What changed in this filing

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Item 9A. Controls and Procedures

2025-03-11 compared with 2024-03-12 · 47 added, 99 removed, 345 unchanged (30% of the section changed)

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Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report on Form 10-K.

Our management, with the participation of our President and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) as of the end of the period covered by this Annual Report on Form 10-K.

Based on this evaluation, our President and Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2024.

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in the Exchange Act Rule 13a-15(f)).

The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S.

GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (iii) provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting (as such term is defined in the Exchange Act Rule 13a-15(f)).

The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and Board of Directors regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In connection with the preparation and filing of this Annual Report, the Company’s management, including our President and Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023, based on the framework set forth in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Based on the Company’s evaluation, our President and Chief Executive Officer and Chief Financial Officer, concluded that, as of December 31, 2023, the Company’s internal controls over financial reporting were effective.

Material Weaknesses in Internal Control over Financial Reporting

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected and corrected on a timely basis.

Changes in Control Environment

As previously reported, we identified a material weakness in internal control related to an ineffective risk assessment in 2022 to identify and assess changes in our business processes and internal control environment related to newly acquired companies and multiple information technology (“IT”) system implementations that occurred.

Further, there was a lack of adequate personnel resources in accounting, IT, and other support functions to support simultaneous system implementations and business process integrations for acquired companies, implement appropriate controls for acquired companies and maintain focus on compliance with internal controls for legacy Bioventus processes.

In addition, during 2022, the Company saw an unprecedented level of turnover in roles that drive execution of internal control activities.

This turnover, paired with business changes, including those related to acquisitions, resulted in a disruption to the effective completion of control activities across a number of business processes.

Further, management identified a gap in control design related to sufficient tracking of control performance to ensure controls operated effectively.

In considering these breakdowns in the control environment, Bioventus determined the associated COSO principles requiring further control and action by management were:

(a) Control environment - Establishes structure, authority, and responsibility (COSO Principle 3);

(b) Risk assessment – Identifies and analyzes significant change (COSO Principle 9);

These ongoing control deficiencies resulted in certain immaterial restatements of the Company’s financial statements as discussed in our Quarterly Reports on Form 10-Q for the periods ended April 1, 2023, July 1, 2023 and September 30, 2023.

Remediation Measures

During 2023, management implemented our previously disclosed remediation plans including:

(a) Ensuring adequate personnel were in place, taking steps to decrease turnover and driving additional accountability, including:

(i) hiring personnel and temporary resources to backfill positions vacated due to employee turnover and adding additional headcount in accounting, finance and IT to expand capacity;

(ii) making organizational changes to ensure proper governance and oversight;

(iii) implementing certain retention programs to retain key resources;

(iv) driving additional accountability for control owners by tying a portion of their performance objectives to successful completion of internal controls;

(b) Enhancing our risk assessment processes to (i) identify and assess changes for acquired companies and IT systems;

(ii) prioritize key projects to ensure organizational capacity, with only essential IT projects occurring during 2023;

(iii) update our internal control policy that further defines expectations for communication and approval of changes to financially relevant processes and internal controls.

(c) Enhancing tracking of control performance and reinforcing execution rigor by (i) establishing and monitoring monthly internal control metrics compared with target performance;

(ii) establishing required quarterly internal control certifications;

(iii) providing additional visibility of internal control performance to management and the Audit Committee;

(iv) engaging third-party consultants to perform an Accounting Transformation & Integration Assessment (“Project Action”) that enhanced processes and use of existing systems for financially relevant processes which allow for more time for internal control execution;

(vi) meeting weekly with leadership to discuss actions needed to successfully close internal control deficiencies identified;

(v) updating and/or developing standard operating procedures to further document process and control performance for use in day-to-day execution and when training new employees.

During the fourth quarter of 2023, we completed our testing of the operating effectiveness of the implemented and remediated controls and found them to be effective.

As a result, we have concluded the material weakness has been remediated as of December 31, 2023.

Rebates Accrual Material Weakness

As previously reported, we identified a material weakness related to the Company’s internal controls over financial reporting that were not performed at a sufficient level of precision to ensure that the third quarter 2022 rebates accrual was complete and accurate.

The process undertaken to estimate the expected reduction in revenue from rebates was consistent with the Company’s historical practice.

However, subsequent to the initial calculation of the third quarter 2022 rebates accrual, an unexpectedly large invoice was received and there were not processes in place to ensure it was reviewed timely in order to update the accrual.

The Company reassessed open rebates accruals and the approach for calculating the rebate accruals based on this invoice.

The Company revised its estimation methodology resulting in a decrease of revenue of $8.4 million.

This adjustment was recorded subsequent to the earnings release but prior to the filing of the Company’s Quarterly Report on Form 10-Q for the third quarter of 2022.

Further, this change in revenue projection related to the rebates accrual adjustment for 2022 and cascading effect on future revenue projections materially impacted the Company’s evaluation of its ability to meet debt covenants in its Amended 2019 Credit Agreement, resulting in liquidity and going concern disclosures in the Company’s Quarterly Report on Form 10-Q for the third quarter of 2022.

Remediation Measures

We have designed and implemented new processes and enhanced controls to address the underlying causes of the material weakness related to the rebates accrual, including:

• Refining the estimation method for calculating the rebates accruals, including enhancing the precision of the controls;

• Implementing enhanced status tracking and introduced new controls to ensure that rebates invoices from third-party payers are received and reviewed timely;

• Increasing rigor of documenting key conversations with payers.

The Company implemented and enhanced the precision of procedures to ensure the completeness and accuracy of key reports and information used in the rebates accrual and further enhanced supporting documentation for control performance.

During the fourth quarter of 2023, we completed our testing of the operating effectiveness of the enhanced controls and found them to be effective.

As a result, we have concluded the material weakness has been remediated as of December 31, 2023.

We believe the implementations and continued operation of the actions described above with respect to our control environment and rebates accrual processes are sufficient to remediate our previously identified material weaknesses and strengthen our internal control over financial reporting.

When considered in the aggregate, the previously identified material weaknesses no longer create a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Therefore, management concluded that the deficiencies no longer represent a material weakness in our internal control over financial reporting, and that disclosure controls and procedures were effective, at the reasonable assurance level, as of December 31, 2023.

The President and Chief Executive Officer and Chief Financial Officer believe that the financial statements and related financial information included in this Annual Report on Form 10-K fairly present, in all material respects, our balance sheets, statements of operations and comprehensive (loss) income, statement of changes in stockholders’ equity and statements of cash flows as of and for the periods presented.

In connection with the preparation and filing of this Annual Report, the Company’s management, including our President and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2024.

In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013) .

Based upon this evaluation, our President and Chief Executive Officer and Chief Financial Officer concluded that we maintained effective internal control over financial reporting as of December 31, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting except for changes to controls resulting from the material weaknesses described above.

There were no changes in our internal control over financial reporting that occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of Independent Registered Public Accounting Firm

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Business—Information about our Executive Officers of this Annual Report .

The Company’s Board of Directors (the “Board”) believes that Mr.

Claypoole is well-qualified to serve on our Board considering the breadth of his experience across multiple global medical device markets and his extensive expertise in accelerating innovation, driving operational excellence, enhancing go-to-market strategies, and driving commercial execution and organizational effectiveness.

Hawkins has served as a member of our Board since September 2020 and as Chairperson of our Board since September 2020.

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from 2015 to 2021.

Hawkins served on the Duke University Board of Trustees from 2011 to 2023, where he held the position of Vice Chair, and was recently appointed Duke University Trustee Emeritus.

Hawkins served on the Duke University Board of Trustees from 2011 to 2023, where he held the position of Vice Chair, and was appointed Duke University Trustee Emeritus in 2023.

Hawkins also previously served as the Chair of the Duke University Health System board of directors.

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Hawkins was selected to serve on our Board because of his experience in and knowledge of the life science industry.

Bartholdson was appointed as a member of our Board in January 2023 and his appointment became effective January 8, 2023.

Bartholdson was appointed as a member of our Board effective January 8, 2023.

Bartholdson is the co-founder and has been a Partner of Juniper Investment Company, a private investment management firm that invests in publicly traded and private companies through concentrated ownership positions since its inception in 2007.

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His experience includes extensive management oversight, service on multiple public and private company boards, and deep transactional expertise.

Bartholdson presently serves as the Chairman of the board of directors of Theragenics Corporation, a medical device company serving the surgical products and prostate cancer treatment markets.

From 2019, he has been a member of the board of directors of Lincoln Educational Services Corporation, a public company and a leading provider of career education and training services, and presently serves on its Compensation, Audit and Nominating and Corporate Governance Committees.

Bartholdson presently serves as the Chairman of the board of directors of Lincoln Educational Services Corporation, a public company and a leading provider of career education and training services, and Theragenics Corporation, a private medical device company serving the surgical products and prostate cancer treatment markets.

Previously, he served as a member of the board of directors of Obagi Medical Products, Inc., a public specialty pharmaceutical company, until its acquisition by Valeant Pharmaceuticals in 2013.

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Bartholdson received his Bachelor of Arts from Duke University and his Master of Business Administration from Stanford Graduate School of Business.

Bartholdson was selected to serve on our board because of his significant governance, finance, and transactional experience on multiple public and private company boards.

Bartholdson was selected to serve on our board because of his professional investor perspective on stockholder and related matters and his significant governance, finance, capital markets and transactional experience on multiple public and private company boards.

Beyer has served as a member of our Board since October 2021.

Beyer is the President of International and Global Orthopedics for ConMed Corporation, a publicly held medical technology company, a position in which he has served since October 2020.

Beyer was appointed President and Chief Executive Officer and a member of the board of directors of ConMed Corporation, a publicly held medical technology company, effective January 1, 2025.

Prior to that, Mr.

Beyer served as ConMed Corporation’s Chief Operation Officer from April 2024 to December 2024, and before that as its President International and Global Orthopedics from October 2020 to April 2024.

He previously served as President of ConMed International from December 2014 to October 2020.

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Beyer graduated from Kalamazoo College with a Bachelor of Arts in Economics, Western Michigan University with a Master of Business Administration in Finance and Harvard Business School’s Advanced Management Program.

Beyer was selected to serve on our Board because of his extensive healthcare and public company experience.

Beyer was selected to serve on our Board because of his extensive experience in international healthcare markets, his service as a chief executive officer and his broad business and public company experience.

Cowdy has served as a member of our Board since September 2020.

Cowdy has served as the Chief Business Development and Corporate Affairs Officer for Smith & Nephew plc, a medical equipment manufacturing company, since 2018 Since joining Smith & Nephew plc in June 2008, he has also served as Executive Vice President of Business Development and Corporate Affairs, Head of Corporate Affairs and Strategic Planning, Group Director of Corporate Affairs and Director of Investor Relations.

Cowdy has served as the Chief Business Development and Corporate Affairs Officer for Smith & Nephew plc, a medical equipment manufacturing company, since 2018.

Since joining Smith & Nephew plc in June 2008, he has also served as Executive Vice President of Business Development and Corporate Affairs, Head of Corporate Affairs and Strategic Planning, Group Director of Corporate Affairs and Director of Investor Relations.

Prior to joining Smith & Nephew plc, Mr.

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Ladone has also served on the board of directors of Inogen Inc., a publicly traded supplemental oxygen therapies provider, where she is a member of the audit and compensation committees.

Ladone also serves on the board of directors of Kestra Medical Technologies, Inc., a privately held wearable medical device and digital healthcare company, where she has been the chair of the audit committee since September 2022, and of Novanta Inc., a publicly traded supplier of technology solutions service to medical and advanced industrial original equipment manufacturers since July 2024.

Ladone holds a Bachelor of Arts in Finance and Economics from the University of Notre Dame.

Ladone was selected to serve on our Board due to her significant finance and investor relations experience at large healthcare companies.

Ladone was selected to serve on our Board due to her significant finance and investor relations, talent management, and M&A experience at large healthcare companies.

Michelle McMurry-Heath , MD, PhD, has served as a member of our Board since January 2022.

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She later served as a Robert Wood Johnson Health and Society Scholar at the University of California, San Francisco and Berkeley from 2004 to 2005 and a Mcarthur Fellow, Global Health for the Council on Foreign Relations from 2004 to 2006.

McMurry-Heath also serves on the Board of Directors at publicly traded PerkinElmer, where she is a member of the audit committee.

McMurry-Heath also serves on the Board of Directors at publicly traded Revvity Inc., the former life sciences and diagnostics business of the company previously known as PerkinElmer, where she is a member of the audit committee.

McMurray-Heath received her M.D./Ph.D.

in Immunology from Duke University’s Medical Scientist Training Program, becoming the first African American to graduate from the prestigious program, and her AB in Biochemistry from Harvard University.

McMurry-Heath was selected to serve on our Board due to her significant policy, regulatory, commercial health care and advocacy experience.

McMurry-Heath was selected to serve on our Board due to her significant policy, regulatory, commercial healthcare and advocacy experience.

Neels has served as a member of our Board since September 2020.

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Stalnecker holds a Master of Business Administration from The Wharton School of the University of Pennsylvania and received her Bachelor of Arts from Duke University.

Stalnecker was selected to serve on our Board because of her extensive experience as a financial expert, her investment experience, and her service as a director of other public companies.

Stalnecker was selected to serve on our Board because of her qualifications as a financial expert, and her extensive treasury, governance, risk management and investment experience, and her service as a director of other public companies.

Additional information required by this Item concerning our directors is incorporated by reference from the sections captioned “Election of Directors,” “Corporate Governance” and “Committees of the Board” contained in our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.

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Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters.

The information required by this Item is incorporated by reference from the section captioned “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” contained in our definitive proxy statement for our 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2023.

The information required by this Item is incorporated by reference from the section captioned “Equity-based Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” contained in our definitive proxy statement for our 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2024.

Certain Relationships and Related Transactions, and Director Independence.

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8-K 001-37844 2.1 7/29/2021

2.3 Asset Purchase Agreement, dated a s of May 10, 2023, by and among Misonix, LLC, Solsys Medical, LLC, Bioventus LLC and LifeNet Health.

2.3 Asset Purchase Agreement, dated as of May 10, 2023, by and among Misonix, LLC, Solsys Medical, LLC, Bioventus LLC and LifeNet Health.

8-K 001-37844 2.1 5/16/2023

3.1 Amended and Restated Certificate of Incorporation of Bioventus Inc.

2.4 Purchase and Sale Agreement, dated as of September 30, 2024, by and among Bioventus LLC, Bioness Inc., Bioventus Cooperatief, U.A., and Rehab Acquisition Corporation, III

8-K 001-37844 2.1 10/4/2024

3.2 Amended and Restated Bylaws of Bioventus Inc.

3.1 Second Am ended and Restated Certificate of Incorporation of Bioventus Inc.

8-K 001-37844 3.1 6/17/2024

3.1(a) Certificate of Amendment to Amended and Restated Certificate of Incorporation of Bioventus Inc.

8-K 001-37844 3.1 6/17/2024

3.2 Second Amended and Restated Bylaws of Bioventus Inc.

8-K 001-37844 3.2 6/17/2024

4.1 Specimen Stock Certificate evidencing the shares of Class A common stock .

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4.2 Description of C apital Stock.

10-K 001-37844 4.2 3/26/2021

10.1 Tax Receivable Agreement, dated as of February 16, 2021, by and among Bioventus Inc., Bioventus LLC and its Members .

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8-K 001-37844 10.4 2/17/2021

10.4(a) Amendment No.

1 to Stockholders Agreement, dated June 19, 2024, by and among Bioventus Inc., Bioventus LLC and the Principal Stockholders.

8-K 001-37844 10.1 6/21/2024

Form File No.

Exhibit Filing Date Filed / Furnished Herewith

10.5† Amended and Restated License Agreement, dated as of December 9, 2016, by and between Bioventus LLC, Q-Med AB and Nestlé Skin Health S.A.

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S-1 333-252238 10.6 1/20/2021

Form File No.

Exhibit Filing Date Filed / Furnished Herewith

10.7† Exclusive License, Supply and Distribution Agreement, dated as of February 9, 2016, by and between IBSA Institut Biochimique SA (Switzerland) and Bioventus LLC.

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10-K 001-37844 10.8(d) 3/31/2023

Form File No.

Exhibit Filing Date Filed / Furnished Herewith

10.8(e) Amendment No.

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8-K 001-37844 10.1 1/19/2024

Form File No.

Exhibit Filing Date Filed / Furnished Herewith

Director Offer Letter, dated as of December 11, 2015, by and between Bioventus LLC and William A.

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S-1 333-252238 10.38 1/20/2021

Phantom Profits Interest Plan Award Agreement, dated as of June 25, 2020, by and between Bioventus LLC and Kenneth M.

S-1 333-252238 10.42 1/20/2021

Option Letter, dated as of July 30, 2020, by and between Bioventus LLC and Kenneth M.

S-1 333-252238 10.43 1/20/2021

Bioventus Inc.

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10.48 2/10/2021

Form of Restricted Stock Unit Award Grant Notice and Restricted Stock U nit Agreement (2025) .

10.1 6 ^

Form of Bioventus Performance Restricted Stock Unit Award Grant Notice and Agreement.

Bioventus Inc.

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10.51 2/10/2021

Employment Agreement, dated as of February 9, 2021, by and among Bioventus Inc., Bioventus LLC and Kenneth Reali .

S-1/A 333-252238

10.52 2/10/2021

Employment Agreement, dated as of February 9, 2021, by and among Bioventus Inc., Bioventus LLC and Anthony D’Adamio .

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8-K 001-37844 10.1 11/22/2021

10.20(a) Amendment to the Lease Agreement, dated October 14, 2024, between Bioventus LLC and 7101 Goodlett Farms Parkway, LLC.

Revised Employment Agreement, dated as of February 14, 2022, by and among Bioventus Inc., Bioventus LLC and Mark Singleton.

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S-8 333-264050 99.2 4/1/2022

10.25 Option and Equity Purchase Agreement, between Bioventus LLC, CartiHeal (2009) Ltd., Elron Electronic Industries Ltd., dated July 15, 2020.

S-1 333-252238 10.10 1/20/2021

10.25(a) Amendment to Option and Equity Purchase Agreement, between Bioventus LLC, CartiHeal (2009) Ltd., Elron Ventures Ltd.

and dated June 17, 2022.

8-K 001-37844 10.1 6/22/2022

Form File No.

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10-Q 001-37844 10.1 5/16/2023

Separation Agreement and Release between Kenneth Reali and Bioventus Inc., dated April 4, 2023.

8-K 001-37844 10.1 4/5/2023

Employment Agreement between Anthony P.

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Employment Agreement, between Robert E.

Claypoole and Bioventus Inc.

, dated as of December 19, 2023.

Claypoole and Bioventus Inc., dated as of December 19, 2023.

8-K 001-37844 10.1 12/21/2023

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8-K 001-37844 10.3 12/21/2023

Bioventus Inc.

Insider Trading Policy, dated as of February 10, 2021

21.1 Listing of Subsidiaries

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Compensation Recovery Policy, dated September 7, 2023.

10-K 001-37844 97.1 3/12/2024

List of patents and pending patent applications directed to Bioventus Inc.’s material products .

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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 9A. Controls and Procedures