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Item 3. Legal Proceedings

2025-03-11 compared with 2024-03-12 · 41 added, 39 removed, 17 unchanged (82% of the section changed)

Legal Proceedings.

Bioventus stockholder litigation

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 shareholder litigation

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 asserted 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.

5 unchanged sentences

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 named as defendants in a derivative shareholder lawsuit (in which the Company was 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.

On July 15, 2024, a Stipulation and Agreement of Settlement (the “Settlement Agreement”) by and between the lead plaintiff and the defendants was filed with the Court and the Court preliminarily approved the Settlement Agreement on August 13, 2024.

The Court entered judgment on December 18, 2024, granting final approval of the terms of the Settlement Agreement and dismissing all claims against the defendants, including the Company.

The parties settled without any admission of liability or wrongdoing by any party.

The settlement amount of $15.3 million, together with interest earned thereon, has been paid by the defendants and/or the defendant’s insurers.

The Company incurred $13.8 million of net shareholder litigation costs (including estimated settlement and reimbursement) during the year ended December 31, 2024 under the Settlement Agreement, which were recorded in selling, general and administrative expense within the consolidated condensed statements of operations and comprehensive loss.

On October 4, 2023, certain of the Company’s current and former directors and officers were 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.

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

1 unchanged sentence

On January 12, 2024, the Court agreed to stay this 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.

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) in the United States District Court for the District of Delaware, Sanderson, on behalf of Bioventus Inc., v.

Reali, et al.

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.

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

Misonix former distributor litigation

On March 23, 2017, Misonix’s former distributor in China, Cicel (Beijing) Science & Technology Co., Ltd., filed a lawsuit against Misonix and certain of its officers and directors in the United States District Court for the Eastern District of New York.

The complaint alleged that Misonix improperly terminated its contract with the former distributor.

The complaint sought various remedies, including compensatory and punitive damages, specific performance and preliminary and post judgment injunctive relief, and asserted various causes of action, including breach of contract, unfair competition, tortious interference with contract, fraudulent inducement, and conversion.

On October 7, 2017, the court granted Misonix’s motion to dismiss each of the tort claims asserted against Misonix, and also granted the individual defendants’ motion to dismiss all claims asserted against them.

On January 23, 2020, the court granted Cicel’s motion to amend its complaint, to include claims for alleged defamation and theft of trade secrets in addition to the breach of contract claim.

Discovery in the matter ended on August 5, 2021.

On January 20, 2022, the court granted Misonix’s summary judgment motion on Cicel’s breach of contract and defamation claims.

Cicel’s motion for reconsideration of the court’s summary judgment ruling in Misonix’s favor was dismissed by the Court on April 29, 2022.

On July 18, 2022, Cicel voluntarily dismissed the remaining claim for trade secret theft and later filed an appeal to the United States Court of Appeals for the Second Circuit.

On March 6, 2024, the Second Circuit Court of Appeals issued its ruling affirming the lower Court’s summary judgement in favor of Misonix in all respects.

Bioness stockholder litigation

On February 8, 2022, a minority shareholder of Bioness filed an action in the Delaware State Court of Chancery in connection with the Company’s acquisition of Bioness.

Teuza, a Fairchild Technology Venture Ltd.

2022-0130 -SG.

This action names the former Bioness directors, the Alfred E.

Mann Trust (Trust), which was the former majority shareholder of Bioness, the trustees of the Trust and Bioventus as defendants.

The complaint alleges, among other things, that the individual directors, the Trust, and the trustees breached their fiduciary duty to the plaintiff in connection with their consideration and approval of the Company’s transaction.

The complaint also alleges that the Company aided and abetted the other defendants in breaching their fiduciary duties to the plaintiff and that the Company breached the Merger Agreement by failing to pay the plaintiff its pro rata share of the merger consideration.

The Company believes that it is indemnified under the indemnification provisions contained in the Bioness Merger Agreement for these claims.

On July 20, 2022, the Company filed a motion to dismiss all claims made against it on various grounds, as did all the other named defendants in the suit.

A hearing on Bioness’ and other the defendant’s motions was held before the Court of Chancery on January 19, 2023.

On April 27, 2023, the Court issued an order which, among other things, dismissed Bioventus from the case.

Please refer to Part II, Item 8.

Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12.

Commitments and contingencies of this Annual Report for additional information pertaining to legal proceedings.

In addition, we are party to legal proceedings incidental to our business.

While our management currently believes the ultimate outcome of these proceedings, individually and in the aggregate, will not have a material adverse effect on our consolidated financial statements, litigation is subject to inherent uncertainties.

Were an unfavorable ruling to occur, there exists the possibility of a material adverse impact on our financial condition and results of operations.

On May 1, 2024, the parties filed a stipulation to consolidate the two derivative matters and stay them on terms similar to those entered in the Grogan case.

On May 2, 2024, the United States District Court for the District of Delaware granted the stipulation and ordered the consolidation of the Sanderson and Grogan cases, captioned In re Bioventus Inc.

Derivative Litigation , Case No.:

1:23-cv-01099-RGA.

The Court also stayed the consolidated case.

Following resolution of the Ciarciello case, on December 30, 2024, the plaintiffs in the consolidated case filed an amended complaint asserting the same claims as in the Grogan case against certain of the Company’s current and former directors and officers.

On January 6, 2025, the Court entered a scheduling order, under which the defendants had until March 3, 2025, to file a motion to dismiss the amended complaint.

On February 21, 2025, the parties submitted a joint stipulation to stay the proceedings to allow the parties time to negotiate a settlement, which the company expects to be in the form of governance reforms.

On July 31, 2024, another plaintiff filed a derivative complaint against certain of the Company’s current and former officers and directors, naming Bioventus as a nominal defendant only, in the United States District Court for the Middle District of North Carolina, captioned Vince v.

1:24-cv-006390CCEJEP (M.D.N.C.

Like the Grogan case, the Vince case asserts violations of Section 14(a) of the Exchange Act, breaches of fiduciary duties, unjust enrichment, contribution, and waste and generally alleges the same purported misconduct as alleged in the in the Ciarciello case.

On November 11, 2024, the defendants filed a motion to transfer the Vince case to the United States District Court for the District of Delaware, pursuant to the forum selection clause in Bioventus’s certificate of incorporation.

On January 14, 2025, the Court granted the motion and transferred the Vince case to the District of Delaware.

On February 14, 2025, the plaintiff requested voluntary dismissal of the Vince case without prejudice and the Court granted the request that same day.

On February 20, 2025, plaintiff Jeffrey Vince refiled a Verified Stockholder Derivative Complaint against certain of Bioventus’ current and former officers and directors, naming Bioventus as a nominal defendant only, in Delaware Chancery Court, captioned Jeffrey Vince v.

Reali et al ., C.A.

2025-0192-LWW (Del.

Like his prior complaint, which he voluntarily dismissed, Vince asserts breaches of fiduciary duties, unjust enrichment, contribution, and waste, and generally alleges the same purported misconduct as alleged in the Ciarciello case.

The Defendants have not yet been served.

On February 26, 2025, plaintiff James Bouchereau filed a Verified Stockholder Derivative Complaint against certain of Bioventus’s current and former officers and directors, naming Bioventus as a nominal defendant only, in Delaware Chancery Court, captioned James Bouchereau v.

Reali et al ., C.A.

2025-___-___ (Del.

The complaint is identical to the Vince complaint and asserts breaches of fiduciary duties, unjust enrichment, contribution, and waste, and generally alleges the same purported misconduct as alleged in the Ciarciello case.

The Defendants have not yet been served.

On February 6, 2025, purported stockholder Jae Hyung Jung served a litigation demand, requesting that the Board take action against certain directors and officers for alleged breaches of fiduciary duties, gross mismanagement, unjust enrichment, waste, aiding and abetting in connection with the same conduct at issue in the litigations.

On February 7, 2025, the same purported stockholder, Jung, served a settlement demand, requesting that the Company adopt certain corporate governance reforms and agree to certain monetary payments.

The Company has not yet responded to either demand.

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

Except as described above, the outcomes of these matters are not presently determinable, and any loss is neither probable nor reasonably estimable.

Mine Safety Disclosures.

1 unchanged sentence

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 3. Legal Proceedings