks could cause our future results to differ materially from historical results and from guidance we may provide regarding our expectations of future financial performance.

The risks described below are those that we have identified as material and is not an exhaustive list of all the risks we face.

The risks described below are those that we have identified as material and are not an exhaustive list of all the risks we face.

There may be others that we have not identified or that we have deemed to be immaterial.

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Risks related to our financial position

If we are unable to meet our current operating projections or secure other sources of liquidity, substantial doubt about our ability to continue as a going concern may arise, which may negatively affect the market value of our Class A common stock.

The consolidated financial statements included elsewhere in this Annual Report have been prepared under the going concern basis of accounting, which presumes that the Company’s liquidation is not imminent.

Based on our current operating plans and potential market and economic conditions, the Company believes it should be able to meet its obligations as they become due within the next twelve months from the date of issuance of the consolidated financial statements included elsewhere in this Annual Report, as evaluated under generally accepted accounting principles in the United States.

While we were in compliance as of December 31, 2023 with the financial covenants as stated within the Credit and Guaranty Agreement dated as of December 6, 2019 (the “2019 Credit Agreement,” and, as amended by that certain Amendment No.

1 to Credit and Guaranty Agreement, dated as of August 29, 2021, by the Second Amendment to Credit and Guaranty Agreement, dated as of October 29, 2021, by the Third Amendment to Credit and Guaranty Agreement, dated as of July 11, 2022, by the Fourth Amendment to Credit and Guaranty Agreement, dated as of March 31, 2023 and by the Fifth Amendment, the “Amended 2019 Credit Agreement”), on January 18, 2024, the Company entered into Amendment No.

5 to the 2019 Credit Agreement (the “Fifth Amendment”) as part of its efforts to further improve its financial condition.

The Fifth Amendment modified the financial covenant requirements contained in the 2019 Credit Agreement to provide additional financial covenant relief and included modifications to the Company’s leverage maintenance covenant and interest coverage ratio to provide financial and operational flexibility relative to its operating plan.

However, the Company has based the above assessment on assumptions of revenues, cash flows and operating costs that may prove to be wrong.

In such event, the Company may need to seek further modifications to certain of the covenants in the Amended 2019 Credit Agreement to avoid an event of default or seek waivers of any potential noncompliance.

Moreover, the Company has historically relied on its ability to fund its operations primarily through cash flows from operations, as well as public and private debt and equity financings, but there can be no assurances that such financing or funding will continue to be available to the Company on satisfactory terms, or at all.

In addition, we cannot guarantee that financing will be available in sufficient amounts or on terms acceptable to us, if at all.

Moreover, the terms of any financing may adversely affect the holdings or the rights of our stockholders and the issuance of additional securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our shares to decline.

The sale of additional equity or convertible securities would dilute all of our stockholders.

The incurrence of indebtedness would result in increased fixed payment obligations and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

The inability to secure alternative financing on acceptable terms or to obtain any additional required modifications to the Amended 2019 Credit Agreement in the event that we fail to meet our operating projections may raise substantial doubt about our ability to continue as a going concern and adversely affect our business and financial condition.

Our Amended 2019 Credit Agreement contains financial and operating restrictions that may limit our access to credit.

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• a minimum interest coverage ratio and a maximum debt leverage ratio requirement as defined in the Amended 2019 Credit Agreement;

• a minimum Liquidity (as defined in the Amended 2019 Credit Agreement) of not less than $10.0 million as of the end of each calendar month through October 29, 2025;

• minimum Liquidity (as defined in the Amended 2019 Credit Agreement) of not less than $10.0 million as of the end of each calendar month through October 29, 2025;

• restrictions on the declaration or payment of certain distributions on or in respect of our equity interests;

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Management’s Discussion and Analysis of Financial Condition and Results of Operations — Indebtedness for further discussion concerning our indebtedness.

We might require additional capital to fund our financial and operating obligations and support business growth.

If our expected cash from operations together with available borrowings under our Amended 2019 Credit Agreement are not sufficient to fund our current financial and operating obligations, we might require additional capital.

In addition, we intend to continue to make investments to support our business growth and might require additional funds to respond to business challenges or opportunities, including the need to further develop our current products and any new products, enhance our operating infrastructure, and acquire complementary businesses.

Accordingly, we might need to engage in equity or additional debt financings to secure additional funds.

If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

Any additional debt financing secured by us could involve restrictive covenants relating to our capital-raising activities and other financial and operational matters, which might make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

In addition, we might not be able to obtain additional financing on terms favorable to us, if at all.

If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited.

Failure to establish and maintain effective financial controls could cause us to have material weaknesses and financial misstatements due to error, which could adversely affect our business and stock price.

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If we identify any material weaknesses in our internal controls over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner, or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal controls over financial reporting once we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Class A common stock could be adversely affected, and we could become subject to investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

We maintain our cash at financial institutions, often in balances that exceed federally insured limits.

We maintain the majority of our cash and cash equivalents in accounts at banking institutions in the United States that we believe are of high quality.

Cash held in these accounts often exceed the Federal Deposit Insurance Corporation (“FDIC”) insurance limits.

If such banking institutions were to fail, we could lose all or a portion of amounts held in excess of such insurance limitations.

The FDIC took control of two such banking institutions, Silicon Valley Bank (“SVB”) on March 10, 2023 and Signature Bank (“Signature Bank”) on March 12, 2023.

While we did have an account at SVB, we were able to recover all of our deposits when the FDIC stepped in and allowed us to transfer funds held at SVB to another bank without incurring any losses.

In the event of failure of any of the financial institutions where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.

Any inability to access or delay in accessing these funds could adversely affect our business and financial position .

We might require additional capital to fund our financial and operating obligations and support business growth.

Accordingly, we might need to engage in equity or additional debt financings to secure additional funds.

In addition, we might not be able to obtain additional financing on terms favorable to us, if at all.

We maintain our cash and cash equivalents at financial institutions, in accounts where the balance exceeds federally insured limits (“FDIC”).

We maintain the majority of our cash and cash equivalents in accounts at a banking institution in the United States that we believe is of high quality.

Cash held in these accounts exceed the FDIC insurance limits.

If such banking institution were to fail we could lose all or a portion of the amounts held in excess of such insurance limitations.

In the event of failure of the financial institution where we maintain our cash and cash equivalents, there can be no assurance that we would be able to access uninsured funds in a timely manner or at all.

Any inability to access or any delay in accessing these funds could adversely affect our business and financial position.

Risks related to our business

We are currently subject to securities class action litigation and derivative shareholder lawsuits and may be subject to similar or other litigation in the future, which will require significant management time and attention, result in significant legal expenses and may result in unfavorable outcomes, which may have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.

We are currently subject derivative shareholder lawsuits and have been defendants in securities class action litigation and may be subject to similar or other litigation in the future, which will require significant management time and attention, result in significant legal expenses and may result in unfavorable outcomes, which may have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.

We are, and may in the future become, subject to various legal proceedings and claims that arise in or outside the ordinary course of business.

For example, on January 12, 2023, the Company and certain of its current and former directors and officers were named as defendants in a putative class action lawsuit filed in the Middle District of North Carolina, Ciarciello v.

Bioventus, Inc., No.

1:23– CV – 00032-CCE-JEP (M.D.N.C.

The complaint asserts violations of Sections 10(b) and 20(a) of the Exchange Act and of Sections 11 and 15 of the Securities Act and generally alleges that the Company failed to disclose certain information regarding rebate practices, its business and financial prospects, and the sufficiency of internal controls regarding financial reporting.

The complaint seeks damages in an unspecified amount.

On April 12, 2023, the Court appointed Wayne County Employees’ Retirement System as lead plaintiff.

The plaintiff’s amended consolidated complaint was filed with the Court on June 12, 2023.

On July 17, 2023, the defendants filed a motion to dismiss the complaint raising a number of legal and factual deficiencies with the amended consolidated complaint.

In response to the defendants’ motion to dismiss, the lead plaintiff filed a second amended complaint on July 31, 2023.

The defendants moved to dismiss the second amended complaint on August 21, 2023, which the Court granted in part and denied in part on November 6, 2023.

The Court dismissed the plaintiff’s Securities Act claims, but allowed the plaintiff’s Exchange Act claims to proceed into discovery.

On October 4, 2023, certain of the Company’s current and former directors and officers were also named as defendants in a derivative shareholder lawsuit (in which the Company is a nominal defendant) filed in the United States District Court for the District of Delaware, Grogan, on behalf of Bioventus Inc., v.

Reali, et.al., No.

1:23-CV-01099-RGA (D.

The complaint asserts violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties and related state law claims, and a claim for contribution, and generally alleges the same purported misconduct as alleged in the Ciarciello case.

On January 12, 2024, the Court agreed to stay the case pending resolution of the Ciarciello case.

On February 9, 2024, another plaintiff filed a derivative shareholder lawsuit against certain of the Company’s current and former directors and officers (in which the Company is a nominal defendant) filed in the United States District Court for the District of Delaware, Sanderson, on behalf of Bioventus Inc., v.

Reali, et.al., No.

1:24-cv-00180-RGA (D.

Like the Grogan case, this case asserts violations of Section 10(b) of the Exchange Act, breaches of fiduciary duties and related state law claims, and a claim for contribution, and generally alleges the same purported misconduct as alleged in the Ciarciello case.

The parties are in discussions to consolidate the two derivative matters and stay them on terms similar to those entered in the Grogan case.

The Company believes the claims alleged in each of the above matters lack merit and intends to defend itself vigorously.

However, the outcome of these matters is not presently determinable, and any loss is neither probable nor reasonably estimable.

The results of such lawsuits and any future legal proceedings cannot be predicted with certainty.

In particular, we are a party to derivative shareholder litigation described under the below heading “Legal Proceedings.”

The results of such lawsuits and any future legal proceedings might not be able to be predicted with certainty.

Also, our assets may be insufficient to cover any claimed amounts that exceed our insurance coverage, and we may have to pay damage awards or otherwise may enter into settlement arrangements in connection with such claims.

Any such payments or settlement arrangements in current or future litigation could have a material adverse effect on our business, operating results or financial condition.

Regardless of the merits of these claims, any such payments or settlement arrangements in current or future litigation could have a material adverse effect on our business, operating results or financial condition.

Even if the plaintiffs’ claims are not successful, current or future litigation could result in substantial costs and significantly and adversely impact our reputation and divert management’s attention and resources, which could have a material adverse effect on our business, operating results and financial condition, and negatively affect the price of our common stock.

In addition, such lawsuits may make it more difficult to finance our operations.

We are highly dependent on a limited number of products.

We are highly dependent on a limited number of products for revenue generation and profitability.

Our HA products accounted for 46%, 43% and 42% of our total revenue for the years ended December 31, 2024, 2023 and 2022, respectively.

We expect that sales of such products will continue to account for a substantial portion of our revenue, and therefore, our ability to execute our growth strategy and maintain profitability will depend upon the continued demand for these products.

If the supply and distribution agreements for any of our HA products were terminated, our revenue would be impaired.

If the supply and distribution agreements for any of our HA products were terminated, or if our efforts to commercialize these products prove unsuccessful, our revenue would be impaired.

If our HA products fail to maintain their market acceptance for any reason, our business, results of operations and financial condition may be adversely affected.

Our long-term growth depends on our ability to develop, acquire and commercialize new products, line extensions or expanded indications.

Our long-term growth may be limited by our inability to develop, acquire and commercialize new products, line extensions or expanded indications.

Our industry is highly competitive and subject to rapid change and technological advancements.

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• maintain an effective and dedicated sales and marketing team.

If we are unsuccessful in developing, acquiring and commercializing new products or enhancing our existing product offerings through line extensions and expanded indications, our long-term growth may be negatively affected.

Additionally, our research and development efforts may require a substantial investment of time and resources before we are adequately able to determine the commercial viability of a new product, technology, material or other innovation.

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In addition, even if we are able to successfully develop new active healing products, line extensions and expanded indications, these products may not produce sales in excess of the costs of development and they may be rendered obsolete by changing customer preferences or the introduction by our competitors of products embodying new technologies or features.

If we fail to properly manage growth or scale our business processes, systems, and data management, our business could suffer.

We may, in the future, experience periods of rapid growth and expansion, which could place a significant additional strain on our limited personnel, information technology systems and other resources.

In particular, our supply chain, inventory management, product services, sales processes and distributor network require significant management, training, financial and other supporting resources.

System limitations may result in increased cost, delayed execution, and errors.

Any failure by us to manage our growth effectively could adversely affect our ability to achieve our development and commercialization goals.

To achieve our long-term revenue goals, we also will need to successfully increase supply of our products to meet expected customer demand.

In the future, we may experience difficulties with yields, quality control, component supply and shortages of qualified personnel, among other problems.

These problems could result in delays in product availability and increases in expenses which could adversely affect our ability to generate revenue.

Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees.

In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure.

In order to manage our operations during any growth period, we will need to continue to improve our operational and management controls, reporting and information technology systems and financial internal control procedures.

If we are unable to manage our growth effectively, it may be difficult for us to execute our business strategy and our operating results and business could suffer.

Demand for our existing products and any new products, line extensions or expanded indications depends on the continued and future acceptance of our products by physicians, patients, third-party payers and others in the medical community.

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If the medical community does not broadly accept our products, we may not remain competitive in the market, which could adversely affect our business, results of operations and financial condition.

We rely on a limited number of third-party manufacturers to manufacture certain of our products and critical components.

Third-party manufacturers generally manufacture our HA products, EXOGEN components, certain Surgical Solutions products, PNS and our rehabilitation devices.

We have developed in-house assembly capabilities for certain of our products, such as our EXOGEN system.

We and our third-party manufacturers are required to comply with the Quality System Regulation (“QSR”), which is a set of FDA regulations that establishes cGMP requirements for medical devices and covers the methods and documentation of the design, testing, production, control, quality assurance and complaint handling, labeling, packaging, sterilization, storage and shipping of such devices.

Moreover, certain of our products may be re-classified as drugs, and we are planning to seek approval of a product pursuant to the BLA pathway.

In each case, such products would be required to comply with the cGMP requirements that apply to drugs and biologics, respectively.

There are a limited number of suppliers and third-party manufacturers that operate under FDA’s QSR requirements and that have the necessary expertise and capacity to manufacture our products or components for our products.

As a result, it may be difficult for us to locate manufacturers for our anticipated future needs, and our anticipated growth could strain the ability of our current suppliers and third-party manufacturers to deliver products, materials and components to us.

Upon expiration of our existing agreements with these third-party manufacturers, we may not be able to renegotiate the terms of our agreements with these third-party manufacturers on a commercially reasonable basis, or at all.

Our reliance on different contractor manufacturers to supply certain of our products and their components may result in wide variability in manufacturing processes, product quality and regulatory compliance.

If we or our third-party manufacturers fail to maintain facilities in accordance with the FDA’s QSR, our products may suffer from product quality issues and the noncomplying party could lose the ability to manufacture our products on a commercial scale.

Such issues may result in increased costs, disruptions in supply, contamination and mislabeling of products, and limit our ability to sell some of our products.

The manufacturing of our products may not be easily transferable to other sites in the event that any of our third-party manufacturers experience breakdown, failure or substandard performance of equipment, disruption of supply or shortages of, or quality issues with, components of our products and other supplies, labor problems, power outages, adverse weather conditions, natural disasters (including natural events caused by or intensified by climate change), global pandemics, or the need to comply with environmental and other directives of governmental agencies.

From time to time, a third-party manufacturer may experience financial difficulties, bankruptcy or other business disruptions, which could disrupt our supply of finished goods or require that we incur additional expense by providing financial accommodations to the third-party manufacturer or taking other steps to seek to minimize or avoid supply disruption, such as establishing a new third-party manufacturing arrangement with another provider.

The loss of any of these third-party manufacturers or the failure for any reason of any of these third-party manufacturers to fulfill their obligations under their agreements with us, including a failure to meet our quality controls and standards, may result in disruptions to our supply of finished goods.

We may be unable to locate an additional or alternate third-party manufacturing arrangement that meets our quality controls and standards in a timely manner or on commercially reasonable terms, if at all.

If this occurs, our business, results of operations and financial condition will be adversely affected.

The proposed down-classification of non-invasive bone growth stimulators, including EXOGEN, by the FDA could increase future competition for bone growth stimulators and otherwise adversely affect our sales of EXOGEN.

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The 510(k) clearance process does not always require clinical testing, and is generally less onerous than the premarket approval process applicable to Class III devices.

Also in 2020, the Orthopaedic and Rehabilitation Devices Panel of the FDA Medical Devices Advisory Committee met and ultimately voted in favor of the FDA’s proposal to down-classify non-invasive bone growth stimulators.

Also in 2020, the Orthopedic and Rehabilitation Devices Panel of the FDA Medical Devices Advisory Committee met and ultimately voted in favor of the FDA’s proposal to down-classify non-invasive bone growth stimulators.

While the FDA has not yet finalized its proposal to down-classify non-invasive bone growth stimulators, should such down-classification occur now or in the future, we may face additional competition from new market entrants who would be able to pursue marketing authorization through the 510(k) clearance pathway instead of the more onerous and burdensome PMA approval process.

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Our products are purchased by healthcare providers and customers who typically bill third-party payers or private insurance plans and healthcare networks, to cover all or a portion of the costs and fees associated with our products.

These third-party payers and insurers may deny reimbursement if they determine that a device or product provided to a patient or used in a procedure does not meet applicable payment criteria or if the policyholder’s healthcare insurance benefits are limited.

These third-party payers and insurers may deny reimbursement if they determine that a device or product provided to a patient or used in a procedure is not deemed medically necessary or otherwise does not meet applicable payment criteria or if the policyholder’s healthcare insurance benefits are limited.

Further, limits put on reimbursement by third-party payers, whether foreign or domestic, governmental or commercial, could make it more difficult to buy our products and substantially reduce, or possibly eliminate, patient access to our products.

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In July 2022, CMS began utilizing the new pricing information we reported to it pursuant to these newly adopted reporting obligations to adjust the Medicare payment to healthcare providers using our Durolane and GELSYN-3 products.

As a result, the rates currently available for those products have been reduced from those previously available and will be subject to future reporting and adjustment, which may affect the demand for those products or our ability to sell them profitably.

As a result, the rates available for those products beginning in July 2022 were reduced from those previously available and are subject to future reporting and adjustment, which may affect the demand for those products or our ability to sell them profitably.

We cannot predict the extent to which this law, or other reimbursement reform proposals or other healthcare cost containment measures that might be enacted in the future, may impact the demand or commercial success of our HA viscosupplements and other products we sell or plan to commercialize in the future.

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In order for us to sell our products, we must convince such staff as well as physicians and hospitals that our products are attractive alternatives to competing products for use in surgical procedures.

Additionally, GPOs, integrated delivery networks (“IDNs”) and large single accounts may continue to use their market power to consolidate purchasing decisions for physicians.

Additionally, GPOs, IDNs and large single accounts may continue to use their market power to consolidate purchasing decisions for physicians.

Third-party payers may also continue to use their market power to reduce the reimbursement for our products by increasing the rebates we are required to pay them when our products are covered, which may negatively impact our results.

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We may be unable to complete proposed acquisitions or to successfully integrate proposed or recent acquisitions in a cost-effective and non-disruptive manner.

Our success depends on our ability to enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies.

Our success depends on our ability to enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances in technologies, which may vary significantly across our product portfolio.

We continue to search for viable acquisition candidates or strategic alliances that would expand our market sector and/or global presence, as well as additional products appropriate for current distribution channels.

Accordingly, we have previously and may in the future pursue the acquisition of, or joint ventures relating to, new businesses, products or technologies instead of developing them internally.

Our future success will depend, in part, upon our ability to manage the expanded business following these acquisitions, including challenges related to the management and monitoring of new operations and associated increased costs and complexity associated with the acquisition of Misonix, Bioness, and other potential acquisitions.

Other risks involving potential future and completed acquisitions and strategic investments include:

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If we were to issue additional equity in connection with such acquisitions, this may dilute our stockholders.

We may not realize the anticipated strategic or financial benefits from our business divestitures, which may adversely affect our results of operations and financial condition.

We have in the past divested of certain of our businesses, including most recently our Advanced Rehabilitation business, to help improve our focus on our core businesses and improve our liquidity.

However, we may be unable to achieve some or all of the anticipated strategic and financial benefits following our business divestitures, as their anticipated benefits are based on a number of assumptions, some of which may prove incorrect.

Any divestiture we undertake is subject to a variety of known and unknown risks and uncertainties.

In addition, the anticipated benefits related to any divestiture may take longer to realize than expected, and a failure to achieve the anticipated financial and strategic benefits of a divestiture could be disruptive to our operations and could have a material adverse impact on our business, results of operations, financial condition and cash flows.

Further, even if we do realize some or all of the anticipated strategic and financial benefits following our divestitures, we may face indemnity and other liability claims by the acquirer or other parties.

Pricing pressure from our competitors or hospitals may affect our ability to sell our products at prices necessary to support our current business strategies.

Medical device companies, healthcare systems, IDNs and GPOs have intensified competitive pricing pressure as a result of industry trends and new technologies.

Purchasing decisions are gradually shifting to hospitals, IDNs and other hospital groups, with surgeons and other physicians increasingly acting only as “employees.” Changes in the purchasing behavior of hospitals or the amount that third-party payers are willing to reimburse our customers for procedures using our products, including as result of healthcare reform initiatives, could create additional pricing pressure on us.

Purchasing decisions are shifting to hospitals, IDNs and other hospital groups, with surgeons and other physicians increasingly acting only as “employees.” Changes in the purchasing behavior of hospitals or the amount that third-party payers are willing to reimburse our customers for procedures using our products, including as result of healthcare reform initiatives, could create additional pricing pressure on us.

In addition to these competitive forces, we continue to see pricing pressure as hospitals introduce new pricing structures into their contracts and agreements, including fixed price formulas, capitated pricing and episodic or bundled payments intended to contain healthcare costs.

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Our future growth depends on physician awareness of the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products.

We focus our sales, marketing and training efforts on physicians, surgeons and other health care professionals.

We focus our sales, marketing and training efforts on physicians, surgeons and other healthcare professionals.

The acceptance of our products depends in part on our ability to educate physicians as to the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness of our products compared to alternative products, procedures and therapies.

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Many of our current and potential competitors are major medical device and pharmaceutical companies that have substantially greater financial, technical and marketing resources than we do, and they may succeed in developing products that would render our products obsolete or noncompetitive.

It is also possible that our competition will be able to leverage their large market share to set prices at a level below that which is profitable for us.

It is also possible that our competitors will be able to leverage their large market share to set prices at a level below that which is profitable for us.

Some of our competitors have several competitive advantages over us, including:

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Risk Factors — Risks related to our business — If we are unable to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize, the commercial success of these products may be severely hindered .

Our ability to maintain our competitive position depends on our ability to attract, retain and motivate our senior management team and highly qualified personnel, and our failure to do so could adversely affect our business, results of operations and financial condition.

Our ability to maintain our competitive position and to execute our strategic plans, depends on our ability to attract, retain and motivate our senior management team and other highly qualified personnel, and our failure to do so could adversely affect our business, results of operations and financial condition.

We believe that our continued success depends to a significant extent upon the skill, experience and performance of members of our senior management team, who have been critical to the management of our operations and implementation of our strategy, as well as our ability to continue to attract, retain and motivate additional executive officers, and other key employees and consultants, such as those individuals who are engaged in our research and development efforts.

The replacement of any of our key personnel likely would involve significant time and costs and may significantly delay or prevent the achievement of our business objectives and could therefore adversely affect our business, results of operations and financial condition.

The replacement of any of our key personnel likely would involve significant time and cost and may significantly delay or prevent the achievement of our business objectives and could therefore adversely affect our business, results of operations and financial condition.

In addition, we do not carry any “key person” insurance policies that could offset potential loss of service under applicable circumstances.

Competition for experienced employees in the medical device industry can be intense.

To attract, retain and motivate qualified employees, we may utilize equity-based incentive awards such as employee stock options.

If the value of such equity incentive awards does not appreciate as measured by the performance of the price of our Class A common stock, as seen in current market conditions, such awards may cease to be viewed as valuable and our ability to attract, retain and motivate our employees could be adversely impacted, which could adversely affect our business, results of operations and financial condition and/or require us to increase the amount we expend on cash and other forms of compensation.

If we fail to properly manage growth, our business could suffer.

In particular, our sales force and distributor network require significant management, training, financial and other supporting resources.

Any failure by us to manage our growth effectively could adversely affect our ability to achieve our development and commercialization goals.

To achieve our long-term revenue goals, we also will need to successfully increase supply of our products to meet expected customer demand.

In the future, we may experience difficulties with yields, quality control, component supply and shortages of qualified personnel, among other problems.

These problems could result in delays in product availability and increases in expenses which could adversely affect our ability to generate revenue.

Future growth will also impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees.

In addition, rapid and significant growth will place a strain on our administrative and operational infrastructure.

If we are unable to manage our growth effectively, it may be difficult for us to execute our business strategy and our operating results and business could suffer.

To attract, retain and motivate qualified employees, we may utilize equity-based incentive awards, including employee stock options.

If the value of such equity incentive awards does not appreciate as measured by the performance of the price of our Class A common stock, such awards may cease to be viewed as valuable and our ability to attract, retain and motivate our employees could be adversely impacted, which could adversely affect our business, results of operations and financial condition and/or require us to increase the amount we expend on cash and other forms of compensation.

We may not be able to strengthen our brand and the brands associated with our products.

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Such recalls and withdrawals may also be used by our competitors to harm our reputation for product safety or be perceived by patients as a safety risk when considering the use of our products, either of which could adversely affect our business, results of operations and financial condition.

In addition, although we have product liability and clinical study liability insurance that we believe is appropriate, this insurance is subject to deductibles and coverage limitations.

In addition, although we have product liability and clinical study liability insurance policies that we believe provide appropriate levels of coverage, this insurance is subject to deductibles and coverage limitations.

Our current product liability insurance may not continue to be available to us on acceptable terms, if at all, and, if available, coverage may not be adequate to protect us against any future product liability claims.

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Our top three single-source third-party manufacturers supply us with our HA products and constituted 46%, 43% and 42% of total net sales for the years ended December 31, 2024, 2023 and 2022, respectively.

Many of the acquired Bioness and Misonix products are also dependent on a limited number of suppliers for these products and their components.

We may not be able to renew or enter into new contracts with our existing suppliers following the expiration of such contracts on commercially reasonable terms, or at all.

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The unavailability of such components from our suppliers may impact our ability to meet the customer demand for these products.

The success of certain Surgical products depends on our suppliers continuing to have access to donated human cadaveric tissue, as well as the maintenance of high standards in their processing methodology.

The success of certain of our bone graft substitute products depends on our suppliers continuing to have access to donated human cadaveric tissue, as well as the maintenance of high standards in their processing methodology.

The supply of such donors can fluctuate over time.

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If our products or the components in our products are affected by adverse prices or quality or other concerns, we may not be able to identify alternate sources of components or other supplies that meet our quality controls and standards to sustain our sales volumes or on commercially reasonable terms, or at all.

We rely on a limited number of third-party manufacturers to manufacture certain of our products.

Third-party manufacturers generally manufacture our HA products, Exogen components, certain Surgical Solutions products, PNS and our rehabilitation devices.

We have developed in-house assembly capabilities for our Exogen system.

We and our third-party manufacturers are required to comply with the QSR which is a set of FDA regulations that establishes cGMP requirements for medical devices and covers the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of such devices.

Moreover, certain of our products may be re-classified as drugs, and we are planning to seek approval of a product pursuant to the BLA pathway.

In each case, such products would be required to comply with the cGMP requirements that apply to drugs and biologics, respectively.

If we or our third-party manufacturers fail to maintain facilities in accordance with the FDA’s QSR, the noncomplying party could lose the ability to manufacture our products on a commercial scale.

Loss of this manufacturing capability would limit our ability to sell some of our products.

If this occurs, our business, results of operations and financial condition will be adversely affected.

If we fail to maintain our numerous contractual relationships, our business, results of operations and financial condition could be adversely affected.

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However, these contracts may not continue in effect past their current term or we may not be able to negotiate satisfactory contracts in the future with current or new business partners, which may adversely affect our business, results of operations and financial condition.

Actual or attempted breaches of security, unauthorized access to or disclosure of information, cyberattacks, or other incidents or the perception that personal and/or other sensitive or confidential information in our possession or control or in the possession or control of our third-party vendors or service providers is not secure, could result in a material loss of business, substantial legal liability or significant harm to our reputation.

Actual or attempted breaches of security, unauthorized access to or disclosure of information, cyberattacks, or other incidents or the perception that personal and/or other sensitive or confidential information in our possession or control or in the possession or control of our vendors or service providers is not secure, could result in a material loss of business, substantial legal liability or significant harm to our reputation.

We receive, collect, process, use and store directly and through third-party vendors and service providers a large amount of information, including personally identifiable information, protected health information and other sensitive and confidential information.

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These incidents demonstrate the sophistication of the threat actors and magnitude of the threat posed to companies across the nation, including the health care industry.

For example, a third-party vendor recently informed us that Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our Exogen device to commercial payers, experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems.

As a result of the Change Healthcare incident, certain of our patient billing and collections processes have been disrupted.

While we have identified an alternative claim processing intermediary and have resumed claims submissions to some payers, this event may cause delays in a portion of our claims submissions to some commercial payers thereby delaying the related cash remittances to us.

For example, a vendor informed us that Change Healthcare, a subsidiary of UnitedHealth Group that acts as an intermediary for processing certain of our claims for reimbursement related to our EXOGEN device to commercial payers, experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems.

As a result of the Change Healthcare incident, certain of our patient billing and collections processes were disrupted.

We have identified an alternative claim processing intermediary and resumed claims submissions, but this incident caused delays in a portion of our claims submissions to some commercial payers thereby delaying the related cash remittances to us.

As of the date of this Annual Report, UnitedHealth Group is still investigating this incident, including any potential impact on claims and patient data.

On March 7, 2024, UnitedHealth Group issued a statement indicating that it expects to begin testing and reestablish connectivity to the effected claims network to restore service beginning March 18, 2024.

We do not presently believe that the Change Healthcare incident has materially affected, or is reasonably likely to materially affect the Company, including with respect to our claims collection and cash flows.

We continue to evaluate the impact of the Change Healthcare incident on our Company.

If someone is able to gain unauthorized access to our systems or those of our third-party vendors or service providers, they could access, acquire, or alter any information located therein or cause interruptions to our operations.

Security breaches and attempted security breaches thereof could also damage our reputation and expose us to a risk of monetary loss and/or litigation, fines, sanctions, and reputational damage.

We also face risks associated with security breaches affecting third parties that conduct business with us or our customers and others who interact with our data.

If an individual or entity is able to gain unauthorized access to our systems or those of our vendors or service providers, the individual or entity could access, acquire, or alter any information located therein or cause interruptions to our operations.

Security breaches and other incidents could also damage our reputation and expose us to a risk of monetary loss and/or litigation, fines, sanctions, and reputational damage.

We also face risks associated with security breaches and other incidents affecting third parties that conduct business with us or our customers and others who interact with our data, as well as incidents affecting service providers of these third parties.

We cannot assure you that our vendors or service providers with access to our or our customers’, suppliers’, trial patients’, and employees’ personally identifiable and other sensitive or confidential information in relation to which we are responsible will not breach contractual obligations imposed by us, or that they will not experience data security breaches, cyberattacks or other incidents negatively impacting the privacy or security of sensitive or confidential information or our vendors’ or service providers’ ability to provide services to us, which could have a corresponding effect on our business including putting us in breach of our obligations under privacy laws and regulations and/or which could in turn adversely affect our business, results of operations and financial condition.

While we attempt to address the associated risks by performing security assessments and detailed due diligence, we cannot assure you that these contractual measures and our own privacy and security-related due diligence safeguards will protect us from the risks associated with the processing, storage and transmission of such information by vendors, service providers and others acting on our behalf.

While we maintain insurance that covers certain security and privacy breaches, we may not carry or maintain sufficient coverage to compensate for all potential liability.

Additionally, the costs incurred to remediate any data security or privacy incident could be substantial.

We cannot assure you that our third-party service providers or service providers with access to our or our customers’, suppliers’, trial patients’, and employees’ personally identifiable and other sensitive or confidential information in relation to which we are responsible will not breach contractual obligations imposed by us, or that they will not experience data security breaches, cyber-attacks or other incidents negatively impacting the privacy or security of sensitive or confidential information or our service providers’ ability to provide services to us, which could have a corresponding effect on our business including putting us in breach of our obligations under privacy laws and regulations and/or which could in turn adversely affect our business, results of operations and financial condition.

Failure of a key information technology and communication system, process or site could adversely affect our business, results of operations and financial condition.

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These systems and software and hardware impact, among other things, ordering and managing components of our products from suppliers, shipping products to customers on a timely basis, processing transactions, coordinating our sales activities across all of our products, summarizing and reporting results of operations, complying with regulatory, legal or tax requirements, data security and other processes necessary to manage our business.

Despite any precautions we may take, our systems and software and hardware could be exposed to damage or interruption from circumstances beyond our control, such as fire, natural disasters, systems failures, power outages, cyber-attacks, terrorism, energy loss, telecommunications failure, security breaches and attempts thereof, computer viruses and similar disruptions affecting the global Internet.

Despite any precautions we may take, our systems and software and hardware could be exposed to damage or interruption from circumstances beyond our control, such as fire, natural disasters, systems failures, power outages, cyberattacks, terrorism, energy loss, telecommunications failure, security breaches, computer viruses and similar disruptions affecting the global Internet.

Although we have taken steps to prevent system failures and have back-up systems and procedures to prevent or reduce disruptions, such steps may not prevent an interruption of services and our disaster recovery planning may not be adequate or account for all contingencies.

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Any service outages or delays due to the installation of any new or upgraded technology (and customer issues therewith), or the impact on the reliability of our data from any new or upgraded technology could adversely affect our business, results of operations and financial condition.

The ongoing conflict in Israel could have an adverse impact our business and the extent to which the conflict will impact our future operations and financial condition remains uncertain.

We have a manufacturing facility in Hod Hasharon, Israel which produces certain of our rehabilitation products, including with product components from third-party suppliers located elsewhere in Israel.

Together, these products account for less than 10% of our total net sales for the year ended December 31, 2023.

In October 2023, Hamas infiltrated Israel’s southern border from the Gaza Strip and conducted a series of attacks on civilian and military targets.

Hamas also launched extensive rocket attacks on the Israeli population and industrial centers located along Israel’s border with the Gaza Strip and in other areas within the State of Israel.

Following the attack, Israel’s security cabinet declared war against Hamas.

In addition, the clash between Israel and Hezbollah in Lebanon, may escalate in the future into a greater regional conflict.

Hostilities involving Israel could have an adverse impact on our future operations and financial condition.

In the event that the Company’s facility in Hod Hasharon is damaged or otherwise materially disrupted as a result of hostilities in Israel, the Company’s ability to manufacture and deliver certain rehabilitation products to its customers could be materially adversely affected.

The conflict in Israel also could cause situations where medical product certifying or auditing bodies cannot visit our manufacturing facility in Israel in order to review relevant certifications or clearances, which could lead to temporary suspensions or even cancellations of our product clearances or certifications.

The conflict in Israel could result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to perform their commitments under those agreements pursuant to force majeure provisions in such agreements.

Delays and disruptions as related to exports from Israel also may be imposed in the future and adversely impact our ability to manufacture and deliver some rehabilitation products in a timely manner.

In addition, approximately 25 of our employees currently reside in Israel and work at the manufacturing facility in Hod Hasharon.

Government-imposed restrictions on movement and travel and other precautions taken to address the ongoing conflict may temporarily disrupt our employees’ ability to effectively perform their daily tasks.

The Israel Defense Force (the “IDF”), the national military of Israel, is a conscripted military service, subject to certain exceptions.

Some of our employees may be subject to military service in the IDF and may be called to serve.

It is possible that there will be further military reserve duty call-ups in the future, which may affect our business due to a shortage of skilled labor at our manufacturing facility in Israel.

The ultimate impact of the ongoing hostilities in Israel on our operations and financial condition remains uncertain and depends on many factors, including, but not limited to, the duration and severity of the conflict in Israel, the extent to which we can successfully rely on our other manufacturing facilities and third-party suppliers with respect to certain of our rehabilitation products and the cost of any necessary mitigation efforts.

To the extent the conflict in Israel adversely impacts our business, operations and financial condition, they may also have the effect of heightening many of the other risks described in our SEC filings.

Our business subjects us to economic, political, regulatory and other risks associated with international sales and operations that could adversely affect our business, results of operations and financial condition.

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• economic weakness, including inflation, or political instability in particular foreign economies and markets;

• unexpected changes in tariffs, trade barriers and regulatory requirements, export licensing requirements or other restrictive actions by the United States or foreign governments;

• foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country;

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• reduced protection for and greater difficulty enforcing our intellectual property rights;

• unexpected changes in tariffs, trade barriers and regulatory requirements, export licensing requirements or other restrictive actions by foreign governments;

• difficulty in staffing and managing widespread operations, including compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

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Dollar could adversely affect our business, results of operations and financial condition.

International tariffs applied to goods traded between the United States and China for restrictions on goods imported from certain regions of China may adversely affect our business, results of operations and financial condition.

International tariffs, including tariffs applied to goods traded between the United States and China, may adversely affect our business, results of operations and financial condition.

International tariffs, including tariffs applied to goods traded between the United States and countries such as Mexico, Canada, China, and, other countries and restrictions on goods imported from certain regions of China may adversely affect our business, results of operations and financial condition.

International tariffs, including tariffs applied to goods traded between the United States and countries such as Mexico, Canada, China, and other countries, may adversely affect our business, results of operations and financial condition.

Since the beginning of 2018, there has been increasing discussion, in some cases coupled with legislative or executive action, from several U.S.

and foreign leaders regarding the possibility of instituting tariffs against foreign imports of certain materials.

The institution of trade tariffs both globally and between the U.S.

and China specifically carries the risk of adversely affecting overall economic condition, which could have a negative impact on us as imposition of tariffs could cause an increase in the cost of our products and the components for our products, specifically with respect to our Exogen system, which may adversely affect our business, results of operations and financial condition.

In 2025, the new political administration in the United States has indicated that it intends to impose tariffs in pursuing government policy and has already imposed several new tariffs, including tariffs on goods and materials from Mexico, Canada and China.

When changes are made to United States tariffs, other countries may reciprocate, and have reciprocated, with tariffs imposed against the United States.

Whether and to what extent these tariffs will remain in place or additional tariffs will be imposed remains uncertain, but if tariffs are imposed or increased by either the United States or other countries, it may impact the cost of goods, the price of our products and demand for our products, particularly in countries impacted by such tariffs.

The institution of trade tariffs globally also carries the risk of adversely affecting overall global economic conditions, which could have a negative impact on us.

In addition, the U.S.

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For example, in February 2021 we entered into a settlement agreement with the United States Attorney’s Office for the Middle District of North Carolina and the Office of Inspector General of the U.S.

Department of Health and Human Services (“OIG”) to resolve potential liabilities associated with a self-disclosure we made to the OIG in November 2018 regarding violations of certain Medicare claim submission requirements.

Department of Health and Human Services to resolve potential liabilities associated with a self-disclosure we made to the OIG in November 2018 regarding violations of certain Medicare claim submission requirements.

See Part I, Item 1A.

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The FDA regulatory process is expensive, time-consuming and uncertain, and the failure to obtain and maintain required regulatory clearances and approvals could prevent us from commercializing our products.

Before we can market or sell a new medical device or other product or a new use of or a claim for or significant modification to an existing medical device in the United States, we must obtain either clearance from the FDA under 510(k) pathway or approval of a Pre-Market Approval (“PMA”), unless an exemption applies.

Before we can market or sell a new medical device or other product or a new use of or a claim for or significant modification to an existing medical device in the United States, we must obtain either clearance from the FDA under the 510(k) pathway or approval of an application for Pre-market Approval (“PMA”), unless an exemption applies.

In the United States, we have obtained 510(k) clearance from the FDA to market certain of our products such as SIGNAFUSE Bioactive Bone Graft Putty, Interface Bioactive Bone Graft and SIGNAFUSE Mineralized Collagen Scaffold.

Our Pain Treatment products, including Durolane, GELSYN-3 and SUPARTZ FX, and our Exogen system, have an obtained PMA.

Our Pain Treatment products, including Durolane, GELSYN-3 and SUPARTZ FX, and our EXOGEN system, have obtained a PMA.

In the 510(k) clearance process, the FDA must determine that a proposed device is “substantially equivalent” to a legally-marketed predicate device.

To be “substantially equivalent,” the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device.

In the PMA process, the FDA must determine that a proposed product is safe and effective for our intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data.

In the PMA process, the FDA must determine that a proposed product is safe and effective for its intended use based, in part, on extensive data, including, but not limited to, technical, preclinical, clinical trial, manufacturing and labeling data.

The PMA process is typically required for products that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices.

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The process of obtaining a PMA is much more costly and uncertain than the 510(k) clearance process and generally takes from six to eighteen months, or even longer, from the time the application is filed with the FDA.

If the mass layoffs that began at the FDA in February 2025 continue, or are not reversed, then the clearance and approval process may be extended even longer.

In addition, a PMA generally requires the performance of one or more clinical trials.

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The FDA requires every manufacturer to make the determination regarding the need for a new 510(k) submission in the first instance, but the FDA may review any manufacturer’s decision.

We may make changes to our 510(k)-cleared products in the future that we may determine do not require a new 510(k) clearance or PMA approval.

If the FDA disagrees with our decision not to seek a new 510(k) or PMA approval for changes or modifications to existing devices and requires new clearances or approvals, we may be required to recall and stop marketing our products as modified, which could require us to redesign our products, conduct clinical trials to support any modifications, and pay significant regulatory fines or penalties.

We may make changes to our 510(k)-cleared products in the future that we may determine do not require a new 510(k) clearance or PMA.

If the FDA disagrees with our decision not to seek a new 510(k) or PMA for changes or modifications to existing devices and requires new clearances or approvals, we may be required to recall and stop marketing our products as modified, which could require us to redesign our products, conduct clinical trials to support any modifications, and pay significant regulatory fines or penalties.

If there is any delay or failure in obtaining required clearances or approvals or if the FDA requires us to go through a lengthier, more rigorous examination for future products or modifications to existing products than we had expected, our ability to introduce new or enhanced products in a timely manner would be adversely affected, which in turn would result in delayed or no realization of revenue from such product enhancements or new products and could also result in substantial additional costs which could decrease our profitability.

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• customer notifications or repair, replacement or refunds;

• refusing our requests for 510(k) clearance or PMA approvals or foreign regulatory approvals of new products, new intended uses or modifications to existing products;

• withdrawals of current 510(k) clearances or PMAs or foreign regulatory approvals, resulting in prohibitions on sales of our products;

• refusing our requests for 510(k) clearance or applications for a PMA or foreign regulatory approvals of new products, new intended uses or modifications to existing products;

• withdrawals of current 510(k) clearances, PMAs or foreign regulatory approvals, resulting in prohibitions on sales of our products;

• FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries;

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From time to time, legislation is introduced that could significantly change the statutory provisions and regulations governing the approval, manufacture and marketing of regulated products or the reimbursement thereof.

In addition, FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, propose new reclassification orders, or take other actions, which may prevent or delay approval or clearance of our future products under development or impact our ability to market or modify our currently cleared products on a timely basis.

In addition, the FDA may change its clearance and approval policies, adopt additional regulations or revise existing regulations, propose new reclassification orders, or take other actions, which may prevent or delay approval or clearance of our future products under development or impact our ability to market or modify our currently cleared products on a timely basis.

For example, over the last several years, the FDA has proposed reforms to its 510(k) clearance process, and such proposals could include increased requirements for clinical data and a longer review period, or could make it more difficult for manufacturers to utilize the 510(k) clearance process for their products.

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HCT/Ps that do not meet the criteria to be considered Section 361 HCT/Ps are subject to the FDA’s regulatory requirements applicable to medical devices, biologics or drugs.

Device, biologic or drug HCT/Ps must comply both with the requirements exclusively applicable to Section 361 HCT/Ps and, in addition, with other requirements, including requirements for marketing authorization, such as 510(k) clearance or PMA or BLA approvals before marketing.

We believe our HCT/Ps are regulated solely under Section 361 of the PHSA, and therefore, we have not sought or obtained 510(k) clearance, PMA approval, or licensure through a BLA for such HCT/Ps.

The FDA could disagree with our determination that these human tissue products are Section 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or PMA approval, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA.

We believe our HCT/Ps are regulated solely under Section 361 of the PHSA, and therefore, we have not sought or obtained 510(k) clearance, a PMA, or licensure through a BLA for such HCT/Ps.

The FDA could disagree with our determination that these human tissue products are Section 361 HCT/Ps and could determine that these products are biologics requiring a BLA or medical devices requiring 510(k) clearance or a PMA, and could require that we cease marketing such products and/or recall them pending appropriate clearance, approval or licensure from the FDA.

If we have to cease marketing and/or have to recall any of our Surgical Solutions products our net sales would decrease, which would adversely affect our business, results of operations and financial condition.

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We will likely need to conduct additional clinical studies in the future to support new indications for our products or for clearances, approvals or certifications of new product lines, or for the approval or certification of the use of our products in some foreign countries.

Clinical testing can take many years, can be expensive and carries uncertain outcomes.

Clinical testing can take many years, is expensive and carries uncertain outcomes.

The initiation and completion of any of these studies may be prevented, delayed, or halted for numerous reasons.

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Some of our marketed products are subject to medical device reporting obligations, which require that we report to the FDA any incident in which our products may have caused or contributed to a death or serious injury, or in which our products malfunctioned and, if the malfunction were to recur, it could likely cause or contribute to a death or serious injury.

The timing of our obligation to report under the MDR regulations is triggered by the date we become aware of the adverse event as well as the nature of the event.

The timing of our obligation to report under medical device reporting regulations is triggered by the date we become aware of the adverse event as well as the nature of the event.

We may fail to report adverse events of which we become aware within the prescribed timeframe.

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Our products and the manufacturing processes, reporting requirements, post-approval clinical data and promotional activities for such products, will be subject to continued regulatory review, oversight and periodic inspection by the FDA and other domestic and foreign regulatory bodies.

In particular, the methods used in, and the facilities used for, the manufacture of the products that we own and distribute that are regulated as medical devices must comply with the FDA’s Quality System Regulation (“QSR”), which covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of medical devices.

In particular, the methods used in, and the facilities used for, the manufacture of the products that we own and distribute that are regulated as medical devices must comply with the FDA’s QSR, which covers the procedures and documentation of the design, testing, production, control, quality assurance, labeling, packaging, sterilization, storage and shipping of medical devices.

The FDA enforces the QSR through periodic announced or unannounced inspections of manufacturing facilities, and both we and our third-party manufacturers and suppliers are subject to such inspections.

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If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties or to do so on commercially reasonable terms.

In addition, our third-party contractors are not our employees, and except for remedies available to us under our agreements with them, we cannot control whether or not they devote sufficient time and resources to our on-going clinical, nonclinical and preclinical programs.

Switching or adding additional third-party contractors involves additional cost and requires management time and focus.

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Healthcare regulatory reform may affect our ability to sell our products profitably and could adversely affect our business, results of operations and financial condition.

In the United States and in certain foreign jurisdictions, there have been a number of legislative and regulatory proposals to change the regulatory and healthcare systems in ways that could prevent or delay marketing approval or certification of our products in development, restrict or regulate post-approval or certification activities of our products and impact our ability to sell our products profitably.

In the United States in recent years, new legislation has been proposed and adopted at the federal and state level that is effecting major changes in the healthcare system.

In the United States and abroad, legislative and regulatory reforms could prevent or delay marketing approval or certification of our products in development, restrict or regulate post-approval or certification activities of our products and impact our ability to sell our products profitably.

In the United States, legislation has been proposed and adopted at the federal and state level that is effecting major changes in the healthcare system.

In addition, new regulations and interpretations of existing healthcare statutes and regulations are frequently adopted.

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Supreme Court dismissed the most recent judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Prior to the Supreme Court's decision, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage through the ACA marketplace, from February 15, 2021 through August 15, 2021.

The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.

Efforts to reform the marketplace for healthcare services is ongoing, and we cannot predict with certainty what impact any U.S.

Efforts to reform the marketplace for healthcare services are ongoing and are expected to increase in the new administration, and we cannot predict with certainty what impact any U.S.

federal and state health reforms will have on us, but such changes could impose new and/or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.

In addition, other legislative changes have been proposed and adopted since the ACA was enacted.

The Budget Control Act of 2011, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2022, unless additional Congressional action is taken.

Additionally, the American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

In addition, the Budget Act of 2011, among other things, reduced Medicare payments to providers by 2% per fiscal year, effective on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020, through March 31, 2022, unless additional congressional action is taken.

The American Taxpayer Relief Act of 2012, among other things, further reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

Third-party payers also regularly update payments to physicians and hospitals where our products are used.

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We are subject to federal, state and foreign laws and regulations relating to our healthcare business, and could face substantial penalties if we are determined not to have fully complied with such laws, which would adversely affect our business, results of operations and financial condition.

In our capacity as a pharmaceutical and medical device manufacturer, as a supplier of covered items and services to federal health care program beneficiaries, and with respect to items and services for which we submit claims for reimbursement from such programs, we are subject to healthcare fraud, waste and abuse regulation and enforcement by federal, state and foreign governments, which could adversely impact our business, results of operations and financial condition.

In our capacity as a pharmaceutical and medical device manufacturer, as a supplier of covered items and services to federal healthcare program beneficiaries, and with respect to items and services for which we submit claims for reimbursement from such programs, we are subject to healthcare fraud, waste and abuse regulation and enforcement by federal, state and foreign governments, which could adversely impact our business, results of operations and financial condition.

Healthcare fraud and abuse and health information privacy and security laws potentially applicable to our operations include:

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A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation.

Penalties for violating the AKS include civil penalties of up to $120,816 per violation plus three times the amount of the improper remuneration, criminal penalties up to $100,000 per violation, prison terms of up to ten years, and exclusion from participation in the Federal health care programs.

Penalties for violating the AKS include civil penalties of up to $124,732 per violation plus three times the amount of the improper remuneration, criminal penalties up to $100,000 per violation, prison terms of up to ten years, and exclusion from participation in the federal healthcare programs.

Under the Civil Monetary Penalties statute, physicians who pay or accept kickbacks also face penalties of up to $50,000 per kickback plus three times the amount of the prohibited remuneration;

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• the beneficiary inducement provisions of the Civil Monetary Penalties Law, which prohibits, an individual or entity from offering remuneration to a federal healthcare program beneficiary that the individual or entity knows or should know is likely to influence the beneficiary to order or receive healthcare items or services from a particular provider.

Violations of the CMPL may result in administrative penalties ranging from $5,000 to $100,000 per violation depending on the conduct involved;

Violations of the CMPL may result in CMPs of $24,947 and in administrative penalties ranging up to $100,000 per violation depending on the conduct involved;

• the criminal healthcare fraud provisions of Health Insurance Portability and Accountability Act, or “HIPAA”, and related rules that prohibit knowingly and willfully executing a scheme or artifice to defraud any healthcare benefit program or falsifying, concealing or covering up a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.

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• federal government price reporting laws;

• privacy and data security requirements imposed by HIPAA, including the Privacy Rule, the Security Rule, and the Breach Notification Rule promulgated pursuant to HIPAA;

• analogous state law equivalents of each of the above federal laws, state anti-kickback and false claims laws;

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federal statutes and requirements governing the Medicare program in related to improper completion of Certificate for Medical Necessity (“CMN”) forms.

In November 2018, we made a voluntary self-disclosure related to this matter to the Office of Inspector General of the U.S.

Department of Health and Human Services (“OIG”) pursuant to the OIG’s Provider Self-Disclosure Protocol.

In November 2018, we made a voluntary self-disclosure related to this matter to the OIG pursuant to the OIG’s Provider Self-Disclosure Protocol.

After settlement discussions with the Office of the United States Attorney in the Middle District of North Carolina (“USAO”) and OIG, on February 22, 2021, we entered into a formal settlement agreement, which included releases from associated False Claims Act liability and further Civil Monetary Penalties that are customary in self-disclosures of this type, and agreed to pay $3.6 million in resolution of this matter.

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However, given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and/or in a manner that conflicts with our practices.

Failure or perceived failure by us or our service providers to comply with any privacy, data security, or data protection laws or other obligations, or any security incident or data breach experienced by us, one of our service providers, or another party, could adversely affect our business.

Failure or perceived failure by us or our vendors or service providers to comply with any privacy, data security, or data protection laws or other obligations, or any security incident or data breach experienced by us, one of our vendors service providers, or another party, could adversely affect our business.

Such impacts include but are not limited to:

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and injunctive relief.

In the United States, HIPAA, as amended, and regulations implemented thereunder (collectively referred to as “HIPAA”) imposes, among other things, certain standards relating to the privacy, security, transmission and breach reporting of protected health information (“PHI”) on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that generally involve creating, receiving, maintaining or transmitting PHI for or on behalf of such covered entities, and their covered subcontractors.

HIPAA requires covered entities, such as us, as well as business associates to develop and maintain administrative, physical and technical safeguards to protect PHI, and meet certain notification requirements in the event of a breach of unsecured PHI.

Additionally, under HIPAA, covered entities must report breaches of unsecured PHI to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach or, if earlier, the date on which the breach would have been discovered through the exercise of reasonable diligence.

In the United States, HIPAA, as amended, and regulations implemented thereunder (collectively referred to as “HIPAA”) imposes, among other things, certain standards relating to the privacy and security of protected health information (“PHI”) on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services that generally involve creating, receiving, maintaining or transmitting PHI for or on behalf of such covered entities, and their covered subcontractors.

HIPAA requires covered entities, such as us, as well as business associates, to develop and maintain administrative, physical and technical safeguards to protect PHI.

HHS recently updated the HIPAA Privacy Rule and proposed updates to the HIPAA Security Rule.

These developments could pose compliance challenges for us.

Additionally, under the HIPAA Breach Notification Rule, covered entities must report breaches of unsecured PHI to affected individuals without unreasonable delay, not to exceed 60 days following discovery of the breach or, if earlier, the date on which the breach would have been discovered through the exercise of reasonable diligence.

Notification also must be made to the U.S.

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Such laws and regulations will be subject to interpretation by various courts and other governmental authorities, thus creating potentially complex compliance issues for us and our future customers and strategic partners.

For example, the California Consumer Privacy Act (“CCPA”) creates individual privacy rights for California residents and increases the privacy and security obligations of entities handling certain personal information.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

Further, the California Privacy Rights Act (“CPRA”), which amended the CCPA, imposes additional data protection obligations on covered businesses, including additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt-out rights for certain uses of sensitive data.

It also created the California Privacy Protection Agency, which is authorized to issue substantive regulations and enforce law.

Additional states, including Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Montana, Oregon, Tennessee, Texas, Utah and Virginia have enacted similar comprehensive privacy laws.

For example, the California Consumer Privacy Act (“CCPA”), as amended by the California Privacy Rights Act (“CPRA”), creates individual privacy rights for California residents and imposes additional privacy and security obligations on covered businesses, including data use limitations and audit requirements.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches.

The CPRA created the California Privacy Protection Agency, which is authorized to issue substantive regulations and enforce law.

Additional states, including Colorado, Connecticut, Delaware, Florida, Indiana, Iowa, Kentucky, Maryland, Minnesota, Montana, Nebraska, New Hampshire, New Jersey, Oregon, Rhode Island, Tennessee, Texas, Utah, and Virginia have enacted similar comprehensive privacy laws.

Other states, including Nevada and Washington, have recently enacted robust health privacy laws.

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Additional compliance investment and potential business process changes may be required, and the enactment of new laws could have potentially conflicting requirements that would make compliance challenging and burdensome.

The Federal Trade Commission (“FTC”) and many state Attorneys General also continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.

The Federal Trade Commission (“FTC”) and many state Attorneys General also continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination, and security practices, including based on allegations that companies are engaged in unfair or deceptive trade practices.

For example, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure can constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the FTC Act.

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In addition to enforcing against organizations, the FTC has made clear that it may seek to hold officers personally liable for privacy or security violations of their organizations, having done so in the past.

In Europe, the GDPR imposes strict requirements for processing the personal data of individuals within the EEA.

In Europe, the GDPR imposes strict requirements for processing personal data.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

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For example, in 2016, the EU and United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield.

In July 2020, the Court of Justice of the EU (“CJEU”) limited how organizations could lawfully transfer personal data from the EU/EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“SCCs”).

The European Commission issued revised SCCs on June 4, 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board (“EDPB”).

The United States and the EU recently agreed to a new data transfer mechanism to replace the Privacy Shield known as the EU-U.S.

In 2020, the Court of Justice of the EU (“CJEU”) limited how organizations could lawfully transfer personal data from the EU/EEA to the United States by invalidating the Privacy Shield for purposes of international transfers and imposing further restrictions on the use of standard contractual clauses (“SCCs”).

The European Commission issued revised SCCs in 2021 to account for the decision of the CJEU and recommendations made by the European Data Protection Board (“EDPB”).

The United States and the EU agreed to a new data transfer mechanism to replace the Privacy Shield known as the EU-U.S.

Data Privacy Framework, which may be subject to legal challenges.

As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and take additional enforcement actions, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.

Additionally, from January 1, 2021, following the United Kingdom’s departure from the EU, we have had to comply with the GDPR and the UK GDPR (i.e., the GDPR as implemented into UK law).

In addition to the GDPR, EU member states impose additional, and sometimes inconsistent, data protection requirements.

As supervisory authorities issue further guidance on personal data export mechanisms, including circumstances where the SCCs cannot be used, and take additional enforcement actions, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we provide our services, impose challenges associated with the geographical location or segregation of our relevant systems and operations, and adversely affect our financial results.

Failure to comply with the GDPR can result in fines up to the greater of €20 million (approximately $21 million), or 4% of global revenue.

Additionally, following the United Kingdom’s departure from the EU, we have also had to comply with the UK GDPR (i.e., the GDPR as implemented into UK law).

Failure to comply with the UK GDPR can result in fines up to the greater of £17.5 million (approximately $22 million), or 4% of global revenue.

However, the relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear.

However, the relationship between the United Kingdom and the EU in relation to certain aspects of data protection law remains unclear.

The European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from EU member states to the United Kingdom without additional safeguards.

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Among other things, the EU Medical Devices Regulation (“MDR”) imposed changes in the clinical evidence for medical devices, post-market clinical follow-up evidence, annual reporting of safety information for Class III products, and bi-annual reporting for Class II products, Unique Device Identification (“UDI”) for all products, submission of core data elements to a European UDI database prior to placement of a device on the market, reclassification of medical devices, and multiple other labeling changes.

While we are able to continue marketing our currently CE-marked products in the Europe after the effective date of the EU MDR until the associated CE mark certificates expire, securing renewals of our existing CE mark certificates to allow for continued marketing of the product after CE mark expiration or obtaining certifications for new products requires the performance of certain conformity assessment procedures by a notified body.

While we are able to continue marketing our currently CE-marked products in Europe after the effective date of the EU MDR until the associated CE mark certificates expire, securing renewals of our existing CE mark certificates to allow for continued marketing of the product after CE mark expiration or obtaining certifications for new products requires the performance of certain conformity assessment procedures by a notified body.

Notified bodies are independent organizations designated by EU member states which are responsible for, among other things, auditing and examining a product’s technical dossiers and the manufacturers’ quality system.

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For example, technical documentation for certain of our products requiring recertification, such as our single injection HA treatment Durolane, and EXOGEN Bone Stimulation System have been submitted to our notified body.

While we are actively engaged with our notified body to renew the CE marks for these and our other products, CE mark renewals for these products are still pending.

Our inability to timely review and obtain CE mark certificates for these and other of our products could prohibit their distribution and marketing in EU member states, which would adversely affect our business, prospects, financial condition and results of operations.

While Durolane recently received EU MDR certification, we are actively engaged with our notified body to renew the CE marks for these and our other products.

The inability to timely review and obtain CE mark certificates for these and other of our products could prohibit their distribution and marketing in EU member states, which would adversely affect our business, prospects, financial condition and results of operations.

We may be subject to environmental, social and governance (“ESG”) regulations or stakeholder requirements which may negatively impact our business or adversely affect our relationship with customers.

Across industries, companies are facing increasing requirements to disclose information about social and environmental risks and increasing pressure to improve performance on aspects of sustainability, such as climate impact and product environmental performance, that go beyond currently enacted legislative or regulatory mandates.

Several of our customers are adopting, or may adopt in the future, sustainability policies that influence how they make purchasing decisions.

Due to the complex nature of our supply chain, we may not always have direct influence over our ability to meet new customer sustainability expectations or policies, which may harm our customer relationships and reputation and may result in an impact on our revenue.

Further, new and emerging ESG reporting and disclosure requirements may be unpredictable and expensive to comply with.

Our ability to meet stakeholder ESG expectations may not keep up with industry peers which may negatively impact our ability to attract and retain talent.

Recent environmental regulatory actions regarding medical device sterilization facilities could result in disruptions in the supply of certain of our products and could adversely affect our business, results of operations and financial condition.

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While such actions have not disrupted our ability to supply products and the previously shut down facilities have been permitted to resume certain operations after implementation of increased emissions controls, it is uncertain as to whether these facilities will be shut down or experience capacity reductions related to environmental, health and safety concerns.

Environmental Protection Agency has proposed new rules governing emissions from ethylene oxide sterilization facilities and has announced their intent to finalize the rule during 2024.

It is unknown whether any other sterilization facilities we may contract with in the future will experience reduced capacity related to new regulatory requirements or will be required to shut down, either temporarily related to upgrading emissions controls or permanently due to inability to comply with new environmental regulation.

In March 2024, the U.S.

Environmental Protection Agency finalized rules governing emissions from ethylene oxide sterilization facilities.

To the extent that our third-party sterilizers are unable to sterilize our products, whether due to these regulatory or other limitations (such as capacity, reductions in operations, or availability of materials for sterilization), we may be unable to transition to other third-party sterilizers, sterilizer locations or sterilization methods in a timely or cost effective manner, or at all, which could have a material adverse impact on our results of operations and financial condition.

If our facilities are damaged or become inoperable, we will be unable to continue to research, develop and manufacture our products and, as a result, our business, results of operations and financial condition may be adversely affected until we are able to secure a new facility.

We do not have redundant manufacturing facilities.

We do not have redundant manufacturing facilities and have one primary location for manufacturing in the Memphis, Tennessee area.

Our other facilities and equipment would be costly to replace and could require substantial lead-time to repair or replace.

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Our success depends in part on our ability to protect our proprietary rights to the technologies and inventions used in, or embodied by, our products.

To protect our proprietary technology, we rely on patent protection, as well as a combination of copyright, trade secret and trademark laws, as well as nondisclosure, confidentiality and other contractual restrictions in our consulting and employment agreements.

To protect our proprietary technology, we rely on patent protection, copyright, trade secret and trademark laws, and nondisclosure, confidentiality and other contractual restrictions in our consulting, employment, and other agreements.

These legal means afford only limited protection, however, and may not adequately protect our rights or permit us to gain or keep any competitive advantage.

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Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective.

Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

Moreover, our competitors may independently develop equivalent knowledge, methods or know-how.

For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.

Our competitors could use any of the information we may be required to disclose by the FDA to develop independently technology similar to ours.

Competitors could purchase our products and attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe our intellectual property rights, design around our protected technology or develop their own competitive technologies that fall outside of our intellectual property rights.

If our intellectual property is not adequately protected so as to protect our market against competitors’ products and methods, our competitive position could be adversely affected, as could our business, results of operations and financial condition.

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• we, the inventors of any in-licensed patent rights, or any future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

• we, the investors of any in-licensed patent rights, or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

• we, the filing party(ies) of any in-licensed patent rights, or any future strategic partners might not have been the first to file patent applications covering certain of our inventions;

• others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

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Under the terms of the Bioventus LLC Agreement, BV LLC will be obligated to make tax distributions to holders of LLC Interests, including us, subject to any limitations or restrictions in our debt arrangements.

In addition to tax expenses, we will also incur expenses related to our operations, including payments under the Tax Receivable Agreement (“TRA”), which we expect could be significant.

In addition to tax expenses, we will also incur expenses related to our operations, including payments under the TRA, which we expect could be significant.

See Part III, Item 13.

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The TRA with the Continuing LLC Owner requires us to make cash payments to it in respect of certain tax benefits to which we are or may become entitled, and we expect that the payments we will be required to make could be significant.

We are a party to a TRA with Smith & Nephew, Inc.

(“Continuing LLC Owner”).

We are a party to a TRA with the Continuing LLC Owner.

Under the TRA, we are required to make cash payments to the Continuing LLC Owner equal to 85% of the tax benefits, if any, that we actually realize, or in certain circumstances are deemed to realize, as a result of (1) increases in the tax basis of assets of BV LLC resulting from (a) any future redemptions or exchanges of LLC Interests and (b) certain distributions (or deemed distributions) by BV LLC and (2) certain other tax benefits arising from payments under the TRA.

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Risks related to our ownership of our Class A common stock

The dilution of our Class A common stockholders upon the exchange of the outstanding common membership interests in BV LLC could adversely affect the market price of our Class A common stock and the resale of such shares could cause the market price of our Class A common stock to fall.

As provided in the amended and restated limited liability agreement of Bioventus LLC (“BV LLC”), the holders (the “Selling Securityholders”) of common membership interests in BV LLC (the “LLC Interests”) may, from time to time, exchange their LLC Interests for newly issued shares of our Class A common stock on a one-for-one basis.

On October 25, 2024, the Company filed a registration statement on Form S-3 (“Form S-3”) to in part register for resale 35,038,052 shares of our Class A common stock held by the Selling Securityholders, of which 15,786,737 shares are issuable upon the exchange of their outstanding LLC Interests.

The issuance of shares of our Class A common stock upon the exchange of LLC Interests would significantly dilute the ownership interest of our Class A common stockholders and the resale of such shares by the Selling Securityholders pursuant to the Form S-3 once declared effective, or the perception in the market that the Selling Securityholders intend to sell such shares, could adversely affect the market price of our Class A common stock.

Our stock price may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares of Class A common stock at or above the price at which you purchase them.

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This litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources, and harm our business, operating results, and financial condition.

Our amended and restated certificate of incorporation, to the extent permitted by applicable law, contains provisions renouncing our interest and expectation to participate in certain corporate opportunities identified or presented to certain of our Original LLC Owners.

Our amended and restated certificate of incorporation, as amended, to the extent permitted by applicable law, contains provisions renouncing our interest and expectation to participate in certain corporate opportunities identified or presented to certain of our Original LLC Owners.

Certain of the Original LLC Owners are in the business of making or advising on investments in companies and these Original LLC owners may hold, and may, from time to time in the future, acquire interests in or provide advice to businesses that directly or indirectly compete with certain portions of our business or the business of our suppliers.

Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by law, none of the Original LLC Owners or any director who is not employed by us or his or her affiliates will have any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us.

Our amended and restated certificate of incorporation, as amended, provides that, to the fullest extent permitted by law, none of the Original LLC Owners or any director who is not employed by us or his or her affiliates will have any duty to refrain from engaging in a corporate opportunity in the same or similar lines of business as us.

The Original LLC Owners may also pursue acquisitions that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.

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Certain anti-takeover provisions in our governing documents and under Delaware law could make an acquisition of our Company more difficult, limit attempts by our stockholders to replace or remove our current management, and depress the market price of our common stock.

Certain provisions of our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could render more difficult, delay or prevent transactions that stockholders consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock.

Certain provisions of our amended and restated certificate of incorporation, as amended, our second amended and restated bylaws and Delaware law could render more difficult, delay or prevent transactions that stockholders consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock.

These provisions might also prevent or frustrate attempts by our stockholders to replace or remove management, and include provisions that:

• authorize the issuance of “blank check” preferred stock that could be issued by our Board to increase the number of outstanding shares and thwart a takeover attempt;

• establish a classified Board so that not all members of our Board are elected at one time;

• provide the removal of directors only for cause;

• establish a classified Board so that not all members of our Board are elected at one time, which is currently being phased out and will be discontinued beginning with our 2026 annual meeting of stockholders;

• provide the removal of directors only for cause, provided directors may be removed with or without cause beginning with our 2026 annual meeting of stockholders;

• prohibit the use of cumulative voting for the election of directors;

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These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management, which could in turn limit the opportunity for our stockholders to receive a premium for their shares of our common stock and affect the price that some investors are willing to pay for our common stock.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be, to the fullest extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or the Court of Chancery, will be, to the fullest extent permitted by law, the sole and exclusive forum for:

Our amended and restated certificate of incorporation, as amended, provides that the Court of Chancery of the State of Delaware will be, to the fullest extent permitted by law, the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation, as amended, provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or the Court of Chancery, will be, to the fullest extent permitted by law, the sole and exclusive forum for:

(a) any derivative action, suit or proceeding brought on our behalf;

(b) any action, suit or proceeding asserting a claim of breach of fiduciary duty owed by any of our directors, officers or stockholders to us or to our stockholders;

(c) any action, suit or proceeding arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or amended bylaws (as either may be amended from time to time);

(c) any action, suit or proceeding arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation, as amended, or our second amended and restated bylaws (as either may be amended from time to time);

or, (d) any action, suit or proceeding asserting a claim governed by the internal affairs doctrine;

provided that the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

The choice of forum provision in our amended and restated certificate of incorporation does not designate the Court of Chancery as the exclusive forum for any claim for which the applicable statute creates exclusive jurisdiction in another forum and, accordingly, does not apply to any claims brought to enforce any liability or duty created by the Exchange Act.

The choice of forum provision in our amended and restated certificate of incorporation, as amended does not designate the Court of Chancery as the exclusive forum for any claim for which the applicable statute creates exclusive jurisdiction in another forum and, accordingly, does not apply to any claims brought to enforce any liability or duty created by the Exchange Act.

The choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees.

Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.

Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation, as amended, to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations and financial condition.

We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced disclosure requirements applicable to us will make our Class A common stock less attractive to investors.

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We cannot predict if investors will find our Class A common stock less attractive because we may rely on the reduced disclosure requirements and exemptions applicable to emerging growth companies and/or smaller reporting companies.

investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile

If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for our Class A common stock and our stock price may be more volatile.

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