What changed in this filing

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Item 1A. Risk Factors

2021-05-07 compared with 2020-11-20 · 14 added, 3256 removed, 2 unchanged (100% of the section changed)

Risk Factors.

Investing in our common stock involves

a high degree of risk.

You should carefully consider the risks and uncertainties described below and the other information in this

Quarterly Report, including our unaudited condensed consolidated financial statements and the related notes, as well as our other

public filings with the SEC, before making an investment in our common stock.

Our business, financial condition, results of operations

and prospects could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our

common stock could decline and you could lose all or part of your investment.

This Quarterly Report also contains forward-looking

statements that involve risks and uncertainties.

See “Forward-Looking Statements.”

Our actual results could differ

materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including those

set forth below.

Risks Related to Our Business

Our long-term growth depends on our

ability to enhance our products, expand our product indications and develop, acquire and commercialize additional product offerings.

Our industry is highly competitive and

subject to rapid change and technological advancements.

Competition intensifies as technical advances in each field are made and

become more widely known.

We can give no assurance that others will not develop products, services and processes with significant

advantages over the products, services and processes that we offer or are seeking to develop.

It is, therefore, important to our

business that we continue to enhance our existing product offerings, expand our product indications and develop or otherwise introduce

and successfully commercialize new products.

Developing, acquiring and commercializing products is expensive and time-consuming

and could divert management’s attention away from our core business.

Even if we are successful in developing additional products,

the success of any new product offering or enhancements to any of our existing products will depend on several factors, including

our ability to:

properly identify and anticipate physician and patient needs;

develop and introduce new products and product enhancements in a timely manner;

distinguish our products from those of our competitors;

develop an effective and dedicated sales and marketing team;

enter into successful agreements with commercial partners, independent sales agents and other third

parties where it is beneficial for us to do so;

adequately protect our intellectual property, avoid infringing, misappropriating or otherwise violating

the intellectual property rights of third parties and obtain and maintain necessary intellectual property licenses from third parties;

demonstrate, if required, the safety and efficacy of new products with data from pre-clinical studies

and clinical trials;

obtain the necessary regulatory clearances or approvals for new products, product enhancements

and expanded indications;

maintain full compliance with FDA, European Union Medical Devices regulations and other regulatory

requirements applicable to new devices or products or modifications of existing devices or products;

provide adequate training to potential users of our products;

receive adequate coverage and reimbursement for our products;

otherwise compete effectively against products and enhancements developed by our competitors.

If we are not successful in expanding our

indications and developing, acquiring and commercializing new products and product enhancements, our ability to increase our net

sales may be impaired, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, 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 or other innovation.

Even if we are able to successfully develop

and commercialize new product offerings or enhancements, they may be quickly rendered obsolete by changing customer preferences

or the introduction by our competitors of products embodying new technologies or features and/or otherwise not produce sales in

excess of the costs of development, any of which could also materially and adversely affect our business, financial condition and

results of operations.

Furthermore, to the extent we seek to enhance our products and broaden our product portfolio through acquisitions

or other commercial transactions, we will be subject to additional risks.

See “—

We regularly evaluate opportunities

to make acquisitions of, investments in, and licenses or other commercial arrangements involving, other companies or technologies,

and to enter into other strategic transactions.

These transactions entail significant risks.

A substantial portion of our net

sales is generated through our commercial partners and independent sales agents, which subjects us to various risks.

We currently rely on the efforts of our

commercial partners and independent sales agents to generate a substantial portion of our net sales, and we expect to continue

to rely on these third parties to generate a substantial portion of our net sales in the future while we work to grow our direct

As a result, the impairment or termination of these relationships for any reason, or the failure of these parties

to diligently sell our products and comply with applicable laws and regulations, could materially and adversely affect our ability

to generate revenue and profits.

Because our commercial partners and independent sales agents control the relationships with our

end customers, if our relationship with any commercial partner or independent sales agent ends, we will likely also lose our relationship

with their customers.

Furthermore, our success is partially dependent on the willingness and ability of the sales representatives

and other employees of our commercial partners and independent sales agents to diligently sell our products.

However, we cannot

guarantee that they will be successful in marketing our products.

In addition, because our commercial partners and independent

sales agents do not sell our products exclusively, they may focus their sales efforts and resources on other products that produce

better margins or greater commissions for them or are incorporated into a broader strategic relationship with a partner.

we do not control the sales representatives and other employees of our commercial partners, we cannot guarantee that our sales

processes, regulatory compliance and other priorities will be consistently communicated and executed.

In addition, we do not have

staff in many of the areas covered by our commercial partners and independent sales agents, which makes it particularly difficult

for us to monitor their performance.

While we may take steps to mitigate the risks associated with noncompliance by our commercial

partners and independent sales agents, there remains a risk that they will not comply with regulatory requirements or our requirements

and policies.

Actions by the sales representatives and other employees of our commercial partners and independent sales agents

that are beyond our control could result in flat or declining sales in that territory, harm to the reputation of our company or

our products or legal liability, any of which could have a material adverse effect on our business, financial condition and results

of operations.

In addition to the risk of losing customers, the operation of local laws and our agreements with our commercial

partners and independent sales agents would make it difficult for us to replace a commercial partner or independent sales agent

we feel is underperforming.

In order to increase our sales, particularly

with respect to our Core Products, we intend to develop relationships and arrangements with additional commercial partners and/or

independent sales agents, which we may not be able to do on commercially reasonable terms or at all.

If we are unable to establish

new commercial partner and independent sales agent relationships and maintain our relationships with our existing commercial partners

and independent sales agents, in each case, on commercially reasonable terms, we will be unable to increase sales of our products

and our business, financial condition and results of operations could be materially and adversely affected.

In addition, certain of our commercial

partners may, from time to time, account for a significant portion of our net sales and/or accounts receivable.

Sales to Surgalign

Holdings, one of our commercial partners, accounted for 11% of our net sales during the nine months ended September 30, 2020

and represented 10% of our accounts receivable as of September 30, 2020.

Sales to Medtronic, also one of our commercial partners,

accounted for 16% of our net sales during the nine months ended September 30, 2020 and represented 29% of our accounts receivable

as of September 30, 2020.

The loss of one or more significant commercial partners, or a material reduction in their purchases

of our products, would adversely affect our business, financial condition and results of operations.

We are also subject to the

risk that any such commercial partner will experience financial difficulties that prevent them from making payments to us on a

timely basis or at all.

Our revenue and profitability could

be materially and adversely affected if we fail to maintain our relationships with our existing contract manufacturing customers

and enter into agreements with new contract manufacturing customers, or if existing contract manufacturing customers reduce purchases

of our products.

Our relationships with these customers also subject us to certain risks.

contract manufacturing operations are an important component of our business, enabling us to utilize as much as possible of the

human biological material from which we produce our core orthopedic/spinal repair and soft tissue reconstruction products, leverage

our existing overhead and improve our cash flow.

In addition, we have historically generated a significant portion of our total

net sales from sales of our Non-Core Products, which is composed primarily of purchases from our contract manufacturing customers.

Sales of our Non-Core Product sales which represented approximately 14.1% and 30.1% of our total net sales for the nine months

ended September 30, 2020 and 2019 respectively, and this decrease largely resulted from a reduction in volume of products

purchased by one significant contract customer following the expiration of its contract.

As a result, if we are unable to maintain

our relationships with our existing contract manufacturing customers and establish relationships with new contract manufacturing

customers on terms that are favorable to us, or if our existing contract manufacturing customers materially reduce their purchases

of our products, our sales and profitability may be further adversely affected.

In addition, although we have invested,

and expect to continue to invest, significant time and resources cultivating our relationships with these customers, these relationships

subject us to certain risks.

For example, our contract manufacturing customers may use their experience with our products to develop

their own solutions, which they may be able to produce at a lower cost than the price they pay for our products.

This is particularly

true given that many of our customers are large, established companies that may be able to achieve greater economies of scale in

manufacturing and production and/or experience synergies from vertical integration.

In addition, our contract manufacturing customers

routinely audit and inspect our facilities, processes and practices to ensure that our manufacturing process and products meet

their internal standards and applicable regulatory standards.

To date, we have passed all such audits and inspections.

we may not do so in the future, and any failure to perform to our customers’

satisfaction in these audits could significantly

harm our relationships with them and our reputation, which could materially and adversely affect our business, financial condition

and results of operations.

Furthermore, the need to comply with our customers’

internal requirements could result in increased

development, manufacturing, warranty and administrative costs.

A significant increase in these costs could adversely affect our

business, financial condition and results of operations.

There is also a risk that we may be unable to supply products in the quantities

and of the quality required by these customers within their required timeframes, which would also jeopardize our relationships

Disagreements or disputes may also arise from time to time.

Any of these events, to the extent they cause our customers

to reduce purchases of our products or terminate their relationships with us, could have a material adverse effect on our business,

financial condition and results of operations.

In addition, our sales to these customers

may be impacted by changes in their buying habits over which we have no control.

Such changes may be driven by, among other things,

changes in market share, cyclicality, inventory reductions, spending patterns, cost-cutting measures, product development activity

and timelines and changes in supply chain management, as well as the impact of general economic conditions.

These customers may

also experience financial difficulties or other problems that may prevent them from making payments to us on a timely basis or

Any of these events could cause our operating results to fluctuate from period to period, make it more difficult for us

to manage our inventory and production schedules and otherwise adversely affect our business, financial condition and results of

We plan to expand our direct sales

force, and if we are unable to successfully expand, manage and maintain our direct sales force, we may not be able to generate

greater market share and revenue growth.

Prior to the CorMatrix Acquisition, we

had a very small direct sales force and sold our Core Products primarily through independent sales agents or to other companies

for resale or incorporation into their products.

Though our orthopedic/spinal repair products are now primarily sold through our

commercial partners, we currently utilize our direct sales force to sell CanGaroo and our cardiovascular products, as well as our

SimpliDerm product.

As of September 30, 2020, our direct sales organization consisted of 25 sales representatives, who are

focused on increasing market access and market penetration by selling our products, managing our commercial partners, who assist

in selling CanGaroo, and providing technical assistance.

Our operating results are directly dependent upon the efforts of these

If our direct sales force fails to adequately promote, market and sell our products and effectively manage and assist

our commercial partners, our net sales may be adversely affected.

In addition, in order to expand our network

of hospital and physician customers, drive deeper penetration in our current accounts and provide additional technical assistance

to our commercial partners, we plan to expand the size and geographic scope of our direct sales force.

This growth may require

us to split or adjust existing sales territories, which may adversely affect our ability to retain customers in those territories.

Additionally, our future success will depend largely on our ability to continue to hire, train, retain and motivate skilled sales

personnel with significant industry experience and technical knowledge of regenerative medicine and related products.

competition for their services is high, we cannot assure you we will be able to hire and retain additional personnel on favorable

or commercially reasonable terms, if at all.

Failure to hire or retain qualified sales personnel would prevent us from expanding

our business and generating additional revenue.

In addition, it typically takes a substantial period of time before newly hired

sales personnel are effective.

Though we currently utilize commercial partners and independent sales agents to sell certain of

our products, there is no guarantee that we will be able to establish relationships with additional parties, or that our existing

commercial partners and independent sales agents will purchase or otherwise commercialize any products we may seek to introduce

in the future.

If we are unable to expand our sales and marketing capabilities, we may not be able to effectively commercialize

our products, which could have a material adverse effect on our business, financial condition and results of operations.

We are working to grow our direct

sales force for certain of our products, which may result in higher fixed costs and may slow our ability to reduce costs in the

face of a sudden decline in demand for our products.

A key component of our growth involves

expanding the size and geographic scope of our direct sales force.

A direct sales force may subject us to higher fixed costs than

those of other companies that market competing products primarily through third parties due to the costs that we will bear associated

with employee benefits, training and managing sales personnel.

As a result, we could be at a competitive disadvantage relative

to competitors who rely more heavily on third parties to market and sell their products.

Additionally, these fixed costs may slow

our ability to reduce costs in the face of a sudden decline in demand for our products, which could have a material adverse effect

on our business, financial condition and results of operations.

We have incurred operating losses

since our inception, expect to continue to incur significant expenses and operating losses in the future, and may not be able to

achieve or sustain profitability.

We have incurred net losses since our inception

For the years ended December 31, 2018 and 2019, we had net losses of 

$11.6 million and $11.9 million, respectively,

and for the nine months ended September 30, 2019 and 2020, we had net losses of 

$9.1 million and $13.0 million, respectively.

As of September 30, 2020, we had an accumulated deficit of 

$74.9 million.

To date, we have financed our operations

primarily through private placements of our convertible preferred stock, amounts borrowed under our credit facilities and sales

of our products.

We have devoted the majority of our resources to acquisition and integration, manufacturing costs, research and

development, clinical activity and investing in our commercial infrastructure through our direct sales force and commercial partners

in order to expand our presence and to promote awareness and adoption of our products.

We expect that our operating expenses will

continue to increase as we grow our sales organization, expand our product development and clinical and research activities, and

incur additional costs associated with being a public company.

As a result, we expect to continue to incur operating losses in

the future and may never achieve profitability.

Furthermore, even if we do achieve profitability, we may not be able to sustain

or increase profitability on an ongoing basis.

If we do not achieve or sustain profitability, it will be more difficult for us

to finance our business and accomplish our strategic objectives, either of which would have a material adverse effect on our business,

financial condition and results of operations and cause the market price of our Class A common stock to decline.

failure of our products to significantly penetrate existing or new markets would negatively affect our business, financial condition

and results of operations.

Our business has been, and may continue

to be, adversely affected by the outbreak of the novel strain of coronavirus disease, COVID-19, and may be adversely affected by

any future pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide.

If a pandemic, epidemic or outbreak of

an infectious disease occurs in the United States or worldwide, our business may be adversely affected.

In December 2019,

a novel strain of coronavirus, SARS-CoV-2, was identified in Wuhan, China.

Since then, SARS-CoV-2, and the resulting disease, COVID-19,

has spread to most countries and all 50 states within the United States.

The COVID-19 pandemic has negatively impacted our business,

financial condition and results of operations by significantly decreasing and delaying the number of procedures performed using

our products, and we expect the pandemic to continue to negatively impact our business, financial condition and results of operations.

Similar to the general trend in elective and other surgical procedures, the number of procedures performed using our products has

decreased significantly as healthcare organizations in the United States have prioritized the treatment of patients with COVID-19

or have otherwise altered their operations to prepare for and respond to the pandemic.

For example, in the United States, governmental

authorities have recommended, and in certain cases required, that elective, specialty and other non-emergency procedures and appointments

be suspended or canceled in order to avoid patient exposure to medical environments and the risk of potential infection with the

novel coronavirus, and to focus limited resources and personnel capacity on the treatment of COVID-19 patients.

Beginning in March 2020,

a significant number of procedures using our products have been postponed or cancelled, which has negatively impacted sales of

our products.

Decreases in procedures have been most prevalent in regions experiencing significant outbreaks, while healthcare

organizations in other regions have continued to undertake procedures using our products at reduced levels as compared to before

the pandemic.

The COVID-19 pandemic could also adversely impact the initiation, continuation and completion of our clinical trials

by, for example, delaying procedures using our products or reducing the number of patients, healthcare providers or clinical facilities

available or willing to participate in the clinical trials.

These delays could result in increased costs, delays in advancing our

product development, delays in testing the effectiveness of our technology or termination of the clinical studies altogether.

measures and challenges will likely continue for the duration of the pandemic, which is uncertain, and may continue to reduce our

net sales and negatively impact our business, financial condition and results of operations while the pandemic continues.

even after the pandemic ultimately subsides, we anticipate there will be a substantial backlog of patients seeking procedures and

appointments for a variety of medical conditions and, as a result, patients seeking procedures performed using our products will

have to navigate limited provider capacity.

We believe this limited capacity of providers, hospitals and other healthcare facilities

could have a significant adverse effect on our business, financial condition and results of operations during and following the

COVID-19 pandemic.

Numerous state and local jurisdictions,

including those where our facilities are located, have imposed, and others in the future may impose, “shelter-in-place”

orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread

Such orders or restrictions have resulted in reduced operations at our manufacturing facilities, travel restrictions

and cancellation of events and have restricted the ability of our sales representatives and those of our commercial partners and

independent sales agents to attend procedures in which our products are used, among other effects, thereby significantly and negatively

impacting our operations.

Other disruptions or potential disruptions include restrictions on the ability of our sales representatives

and other personnel, and those of our commercial partners and independent sales agents, to travel and access customers for training

and case support;

inability of our suppliers to manufacture and deliver to us on a timely basis or at all;

delays in our ability

to obtain medical records for tissue donors, which we need in order to release our products;

disruptions in our production schedule

and ability to manufacture and assemble products;

inventory shortages or obsolescence;

delays in actions of regulatory bodies;

delays in clinical trials and studies;

diversion of or limitations on employee resources that would otherwise be focused on the

operations of our business, including because of sickness of employees or their families or the desire of employees to avoid contact

with groups of people;

delays in growing or reductions in our direct sales force, including through delays in hiring, lay-offs,

furloughs or other losses of sales representatives;

restrictions in our ability to ship our products to customers;

business adjustments

or disruptions of certain third parties, including suppliers, medical institutions and clinical investigators with whom we conduct

negative impact on our customers’

credit profiles, which may adversely impact our future collection experience;

and additional government requirements or other incremental mitigation efforts that may further impact our or our suppliers’

capacity to manufacture our products.

The extent, to which the COVID-19 pandemic or any future pandemic, epidemic or outbreak of

an infectious disease impacts our business, will depend on future events and developments, which are highly uncertain and cannot

be predicted, including the severity and spread of the disease and the effectiveness of actions to contain the disease or treat

its impact, among others.

As new information regarding COVID-19 continues to emerge, it is difficult to predict what impact this

disease will ultimately have on our business.

Adverse changes in general domestic

and global economic conditions and instability and disruption of credit markets, including as a result of the current COVID-19

pandemic or any other outbreak of an infectious disease, could adversely affect our business, financial condition, results of operations

and liquidity.

We are subject to risks arising from adverse

changes in general domestic and global economic conditions, including any recession, economic slowdown or disruption of credit

While the potential economic impact brought by, and the duration of, any pandemic, epidemic or outbreak of an infectious

disease, including COVID-19, may be difficult to assess or predict, the current COVID-19 pandemic has resulted in, and may continue

to result in, significant disruption of global financial markets.

These events, and any financial crisis that may occur in the

future, could make it more difficult and more expensive for hospitals and health systems to obtain credit, which may contribute

to pressures on their operating margins.

As a result, hospitals and health systems may curtail and reduce capital and overall spending,

which may have a significant adverse effect on our business.

In addition, the current economic downturn that has resulted from

the COVID-19 pandemic has resulted and may continue to result in, and any economic downturn that may occur in the future may also

result in, higher unemployment and a reduction in the number of individuals covered by private insurance, which may result in an

increase in the cost of uncompensated care for hospitals.

Higher unemployment may also result in a shift in reimbursement patterns

as unemployed individuals switch from private plans to public plans such as U.S.

Medicaid or Medicare.

As economic conditions deteriorate

and unemployment increases, any significant shift in coverage for the unemployed may have an unfavorable impact on our business.

In addition, the current COVID-19 pandemic

and any other disruption in the capital and credit markets could impede our access to capital, which could be further adversely

affected if we are unable to maintain our current credit ratings.

Should we have limited access to additional financing sources,

we may need to defer capital expenditures or seek other sources of liquidity, which may not be available to us on acceptable terms

Similarly, if our suppliers face challenges in obtaining credit or other financial difficulties, they may be unable

to provide the materials required to manufacture our products.

All of these factors related to global economic conditions, which

are beyond our control, could adversely impact our business, financial condition, results of operations and liquidity.

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 healthcare professionals.

The acceptance of our products depends in part on our ability

to educate these individuals as to the distinctive characteristics, benefits, safety, clinical efficacy and cost-effectiveness

of our products compared to alternative products, procedures and therapies.

We support our direct sales force, commercial partners

and independent sales agents through in-person educational programs and online medical educational materials, among other things.

We also produce marketing materials, including materials outlining our products, for our sales teams using printed, video and multimedia

However, our efforts to educate physicians, surgeons and other healthcare professionals regarding our products may not

be successful, particularly in markets in which we rely exclusively on the efforts of our commercial partners and independent sales

A failure to educate physicians and surgeons may impair our ability to achieve market acceptance of our products and adversely

affect our business, financial condition and results of operations.

Our success depends on the continued

and future acceptance of our products by the medical community.

Even if we are able to increase awareness

of our products among healthcare professionals, there can be no assurance that this will translate into greater acceptance of our

products by the medical community.

We believe physicians, surgeons and other healthcare professionals will only adopt our products

if they determine, based on experience, clinical data and published peer reviewed journal articles, that the use of our products

in a particular procedure is a favorable alternative to other available methods.

Physicians also are more interested in using cost-effective

products as they face increasing cost-containment pressure.

In general, physicians may be slow to change their medical treatment

practices and adopt our products for a variety of reasons, including, among others:

their lack of experience using our products;

lack of evidence supporting additional patient benefits from use of our products over conventional

pressure to contain costs;

preference for other treatment modalities or our competitors’

perceived liability risks generally associated with the use of new products and procedures;

limited availability of coverage and/or reimbursement from third-party payors;

the time that must be dedicated to learning how to use our products.

The degree of market acceptance of our

products will continue to depend on a number of factors, some of which are outside of our control, including, among other things:

the actual and perceived safety and efficacy of our products;

the potential and perceived advantages of our products over alternative treatments;

clinical data and the clinical indications for which our products are approved;

product labeling or product insert requirements of the FDA, the European Union or other regulatory

authorities, including any limitations or warnings contained in approved labeling;

the cost of using our products relative to the use of our competitors’

products or alternative

treatment modalities;

relative convenience and ease of administration;

the strength of marketing and distribution support;

the timing of market introduction of competitive products;

publicity concerning our products or competing products and treatments;

our reputation and the reputation of our products;

the prevalence and severity of any adverse events patients experience involving our products;

the shelf life of our products and our ability to manage the logistics of the end-user supply chain;

sufficient and readily accessible third-party insurance coverage and reimbursement for procedures

incorporating our products.

In addition, we believe recommendations

for, and support of our products by, influential physicians are essential for market acceptance and adoption.

If we do not receive

this support (e.g., because we are unable to demonstrate favorable long-term clinical data or otherwise), physicians and hospitals

may not use our products, which would significantly impair our ability to increase our sales and prevent us from achieving and

sustaining profitability.

Unfavorable results from any of our

pre-clinical studies or clinical trials, comparative effectiveness, economic or other studies, or from similar trials or studies

conducted by others, may negatively affect the use or adoption of our products by physicians, hospitals and payors, which could

have a negative impact on the market acceptance of our products and their profitability.

We regularly conduct a variety of pre-clinical

studies and clinical trials, comparative effectiveness studies and economic and other studies of our products in an effort to generate

clinical and real-world outcomes and cost effectiveness data in order to obtain product approval and drive further penetration

in the markets we serve.

If a clinical study conducted by us or a third party fails to demonstrate statistically significant results

supporting performance, use benefits or compelling health or economic outcomes from using our products, physicians may elect not

to use our products.

Furthermore, in the event of an adverse clinical study outcome, our products may not achieve “standard-of-care”

status, where they exist, for the conditions in question, which could deter the adoption of our products.

Also, if serious adverse

events are reported during the conduct of a study, it could affect continuation of the study, product approval or clearance and

product adoption.

In addition, U.S.

and foreign regulatory authorities routinely conduct audits of clinical studies and such audits

may result in adverse regulatory actions.

If we are unable to develop a body of statistically significant evidence from our clinical

study program, whether due to adverse results or the inability to complete properly designed studies, domestic and international

public and private payors could refuse to cover procedures using our products, limit the manner in which they cover our products

or reduce the price they are willing to pay or reimburse for procedures using our products.

Any of these events could have a negative

impact on market acceptance of procedures using our products and their profitability, which could have a material adverse effect

on our business, financial condition and results of operations.

We will need to continue to expand

our organization, and managing growth may be more difficult than we expect.

Managing our growth may be more difficult

than we expect.

We anticipate that a period of significant expansion will be required to penetrate and service the markets for

our existing and anticipated future products and to continue to develop new products.

This expansion will place a significant strain

on our management, operational and financial resources.

To manage the expected growth of our operations and personnel, we must

both modify our existing operational and financial systems, procedures and controls and implement new systems, procedures and controls.

We must also expand our finance, administrative and operations staff.

Management may be unable to hire, train, retain, motivate

and manage necessary personnel or to identify, manage and exploit existing and potential strategic relationships and market opportunities.

If we fail to meet these challenges effectively, there may be an adverse effect on our business, financial condition and results

of operations.

We regularly evaluate opportunities

to make acquisitions of, investments in, and licenses or other commercial arrangements involving, other companies or technologies,

and to enter into other strategic transactions.

These transactions entail significant risks.

Our success depends, in part, on our ability

to continually enhance and broaden our product offerings in response to changing customer demands, competitive pressures and advances

in technologies.

Accordingly, although we have no current commitments with respect to any acquisition or investment, we regularly

review potential acquisitions of, investments in, and licenses or other commercial arrangements involving, complementary businesses,

products or technologies instead of developing them ourselves.

In addition, in regularly evaluating our financial and operating

performance, we may decide to sell one or more of our product lines or another portion of our business.

Opportunities to engage

in these transactions may not be readily available to us at commercially reasonable prices, on other terms acceptable to us or

Even if such opportunities are available, these transactions involve significant risks.

In connection with one or more

of these transactions, we may:

issue additional equity securities that would dilute the value of your investment in us;

use cash that we may need in the future to operate our business;

incur debt that could have terms unfavorable to us or that we might be unable to repay;

structure the transaction in a manner that has unfavorable tax consequences, such as a stock purchase

that does not permit a step-up in the tax basis for the assets acquired;

incur asset impairment or other acquisition-related charges, or unforeseen costs, expenditures

be unable to realize the anticipated benefits, such as increased revenues, cost savings or synergies

from additional sales of existing or newly acquired products;

experience dissynergies in shared functions following a divestment of any portion of our business;

be unable to successfully integrate, operate, maintain and manage any newly acquired operations;

divert management’s attention from the existing business to integrate, operate, maintain

and manage any newly acquired operations and personnel, or to manage the complexities involved in separating divested operations,

services, products and personnel;

be unable to secure the services of key employees related to an acquisition or, in the case of

a divestiture, lose one or more of our key employees;

face increased scrutiny and review of our company and operations from government and other regulatory

otherwise be unable to succeed in the marketplace with the acquisition.

The occurrence of any of the above could

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

Furthermore, business acquisitions

also involve the risk of unknown liabilities associated with the acquired business, which could be material.

Such liabilities could

include lack of compliance with government regulations that could subject us to investigation, civil and criminal sanctions, litigation

and/or other actions that make it impossible to realize the anticipated benefits of the transaction.

For example, we may acquire

a company that was not compliant with FDA quality requirements or was making payments or other forms of remuneration to physicians

to induce them to use their products.

Incurring unknown liabilities or the failure to complete or realize the anticipated benefits

of an acquisition, investment or other commercial arrangement, whether resulting from one or more of the factors described above

or otherwise, could have a material and adverse effect on our business, financial condition and results of operations.

New lines of business and new products

and services may subject us to additional risks.

From time to time, we may implement or

acquire new lines of business or introduce new products and services within our existing business lines.

There are risks and uncertainties

associated with these efforts, particularly in instances where the markets are not fully developed or are evolving.

In developing

and commercializing new lines of business and new products and services, we may invest significant time and resources.

factors, such as regulatory compliance obligations, competitive alternatives, lack of market acceptance and shifting market preferences,

may also affect the successful implementation of a new line of business or a new product or service.

Failure to successfully plan

for and manage these risks in the development and implementation of new lines of business or new products or services could have

a material adverse effect on our business, financial condition and results of operations.

We face significant and continuing

competition from other companies, some of which have longer operating histories, more established products and/or greater resources

than we do, which could adversely affect our business, financial condition and results of operations.

We operate in highly competitive markets

that are characterized by intense competition, subject to rapid change and significantly affected by new product introductions,

technological advancements and other market activities of industry participants.

Our competitors have historically dedicated, and

will continue to dedicate, significant resources to promote their products and to develop new products that compete with ours.

Customers in our target markets consider many factors when selecting a product, including product efficacy, ease of use, price,

availability of payor coverage and adequate third-party reimbursement for procedures using the product, customer support services

for technical-, clinical- and reimbursement-related matters and customer preference for, and loyalty to, particular products or

a particular manufacturer.

We expect competition to remain intense as competitors introduce additional competing products and enhancements

to their existing products, and continue expanding into geographic markets where we currently operate or plan to expand.

introductions or enhancements by competitors, which may have advanced technology, better features or lower pricing, may make our

products obsolete or less competitive.

As a result, we will be required to devote continued efforts and financial resources to

develop and commercialize new products and enhancements to our existing products, deliver cost-effective clinical outcomes, manage

our costs and expand our geographic reach.

Many of our current and potential competitors

have longer operating histories and substantially greater financial, technical, marketing, sales, distribution and other resources

than we do, which may prevent us from achieving significant market penetration or improved operating results.

Certain competitors’

products, such as competitors of SimpliDerm, are subject to a simpler reimbursement process than are our products.

may also be able to leverage their market share and other resources to set prices at a level below that which is profitable for

These companies may also enjoy other competitive advantages, including, without limitation:

greater company, product and brand recognition;

better quality and greater volume of clinical data;

more effective marketing to and education of physicians and other healthcare professionals;

greater control of key intellectual property and more expansive portfolios of intellectual property

more experience in obtaining and maintaining regulatory clearances or approvals for products and

product enhancements;

more established relationships with hospitals and other healthcare providers, physicians, suppliers,

customers and third-party payors;

additional lines of products, and the ability to bundle products to offer greater incentives to

gain a competitive advantage;

more established sales, marketing and worldwide distribution networks;

better product support and service;

superior product safety, reliability and durability;

more effective pricing and revenue strategies;

more effective clinical training programs.

Our ability to achieve and maintain profitability

will depend, in part, on our ability to develop or acquire proprietary products that reach the market in a timely manner, receive

adequate coverage and reimbursement for procedures using our products, and are safer and more effective than their alternatives,

as well as our ability to otherwise compete effectively on the factors listed above.

If we are unable to do so, our sales and/or

margins will decrease, which could have a material adverse effect on our business, financial condition and results of operations.

Pricing pressure as a result of cost-containment

efforts of our customers, purchasing groups, third-party payors and governmental organizations could adversely affect our sales

and profitability.

Medical technology companies, healthcare

systems and group purchasing organizations, or GPOs, have intensified competitive pricing pressure as a result of industry trends

and new technologies.

Rising healthcare costs have resulted in numerous cost reform initiatives by legislators, regulators and

third-party payors.

This cost reform has triggered a consolidation trend in the healthcare industry to aggregate purchasing power

and, as a result, purchasing decisions are increasingly shifting to hospitals, integrated delivery networks, or IDNs, and other

hospital groups, and away from individual surgeons and physicians.

Many existing and potential facility customers for our products

within the United States are members of GPOs and IDNs, including accountable care organizations or public-based purchasing organizations,

and our business is partly dependent on contracts with these organizations.

Purchases of our products can be contracted under national

tenders or with larger hospital GPOs.

GPOs and IDNs negotiate pricing arrangements with healthcare product manufacturers and distributors

and offer the negotiated prices to affiliated hospitals and other members.

GPOs and IDNs typically award contracts on a category-by-category

basis through a competitive bidding process and, at any given time, we are typically in various stages of responding to bids and

negotiating and renewing GPO and IDN agreements.

Bids are generally solicited from multiple manufacturers or service providers

with the intention of obtaining lower pricing.

Due to the highly competitive nature of the bidding process and the GPO and IDN

contracting processes in the United States, we may not be able to obtain or maintain contract positions with major GPOs and IDNs

across our product portfolio.

Furthermore, GPO and IDN contracts are typically terminable without cause upon 60 to 90 days’

In addition, while having a contract with a major purchaser for a given product category can facilitate sales, there can

be no guarantee that sales volumes for those products will be maintained.

For example, GPOs and IDNs are increasingly awarding

contracts to multiple suppliers for the same product category and, even when we are the sole contracted supplier of a GPO or IDN

for a certain product category, members of the GPO or IDN are generally free to purchase from other suppliers.

If we are unable

to maintain and renew our contracts with our current GPO and IDN customers and negotiate contracts with new customers on favorable

terms, or if sales volumes under these agreements decline, our business, financial condition and results of operations could be

materially and adversely affected.

In addition, most of our customers purchase

our products directly and then bill third-party payors for procedures using those products.

Because there is typically no separate

reimbursement for supplies used in surgical procedures, the additional cost associated with the use of our products can affect

the profit margin of the hospital or surgery center where the procedure is performed.

Some of our target customers may be unwilling

to adopt our products in light of the additional associated cost or may negotiate for lower pricing.

Further, any decline in the

amount payors are willing to reimburse our customers for procedures using our products, including those as a result of healthcare

reform initiatives, could make it difficult for existing customers to continue using or to adopt our products and could create

additional pricing pressure for 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.

If we are forced to lower the price we charge for our products, our margins will

decrease, which could impair our ability to grow our business and have a material adverse effect on our business, financial condition

and results of operations and impair our ability to grow our business.

Outside the United States, centralized

governmental healthcare authorities may exert pricing pressures in an effort to lower healthcare costs.

Implementation of healthcare

reforms and competitive bidding contract tenders may limit the price or the level at which reimbursement is provided for our products

and adversely affect both our pricing flexibility and the demand for our products.

Healthcare providers may respond to such cost-containment

pressures by substituting lower-cost products or other therapies for our products.

Our failure to offer acceptable prices to these

customers could adversely affect our sales and profitability in these markets.

We expect that market demand, government

regulation, third-party coverage and reimbursement policies and societal pressures will continue to change the healthcare industry

worldwide, resulting in further business consolidations and alliances among our customers, which may exert further downward pressure

on the prices for our products.

The processing of human and porcine

tissue for our products is technically complex, requiring high levels of quality control and precision, which subjects us to increased

production risks.

We manufacture our human and porcine tissue

products using technically complex processes requiring specialized facilities, highly specific raw materials, skill and diligence

by our personnel and other production constraints.

The complexity of these processes, as well as strict company and government

standards for the manufacture and storage of our products, subjects us to production risks.

In addition to ongoing production risks,

process deviations or unanticipated effects of approved process changes may result in non-compliance with regulatory requirements,

including stability requirements or specifications.

For example, our bone allograft products FiberCel, ViBone and OsteGro V, must

be shipped and maintained within a specified temperature range.

If environmental conditions deviate from that range, our products’

remaining shelf-lives could be impaired or their safety and efficacy could be adversely affected, making them unsuitable for use.

The occurrence of this or any other actual or suspected production or distribution problem can lead to lost inventories, customer

returns and, in some cases, recalls, with consequential damage to our reputation and customer relationships and the risk of product

The investigation and remediation of any potential or identified problems can cause production delays and result in

substantial additional expenses and lost revenue.

In addition, we may experience difficulties in scaling up processing and production

of our human and porcine tissue products, including problems related to yields, quality control and assurance, tissue availability,

adequacy of control policies and procedures and availability of skilled personnel.

Furthermore, developing and maintaining our

production capabilities has required, and will continue to require, the investment of significant resources, and we cannot guarantee

that we will be able to achieve economies of scale.

If we are unable to process and produce our human tissue products on a timely

basis, at acceptable quality and costs and in sufficient quantities, or if we experience technological problems, delays in production,

failure in the storage of our products or other loss of supply, our business would be materially and adversely affected.

Performance issues, service interruptions

or price increases by our shipping carriers could adversely affect our business, harm our reputation and impair our ability to

provide our products on a timely basis or at all.

Expedited, reliable shipping is essential

to our operations.

We rely heavily on providers of transport services for reliable, timely and secure point-to-point transport

of our products to our customers and for tracking of these shipments.

Should a carrier encounter delivery performance issues such

as loss, delays, damage or destruction of any of our products, it would be costly to replace these products in a timely manner

and such occurrences may damage our reputation and lead to decreased demand for our products and increased cost and expense to

our business.

This risk is particularly high with respect to FiberCel, ViBone and OsteGro V, which must be shipped and maintained

within a specified temperature range.

In addition, any significant increase in shipping rates could adversely affect our operating

margins and results of operations.

Similarly, strikes, severe weather, natural disasters, equipment malfunctions or other service

interruptions affecting the delivery services we use, would impair our ability to process orders for our products on a timely basis

or at all, which could have a material adverse effect on our business, financial condition and results of operations.

If our facilities are damaged or

become inoperable, we will be unable to continue to research, develop and supply our products and, as a result, there will be an

adverse effect on our business until we are able to secure new facilities and rebuild our inventory.

We do not have redundant facilities.

perform most of our research and development activity and manufacture our tissue-based products at our facility in Richmond, California.

The SIS ECM biomaterial used in our medical device products are manufactured by Cook Biotech Incorporated, or Cook Biotech, at

their facility in West Lafayette, Indiana and converted to a finished product at our facility in Roswell, Georgia.

approvals of our products are limited to one or more specifically approved manufacturing facilities.

As a result, if we fail to

produce enough of a product at a facility, or if any of our production facilities were to be shut down or otherwise become unavailable

for any reason, finding alternative manufacturing capabilities and obtaining the necessary regulatory approvals would require a

considerable amount of time and expense and would cause a significant disruption in service to our customers.

Disruption to our facilities could arise

for a variety of reasons, including technical, labor or other difficulties, equipment malfunction, contamination due to a COVID-19

infection or otherwise, the failure of our employees to follow specific protocols and procedures, the destruction of, or damage

to, any facility (as a result of a natural or man-made disaster, including, but not limited to, a tornado, flood, fire, power outage

or other event), quality control issues or other reasons.

Any disruption in the operation of our facilities as a result of any

of the above could impair our product development and commercialization efforts and result in lost sales, lost customers and harm

to our reputation, any of which would negatively impact our growth prospects and profitability and have a material adverse effect

on our business, financial condition and results of operations.

In addition, certain of these events, such as natural or man-made

disasters, would cause us to incur additional losses, including the time and expense required to repair and/or replace our equipment

and to rebuild our inventory.

Although we possess insurance for damage to our property and the disruption of our business, this

insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms

Because we depend upon a limited

number of third-party suppliers and manufacturers and, in certain cases, exclusive suppliers for products essential to our business,

we may incur significant product development costs and experience material delivery delays if we lose any significant supplier,

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

We obtain some of our raw materials from

a limited group of suppliers and rely on a single supplier to source the SIS ECM biomaterial used to manufacture CanGaroo and our

cardiovascular products for reasons of quality assurance, cost-effectiveness, availability or constraints resulting from regulatory

requirements.

For us to be successful, our suppliers must be able to provide us with products and components in substantial quantities,

in compliance with regulatory requirements, in accordance with agreed upon specifications, at acceptable costs and on a timely

Our efforts to maintain a continuity of supply and high quality and reliability may not be successful on a timely basis

Manufacturing disruptions experienced by our suppliers may jeopardize our supply of finished products.

Due to the stringent

regulations and requirements of the FDA and other similar non-U.S.

regulatory agencies regarding the manufacture of our products,

we may not be able to quickly establish additional or replacement sources for certain raw materials.

A change in suppliers could

require significant effort or investment in circumstances where the items supplied are integral to product performance or incorporate

unique technology.

Transitioning to a new supplier could be time-consuming and expensive, may result in interruptions in our operations

and product delivery, could affect the performance specifications of our products or could require that we modify the design of

those systems.

A reduction or interruption in manufacturing,

or an inability to secure alternative sources of raw materials or components, could have a material and adverse effect on our business,

financial condition, results of operations and cash flows.

One or more of our suppliers may refuse to extend us credit with respect

to our purchasing or leasing of equipment, supplies, products or components, or may only agree to extend us credit on significantly

less favorable terms or subject to more onerous conditions.

This could significantly disrupt our ability to purchase or lease required

equipment, supplies, products and components in a cost-effective and timely manner, and could have a material adverse effect on

our business, financial condition and results of operations.

Any casualty, natural disaster or other disruption of any of our sole-source

suppliers’

operations, for example due to a COVID-19 infection of employees of the supplier, or any unexpected loss of any

existing exclusive supply contract, could have a material adverse effect on our business, financial condition and results of operations.

In addition, if a change in manufacturer results in a significant change to any product, a new 510(k) clearance from the FDA

or similar international regulatory authorization may be necessary before we implement the change, which could cause substantial

Certain of our products are dependent

on the availability of tissue from human donors, and any disruption in supply could adversely affect our business, financial condition

and results of operations.

The products we manufacture for the orthopedic/spinal

repair and soft tissue reconstruction markets, as well as our contract manufacturing products, require that we obtain human tissue.

The success of our business depends, in part, on the availability of tissue from human donors.

Any inability to obtain tissue from

our sources will interfere with our ability to effectively meet demand for these products.

The recovery of human tissue for our

products is very labor-intensive, and it is, therefore, difficult to maintain a steady supply stream.

In addition, the availability

of acceptable donors is relatively limited and may be impacted by regulatory changes, general public opinion of the donation process

and the reputation of our company and the third-party procurement firms with which we partner to manage the donation process.

reports or other negative publicity concerning both improper methods of tissue recovery from donors and disease transmission from

donated tissue, including bones and dermis, may limit widespread acceptance of our products.

Unfavorable reports of improper or

illegal tissue recovery practices, both in the United States and internationally, as well as incidents of improperly processed

tissue leading to transmission of disease, may broadly affect the rate of future tissue donation and market acceptance of allograft

technologies and donated tissue use.

Potential patients may not be able to distinguish our products, technologies and tissue recovery

and processing procedures from others engaged in tissue recovery.

In addition, unfavorable reports about us or any of our third-party

procurement firms may make families of potential donors or donors themselves, from whom we are required to obtain consent before

processing tissue, reluctant to agree to donate tissue to for-profit tissue processors.

Any disruption in the supply of any human

tissue component could materially harm our ability to manufacture our products until a new source of supply, if any, could be found.

We may be unable to find a sufficient alternative supply channel within a reasonable period of time, on commercially reasonable

terms or at all, which would have a material adverse effect on our business, financial condition and results of operations.

Increased prices for raw materials

used in our products could adversely affect our business, financial condition and results of operations.

Our profitability is affected by the prices

of the raw materials used in the manufacture of our products.

These prices may fluctuate based on a number of factors beyond our

control, including changes in supply and demand, general economic conditions, labor costs, delivery costs, competition, import

duties, excises and other indirect taxes, currency exchange rates and government regulation.

Due to the highly competitive nature

of the healthcare industry and the cost containment efforts of our customers and third-party payors, we may be unable to pass along

cost increases for key components or raw materials through higher prices to our customers.

If the cost of key components or raw

materials increases, and we are unable to fully recover these increased costs through price increases or offset these increases

through other cost reductions, we could experience lower margins and profitability.

Significant increases in the prices of raw

materials that cannot be recovered through productivity gains, price increases or other methods could adversely affect our business,

financial condition and results of operations.

If we are not able to accurately

forecast demand for our products and manage our inventory, our margins could decrease and we could lose sales, either of which

could have a material adverse effect on our business, financial condition and results of operations.

While we must maintain sufficient inventory

levels to operate our business successfully and meet customer demand for our products, we must be careful to avoid amassing excess

To ensure adequate inventory supply, we must forecast inventory needs and place orders with our suppliers based on our

estimates of future demand for our products.

Demand for our products can change rapidly and unexpectedly, including during the

time between when raw materials are ordered from our suppliers and the finished product is offered for sale.

Our ability to accurately

forecast demand for our products could be negatively affected by a number of factors, many of which are beyond our control, including

our failure to accurately manage our expansion strategy, product introductions by competitors, an increase or decrease in customer

demand for our products or for products of our competitors, our failure to accurately forecast customer acceptance of new products,

unanticipated changes in general market conditions, reimbursement or regulatory matters and weakening of economic conditions.

levels that exceed the demand for our products may result in inventory write-downs or write-offs, which would adversely affect

our gross margins.

For example, in 2019, our launch of SimpliDerm resulted in reduced demand for certain of our other dermis inventory

and resulted in inventory write-downs.

Conversely, if we underestimate demand for our products, additional supplies of raw materials

or additional manufacturing capacity may not be available when required on terms that are acceptable to us or at all, and suppliers

or our third-party manufacturer may not be able to allocate sufficient capacity in order to meet our increased requirements.

a result, we may not be able to meet customer demand for our products, resulting in lost sales and potential damage to our reputation

and customer relationships, any of which would adversely affect our business, financial condition and results of operations.

In addition, while we seek to maintain

sufficient levels of inventory in order to protect ourselves from supply interruptions, our products generally have a shelf life

of two to three years.

We are, therefore, subject to the risk that a portion of our inventory will become obsolete or expire, which

could have a material adverse effect on our profitability and cash flows due to the resulting inventory impairment charges and

costs required to replace such inventory.

If hospitals and other healthcare

providers are unable to obtain coverage or adequate reimbursement for procedures performed with our products, it is unlikely our

products will be widely used.

In the United States, the commercial success

of our existing products and any products we may develop or acquire in the future will depend, in part, on the extent to which

governmental payors at the federal and state levels, including Medicare and Medicaid, private health insurers and other third-party

payors, provide coverage and establish adequate reimbursement levels for procedures utilizing our products.

Hospitals and other

healthcare providers that purchase our products for treatment of their patients generally rely on third-party payors to pay for

all or part of the costs and fees associated with our products as part of a “bundled”

rate for the associated procedures.

The existence of coverage and adequate reimbursement for procedures using our products by government and private payors is critical

to market acceptance of our existing and future products.

Neither hospitals nor surgeons are likely to use our products if they

do not receive adequate reimbursement for the procedures utilizing our products.

Many private payors currently base their

reimbursement policies on the coverage decisions and payment amounts determined by the Centers for Medicare and Medicaid Services,

or CMS, which administers the Medicare program.

Others may adopt different coverage or reimbursement policies for procedures performed

with our products, while some governmental programs, such as Medicaid, have reimbursement policies that vary from state to state,

some of which may not pay for the procedures performed with our products in an adequate amount, if at all.

Because the Medicare

and Medicaid programs are increasingly used as models for how private payors and other governmental payors develop their coverage

and reimbursement policies, a Medicare national or local non-coverage decision, denying coverage for procedures using one or more

of our products, could result in private and other third-party payors also denying coverage.

Third-party payors also may deny reimbursement

for procedures using our products if they determine that a product used in a procedure was not medically necessary, was not used

in accordance with cost-effective treatment methods, as determined by the third-party payor, or was used for an unapproved use.

Unfavorable coverage or reimbursement decisions by government programs or private payors underscore the uncertainty that our products

face in the market and could have a material adverse effect on our business.

Many hospitals and clinics in the United

States belong to GPOs, which typically incentivize their hospital members to make a relatively large proportion of purchases of

similar products from a limited number of vendors that have contracted to offer discounted prices.

Such contracts often include

exceptions for purchasing certain innovative new technologies, however.

Accordingly, the commercial success of our products may

also depend to some extent on our ability to either negotiate favorable purchase contracts with key group purchasing organizations

and/or persuade hospitals and clinics to purchase our product “off contract.”

The healthcare industry in the United States

has experienced a trend toward cost containment as government and private payors seek to control healthcare costs by paying service

providers lower rates.

While it is expected that hospitals will be able to obtain coverage for procedures using our products, the

level of payment available to them for such procedures may change over time.

State and federal healthcare programs, such as Medicare

and Medicaid, closely regulate provider payment levels and have sought to contain, and sometimes reduce, payment levels.

payors frequently follow government payment policies and are likewise interested in controlling increases in the cost of medical

In addition, some payors are adopting pay-for-performance programs that differentiate payments to healthcare providers based

on the achievement of documented quality-of-care metrics, cost efficiencies or patient outcomes.

These programs are intended to

provide incentives to providers to deliver the same or better results while consuming fewer resources.

As a result of these programs,

and related payor efforts to reduce payment levels, hospitals and other providers are seeking ways to reduce their costs, including

the amounts they pay to medical device manufacturers.

We may not be able to sell our products profitably if third-party payors

deny or discontinue coverage or reduce their levels of payment below that which we project, or if our production costs increase

at a greater rate than payment levels.

Adverse changes in payment rates by payors to hospitals could adversely impact our ability

to market and sell our products and negatively affect our financial performance.

In international markets, medical device

regulatory requirements and healthcare payment systems vary significantly from country to country, and many countries have instituted

price ceilings on specific product lines.

We cannot assure you that our products will be considered cost-effective by international

third-party payors, that reimbursement will be available or, if available, that the third-party payors’

reimbursement policies

will not adversely affect our ability to sell our products profitably.

Any failure to receive regulatory or reimbursement approvals

would negatively impact market acceptance of our products in any international markets in which those approvals are sought.

We face the risk of product liability

claims and may not be able to obtain or maintain adequate product liability insurance.

Our business exposes us to the risk of

product liability claims that are inherent in the manufacturing, processing, investigating and marketing of medical devices and

human and animal tissue products.

We are, and may in the future be, subject to product liability claims and lawsuits, including

potential class actions or mass tort claims, alleging that our products have resulted or could result in an unsafe condition or

Product liability claims may be made by patients and their families, healthcare providers or others selling our products.

Product liability claims may include, among other things, allegations of defects in manufacturing, defects in design, a failure

to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties.

We may be subject to such claims

even if the apparent injury is due to the actions of others or the pre-existing health of the patient.

For example, we rely on

physicians and other healthcare providers to properly and correctly use our products.

If these physicians or other healthcare providers

are not properly trained or are negligent in using our products, the capabilities of our products may be diminished or the patient

may suffer critical injury.

In addition, we may be subject to product liability claims, as well as a number of other risks, as

a result of physicians and other healthcare providers using our products “off-label.”

See “—

or off-label use of our products may harm our reputation in the marketplace, result in injuries that lead to product liability

suits or result in costly investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion

of these uses, any of which could be costly to our business.

Defending a lawsuit, regardless of merit,

could be costly, divert management attention and result in adverse publicity, which could result in the withdrawal of, or reduced

acceptance of, our products in the market.

If we cannot successfully defend against product liability claims, we could incur substantial

liability and costs.

In addition, regardless of merit or eventual outcome, product liability claims may result in:

harm to our business reputation;

investigations by regulators;

significant legal costs;

distraction of management’s attention from our primary business;

substantial monetary awards to patients or other claimants;

loss of revenue;

exhaustion of any available insurance and our capital resources;

decreased demand for our products.

Although we have product liability insurance

that we believe is adequate, this insurance is subject to deductibles and coverage limitations, and we may not be able to maintain

this insurance.

Also, it is possible that claims could exceed the limits of our coverage or be excluded from coverage under our

policy, and may increase the cost of maintaining our coverage.

If we are unable to maintain product liability insurance at an acceptable

cost or on acceptable terms with adequate coverage or otherwise protect ourselves against potential product liability claims, or

if we underestimate the amount of insurance we need, we could be exposed to significant liabilities, which may harm our business.

One or more product liability claims could have a significant adverse effect on our business, financial condition and results of

We bear the risk of warranty claims

on our products.

We bear the risk of warranty claims on

our products.

We may not be successful in claiming recovery under any warranty or indemnity provided to us by our suppliers or

vendors in the event of a successful warranty claim against us by a customer, and any recovery from such supplier or vendor may

not be adequate.

Furthermore, we may not have any, or have an adequate, warranty provided by our supplier.

In addition, warranty

claims brought by our customers related to third-party components may arise after our ability to bring corresponding warranty claims

against such suppliers expires, which could result in costs to us.

Defects, failures or quality issues

associated with our products could lead to product recalls or safety alerts, adverse regulatory actions, litigation, including

product liability claims, and negative publicity, any of which may erode our competitive advantage and market share and have a

material adverse effect on our reputation, business, financial condition and results of operations.

Quality is extremely important to us and

our customers due to the serious and costly consequences of product failure.

Quality and safety issues may occur with respect to

any of our products, and our future operating results will depend on our ability to maintain an effective quality control system

and effectively train and manage our workforce with respect to our quality system.

The development, manufacture and control of

our products are subject to extensive and rigorous regulation by numerous government agencies, including the FDA, the Competent

Authorities of the European Union and similar foreign agencies.

Compliance with these regulatory requirements, including but not

limited to the FDA’s Quality System Regulation, or QSR, current Good Manufacturing Practices, or GMPs and adverse events/recall

reporting requirements in the United States and other applicable regulations worldwide, is subject to continual review and is monitored

rigorously through periodic inspections by the FDA and foreign regulatory authorities.

If we fail to comply with our reporting

obligations, the FDA, the Competent Authorities of the European Union or other regulatory authority could take action, including

issuance of warning letters and/or untitled letters, administrative actions, criminal prosecution, imposition of civil monetary

penalties, revocation of our device clearance, seizure of our products or delay in the clearance of future products.

The FDA and foreign regulatory authorities

may also require post-market testing and surveillance to monitor the performance of approved products.

Our facilities and those

of our suppliers, commercial partners and independent sales agents are also subject to periodic regulatory inspections.

FDA or a foreign authority were to conclude that we have failed to comply with any of these requirements, it could institute a

wide variety of enforcement actions, ranging from a public warning letter to more severe sanctions, such as product recalls or

seizures, withdrawals, monetary penalties, consent decrees, injunctive actions to halt the manufacture or distribution of products,

import detentions of products made outside the United States, export restrictions, restrictions on operations or other civil or

criminal sanctions.

Civil or criminal sanctions could be assessed against our officers, employees, or us.

Any adverse regulatory

action, depending on its magnitude, may restrict us from effectively manufacturing, marketing and selling our products.

If our products do not function as designed,

or are designed improperly, we or the third-party manufacturer of such products may withdraw such products from the market, whether

by choice or as a result of regulatory requirements.

In August 2019, we recalled and discarded certain production lots of

CanGaroo from the market due to suture breakage.

In January 2018, we recalled five of our allograft tissue implants because

a pre-sterilized donor culture should have been disqualified, each of which had a negative effect on our business, financial condition

and results of operations.

Any product recall we or a third-party manufacturer may conduct in the future, whether voluntary or

required, may have also negatively affect our business financial condition and results of operations, and this effect may be material.

In addition, we cannot predict the results

of future legislative activity or future court decisions, any of which could increase regulatory requirements, subject us to government

investigations or expose us to unexpected litigation.

Any regulatory action or litigation, regardless of the merits, may result

in substantial costs, divert management’s attention from other business concerns and place additional restrictions on our

sales or the use of our products.

In addition, negative publicity, including regarding a quality or safety issue, could damage

our reputation, reduce market acceptance of our products, cause us to lose customers and decrease demand for our products.

actual or perceived quality issues may also result in issuances of physician’s advisories against our products or cause us

to conduct voluntary recalls.

Any product defects or problems, regulatory action, litigation, negative publicity or recalls could

disrupt our business and have a material adverse effect on our business, financial condition and results of operations.

Our operating results may fluctuate

significantly from quarter to quarter and year to year due to the seasonality of our business, as well as a variety of other factors,

many of which are outside of our control.

Our quarterly and annual results of operations

may vary significantly in the future, and period-to-period comparisons of our operating results may not be meaningful.

the results of any one quarter or other period should not be relied upon as an indication of our future performance.

Our quarterly

and annual financial results may fluctuate as a result of a variety of factors, many of which are outside our control and, as a

result, may not fully reflect the underlying performance of our business.

One such factor includes seasonal variations in our sales.

We have experienced and may in the future experience higher sales in the fourth quarter as hospitals in the United States increase

their purchases of our products to coincide with the end of their budget cycles.

Satisfaction of patient deductibles through the

course of the year also results in increased sales later in the year.

In general, our first quarter usually has lower sales than

the preceding fourth quarter as patient deductibles are re-established with the new year, thereby increasing their out-of-pocket

Other factors that may cause fluctuations

in our quarterly and annual results include, among other things:

the timing of medical procedures using our products;

the announcement or introduction of new products by our competitors;

failure of government health benefit programs and private health plans to cover our products or

to timely and adequately reimburse the users of our products;

the impact of the COVID-19 pandemic, or any other pandemic, epidemic or outbreak of an infectious

disease in the United States or worldwide that impacts the number of procedures being performed;

the rate of reimbursement for procedures using our products by government and private insurers;

whether our products are granted pass-through reimbursement status or included in the “bundled”

reimbursement structure;

changes in purchasing patterns by our commercial partners or customers, or the loss of any significant

customer or group of customers;

our ability to upgrade and develop our systems and infrastructure to accommodate growth;

the amount and timing of operating costs and capital expenditures relating to the expansion of

our business, operations and infrastructure;

changes in, or enactment of, new laws or regulations promulgated by federal, state or local governments;

changes in our supply or manufacturing costs;

cost containment initiatives or policies developed by government and commercial payors that create

financial incentives not to use our products;

our inability to demonstrate that our products are cost-effective or superior to competing products;

our ability to develop new products;

the degree of competition in our industry and any changes in the competitive landscape;

discovery of product defects during the manufacturing process;

initiation of a government investigation into potential non-compliance with laws or regulations,

or the initiation of a voluntary or involuntary recall with respect to one or more of our products;

sanctions imposed by federal or state governments due to non-compliance with laws or regulations;

general economic conditions as well as economic conditions specific to the healthcare industry.

We have based our current and future expense

levels largely on our investment plans and estimates of future events, although certain of our expense levels are, to a large extent,

We may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall.

any significant shortfall in sales relative to our planned expenditures would have an immediate adverse effect on our business,

results of operations and financial condition.

Further, as a strategic response to changes in the competitive environment or to

changes in laws and regulations, we may from time to time make certain pricing, service or marketing decisions (e.g., reduce prices)

that could have a material and adverse effect on our business, financial condition and results of operations.

Due to the foregoing

factors, our revenue and operating results are and will remain difficult to forecast.

Our indebtedness and our Revenue

Interest Obligation to Ligand Pharmaceuticals Incorporated may limit our flexibility in operating our business and adversely affect

our financial health and competitive position.

of September 30, 2020, we had $19.7 million of indebtedness outstanding, consisting of 

$19.7 million outstanding under

our Term Loan Facility (as defined under Part I, Item 2.

“Management’s Discussion and Analysis of Financial

Condition and Results of Operations —

Liquidity and Capital Resources —

Credit Facilities”) (net of 

million of unamortized discount and deferred financing costs), $5.9 million outstanding under our Revolving Credit Facility (as

defined under Part I, Item 2.

“Management’s Discussion and Analysis of Financial Condition and Results of

Operations —

Liquidity and Capital Resources —

Credit Facilities”) (with $2.1 million of additional borrowings

available thereunder), $3.0 million outstanding pursuant to a promissory note under the Paycheck Protection Program of the Coronavirus

Aid, Relief and Economic Stability Act, or the CARES Act (the “PPP Loan”), and a $1.4 million promissory note payable

to one of our suppliers.

In addition, we are party to a royalty agreement with Ligand Pharmaceuticals Incorporated, or Ligand,

pursuant to which we assumed a restructured, long-term obligation to Ligand (the “Revenue Interest Obligation”), that

requires us to pay Ligand 5.0% of future sales of the products we acquired from CorMatrix (as well as products substantially similar

to those products), subject to annual minimum payments of 

$2.75 million and certain milestone payments if sales of the

acquired products exceed certain thresholds.

See Part I, Item 2.

“Management’s Discussion and Analysis of

Financial Condition and Results of Operations — Critical Accounting Policies and Significant Judgment

and Estimates  — Revenue Interest Obligation.”

In order to service this indebtedness and

our Revenue Interest Obligation, and any additional indebtedness or other long-term obligations we may incur in the future, we

need to generate sufficient levels of cash from our operating activities.

Our ability to generate cash is subject, in part, to

our ability to successfully execute our business strategy, as well as general economic, financial, competitive, regulatory and

other factors beyond our control.

We cannot assure you that our business will be able to generate sufficient levels of cash from

operations or that future borrowings or other financings will be available to us in an amount sufficient to enable us to service

our indebtedness, satisfy our obligations under the Revenue Interest Obligation and fund our other liquidity needs.

To the extent

we are required to use cash from operations or the proceeds of any future financing to service our indebtedness and satisfy our

obligations under the Revenue Interest Obligation instead of funding working capital, capital expenditures or other general corporate

purposes, we will be less able to plan for, or react to, changes in our business, industry and in the economy generally.

place us at a competitive disadvantage compared to our competitors that have less indebtedness.

In addition, the agreements governing our

Term Loan Facility and Revolving Credit Facility contain, and any agreements evidencing or governing other future indebtedness

may also contain, certain covenants that limit our ability to engage in certain transactions that may be in our long-term best

Subject to certain limited exceptions, these covenants limit our ability to, among other things:

incur additional indebtedness;

incur certain liens;

pay dividends or make other distributions on equity interests;

enter into agreements restricting their subsidiaries’

ability to pay dividends;

redeem, repurchase or refinance subordinated indebtedness;

consolidate, merge or sell or otherwise dispose of their assets;

make investments, loans, advances, guarantees and acquisitions;

enter into transactions with affiliates;

amend or modify their governing documents;

amend or modify certain material agreements;

alter the business conducted by them and their subsidiaries;

enter into sale and leaseback transactions.

In addition to these covenants, the agreements

governing our Term Loan Facility and Revolving Credit Facility also contain a financial covenant, which is tested on a monthly

basis, and requires us to achieve a specified minimum net product revenue (as defined therein) for the preceding 12-month period.

While we were in compliance with all covenants under these agreements as of September 30, 2020, we have had past breaches

requiring waivers and there can be no guarantee that we will not breach these covenants in the future.

Our ability to comply with

these covenants may be affected by events and factors beyond our control.

In the event that we breach one or more covenants, our

lenders may choose to declare an event of default and require that we immediately repay all amounts outstanding, terminate any

commitment to extend further credit and foreclose on the collateral granted to them to collateralize such indebtedness.

The occurrence

of any of these events could have a material adverse effect on our business, financial condition and results of operations.

In addition, we may be able to incur significant

additional indebtedness in the future.

Although the agreements governing our Term Loan Facility and Revolving Credit Facility contain

restrictions on the incurrence of additional indebtedness by us, such restrictions are subject to a number of qualifications and

exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial.

Also, these restrictions

do not prohibit us from incurring obligations that do not constitute indebtedness as defined therein.

To the extent that we incur

additional indebtedness or such other obligations, the risks associated with our substantial indebtedness described above will

We may be unable to obtain forgiveness

of the PPP Loan, in whole or in part, in accordance with the provisions of the CARES Act, which could adversely affect our financial

In May 2020, we entered into a promissory

note with Silicon Valley Bank, or SVB, under the Paycheck Protection Program of the CARES Act pursuant to which SVB agreed to make

a loan to us in the amount of approximately $3.0 million.

The PPP Loan matures in May 2022, bears interest at a rate of 1.0%

per annum and requires no payments during the first six months from the date of the loan.

The PPP Loan is unsecured and guaranteed

by the Small Business Administration, or the SBA.

Under the terms of the PPP Loan, the principal amount of the loan may be forgiven

to the extent it is used for qualifying expenses as described in the CARES Act and we otherwise request forgiveness in accordance

with the terms of the PPP Loan and the requirements of the SBA.

While we expect to request that a significant portion of the principal

amount of the PPP Loan be forgiven and to comply with all corresponding requirements, we cannot guarantee that we will be successful

in obtaining forgiveness of all or any part of such principal amount.

We will be required to repay any principal amount of the

PPP Loan that is not forgiven, together with accrued and unpaid interest, in equal monthly installments prior to the maturity date

of the loan, which would further restrict our operating and financial flexibility.

Our future capital needs are uncertain

and we may need to raise funds in the future, and such funds may not be available on acceptable terms or at all.

We believe that the net proceeds from our

IPO, together with our existing cash and our availability under our Revolving Credit Facility, will enable us to fund our operating

expenses and capital expenditure requirements through 2022.

However, we have based these estimates on assumptions that may prove

to be incorrect, and we could spend our available financial resources much faster than we currently expect.

Any future funding

requirements will depend on many factors, including, among other things:

continued patient, physician and market acceptance of our products;

the scope, rate of progress and cost of our current and future pre-clinical studies and clinical

the cost of our research and development activities and the cost of commercializing new products

or technologies;

the cost and timing of expanding our sales and marketing capabilities;

the cost of filing and prosecuting patent applications and maintaining, defending and enforcing

our patent or other intellectual property rights;

the cost of defending, in litigation or otherwise, any claims that we infringe, misappropriate

or otherwise violate third-party patents or other intellectual property rights;

the cost and timing of additional regulatory approvals;

costs associated with any product recall that may occur;

the effect of competing technological and market developments;

the expenses we incur in manufacturing and selling our products;

the costs of developing and commercializing new products or technologies;

the extent to which we acquire or invest in products, technologies and businesses, although we

currently have no commitments or agreements relating to any of these types of transactions;

the costs of operating as a public company;

unanticipated general, legal and administrative expenses;

the effects on any of the above of the current COVID-19 pandemic or any other pandemic, epidemic

or outbreak of infectious disease.

In addition, our operating plan may change

as a result of any number of factors, including those set forth above and other factors currently unknown to us, and we may need

additional funds sooner than anticipated.

Any additional equity or debt financing that we raise may contain terms that are not

favorable to us or our stockholders.

If we raise additional funds by selling additional shares of our common stock or other securities

convertible (directly or indirectly) into or exercisable or exchangeable for shares of our common stock, the issuance of such securities

will result in dilution to our stockholders.

The price per share at which we sell additional shares of our common stock, or securities

convertible into or exercisable or exchangeable for shares of our common stock, in future transactions may be higher or lower than

the price per share paid by you.

Furthermore, investors purchasing any securities we may issue in the future may have rights superior

to your rights as a holder of our common stock.

In addition, any future debt financing

into which we enter may impose upon us covenants that restrict our operations, including limitations on our ability to incur liens

or additional debt, pay dividends, repurchase our common stock, make certain investments and engage in certain merger, consolidation

or asset sale transactions.

If we raise additional funds through collaboration and licensing arrangements with third parties, it

may be necessary to relinquish some rights to our technologies or our products, or grant licenses on terms that are not favorable

Furthermore, we cannot be certain that

additional funding will be available to us on acceptable terms, if at all.

If we do not have, or are not able to obtain, sufficient

funds, we may have to delay development or commercialization of our products or license to third parties the rights to commercialize

products or technologies that we would otherwise seek to commercialize.

We also may have to reduce marketing, customer support

or other resources devoted to our products or cease operations.

Any of these factors could harm our business, financial condition

and results of operations.

Security breaches, loss of or damage

to data, system failures and other disruptions could compromise sensitive information related to our business or our customers’

patients, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business

and our reputation.

In the ordinary course of our business,

we may become exposed to, or collect and store, sensitive data, including procedure-based information and legally protected health

information, credit card, and other financial information, insurance information and other potentially personally identifiable

We also store sensitive intellectual property and other proprietary business information.

Regardless of any precautions

we may take, our information technology, or IT, and infrastructure, and that of our technology partners and providers, may be vulnerable

to cyberattacks by hackers or viruses or breaches due to employee error, malfeasance or other disruptions.

We rely extensively

on IT systems, networks and services, including internet sites, data hosting and processing facilities and tools, physical security

systems and other hardware, software and technical applications and platforms, some of which are managed, hosted, provided and/or

used by third parties or their vendors, to assist in conducting our business.

A significant breakdown, invasion, corruption, destruction

or interruption of critical information technology systems or infrastructure, by our workforce, others with authorized access to

our systems or unauthorized persons could negatively impact operations.

The ever-increasing use and evolution of technology, including

cloud-based computing, creates opportunities for the unintentional dissemination or intentional destruction of confidential information

stored in our or our third-party providers’

systems, portable media or storage devices.

We could also experience a business

interruption, theft of confidential information or reputational damage from industrial espionage attacks, malware or other cyber-attacks,

which may compromise our system infrastructure or lead to data leakage, either internally or at our third-party providers.

Unauthorized disclosure of sensitive or

confidential patient or employee data, including personally identifiable information, whether through breach of computer systems,

systems failure, employee negligence, fraud or misappropriation, or otherwise, or unauthorized access to or through our information

systems and networks, whether by our employees or third parties, could result in negative publicity, legal liability and damage

to our reputation.

Unauthorized disclosure of personally identifiable information could also expose us to sanctions for violations

of data privacy laws and regulations around the world.

Although we have general liability and cybersecurity insurance coverage,

our insurance may not cover all claims, continue to be available to us on reasonable terms or be sufficient in amount to cover

one or more large claims;

additionally, the insurer may disclaim coverage as to any claim.

The successful assertion of one or more

large claims against us that exceed or are not covered by our insurance coverage or changes in our insurance policies, including

premium increases or the imposition of large deductible or co-insurance requirements, could have a material adverse effect on our

business, prospects, operating results and financial condition.

Despite our security measures, there can

be no assurance that our efforts will prevent breakdowns or breaches to our or our third-party providers’

databases or systems,

or any resulting unauthorized access to, or disclosure and use of, non-public or other legally protected information.

social engineering and other attacks upon IT systems are increasing in their frequency, levels of persistence, sophistication and

intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.

In addition to unauthorized access to or acquisition of personal information, confidential information, intellectual property or

other sensitive information, such attacks could include the deployment of harmful malware and ransomware, and may use a variety

of methods, including denial-of-service attacks, social engineering and other means, to attain such unauthorized access or acquisition

or otherwise affect service reliability and threaten the confidentiality, integrity and availability of information.

techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and often are

not foreseeable or recognized until launched against a target, we may be unable to anticipate these techniques or to implement

adequate preventative measures.

Any such breakdowns or breaches, or resulting access, disclosure, or other loss of information,

could significantly disrupt our business and result in legal claims or proceedings, liability under laws that protect the privacy

of personal information, and damage to our reputation, any of which could have a material and adverse effect on our business, financial

condition and results of operations.

Our success depends on our ability

to retain and motivate key management personnel and other employees and consultants, to attract, retain and motivate additional

qualified personnel and to effectively navigate changes in our senior management team.

Our success depends to a significant extent

on our ability to attract, retain and motivate key management personnel and other employees and consultants for our business, including

scientific, technical and sales and marketing personnel.

There is currently a shortage of skilled executives and other personnel

in our industry, which is likely to continue.

As a result, competition for skilled personnel is intense and the turnover rate can

We may not be able to attract and retain personnel on acceptable terms, given the competition among numerous regenerative

medicine and other healthcare companies, for individuals with similar skill sets.

Many of the companies that we compete against

for qualified personnel have substantially greater financial and other resources and different risk profiles than we do.

also provide more diverse opportunities, better chances for career advancement and/or more attractive compensation.

Some of these

characteristics may be more appealing to high quality candidates than what we can offer.

Furthermore, in order to offer attractive

compensation, we may need to increase the level of cash compensation that we pay to them, which will reduce funds available for

research and development and support of our commercialization and sales growth objectives.

There can be no assurance that we will

have sufficient cash available to offer our employees and consultants attractive compensation or that we will realize any corresponding

benefits from the payment of such compensation.

We are also vulnerable to the risk that these individuals may take actions, either

within or outside the scope of their duties, that intentionally or unintentionally tarnish our brand and reputation or otherwise

adversely affect our business.

We also cannot prevent our senior management team from terminating their employment with us.

the services of any member of our senior management team could materially harm our business until a suitable replacement is found,

and such replacement may not have equal experience and capabilities.

In addition, we do not maintain “key person”

policies on the lives of any of our management team or other employees.

The inability to recruit or a loss of the services of any

executive, key employee or consultant may impede the progress of our research, development, commercialization and sales growth

objectives, which could have a material adverse effect on our business, financial condition, results of operations and our ability

to grow our business.

In addition, we have recently added a new

Chief Financial Officer, Chief Commercial Officer and Chief Medical Officer.

These changes, and any other changes to our senior

management team we experience in the future, subject us to a number of additional risks, including risks pertaining to the coordination

of responsibilities and tasks, the creation of new management systems and processes, differences in management style, effects on

corporate culture and the need for transfer of historical knowledge.

If our management team does not work together harmoniously,

efficiently allocate responsibilities between themselves and implement and abide by effective controls, our operations will be

adversely affected.

Our sales into foreign markets expose

us to risks associated with international sales and operations.

Though we have historically focused our

market development and commercial activities primarily in the United States, we have obtained marketing registrations, developed

commercial and distribution capabilities and are currently selling CanGaroo and our cardiovascular products in several countries

outside the United States primarily through independent sales agents.

Our international sales subject us to additional risks as

compared to those we face in the United States.

The sale and shipment of our products across

international borders subject us to extensive U.S.

and foreign governmental trade, import and export and customs regulations and

laws, including but not limited to, the Export Administration Regulations and trade sanctions against embargoed countries, which

are administered by the Office of Foreign Assets Control within the Department of the Treasury, or OFAC, as well as the laws and

regulations administered by the Department of Commerce.

These regulations limit our ability to market, sell, distribute or otherwise

transfer our products or technology to prohibited countries or persons.

Compliance with these regulations and laws

is costly, and failure to comply with applicable legal and regulatory obligations could adversely affect us in a variety of ways

that include, but are not limited to, significant criminal, civil and administrative penalties, including imprisonment of individuals,

monetary fines, denial of export privileges, seizure of shipments and restrictions on certain business activities.

to comply with applicable legal and regulatory obligations could also result in the disruption of our distribution and sales activities.

These risks may limit or disrupt our sales

and commercialization efforts outside the United States, restrict the movement of funds or result in the deprivation of contractual

rights or the taking of property by nationalization or expropriation without fair compensation.

Operating in international markets

also requires significant management attention and financial support, and, as a result, will divert these resources away from our

other operations.

We are subject to anti-bribery, anti-corruption

and anti-money laundering laws, including the U.S.

Foreign Corrupt Practices Act, as well as export control laws, customs laws,

sanctions laws and other laws governing our operations.

If we fail to comply with these laws, we could be subject to civil or criminal

penalties, other remedial measures and legal expenses, any of which would adversely affect our business, financial condition and

results of operations.

We currently are and, as we increase our

international presence and global sales, will increasingly be, exposed to trade and economic sanctions and other restrictions imposed

by the United States, the European Union and other governments and organizations.

Departments of Justice, Commerce, State

and Treasury and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose

against corporations and individuals for violations of economic sanctions laws, export control laws, the U.S.

Foreign Corrupt Practices

Act, or the FCPA, and other federal statutes and regulations, including those established by OFAC.

In addition, the U.K.

Act of 2010, or the Bribery Act, prohibits both domestic and international bribery, as well as bribery across both private and

public sectors.

An organization that “fails to prevent bribery”

by anyone associated with the organization can be charged

under the Bribery Act unless the organization can establish the defense of having implemented “adequate procedures”

to prevent bribery.

Under these laws and regulations, as well as other anti-corruption laws, anti-money laundering laws, export

control laws, customs laws, sanctions laws and other laws governing our operations, various government agencies may require export

licenses, may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries

or with sanctioned persons or entities and modifications to compliance programs, which may increase compliance costs, and may subject

us to fines, penalties and other sanctions.

A violation of these laws or regulations would negatively affect our business, financial

condition and results of operations.

As our international operations increase,

we expect to implement policies and procedures designed to ensure compliance by us and our directors, officers, employees, representatives,

consultants and agents with the FCPA, OFAC restrictions, the Bribery Act and other export control, anti-corruption, anti-money-laundering

and anti-terrorism laws and regulations.

We cannot assure you, however, that any such policies and procedures will be sufficient

or that directors, officers, employees, representatives, consultants and agents have not engaged, and will not engage, in conduct

for which we may be held responsible, nor can we assure you that our business partners have not engaged, and will not engage, in

conduct that could materially affect their ability to perform their contractual obligations to us or result in our being held liable

for such conduct.

Violations of the FCPA, OFAC restrictions, the Bribery Act or other export control, anti-corruption, anti-money

laundering and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other

liabilities, which could have a material adverse effect on our business, financial condition and results of operations.

Our officers, employees, independent

contractors, principal investigators, consultants, commercial partners and independent sales agents may engage in misconduct or

activities that are improper under other laws and regulations, which would create liability for us.

We are exposed to the risk that our officers,

employees, independent contractors (including contract research organizations, or CROs), principal investigators, consultants,

commercial partners and independent sales agents may engage in fraudulent conduct or other illegal activity and/or may fail to

disclose unauthorized activities to us.

Misconduct by these parties could include, but is not limited to, intentional, reckless

and/or negligent failures to comply with the laws and regulations of the FDA and its foreign counterparts, including, but not limited

to, those relating to the manufacture, processing, packing, holding, investigating or distributing in commerce of medical devices,

biological products and/or HCT/Ps, requiring the reporting of true, complete and accurate information to such regulatory bodies

(including any safety problems associated with the use of our products), and relating to the conduct of clinical trials and the

protection of human research subject.

In particular, companies involved in the

manufacture of medical products are subject to laws and regulations intended to ensure that medical products that will be used

in patients are safe and effective, and specifically that they are not adulterated or contaminated, that they are properly labeled,

and have the identity, strength, quality and purity that which they are represented to possess.

Further, companies involved in

the research and development of medical products are subject to extensive laws and regulations intended to protect research subjects

and ensure the integrity of data generated from clinical trials and of the regulatory review process.

Any misconduct in any of

these areas, whether by our own employees or by contractors, vendors, business associates, consultants or other entities acting

as our agents, could result in regulatory sanctions, criminal or civil liability and serious harm to our reputation.

always possible to identify and deter misconduct, and the precautions we take to detect and prevent this activity may not be effective

in preventing such conduct, mitigating risks, or reducing the chance of governmental investigations or other actions or lawsuits

stemming from a failure to comply with these laws or regulations.

If any such investigations or other actions or lawsuits are instituted

against us, those actions could have a significant impact on our business, financial condition and results of operations, including,

without limitation, the imposition of significant fines and other sanctions that may materially impair our ability to run a profitable

Even if we are successful in defending against the imposition of any such fines or other sanctions, we could be required

to incur substantial legal fees and other costs, and management’s attention will be diverted from our core business operations,

either of which would negatively affect our business, financial condition and results of operations.

Our ability to use certain tax attributes

to offset future income tax liabilities may be subject to limitations.

We have certain net operating losses and

other tax attributes, including net operating loss carryforwards (“NOLs”) for federal income tax purposes of approximately

$32.1 million and state NOLs of approximately $10.5 million as of December 31, 2019.

If not utilized, $17.6 million of our

NOLs will begin to expire for federal income tax purposes beginning in 2036, and our state NOLs will expire beginning in 2030.

Our ability to utilize our federal NOLs will depend on our future income, and there is a risk that our NOLs could expire unused

and be unavailable to offset future income tax liabilities, which could adversely affect our operating results.

In addition, our ability to utilize our

NOLs may be subject to an annual limitation under the Internal Revenue Code of 1986, as amended, or the Code.

In general, under

Sections 382 and 383 of the Code, a corporation that undergoes an “ownership change”

is subject to limitations on its

ability to utilize its pre-change NOLs or tax credits to offset future taxable income.

If we undergo an ownership change or have

previously undergone an ownership change, our ability to utilize federal NOLs or tax credits could be limited by Sections 382 and

383 of the Code.

Additionally, future changes in our stock ownership, many of which are outside of our control, could result in

an ownership change under Sections 382 and 383 of the Code.

Our state NOLs or credits may also be impaired under state tax law.

Accordingly, we may not be able to utilize a material portion of our federal and state NOLs or credits.

Our ability to utilize

our NOLs or credits is conditioned upon our attaining profitability and generating U.S.

federal and state taxable income.

allowances have been provided for all deferred tax assets related to our federal and state NOLs.

In addition, other tax attributes, such

as interest carryforwards, are also subject to various limits on their use under the Code.

We have established valuation allowances

for our interest carry forwards to reflect these limitations and their anticipated impact on our ability to utilize these tax attributes

following the adoption of the December 2017 tax reform legislation known as H.R.

1, commonly referred to as the Tax Cuts and

Jobs Act, or the TCJA, in the United States.

Changes in tax laws, unfavorable

resolution of tax contingencies or exposure to additional income tax liabilities could have a material impact on our results of

operations or financial condition.

We are subject to income taxes as well

as non-income based taxes in the United States.

We may from time to time be subject to tax audits in various jurisdictions.

authorities may disagree with certain positions we have taken and assess additional taxes.

We regularly assess the likely outcomes

of any tax audits to which we are subject in order to determine the appropriateness of our tax provision and have established contingency

reserves for material, known tax exposures.

However, the calculation of such tax exposures involves the application of complex

tax laws and regulations in many jurisdictions, as well as interpretations as to the legality under state aid rules of the

European Union of tax advantages granted in certain jurisdictions.

Therefore, there can be no assurance that we will accurately

predict the outcomes of any tax audits to which we may be subject or that issues raised by tax authorities will be resolved at

a financial cost that does not exceed our related reserves and the actual outcomes of any such audit could have a material impact

on our results of operations or financial condition.

Changes in tax laws and regulations, or

their interpretation and application, in the jurisdictions where we are subject to tax, could materially impact our effective tax

For example, changes in tax law implemented by the TCJA became effective in 2018 and 2019, and we expect the U.S.

to continue to issue future notices and regulations under the TCJA.

Certain provisions of the TCJA and the regulations issued thereunder

could have a significant impact on our future results of operations as could interpretations made by us in the absence of regulatory

guidance and judicial interpretations.

In addition, in 2018, we established valuation allowances against certain deferred tax assets

(including interest carry forwards) to reflect certain limitations on these assets and their anticipated impact on our ability

to utilize these tax assets following the adoption of the TCJA.

We are continuing to examine the impact of TCJA.

As the expected

impact of certain aspects of the legislation is unclear and subject to change, we note that the TCJA could adversely affect our

business, financial condition and results of operations.

Additionally, the U.S.

Congress, government

agencies in jurisdictions outside the United States where we do business and the Organization for Economic Co-operation and Development,

or OECD, have recently focused on issues related to the taxation of multinational corporations.

One example is in the area of “base

erosion and profit shifting,”

where profits are claimed to be earned for tax purposes in low-tax jurisdictions, or payments

are made between affiliates from a jurisdiction with high tax rates to a jurisdiction with lower tax rates.

The OECD has released

several components of its comprehensive plan to create an agreed set of international rules for fighting base erosion and

profit shifting.

As a result, the tax laws in the United States and other countries, in which we do business, could change on a

prospective or retroactive basis and any such changes could materially adversely affect our business, financial condition and results

of operations.

As we conduct clinical studies designed

to generate long-term data on some of our existing products, the data we generate may not be consistent with our existing data

and may demonstrate less favorable safety or efficacy.

We are currently collecting and plan to

continue collecting long-term clinical data regarding the quality, safety and effectiveness of some of our existing products.

clinical data collected and generated as part of these studies will further strengthen our clinical evaluation concerning safety

and performance of these products.

We believe that this additional data will help with the marketing of our products by providing

surgeons and physicians with additional confidence in their long-term safety and efficacy.

If the results of these clinical studies

are negative, these results could reduce demand for our products and significantly reduce our ability to achieve expected net sales.

We do not expect to undertake such studies for all of our products and will only do so in the future where we anticipate the benefits

will outweigh the costs and risks.

For these reasons, surgeons and physicians could be less likely to purchase our products than

competing products for which longer-term clinical data are available.

Also, we may not choose or be able to generate the comparative

data that some of our competitors have or are generating and we may be subject to greater regulatory and product liability risks.

If we are unable to or determined not to collect sufficient long-term clinical data supporting the quality, safety and effectiveness

of our existing products, our business, financial condition and results of operations could be adversely affected.

Our estimates of market opportunity

and forecasts of market and sales growth may prove to be inaccurate, and even if the markets in which we compete achieve the forecasted

growth, our business could fail to grow at similar rates, if at all.

Market opportunity estimates and growth

forecasts are inherently uncertain.

Our estimates of the annual total addressable markets for our products are based on a number

of internal and third-party estimates and assumptions, including, without limitation, the number of implantable electronic device

procedures and orthopedic/spinal repair procedures, as well as the number of procedures using biologic products annually in the

United States.

While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates

may not be correct and the conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive

accuracy of these underlying factors.

As a result, our estimates of the annual total addressable market for any of our products

may prove to be incorrect.

If the actual number of procedures, the price at which we are able to sell any of our products, or the

annual total addressable market is smaller than we have estimated, it may impair our sales growth and have an adverse impact on

our business, financial condition and results of operations.

Risks Related to Government Regulation

The regulatory approval and clearance

processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and if we are

ultimately unable to obtain regulatory approval or other marketing authorizations for our products and product candidates, our

business will be substantially harmed.

The medical device and biologics industries

are regulated extensively by governmental authorities, principally the FDA, the E.U.

legislative bodies, and corresponding state

and foreign regulatory agencies and authorities.

The time required to obtain approval, clearance, certification of conformity or

other marketing authorizations from the FDA, European Union Notified Bodies, and comparable foreign authorities is unpredictable

but can often take many years following the commencement of clinical trials and depends upon numerous factors, including the substantial

discretion of the regulatory authorities.

In addition, policies, regulations, or the type and amount of clinical data necessary

to gain clearance or approval may change during the course of a product candidate’s clinical development and may vary among

jurisdictions.

Before we can market or sell a new medical

device 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 Section 510(k) of the Federal Food, Drug, and Cosmetic Act, or FDCA, or approval

of an application for premarket approval, or PMA, unless an exemption applies.

In the United States, we have obtained 510(k) premarket

clearance from the FDA to market products such as our CanGaroo, VasCure, ProxiCor and Tyke products.

In the 510(k) premarket

clearance process, the FDA must determine that a proposed device is “substantially equivalent”

to a device legally

on the market, known as a “predicate”

device, with respect to intended use, technology and safety and effectiveness,

in order to clear the proposed device for marketing.

Clinical data is sometimes required to support a finding of substantial equivalence.

Under certain conditions, a medical device is required to be approved under a PMA before it may be legally marketed.

The PMA pathway

requires an applicant to demonstrate the safety and effectiveness of the device based, in part, on extensive data, including, but

not limited to, technical, nonclinical, clinical trial, manufacturing and labeling data.

The PMA process is typically required

for devices that are deemed to pose the greatest risk, such as life-sustaining, life-supporting or implantable devices.

some devices are automatically subject to the PMA pathway regardless of the level of risk they pose because they have not previously

been classified into a lower risk class by the FDA.

Manufacturers of these devices may request that FDA review such devices in

accordance with the de novo classification procedure, which allows a manufacturer whose novel device would otherwise require

the submission and approval of a PMA prior to marketing to request down-classification of the device on the basis that the device

presents low or moderate risk.

If the FDA agrees with the down classification based on a de novo submission, the FDA will

authorize the device for marketing.

This device type can then be used as a predicate device for future 510(k) submissions.

The process of obtaining regulatory clearances

or approvals, or completing the de novo classification process, to market a medical device can be costly and time consuming,

and we may not be able to successfully obtain pre-market reviews on a timely basis, if at all.

If the FDA requires us to go through

a lengthier, more rigorous examination for our products than we expect, our product introductions or modifications could be delayed

or canceled, which could cause our sales to decline.

Further, even where a PMA is not required, we cannot assure you that we will

be able to obtain 510(k) clearances with respect to such product candidates or modifications to previously cleared products.

The FDA or any foreign regulatory bodies

can delay, limit or deny approval or clearance of our product candidates or require us to conduct additional nonclinical or clinical

testing or abandon a program for many reasons, including:

the FDA or the applicable foreign regulatory agency’s disagreement with the design or implementation

of our clinical trials;

negative or ambiguous results from our clinical trials or results that may not meet the level of

statistical significance required by the FDA or comparable foreign regulatory agencies for approval;

serious and unexpected drug or device-related side effects experienced by participants in our clinical

trials or by individuals using devices similar to our products or natural product candidates;

our inability to demonstrate to the satisfaction of the FDA or the applicable foreign regulatory

body that our product candidates are safe and effective for their intended uses, or in the case of the 510(k) clearance process,

that our product candidate is substantially equivalent to a predicate device;

the FDA’s or the applicable foreign regulatory agency’s disagreement with the interpretation

of data from pre-clinical studies or clinical trials;

our inability to demonstrate the clinical and other benefits of our product candidates outweigh

any safety or other perceived risks;

the FDA’s or the applicable foreign regulatory agency’s requirement for additional

pre-clinical studies or clinical trials;

the FDA’s or the applicable foreign regulatory agency’s disagreement regarding the

formulation, labeling or the specifications of our products or future product candidates;

the FDA’s or the applicable foreign regulatory agency’s failure to approve the manufacturing

processes or facilities of third-party manufacturers with which we contract;

the potential for approval or clearance policies or regulations of the FDA or the applicable foreign

regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.

Of the large number of products in development,

only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.

approval or marketing authorization process, as well as the unpredictability of future clinical trial results, may result in our

failing to obtain regulatory clearance, approval or other marketing authorization to market our product candidates, which would

significantly harm our business, financial condition and results of operations.

Even if we eventually complete clinical

testing and receive approval or clearance of an FDA or foreign marketing application for our product candidates, the FDA or the

applicable foreign regulatory agency may grant clearance, approval or other marketing authorization contingent on the performance

of costly additional clinical trials, including post-market clinical trials.

The FDA or the applicable foreign regulatory agency

also may clear, approve or authorize for marketing a product candidate for a more limited indication or patient population than

we originally requested, and the FDA or applicable foreign regulatory agency may not approve or authorize the labeling that we

believe is necessary or desirable for the successful commercialization of a product candidate.

Any delay in obtaining, or inability

to obtain, applicable regulatory clearance, approval or other marketing authorization would delay or prevent commercialization

of that product candidate and would materially adversely impact our business and prospects.

Our products may cause or contribute

to adverse medical events or be subject to failures or malfunctions that we are required to report to the FDA, and if we fail to

do so, we would be subject to sanctions that could harm our reputation, business, financial condition and results of operations.

The discovery of serious safety issues with our products, or a recall of our products either voluntarily or at the direction of

the FDA or another governmental authority, could have a negative impact on us.

Some of our marketed products are subject

to Medical Device Reporting, or MDR, obligations, which require that we report to the FDA or the Competent Authorities of the European

Union, 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.

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.

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

also fail to recognize that we have become aware of a reportable adverse event, especially if it is not reported to us as an adverse

event or if it is an adverse event that is unexpected or removed in time from the use of our product.

If we fail to comply with

our reporting obligations, the FDA, or the Competent Authorities of the European Union, could take action, including warning letters,

untitled letters, administrative actions, criminal prosecution, imposition of civil monetary penalties, revocation of our device

clearance or approval, seizure of our products or delay in clearance or approval of future products.

The FDA, the Competent Authorities of the

European Union, and foreign regulatory bodies have the authority to require the recall of commercialized products in the event

of material deficiencies or defects in design or manufacture of a product or in the event that a product poses an unacceptable

risk to health.

The FDA’s authority to require a recall must be based on a finding that there is reasonable probability that

the device could cause serious injury or death.

We may also choose to voluntarily recall a product if any material deficiency is

A government-mandated or voluntary recall by us could occur as a result of an unacceptable risk to health, component failures,

malfunctions, manufacturing defects, labeling or design deficiencies, packaging defects or other deficiencies or failures to comply

with applicable regulations.

Product defects or other errors may occur in the future.

Depending on the corrective action we take

to redress a product’s deficiencies or defects, the FDA may require, or we may decide, that we will need to obtain new clearances

or approvals for the device before we may market or distribute the corrected device.

Seeking such clearances or approvals may delay

our ability to replace the recalled devices in a timely manner.

Moreover, if we do not adequately address problems associated with

our devices, we may face additional regulatory enforcement action, including FDA warning letters, product seizure, injunctions,

administrative penalties or civil or criminal fines.

Companies are required to maintain certain

records of recalls and corrections, even if they are not reportable to the FDA.

We may initiate voluntary withdrawals or corrections

for our products in the future that we determine do not require notification of the FDA.

If the FDA disagrees with our determinations,

it could require us to report those actions as recalls, and we may be subject to enforcement action.

A future recall announcement

could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales.

Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication

of our time and capital, distract management from operating our business and may harm our reputation and financial results.

Modifications to our medical device

products may require new 510(k) clearances or other marketing authorizations, and if we make modifications to such products

without obtaining requisite marketing authorization, we may be required to cease marketing or recall the modified products until

clearances or other marketing authorizations are obtained.

Any modification to a cleared or approved

medical device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended

use, design or manufacture, requires a new 510(k) clearance or, possibly, approval of a PMA.

The FDA requires every manufacturer

to make this determination in the first instance, but the FDA may review any manufacturer’s decision.

The FDA may not agree

with our decisions regarding whether new clearances or approvals are necessary.

We may make modifications or add features to any

of our product candidates that are cleared under the 510(k) clearance process in the future that we believe do not require

a new 510(k) clearance or approval of a PMA.

If the FDA disagrees with our determination and requires us to submit new 510(k) notifications

or PMA applications for modifications to our products for which we have concluded that new clearances or approvals are unnecessary,

we may be required to cease marketing or to recall the modified product until we obtain clearance or approval, and we may be subject

to significant regulatory fines or penalties.

In addition, the FDA may not approve or clear our products for the indications that

are necessary or desirable for successful commercialization or could require clinical trials to support any modifications.

delay or failure in obtaining required clearances or approvals for such changes would adversely affect our ability to introduce

new or enhanced products in a timely manner, which in turn would harm our future growth.

Any of these actions would harm our operating

The misuse or off-label use of our

products may harm our reputation in the marketplace, result in injuries that lead to product liability suits or result in costly

investigations, fines or sanctions by regulatory bodies if we are deemed to have engaged in the promotion of these uses, any of

which could be costly to our business.

Our currently marketed products have been

cleared by the FDA for specific indications.

For example, our SimpliDerm product has been labeled for use to repair or replace

damaged or inadequate integumental tissue and our CanGaroo envelope is intended to securely hold an implantable electronic device

to create a stable environment when implanted in the body.

We train our marketing personnel and direct sales force to not promote

our devices for uses outside of the FDA-approved indications for use, known as “off-label uses.”

We cannot, however,

prevent a physician from using our products off-label, when in the physician’s independent professional medical judgment,

he or she deems it appropriate.

There may be increased risk of injury to patients if physicians attempt to use our products off-label.

Furthermore, the use of our products for indications other than those authorized by the FDA or by any foreign regulatory body may

not effectively treat such conditions, which could harm our reputation in the marketplace among physicians and patients.

If the FDA or any foreign regulatory body

determines that our promotional materials or training constitute promotion of an off-label use, it could request that we modify

our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance or imposition

of an untitled letter, which is used for violators that do not necessitate a warning letter, injunction, seizure, civil fine or

criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action under other

regulatory authority, such as false claims laws, if they consider our business activities to constitute promotion of an off-label

use, which could result in significant penalties, including, but not limited to, criminal, civil and administrative penalties,

damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.

In addition, physicians may misuse our

products or use improper techniques if they are not adequately trained, potentially leading to injury and an increased risk of

product liability.

If our devices are misused or used with improper technique, we may become subject to costly litigation by our

customers or their patients.

As described above, product liability claims could divert management’s attention from our core

business, harm our reputation, be expensive to defend and result in sizeable damage awards against us that may not be covered by

Failure to comply with post-marketing

regulatory requirements could subject us to enforcement actions, including substantial penalties, and might require us to recall

or withdraw a product from the market.

We are subject to ongoing and pervasive

regulatory requirements governing, among other things, the manufacture, marketing, advertising, medical device reporting, sale,

promotion, import, export, registration and listing of devices.

For example, we must submit periodic reports to the FDA as a condition

of receiving 510(k) clearances and other marketing authorizations.

These reports include information about failures and certain

adverse events associated with the device after its clearance.

Failure to submit such reports, or failure to submit the reports

in a timely manner, could result in enforcement action by the FDA.

Following its review of the periodic reports, the FDA might

ask for additional information or initiate further investigation.

The regulations to which we are subject

are complex and have become more stringent over time.

Regulatory changes could result in restrictions on our ability to continue

or expand our operations, and higher than anticipated costs or lower than anticipated sales.

Even after we have obtained the proper

regulatory clearance to market a device, we have ongoing responsibilities under FDA regulations and applicable foreign laws and

The FDA, state and foreign regulatory authorities have broad enforcement powers.

Our failure to comply with applicable

regulatory requirements could result in enforcement action by the FDA, state or foreign regulatory authorities, which may include

any of the following sanctions:

untitled letters or warning letters;

fines, injunctions, consent decrees and civil penalties;

recalls, termination of distribution, administrative detention or seizure of our products;

customer notifications or repair, replacement or refunds;

operating restrictions or partial suspension or total shutdown of production;

delays in or refusal to grant our requests for future clearances or approvals or foreign marketing

authorizations of new products, new intended uses or modifications to existing products;

withdrawals or suspensions of our current 510(k) clearances, 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;

criminal prosecution.

Any of these sanctions could result in

higher than anticipated costs or lower than anticipated sales and have a material adverse effect on our reputation, business, financial

condition and results of operations.

In addition, the FDA may change its clearance

policies, adopt additional regulations or revise existing regulations, or take other actions, which may prevent or delay clearance

or approval of our future products under development or impact our ability to modify our currently cleared products on a timely

Such policy or regulatory changes could impose additional requirements upon us that could delay our ability to obtain new

clearances or approvals, increase the costs of compliance or restrict our ability to maintain our clearances of our current products.

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.

For example, in November 2018, FDA officials announced steps that the

FDA intends to take to modernize the premarket notification pathway under Section 510(k) of the FDCA.

Among other things,

the FDA announced that it planned to develop proposals to drive manufacturers utilizing the 510(k) pathway toward the use

of newer predicates.

These proposals included plans to potentially sunset certain older devices that were used as predicates under

the 510(k) clearance pathway, and to potentially publish a list of devices that have been cleared on the basis of demonstrated

substantial equivalence to predicate devices that are more than 10 years old.

These proposals have not yet been finalized or adopted,

and the FDA may work with Congress to implement such proposals through legislation.

Accordingly, it is unclear the extent to which

any proposals, if adopted, could impose additional regulatory requirements on us that could delay our ability to obtain new 510(k) clearances,

increase the costs of compliance or restrict our ability to maintain our current clearances, or otherwise create competition that

may negatively affect our business.

More recently, in September 2019,

the FDA finalized guidance describing an optional “safety and performance based”

premarket review pathway for manufacturers

“certain, well-understood device types”

to demonstrate substantial equivalence under the 510(k) clearance

pathway by showing that such device meets objective safety and performance criteria established by the FDA, thereby obviating the

need for manufacturers to compare the safety and performance of their medical devices to specific predicate devices in the clearance

The FDA is developing a list of device types appropriate for the “safety and performance based”

will continue to develop product-specific guidance documents that identify the performance criteria for each such device type,

as well as the testing methods recommended in the guidance documents, where feasible.

The FDA may establish performance criteria

for classes of devices for which we or our competitors seek or currently have received clearance, and it is unclear the extent

to which such performance standards, if established, could impact our ability to obtain new 510(k) clearances or otherwise

create competition that may negatively affect our business.

In addition, FDA regulations and guidance

are often revised or reinterpreted by the FDA in ways that may significantly affect our business and our products.

Any new statutes,

regulations or revisions or reinterpretations of existing regulations may impose additional costs or lengthen review times of any

future products or make it more difficult to obtain clearance or approval for, manufacture, market or distribute our products.

We cannot determine what effect changes in regulations, statutes, legal interpretation or policies, when and if promulgated, enacted

or adopted may have on our business in the future.

Such changes could, among other things, require:

additional testing prior to

obtaining clearance or approval;

changes to manufacturing methods;

recall, replacement or discontinuance of our products;

or additional

record keeping.

The FDA’s and other regulatory authorities’

policies may change and additional government regulations may be promulgated that could prevent, limit or delay regulatory clearance

or approval of our product candidates.

We cannot predict the likelihood, nature or extent of government regulation that may arise

from future legislation or administrative action, either in the United States or abroad.

If we are slow or unable to adapt to changes

in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance,

we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability.

Our HCT/P products are subject to

extensive government regulation, and our failure to comply with these requirements could cause our business to suffer.

In the United States, we sell human tissue-derived

bone allografts, such as ViBone, FiberCel and OsteGro V, which are referred to by the FDA as HCT/Ps.

Certain HCT/Ps are regulated

by the FDA solely under Section 361 of the Public Health Service Act, or PHSA, and are referred to as “Section 361

HCT/Ps,”

while other HCT/Ps are subject to FDA’s regulatory requirements applicable to medical devices or biologics.

Section 361 HCT/Ps do not require 510(k) clearance, PMA approval, biologics license application, or BLA, or other premarket

authorization from FDA 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.

The FDA could disagree with our

determination that our 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 license from the FDA.

For example, in public comments, the

FDA has suggested that the use of human-derived acellular dermal matrices, such as SimpliDerm, may not be considered HCT/Ps when

utilized in breast reconstruction procedures.

As a result, we may be required to conduct clinical studies and/or seek approval

of a PMA before we are able to market SimpliDerm for use in breast reconstruction.

Even though we believe that our HCT/Ps

are not subject to premarket approval or review, HCT/Ps are subject to donor eligibility and screening, Good Tissue Practices,

product labeling and post-market reporting requirements.

If we or our suppliers fail to comply with these requirements, we could

be subject to FDA enforcement action, including, for example, warning letters, fines, injunctions, product recalls or seizures

and, in the most serious cases, criminal penalties.

The clinical trial process is lengthy

and expensive with uncertain outcomes.

We have limited data and experience regarding the safety and efficacy of our products.

of earlier studies may not be predictive of future clinical trial results, or the safety or efficacy profile for such products.

Clinical testing is difficult to design

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

The long-term effects of using our products

in a large number of patients have not been studied, and the results of short-term clinical use of such products do not necessarily

predict long-term clinical benefits or reveal long-term adverse effects.

The results of pre-clinical studies and

clinical trials of our products conducted to date and ongoing or future studies and trials of our current, planned or future products

may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict

final results.

Our interpretation of data and results from our clinical trials do not ensure that we will achieve similar results

in future clinical trials.

In addition, pre-clinical and clinical data are often susceptible to various interpretations and analyses,

and many companies that have believed their products performed satisfactorily in pre-clinical studies and earlier clinical trials

have, nonetheless, failed to replicate results in later clinical trials.

Products in later stages of clinical trials may fail to

show the desired safety and efficacy despite having progressed through nonclinical studies and earlier clinical trials.

can occur at any stage of clinical testing.

Our clinical studies may produce negative or inconclusive results, and we may decide,

or regulators may require us, to conduct additional clinical and non-clinical testing in addition to those we have planned.

The initiation and completion of any of

clinical studies may be prevented, delayed or halted for numerous reasons.

We may experience delays in our ongoing clinical trials

for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical trials, including

related to the following:

we may be required to submit an investigational device exemption, or IDE, application to the FDA,

which must become effective prior to commencing certain human clinical trials of medical devices, and the FDA may reject our IDE

application and notify us that we may not begin clinical trials;

regulators and other comparable foreign regulatory authorities may disagree as to the design or

implementation of our clinical trials;

regulators and/or IRBs, or other reviewing bodies may not authorize us or our investigators to

commence a clinical trial or to conduct or continue a clinical trial at a prospective or specific trial site;

we may not reach agreement on acceptable terms with prospective CROs and clinical trial sites,

the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

clinical trials may produce negative or inconclusive results, and we may decide, or regulators

may require us, to conduct additional clinical trials or abandon product development programs;

the number of subjects or patients required for clinical trials may be larger than we anticipate,

enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted

at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of

these clinical trials at a higher rate than we anticipate;

our third-party contractors, including those manufacturing products or conducting clinical trials

on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner or

we might have to suspend or terminate clinical trials for various reasons, including a finding

that the subjects are being exposed to unacceptable health risks;

we may have to amend clinical trial protocols or conduct additional studies to reflect changes

in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for re-examination;

regulators, IRBs or other parties may require or recommend that we or our investigators suspend

or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements;

the cost of clinical trials may be greater than we anticipate;

clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial;

we may be unable to recruit a sufficient number of clinical trial sites;

regulators, IRBs or other reviewing bodies may fail to approve or subsequently find fault

with our manufacturing processes or facilities of third-party manufacturers with which we enter into agreement for clinical and

commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate

or not available at an acceptable cost, or we may experience interruptions in supply;

approval policies or regulations of the FDA, the European Union or applicable foreign regulatory

agencies may change in a manner rendering our clinical data insufficient for approval;

our current or future products may have undesirable side effects or other unexpected characteristics.

In addition, disruptions caused by the

COVID-19 pandemic may increase the likelihood that we encounter such difficulties or delays in initiating, enrolling, conducting

or completing our planned and ongoing clinical trials.

Any of these occurrences may significantly harm our business, financial

condition and prospects.

In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of

clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.

Patient enrollment in clinical trials and

completion of patient follow-up depend on many factors, including the size of the patient population, the nature of the trial protocol,

the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, patient compliance, competing clinical

trials and clinicians’

and patients’

perceptions as to the potential advantages of the product being studied in relation

to other available therapies, including any new treatments that may be approved for the indications we are investigating.

patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo extensive post-treatment

procedures or follow-up to assess the safety and efficacy of a product candidate, or they may be persuaded to participate in contemporaneous

clinical trials of a competitor’s product candidate.

In addition, patients participating in our clinical trials may drop

out before completion of the trial or experience adverse medical events unrelated to our products.

Delays in patient enrollment

or failure of patients to continue to participate in a clinical trial may delay commencement or completion of the clinical trial,

cause an increase in the costs of the clinical trial and delays, or result in the failure of the clinical trial.

Even if our future products are cleared

or approved in the United States, commercialization of our products in foreign countries would require clearance or approval by

regulatory authorities in those countries.

Clearance or approval procedures vary among jurisdictions and can involve requirements

and administrative review periods different from, and greater than, those in the United States, including additional pre-clinical

studies or clinical trials.

Any of these occurrences could have an adverse effect on our business, financial condition and results

of operations.

Disruptions at the FDA and other

government agencies caused by funding shortages or global health concerns could hinder their ability to hire, retain or deploy

key leadership and other personnel, or otherwise prevent new or modified products from being developed, cleared or approved or

commercialized in a timely manner or at all, which could negatively impact our business.

The ability of the FDA to review and clear

or approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory

and policy changes, the FDA’s ability to hire and retain key personnel and accept the payment of user fees and other events

that may otherwise affect the FDA’s ability to perform routine functions.

Average review times at the FDA have fluctuated

in recent years as a result.

In addition, government funding of other government agencies that fund research and development activities

is subject to the political process, which is inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may

also slow the time necessary for medical devices and biologics or modifications to cleared or for approved medical devices and

biologics to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

over the last several years, including for 35 days beginning on December 22, 2018, the U.S.

government has shut down several

times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.

Separately, in response to the COVID-19

pandemic, on March 10, 2020, the FDA announced its intention to postpone most foreign inspections of manufacturing facilities

and products, and, on March 18, 2020, the FDA temporarily postponed routine surveillance inspections of domestic manufacturing

Subsequently, on July 10, 2020, the FDA announced its intention to resume certain on-site inspections of domestic

manufacturing facilities subject to a risk-based prioritization system.

The FDA intends to use this risk-based assessment system

to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical

inspections to resumption of all regulatory activities.

Regulatory authorities outside the United States may adopt similar restrictions

or other policy measures in response to the COVID-19 pandemic.

If a prolonged government shutdown occurs, or if global health concerns

continue to prevent the FDA, the European Union or other regulatory authorities from conducting their regular inspections, reviews,

or other regulatory activities, it could significantly impact the ability of the FDA, the European Union or other regulatory authorities

to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

We are subject to certain federal,

state and foreign fraud and abuse laws, health information privacy and security laws and physician payment transparency laws, which,

if violated, could subject us to substantial penalties.

Additionally, any challenge to or investigation into our practices under

these laws could cause adverse publicity and be costly to respond to, and thus could harm our business.

There are numerous U.S.

federal and state,

as well as foreign, laws pertaining to healthcare fraud and abuse, including anti-kickback, false claims and physician transparency

Our business practices and relationships with providers and hospitals are subject to scrutiny under these laws.

be subject to patient information privacy and security regulation by both the federal government and the states and foreign jurisdictions

in which we conduct our business.

The healthcare laws and regulations that may affect our ability to operate include:

the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from

knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind,

to induce either the referral of an individual or furnishing or arranging for a good or service, for which payment may be made,

in whole or in part, under federal healthcare programs, such as Medicare and Medicaid.

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;

the federal civil and criminal false claims laws, including the federal civil False Claims Act,

which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment

from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent.

Moreover, the government may assert

that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or

fraudulent claim for purposes of the federal civil False Claims Act.

Private individuals can bring False Claims Act “qui

actions, on behalf of the government and such individuals, commonly known as “whistleblowers,”

in amounts paid by the entity to the government in fines or settlement.

When an entity is determined to have violated the federal

civil False Claims Act, the government may impose civil penalties, including treble damages, and exclude the entity from participation

in Medicare, Medicaid and other federal healthcare programs;

the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring

remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s

decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional

federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making

false statements relating to healthcare matters.

Similar to the federal Anti-Kickback Statute, 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;

the federal Physician Sunshine Act, which requires certain manufacturers of drugs, devices, biologics

and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program,

or CHIP, to report annually to CMS, information related to payments and other transfers of value to physicians, which is defined

broadly to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals, and applicable manufacturers

and group purchasing organizations, to report annually ownership and investment interests held by such physicians and their immediate

family members.

Manufacturers are required to submit annual reports to CMS and failure to do so may result in civil monetary penalties

for all payments, transfers of value or ownership or investment interests not reported in an annual submission, and may result

in liability under other federal laws or regulations.

Effective January 1, 2022, these reporting obligations will extend to

include payments and transfers of value made to certain nonphysician providers such as physician assistants and nurse practitioners;

analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback

and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers

state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the

applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare

providers and other potential referral sources;

state laws that require device manufacturers to report information related to payments

and other transfers of value to physicians and other healthcare providers or marketing expenditures;

and state laws related to

insurance fraud in the case of claims involving private insurers.

These laws and regulations, among other

things, constrain our business, marketing and other promotional activities by limiting the kinds of financial arrangements we may

have with hospitals, physicians or other potential purchasers of our products, as well as independent sales agents and distributors.

Due to the breadth of these laws, the narrowness of statutory exceptions and regulatory safe harbors available, and the range of

interpretations to which they are subject, it is possible that some of our current or future practices might be challenged under

one or more of these laws.

To enforce compliance with the healthcare

regulatory laws, certain enforcement bodies have recently increased their scrutiny of interactions between healthcare companies

and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare

Responding to investigations can be time-and resource-consuming and can divert management’s attention from the

Additionally, as a result of these investigations, healthcare providers and entities may have to agree to additional

compliance and reporting requirements as part of a consent decree or corporate integrity agreement.

Any such investigation or settlement

could increase our costs or otherwise have an adverse effect on our business.

Even an unsuccessful challenge or investigation into

our practices could cause adverse publicity, and be costly to respond to.

If our operations are found to be in violation of any

of the healthcare laws or regulations described above or any other healthcare regulations that apply to us, we may be subject to

penalties, including administrative, civil and criminal penalties, damages, fines, exclusion from participation in government healthcare

programs, such as Medicare and Medicaid, imprisonment, contractual damages, reputational harm, disgorgement and the curtailment

or restructuring of our operations.

In addition, members of our management

and companies with which they are affiliated or have been affiliated with in the past, have been, and may in the future be, involved

in investigations, prosecutions, convictions or settlements in the healthcare industry.

For example, Kevin Rakin, the chairman

of our board of directors, was named as a defendant in United States ex rel.

Advanced BioHealing, Inc., or ABH, a

whistleblower suit relating to sales methods employed by sales representatives of ABH, a biotechnology company for which Mr.

served as its chief executive officer.

All claims in the lawsuit were dismissed with prejudice pursuant to a settlement agreement,

Rakin expressly denied that he engaged in any wrongful conduct, and Mr.

Rakin agreed to pay to the United

States $2.5 million.

Any investigations, prosecutions, convictions or settlements involving members of our management and companies

with which they are or have been affiliated may be detrimental to our reputation and could negatively affect our business, financial

condition and results of operations.

Healthcare policy changes, including

recently enacted legislation reforming the U.S.

healthcare system, could harm our cash flows, financial condition and results of

In March 2010, the Affordable Care

Act, or ACA, was enacted in the United States, which made a number of substantial changes in the way healthcare is financed by

both governmental and private insurers.

Among other ways in which it may impact our business, the ACA established a new Patient-Centered

Outcomes Research Institute to oversee and identify priorities in comparative clinical effectiveness research in an effort to coordinate

and develop such research, implemented payment system reforms, including a national pilot program on payment bundling to encourage

hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through

bundled payment models, and expanded the eligibility criteria for Medicaid programs.

Since its enactment, there have been judicial,

Congressional and executive branch challenges to certain aspects of the ACA, and we expect there will be additional challenges

and amendments to the ACA in the future.

For example, the TCJA was enacted, which includes a provision repealing, effective January 1,

2019, the tax-based shared responsibility payment imposed by the ACA on certain individuals who fail to maintain qualifying health

coverage for all or part of a year that is commonly referred to as the “individual mandate”.

On December 14, 2018,

District Court judge in the Northern District of Texas ruled that the individual mandate is a critical and inseverable feature

of the ACA and, therefore, because it was repealed as part of the Tax Act, the remaining provisions of the ACA are invalid as well.

On December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit affirmed the District Court’s decision that the

individual mandate was unconstitutional but remanded the case back to the District Court to determine whether the remaining provisions

of the ACA are invalid as well.

On March 2, 2020, the U.S.

Supreme Court granted the petitions for writs of certiorari to

review the case, although it is unclear when a decision will be made or how the Supreme Court will rule.

In addition, there may

be other efforts to challenge, repeal or replace the ACA.

We are continuing to monitor any changes to the ACA that, in turn, may

potentially impact our business in the future.

In addition, other legislative changes

have been proposed and adopted since the ACA was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into

law, which, 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, was to remain in effect through 2029.

The CARES Act, which was signed

into law on March 27, 2020, temporarily suspended these reductions from May 1, 2020 through December 31, 2020, and

extended the sequester by one additional year, through 2030.

In addition, on January 2, 2013, the American Taxpayer Relief

Act of 2012 was signed into law, which, among other things, 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.

We expect additional state and federal

healthcare reform measures to be adopted in the future, any of which could limit reimbursement for healthcare products and services,

which could result in reduced demand for our products or additional pricing pressure.

Failure to comply with data protection

laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation

and/or adverse publicity and could negatively affect our operating results and business.

We and our commercial partners, independent

sales agents, suppliers and other business partners may be subject to federal, state and foreign data protection laws and regulations

(i.e., laws and regulations that address data privacy and security).

In the United States, numerous federal and state laws and

regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer

protection laws and regulations (e.g., Section 5 of the FTC Act), that govern the collection, use, disclosure and protection

of health-related and other personal information could apply to our operations or the operations of our partners.

We may also be

subject to U.S.

federal rules, regulations and guidance concerning data security for medical devices, including guidance from the

In addition, we may obtain health information from third parties (including research institutions from which we obtain clinical

trial data) that are subject to privacy and security requirements under HIPAA.

Depending on the facts and circumstances, we could

be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained

by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

In addition, the California Consumer Privacy

Act, or CCPA, became effective on January 1, 2020.

The CCPA gives California residents expanded rights to access and delete

their personal information, opt out of certain personal information sharing and receive detailed information about how their personal

information is used by requiring covered companies to provide new disclosures to California consumers (as that term is broadly

defined) and provide such consumers new ways to opt out of certain sales of 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.

there are limited exemptions for certain health-related information, including certain clinical trial data, the CCPA may increase

our compliance costs and potential liability.

Additionally, a new California ballot initiative, the California Privacy Rights Act,

appears to have garnered enough signatures to be included on the November 2020 ballot, and if voted into law by California

residents, would impose additional data protection obligations on companies doing business in California, including additional

consumer rights processes and opt outs for certain uses of sensitive data.

It would also create a new California data protection

agency specifically tasked to enforce the law, which would likely result in increased regulatory scrutiny of California businesses

in the areas of data protection and security.

Similar laws have been proposed in other states and at the federal level, and if

passed, such laws may have potentially conflicting requirements that would make compliance challenging.

Foreign data protection laws, including

General Data Protection Regulation, or the GDPR, which became effective in May 2018, may also apply to health-related

and other personal information obtained outside of the United States.

The GDPR imposes stringent data protection requirements for

the processing of personal data in the European Economic Area, or EEA.

The GDPR imposes several stringent requirements for controllers

and processors of personal data, including, for example, higher standards for obtaining consent from individuals to process their

personal data, more robust disclosures to individuals and a strengthened individual data rights regime, shortened timelines for

data breach notifications, limitations on retention and secondary use of information (including for research purposes), increased

requirements pertaining to health data and pseudonymised (i.e., key-coded) data and additional obligations when we contract third

party processors in connection with the processing of the personal data.

The GDPR also imposes strict rules on the transfer

of personal data out of the EEA, to the United States and other third countries.

Recent legal developments in Europe have created

complexity and uncertainty regarding transfers of personal data from the EEA to the United States, e.g.

on July 16, 2020,

the Court of Justice of the European Union, or the CJEU, invalidated the E.U.-U.S.

Privacy Shield Framework, or the Privacy Shield,

under which personal data could be transferred from the EEA to U.S.

entities who had self-certified under the Privacy Shield scheme.

While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission

as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance

on them alone may not necessarily be sufficient in all circumstances.

European data protection law provides that E.U.

and EEA member

states may make their own further laws and regulations limiting the processing of health-related data, which could limit our ability

to use and share personal data or could cause our costs to increase, and harm our business and financial condition.

comply with the requirements of GDPR and the applicable national data protection and marketing laws may result in fines of up to

€20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other

administrative penalties as well as individual claims for compensation.

In addition, the United Kingdom leaving

the European Union could also lead to further legislative and regulatory changes.

It remains unclear how the United Kingdom data

protection laws or regulations will develop in the medium to longer term and how data transfer to the United Kingdom from the European

Union and the EEA will be regulated, especially following the United Kingdom’s departure from the European Union on January 31,

However, the United Kingdom has transposed the GDPR into domestic law with the Data Protection Act 2018, which remains in

force following the United Kingdom’s departure from the European Union.

Compliance with these and any other applicable privacy

and data security laws and regulations is a rigorous and time-intensive process, and we may be required to put in place additional

mechanisms ensuring compliance with the new data protection rules.

If we fail to comply with any such laws or regulations, we may

face significant fines and penalties that could adversely affect our business, financial condition and results of operations.

Compliance with U.S.

and foreign privacy

and security laws, rules and regulations could require us to take on more onerous obligations in our contracts, require us

to engage in costly compliance exercises, restrict our ability to collect, use and disclose data, or in some cases, impact our

ability, or the ability of our commercial partners, independent sales agents, suppliers or other business partners, to operate

in certain jurisdictions.

Each of these constantly evolving laws can be subject to varying interpretations.

Failure to comply with

and foreign data protection laws and regulations could result in government investigations and enforcement actions (which

could include civil or criminal penalties), fines, private litigation and/or adverse publicity and could negatively affect our

operating results and business.

Moreover, patients about whom we or our partners obtain information, as well as the providers who

share this information, may contractually limit our ability to use and disclose the information.

Claims that we have violated individuals’

privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable,

could be expensive and time-consuming to defend and could result in adverse publicity that could have a material and adverse effect

on our business, financial condition and results of operations.

Risks Related to Intellectual Property

If we are unable to obtain, maintain

and adequately protect our intellectual property rights, our competitive position could be harmed or we could be required to incur

significant expenses to enforce or defend our rights.

Our commercial success will depend in part

on our success in obtaining and maintaining issued patents, trademarks and other intellectual property rights in the United States

and elsewhere and protecting our proprietary technology.

If we do not adequately protect our intellectual property and proprietary

technology, competitors may be able to use our technologies or the goodwill we have acquired in the marketplace and erode or negate

any competitive advantage we may have, which could harm our business and ability to achieve profitability.

Some of our intellectual property rights

depend on licensing agreements with third parties, and our patent coverage includes protection provided by licensed patents.

in the future we no longer have rights to one or more of these licensed patents, our patent coverage may be compromised, which

in turn could adversely affect our ability to protect our products and defend against competitors.

We have sought to protect our proprietary

position by filing patent applications in the United States and abroad related to our products that we view as important to our

This process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable

patent applications at a reasonable cost or in a timely manner.

In addition, we cannot provide any assurances that any of our patents

have, or that any of our pending patent applications that mature into issued patents will include, claims with a scope sufficient

to protect our existing products, any enhancements we may develop to our existing products or any new products we may develop or

acquire and introduce in the future.

We, or our licensors, may fail to identify patentable aspects of inventions made in the course

of development and commercialization activities before it is too late to obtain patent protection on them.

Therefore, we may miss

potential opportunities to strengthen our patent position.

Other parties may have developed technologies that may be related or

competitive to our system, may have filed or may file patent applications and may have received or may receive patents that overlap

or conflict with our patent applications, either by claiming the same methods or devices or by claiming subject matter that could

dominate our patent position.

The patent positions of regenerative medicine

companies, including our patent position, may involve complex legal, scientific and factual questions, and, therefore, the scope,

validity, ownership and enforceability of any patent claims that we may obtain cannot be predicted with certainty.

issued, may be challenged, deemed unenforceable, narrowed, invalidated or circumvented.

Proceedings challenging our patents could

result in either loss of the patent or denial of the patent application or loss or reduction in the scope of one or more of the

claims of the patent or patent application.

In addition, such proceedings may be costly.

Thus, any patents that we currently own

or may own may not provide any protection against competitors.

Furthermore, an adverse decision in an interference proceeding can

result in a third party receiving the patent right sought by us, which in turn could affect our ability to commercialize our products.

In recent years, patent rights have been the subject of significant litigation.

Changes in either the patent laws or interpretation

of the patent laws in the United States and other countries may diminish the value of our owned or licensed patents or narrow the

scope of our patent protection.

Though an issued patent is presumed valid

and enforceable, its issuance is not conclusive as to its inventorship, scope, validity or enforceability, and it may not provide

us with adequate proprietary protection or competitive advantages against competitors with similar products.

Competitors could

attempt to replicate some or all of the competitive advantages we derive from our development efforts, willfully infringe, misappropriate

or otherwise violate our intellectual property rights, design around our patents or develop and obtain patent protection for more

effective technologies, designs or methods.

CanGaroo and SimpliDerm are the only current

products covered by issued patents.

We rely on unpatented trade secrets and know-how for several of our current products to develop

and maintain our competitive position.

However, trade secrets and know-how can be difficult to protect and enforce against third

Accordingly, we cannot be certain that these intellectual property rights will provide us with adequate protection or

enable us to prevent third parties from developing or commercializing competitive products.

We may be unable to prevent the unauthorized

disclosure or use of our technical knowledge or trade secrets by consultants, suppliers, vendors, current and former employees,

distributors, commercial partners or independent sales agents.

The laws of some foreign countries do not protect our proprietary

rights to the same extent as the laws of the United States, and we may encounter significant problems in protecting our proprietary

rights in these countries.

Our ability to enforce our patent rights

depends on our ability to detect infringement.

It may be difficult to detect infringers who do not advertise the components that

are used in their products.

Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s

or potential competitor’s product.

We may not prevail in any lawsuits that we initiate and the damages or other remedies

awarded, if we were to prevail, may not be commercially meaningful.

In addition, proceedings to enforce or

defend our patents could put our patents at risk of being invalidated, held unenforceable or interpreted narrowly, which could

limit our ability to stop or prevent us from stopping others from using or commercializing similar or identical technology and

products, or limit the duration of the patent protection of our technology and products.

Such proceedings could provoke third parties

to assert claims against us, including that some or all of the claims in one or more of our patents are invalid or otherwise unenforceable.

If any of the patents covering our products are narrowed, invalidated or found unenforceable, or if a court found that valid, enforceable

patents held by third parties covered one or more of our products, our competitive position could be harmed or we could be required

to incur significant expenses to enforce or defend our rights.

The degree of future protection for our

proprietary rights is uncertain, and we cannot ensure that:

any of our patents, or any of our pending patent applications, if issued, will include claims having

a scope sufficient to protect our products;

any of our pending patent applications will issue as patents;

we will be able to successfully commercialize our products on a substantial scale, if approved,

before the relevant patents we currently have, or may have, expire;

we were the first to conceive and reduce to practice the inventions covered by each of our patents

and pending patent applications;

we were the first to file patent applications for these inventions;

others will not develop similar or alternative technologies that do not infringe, misappropriate

or otherwise violate our owned or licensed patents and other intellectual property rights;

any of our patents will ultimately be found to be valid and enforceable;

ownership of our patents or patent applications will not be challenged by third parties;

any patents issued to us will provide a basis for an exclusive market for our commercially viable

products, will provide us with any competitive advantages or will not be challenged by third parties;

our competitors will not conduct research and development activities in countries where we do not

have patent rights, or in countries where research and development safe harbor laws exist, and then use the information learned

from such activities to develop competitive products for sale in our major commercial markets;

we will develop additional proprietary technologies or products that are separately patentable;

our commercial activities or products will not infringe, misappropriate or otherwise violate the

patents and other intellectual property rights of others.

Should any of these events occur, they could have a material and adverse effect on our business,

financial condition and results of operations.

We may not enter into invention assignment

and confidentiality agreements with all of our employees and contractors and such agreements could be ineffective or breached.

We rely, in part, upon unpatented trade

secrets, unpatented know-how and continuing technological innovation to develop and maintain our competitive position, which we

seek to protect, in part, by confidentiality agreements with our employees, consultants, independent sales agents, collaborators

and third-party vendors.

We also seek to enter agreements with our employees and consultants that obligate them to assign any inventions

created during their work for us to us and have non-compete agreements with some, but not all, of our consultants.

may not obtain these agreements in all circumstances and the assignment of intellectual property under such agreements may not

be self-executing.

If the employees, consultants or collaborators that are parties to these agreements breach or violate their

respective terms, we may not have adequate remedies for any such breach or violation.

It is possible that technology relevant to

our business will be independently developed by a person that is not a party to such an agreement.

Furthermore, if the employees

and consultants who are parties to these agreements breach or violate the terms of these agreements, we may not have adequate remedies

for any such breach or violation, and we could lose our trade secrets through such breaches or violations.

Further, our trade secrets

could otherwise become known or be independently discovered by our competitors.

Any of the foregoing could have a material and

adverse effect on our business, financial condition and results of operations.

The patent protection we obtain for

our products may not be sufficient enough to provide us with any competitive advantage or our patents may be challenged.

Our owned and licensed patents and pending

patent applications, if issued, may not provide us with any meaningful protection or prevent competitors from designing around

our patent claims to circumvent our patents by developing similar or alternative technologies or products in a non-infringing manner.

For example, a third party may develop a competitive product that provides benefits similar to one or more of our products but

falls outside the scope of our patent protection or license rights.

If the patent protection provided by the patents and patent

applications we hold or pursue with respect to our products is not sufficiently broad to impede such competition, our ability to

successfully commercialize our products could be negatively affected, which would harm our business.

It is possible that defects of form in

the preparation or filing of our patents or patent applications may exist, or may arise in the future, for example with respect

to proper priority claims, inventorship, claim scope, or requests for patent term adjustments.

If we or our collaborators or licensors,

fail to establish, maintain or protect such patents and other intellectual property rights, such rights may be reduced or eliminated.

If our collaborators or licensors are not fully cooperative or disagree with us as to the prosecution, maintenance or enforcement

of any patent rights, such patent rights could be compromised.

If there are material defects in the form, preparation, prosecution

or enforcement of our patents or patent applications, such patents may be invalid and/or unenforceable, and such applications may

never result in valid and enforceable patents.

Any of these outcomes could impair our ability to prevent competition from third

parties, which may have an adverse impact on our business.

Pending patent applications cannot be enforced

against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications.

Assuming the other requirements for patentability are met, currently, the first to file a patent application is generally entitled

to the patent.

However, prior to March 16, 2013, in the United States, the first to invent was entitled to the patent.

of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States

and other jurisdictions are not published until 18 months after filing, or in some cases not at all.

Therefore, we cannot be certain

that we were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first

to file for patent protection of such inventions.

Similarly, we cannot be certain that parties from whom we do or may license or

purchase patent rights were the first to make relevant claimed inventions, or were the first to file for patent protection for

If third parties have filed prior patent applications on inventions claimed in our patents or applications that were filed

on or before March 15, 2013, an interference proceeding in the United States can be initiated by such third parties to determine

who was the first to invent any of the subject matter covered by the patent claims of our applications.

If third parties have filed

such prior applications after March 15, 2013, a derivation proceeding in the United States can be initiated by such third

parties to determine whether our invention was derived from theirs.

Moreover, because the issuance of a patent

is not conclusive as to its inventorship, scope, validity or enforceability, our owned and licensed patents or pending patent applications

may be challenged in the courts or patent offices in the United States and abroad.

There is no assurance that all of the potentially

relevant prior art relating to our patents and patent applications has been found.

If such prior art exists, it may be used to

invalidate a patent, or may prevent a patent from issuing from a pending patent application.

For example, such patent filings may

be subject to a third-party submission of prior art to the U.S.

Patent and Trademark Office, or USPTO, or to other patent offices

around the world.

Alternately or additionally, we may become involved in post-grant review procedures, oppositions, derivation

proceedings, ex parte reexaminations, inter partes review, supplemental examinations or interference proceedings or challenges

in district court, in the United States or in various foreign patent offices, including both national and regional, challenging

patents or patent applications in which we have rights, including patents on which we rely to protect our business.

if we seek to enforce our patents against third parties, third parties may initiate such challenges in response.

An adverse determination

in any such challenges may result in loss of the patent or in patent or patent application claims being narrowed, invalidated or

held unenforceable, in whole or in part, or in denial of the patent application or loss or reduction in the scope of one or more

claims of the patent or patent application, any of which could limit our ability to stop others from using or commercializing similar

or identical technology and products, or limit the duration of the patent protection of our technology and products.

given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting

such candidates might expire before or shortly after such candidates are commercialized.

Any of the foregoing could have a material

and adverse effect on our business, financial condition and results of operations.

Litigation or other proceedings or

third-party claims of intellectual property infringement, misappropriation or other violations could require us to spend significant

time and money, prevent us from selling our products and adversely affect our stock price.

Our commercial success will depend in part

on not infringing, misappropriating or otherwise violating the patents or other proprietary rights of third parties.

litigation regarding patent rights occurs in our industry.

Our competitors in both the United States and abroad, many of which

have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may

have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere

with our ability to make, use and sell our products.

We do not always conduct independent reviews of patents issued to third parties.

In addition, patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally

abandoned patents or applications can be revived, so there may be applications of others now pending or recently revived patents

of which we are unaware.

These applications may later result in issued patents, or the revival of previously abandoned patents,

that will prevent, limit or otherwise interfere with our ability to make, use or sell our products.

Third parties may, in the future,

assert claims that we are employing their proprietary technology without authorization, including claims from competitors or from

non-practicing entities that have no relevant product sales and against whom our own patent portfolio may have no deterrent effect.

As we continue to commercialize our products in their current or updated forms, launch new products and enter new markets, we expect

competitors may claim that one or more of our products infringe, misappropriate or otherwise violate their intellectual property

rights as part of business strategies designed to impede our successful commercialization and entry into new markets.

number of patents, the rapid rate of new patent applications and issuances, the complexities of the technology involved and the

uncertainty of litigation may increase the risk of business resources and management’s attention being diverted to patent

We may in the future receive letters or other threats or claims from third parties inviting us to take licenses under,

or alleging that we infringe, their patents.

Moreover, we may become party to future

adversarial proceedings regarding our patent portfolio or the patents of third parties.

Such proceedings could include supplemental

examination or contested post-grant proceedings, such as review, reexamination, inter parties review, interference or derivation

proceedings before the USPTO and challenges in U.S.

District Court.

Patents may be subjected to opposition, post-grant review or

comparable proceedings lodged in various foreign, both national and regional, patent offices.

The legal threshold for initiating

litigation or contested proceedings may be low, so that even lawsuits or proceedings with a low probability of success might be

Litigation and contested proceedings can also be expensive and time-consuming, and our adversaries in these proceedings

may have the ability to dedicate substantially greater resources to prosecuting these legal actions than we can.

We may also occasionally

use these proceedings to challenge the patent rights of others.

We cannot be certain that any particular challenge will be successful

in limiting or eliminating the challenged patent rights of the third party.

Any lawsuits resulting from such allegations

could subject us to significant liability for damages and/or invalidate our proprietary rights.

Any potential intellectual property

litigation also could force us to do one or more of the following:

stop making, selling or using products or technologies that allegedly infringe, misappropriate

or otherwise violate the asserted intellectual property;

lose the opportunity to license our technology to others or to collect royalty payments based upon

successful protection and assertion of our intellectual property rights against others;

incur significant legal expenses;

pay substantial damages or royalties to the party whose intellectual property rights we may be

found to be infringing, misappropriating or otherwise violating;

pay the attorney’s fees and costs of litigation to the party whose intellectual property

rights we may be found to be infringing, misappropriating or otherwise violating;

redesign those products that contain the allegedly infringing intellectual property, which could

be costly, disruptive and infeasible;

attempt to obtain a license to the relevant intellectual property from third parties, which may

not be available on reasonable terms or at all, or from third parties who may attempt to license rights that they do not have.

Any litigation or claim against us, even

those without merit, may cause us to incur substantial costs, and could place a significant strain on our financial resources,

divert the attention of management from our core business and harm our reputation.

If we are found to infringe, misappropriate

or otherwise violate the intellectual property rights of third parties, we could be required to pay substantial damages (possibly

treble damages) and/or substantial royalties and could be prevented from selling our products unless we obtain a license or are

able to redesign our products to avoid infringement, misappropriation or violation.

Any such license may not be available on reasonable

terms, if at all, and there can be no assurance that we would be able to redesign our products in a way that would not infringe,

misappropriate or otherwise violate the intellectual property rights of others.

We could encounter delays in product introductions

while we attempt to develop alternative methods or products.

If we fail to obtain any required licenses or make any necessary changes

to our products or technologies, we may have to withdraw existing products from the market or may be unable to commercialize one

or more of our products.

In addition, we generally indemnify our

customers with respect to infringement by our products of the proprietary rights of third parties.

Third parties may assert infringement

claims against our customers.

These claims may require us to initiate or defend protracted and costly litigation on behalf of our

customers, regardless of the merits of these claims.

If any of these claims succeed or settle, we may be forced to pay damages

or settlement payments on behalf of our customers or may be required to obtain licenses for the products they use.

obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using our products.

We may not have sufficient resources to

bring these actions to a successful conclusion.

There could also be public announcements of the results of hearings, motions or

other interim proceedings or developments.

If securities analysts or investors perceive these results to be negative, it could

have a material adverse effect on the market price of shares of our Class A common stock.

Any of the foregoing could have

a material and adverse effect on our business, financial condition and results of operations.

If we are unable to protect the confidentiality

of our trade secrets, our business and competitive position could be harmed.

In addition to patent protection, we also

rely upon copyright and trade secret protection, as well as non-disclosure agreements and invention assignment agreements with

our employees, consultants, independent sales agents and other third parties, to protect our confidential and proprietary information.

In addition to contractual measures, we try to protect the confidential nature of our proprietary information using commonly accepted

physical and technological security measures.

Such measures may not, for example, in the case of misappropriation of a trade secret

by an employee or third party with authorized access, provide adequate protection for our proprietary information.

measures may not prevent an employee or consultant from misappropriating our trade secrets and providing them to a competitor,

and recourse we take against such misconduct may not provide an adequate remedy to protect our interests fully.

Unauthorized parties

may also attempt to copy or reverse engineer certain aspects of our products that we consider proprietary.

Enforcing a claim that

a party illegally disclosed or misappropriated a trade secret can be difficult, expensive and time-consuming, and the outcome is

unpredictable.

Even though we use commonly accepted security measures, trade secret violations are often a matter of state law,

and the criteria for protection of trade secrets can vary among different jurisdictions.

In addition, trade secrets may be independently

developed by others in a manner that could prevent legal recourse by us.

If any of our confidential or proprietary information,

such as our trade secrets, were to be disclosed or misappropriated, or if any such information was independently developed by a

competitor, it could have a material and adverse effect on our business, financial condition and results of operations.

We may be unable to enforce our intellectual

property rights throughout the world.

Obtaining, maintaining and enforcing intellectual

property rights is expensive and it is cost prohibitive to do so throughout the world.

Accordingly, we may determine not to obtain,

maintain or enforce intellectual property rights in certain jurisdictions.

In addition, the laws of some foreign countries do not

protect intellectual property rights to the same extent as the laws of the United States.

Many companies have encountered significant

problems in protecting and defending intellectual property rights in certain foreign jurisdictions.

This could make it difficult

for us to stop infringement of our foreign patents, if obtained, or the misappropriation or other violation of our other intellectual

property rights.

For example, some foreign countries have compulsory licensing laws under which a patent owner must grant licenses

to third parties.

In addition, some countries limit the enforceability of patents against third parties, including government agencies

or government contractors.

In these countries, patents may provide limited or no benefit.

Patent protection must ultimately be

sought on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes.

Accordingly, we

may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

Proceedings to enforce our patent rights

in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business.

Accordingly, our efforts to protect our intellectual property rights in such countries may be inadequate.

In addition, changes

in the law and legal decisions by courts in the United States and foreign countries may affect our ability to obtain adequate protection

for our technology and the enforcement of our intellectual property.

Any of the foregoing could have a material and adverse effect

on our business, financial condition and results of operations.

Third parties may assert ownership

or commercial rights to inventions we develop.

Third parties may in the future make claims

challenging the inventorship or ownership of our intellectual property.

We have written agreements with collaborators that provide

for the ownership of intellectual property arising from our collaborations.

In addition, we may face claims by third parties that

our agreements with employees, contractors or consultants obligating them to assign intellectual property to us are ineffective

or in conflict with prior or competing contractual obligations of assignment, which could result in ownership disputes regarding

intellectual property we have developed or will develop and interfere with our ability to capture the commercial value of such

intellectual property.

Litigation may be necessary to resolve an ownership dispute, and if we are not successful, we may be precluded

from using certain intellectual property or may lose our exclusive rights in such intellectual property.

Either outcome could harm

our business and competitive position.

Any of the foregoing could have a material and adverse effect on our business, financial

condition and results of operations.

Third parties may assert that our

employees or consultants have wrongfully used or disclosed confidential information or misappropriated trade secrets.

We employ individuals who previously worked

with other companies, including our competitors or potential competitors.

Although we try to ensure that our employees and consultants

do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees,

consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property or personal data,

including trade secrets or other proprietary information, of a former employer or other third party.

Litigation may be necessary

to defend against these claims.

If we fail in defending any such claims or settling those claims, in addition to paying monetary

damages or a settlement payment, we may lose valuable intellectual property rights or personnel.

Even if we are successful in defending

against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

the foregoing could have a material and adverse effect on our business, financial condition and results of operations.

Recent changes in U.S.

may limit our ability to obtain, defend and/or enforce our patents.

Recent patent reform legislation could

increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our

issued patents.

The Leahy-Smith America Invents Act, or the Leahy-Smith Act, includes a number of significant changes to U.S.

These include provisions that affect the way patent applications are prosecuted and also affect patent litigation.

recently developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive

changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, which became effective

on March 16, 2013, could affect us.

The first to file provisions limit the rights of an inventor to patent an invention if

the inventor was not the first to file an application for patenting that invention, even if such invention was the first invention.

Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business.

This will require

us to be cognizant going forward of the timing from invention to filing of a patent application and be diligent in filing patent

applications, but circumstances could prevent us from promptly filing patent applications on our inventions.

In addition, the Leahy-Smith Act and its

implementation could increase the uncertainties and costs surrounding the enforcement and defense of our issued patents.

the Leahy-Smith Act provides that an administrative tribunal known as the Patent Trial and Appeals Board, or PTAB, provides a venue

for challenging the validity of patents at a cost that is much lower than district court litigation and on timelines that are much

This applies to all of our U.S.

patents, even those issued before March 16, 2013.

Furthermore, because of a lower

evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S.

federal courts necessary to invalidate a

patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid

even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.

it is not clear what, if any, long-term impact the PTAB proceedings will have on the operation of our business, patent challenge

proceedings before the PTAB since its inception in 2013 have resulted in the invalidation of many U.S.

patent claims.

The availability

of the PTAB as a lower-cost, faster and potentially more potent tribunal for challenging patents could increase the likelihood

that our own patents will be challenged, thereby increasing the uncertainties and costs of maintaining and enforcing them.

failure by us to adequately address the uncertainties and costs surrounding recent patent legislation could have a material and

adverse effect on our business, financial condition and results of operations.

Obtaining and maintaining our patent

protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental

patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance and annuity fees on

any issued patent are due to be paid to the USPTO and European and other patent agencies over the lifetime of a patent.

the USPTO and European and other patent agencies require compliance with a number of procedural, documentary, fee payment and other

similar provisions during the patent application process.

While an inadvertent failure to make payment of such fees or to comply

with such provisions can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules,

there are situations in which such noncompliance will result in the abandonment or lapse of the patent or patent application, and

the partial or complete loss of patent rights in the relevant jurisdiction.

Non-compliance events that could result in abandonment

or lapse of a patent or patent application include failure to respond to official actions within prescribed time limits, non-payment

of fees and failure to properly legalize and submit formal documents within prescribed time limits.

If we or our licensors fail

to maintain the patents and patent applications covering our product candidates or if we or our licensors otherwise allow our patents

or patent applications to be abandoned or lapse, our competitors might be able to enter the market, which would hurt our competitive

position, could impair our ability to successfully commercialize our product candidates in any indication for which they are approved,

and could have a material and adverse effect on our business, financial condition and results of operations.

In addition, any of the intellectual property

rights that we own or license that are developed through the use of U.S.

government funding will be subject to additional federal

Pursuant to the Bayh-Dole Act of 1980, or Bayh-Dole Act, the government will receive a license under inventions developed

under a government-funded program and may require us to manufacture products embodying such inventions in the United States.

certain circumstances, the government may also claim ownership in such inventions or compel us to license them to third parties.

Any failure by us to comply with federal regulations regarding intellectual property rights that were developed through the use

government funding could have a material and adverse effect on our business, financial condition and results of operations.

If we do not obtain patent term extension

in the United States under the Hatch-Waxman Amendments and in foreign countries under similar legislation, thereby potentially

extending the term of marketing exclusivity for our product candidates, our business may be materially harmed.

Patents have a limited lifespan.

United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest

non-provisional filing date.

Various extensions may be available, but the life of a patent, and the protection it affords,

Even if patents covering our product candidates are obtained, once the patent life has expired for a product, we may

be open to competition from competitive products.

Given the amount of time required for the development, testing and regulatory

review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized.

As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing

products similar or identical to ours.

In the United States, a patent that covers

an FDA-approved drug, biologic or medical device may be eligible for a term extension designed to restore the period of the patent

term that is lost during the premarket regulatory review process conducted by the FDA.

Depending upon the timing, duration and

conditions of FDA marketing approval of our product candidates, we may be able to extend the term of a patent covering each product

candidate under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments

and similar legislation in the European Union.

The Hatch-Waxman Amendments permit a patent term extension of up to five years for

a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory

review process.

However, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to

expiration of relevant patents or otherwise fail to satisfy applicable requirements.

Moreover, the length of the extension could

be less than we request.

A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the

date of product approval, and only claims covering such approved product, a method for using it or a method for manufacturing it

may be extended.

In the European Union, our product candidates may be eligible for term extensions based on similar legislation.

If we are unable to obtain patent term extension or the term of any such extension is less than we request, the period during which

we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing

products sooner.

As a result, our revenue from applicable products could be reduced, possibly materially.

Further, under certain circumstances, patent

terms covering our products or product candidates may be extended for time spent during the pendency of the patent application

in the USPTO (referred to as Patent Term Adjustment, or PTA).

The laws and regulations underlying how the USPTO calculates the

PTA is subject to change and any such PTA granted by the USPTO could be challenged by a third-party.

If we do not prevail under

such a challenge, the PTA may be reduced or eliminated, resulting in a shorter patent term, which may negatively impact our ability

to exclude competitors.

Because PTA added to the term of patents covering products has particular value, our business may be adversely

affected if the PTA is successfully challenged by a third party and our ability to exclude competitors is reduced or eliminated.

Any of the foregoing could have a material and adverse effect on our business, financial condition and results of operations.

We depend on certain technologies

that are licensed to us.

We do not control the intellectual property rights covering these technologies, and any loss of our rights

to these technologies or the rights licensed to us could prevent us from selling our products and adversely impact our business.

We are a party to license agreements under

which we are granted rights to intellectual property that is important to our business, and we may need to enter into additional

license agreements in the future.

We rely on these licenses in order to be able to use and sell various proprietary technologies

that are material to our business, as well as technologies we intend to use in our future commercial activities.

For example, we

expect that we will be dependent on our licensing arrangements with Cook Biotech, relating to CanGaroo and our cardiovascular products.

Our rights to use these technologies and the inventions claimed in the licensed patents are subject to the continuation of and

our compliance with the terms of those license agreements.

Our existing license agreements impose, and we expect that future license

agreements will also impose on us, various diligence obligations, milestone payments, royalties and other obligations.

to comply with our obligations under these agreements, or if we are subject to a bankruptcy proceeding, the licensor may have the

right to terminate the license, in which case we would not be able to market products covered by the license, which would adversely

affect our business, financial condition and results of operations.

As we have done previously, we may need

to obtain additional licenses from third parties in order to advance our research or allow commercialization of our products and

technologies.

The in-licensing and acquisition of third-party intellectual property is a competitive area, and a number of more

established companies are also pursuing strategies to in-license or acquire third-party intellectual property rights that we may

consider attractive or necessary.

These established companies may have a competitive advantage over us due to their size, cash

resources and greater clinical development and commercialization capabilities.

Furthermore, companies that perceive us to be a

competitor may be unwilling to assign or license rights to us.

Accordingly, we may not be able to obtain any of these licenses

on commercially reasonable terms or at all.

Even if we are able to obtain a license, it may be non-exclusive, thereby giving our

competitors access to the same technologies licensed to us.

In the event that we are not able to acquire a license, we may be required

to expend significant time and resources to develop or license replacement technology.

If we are unable to do so, we may be unable

to develop or commercialize the affected products and technologies, which could materially harm our business.

In addition, the

third parties owning such intellectual property rights could seek either an injunction prohibiting our sales, or, with respect

to our sales, an obligation on our part to pay royalties or other forms of compensation and damages.

In some cases, we may not have the right

to control the prosecution, maintenance or filing of the patents that are licensed to us, or the enforcement of these patents against

infringement by third parties.

Some of our patents and patent applications were not filed by us, but were either acquired by us

or are licensed from third parties.

Thus, these patents and patent applications were not drafted by us, and we did not control

or have any input into the prosecution of these patents and patent applications prior to our acquisition of, or our entry into

a license with respect to, such patents and patent applications.

We cannot be certain that the drafting or prosecution of these

patents and patent applications will result or has resulted in valid and enforceable patents.

Further, since we do not always retain

complete control over our ability to enforce our licensed patent rights against third-party infringement, we cannot be certain

that our licensor will elect to enforce these patents to the extent that we would choose to do so, or in a way that will ensure

that we retain the rights we currently have under the applicable license agreement.

If our licensor fails to properly enforce the

patents subject to our license agreement in the event of third-party infringement, our ability to retain our competitive advantage

with respect to the applicable products may be materially and adversely affected.

Licensing of intellectual property is an

important part of our business and involves complex legal, business and scientific issues.

Disputes may arise between us and our

licensors regarding intellectual property that is subject to a license agreement, including, with respect to, among other things:

the scope of rights granted under the license agreement and other interpretation-related issues;

whether our licensor had the right to grant the rights granted to us under the license agreement;

whether and the extent to which our technology and processes infringe, misappropriate or otherwise

violate intellectual property of the licensor that is not subject to the license agreement;

our right to sublicense patent and other rights to third parties under collaborative development

relationships;

our involvement in the prosecution and enforcement of the licensed patents and our licensor’s

overall patent enforcement strategy;

our diligence obligations with respect to the use of the licensed technology in relation to our

development and commercialization of our products and technologies, and what activities satisfy those diligence obligations;

the ownership of inventions and know-how resulting from the joint creation or use of intellectual

property by our licensors and us and our partners;

the amounts of royalties, milestones or other payments due under the license agreement.

In addition, we may become the owner of

intellectual property that was obtained through assignments, which may be subject to re-assignment back to the original assignor

upon our failure to prosecute or maintain such intellectual property, upon our breach of the agreement pursuant to which such intellectual

property was assigned, or upon our bankruptcy.

The resolution of any contract interpretation

disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or

technology, or increase what we believe to be our financial or other obligations under the relevant agreement.

If disputes over

intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable

terms, or if intellectual property is re-assigned back to the original assignor, we may be unable to successfully develop and commercialize

or continue selling products that utilize the affected intellectual property, any of which could impair our ability to execute

our growth strategy and could have a material and adverse effect on our business, financial condition and results of operations.

We may not be able to protect and

enforce our trademarks and trade names, or build name recognition in our markets of interest, thereby harming our competitive position.

We have not yet registered certain of our

trademarks in all of our potential markets.

If we apply to register these and other trademarks in the United States and other countries,

our applications may not be allowed for registration in a timely fashion or at all, and our registered trademarks may not be maintained

In addition, the registered or unregistered trademarks or trade names that we own may be challenged, infringed, circumvented,

declared generic, lapsed or determined to be infringing on or dilutive of other marks.

We may not be able to protect our rights

in these trademarks and trade names, which we need in order to build name recognition.

In addition, third parties may file for

registration of trademarks similar or identical to our trademarks, thereby impeding our ability to build brand identity and possibly

leading to market confusion.

If they succeed in registering or developing common law rights in such trademarks, and if we are not

successful in challenging such rights, we may not be able to use these trademarks to develop brand recognition of our technologies,

products or services.

In addition, there could be potential trade name or trademark infringement claims brought by owners of other

registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.

we may in the future enter into agreements with owners of such third party trade names or trademarks to avoid potential trademark

litigation which may limit our ability to use our trade names or trademarks in certain fields of business.

In addition, opposition or cancellation

proceedings may in the future be filed against our trademark applications and registrations, and our trademarks may not survive

such proceedings.

In addition, third parties may file first for our trademarks in certain countries.

If they succeed in registering

such trademarks, and if we are not successful in challenging such third party rights, we may not be able to use these trademarks

to market our products in those countries.

If we do not secure registrations for our trademarks, we may encounter more difficulty

in enforcing them against third parties than we otherwise would.

If we are unable to establish name recognition based on our trademarks

and trade names, we may not be able to compete effectively, which could have a material adverse effect on our business, financial

condition, results of operations and prospects.

Risks Related to Our Common Stock

We expect that the price of our Class A

common stock will fluctuate substantially and you may not be able to sell the shares you purchase at or above the price you paid

for such shares.

The market price of our Class A common

stock is likely to be highly volatile and may fluctuate substantially due to a variety of factors, many of which are outside of

our control, including, among other things:

the volume and timing of sales of our products;

the introduction of new products or product enhancements by us or others in our industry;

developments related to the COVID-19 pandemic;

disputes or other developments with respect to our or others’

intellectual property rights;

our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced

products on a timely basis;

changes or proposed changes in laws or regulations or differing interpretations or enforcement

thereof affecting our business;

product liability claims, other litigation or regulatory investigations;

annual or quarterly variations in our results of operations or those of others in our industry,

or results of operations that otherwise vary from those expected by securities analysts and investors;

publications, reports or other media exposure of our products or those of others in our industry,

or of our industry generally;

announcements by us or others in our industry, or by our or their respective suppliers, distributors

or other business partners, regarding, among other things, significant contracts, price reductions, capital commitments or other

business developments, the entry into or termination of strategic transactions or relationships, securities offerings or other

financing initiatives, and public reaction thereto;

additions or departures of key management personnel;

changes in governmental regulations or in reimbursement;

changes in earnings estimates or recommendations by securities analysts, or other changes in investor

perceptions of the investment opportunity associated with our common stock relative to other investment alternatives;

the development and sustainability of an active trading market for our Class A common stock;

general market conditions and other factors, including factors unrelated to our operating performance

or the operating performance of our competitors;

other factors discussed in Part II, Item 1A.

Our business, financial

condition and operating results can be affected by a number of factors, whether current known or unknown, including but not limited

to those described as risk factors, any one or more of which could, directly or indirectly, cause our actual operating results and

financial condition to vary materially from past, or anticipated future, operating results and financial condition.

For a discussion

of these potential risks and uncertainties, see Part I, Item 1A.

“Risk Factors”

of this Quarterly

In recent years, the stock markets generally

have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance

of those companies, including, as a result of the COVID-19 pandemic.

Broad market and industry factors may significantly affect

the market price of our Class A common stock, regardless of our actual operating performance.

If the market price of shares

of our Class A common stock does not ever exceed the price you paid for your shares, you may not realize any return on your

investment in us and may lose some or all of your investment.

In addition, in the past, class action

litigation has often been instituted against companies whose securities have experienced periods of volatility in market price.

Securities litigation brought against us following volatility in our stock price, regardless of the merit or ultimate results of

such litigation, could result in substantial costs, which would hurt our financial condition and operating results and divert management’s

attention and resources away from our business.

Our principal stockholders have significant

voting power and may take actions that may not be in the best interests of our other stockholders.

As of November 9, 2020, our principal

stockholders each holding more than 5% of our Class A common stock collectively control approximately 56.5% of our

outstanding Class A common stock.

As a result, these stockholders, if they act together, will be able to control the

management and affairs of our company and most matters requiring stockholder approval, including the election of directors

and approval of significant corporate transactions.

The interests of these stockholders may not be the same as or may even

conflict with your interests.

For example, these stockholders could attempt to delay or prevent a change in control of the

company, even if such change in control would benefit our other stockholders, thereby depriving our other stockholders of an

opportunity to receive a premium for their common stock as part of a sale of the company or our assets.

Conversely, these

stockholders may pursue acquisitions, divestitures and other transactions that, in their judgment, could enhance the value of

their investment, even though such transactions might involve risks to you.

Even in the absence of any actual conflict of

interest, the degree of control possessed by these stockholders may affect the prevailing market price of our Class A

common stock due to investors’

perceptions that such conflicts of interest may exist or arise.

As a result, this

concentration of ownership may not be in the best interests of our other stockholders and may impair your ability to realize

any return on your investment in us and may impair your ability to avoid losing some or all of your investment.

A significant portion of our total

outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our Class A

common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares

of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to

sell their shares, could reduce the market price of our Class A common stock.

As of November 9, 2020, we had outstanding

10,226,122 shares of Class A and Class B, collectively.

This includes the 2,941,176 shares that we sold in our IPO, which

may be resold in the public market immediately without restriction.

As a holder of our Class B common stock, Deerfield only

has the right to convert each share of our Class B common stock into one share of Class A common stock at its election

to the extent that as a result of such conversion, it would not beneficially own in excess of 4.9% of any class of our securities

registered under the Exchange Act.

As a result, Deerfield may not be deemed an “affiliate”

for purposes of Rule 144

and, as a result, any securities it purchases may be freely tradable.

Approximately 7.3 million of the remaining shares are restricted

as a result of securities laws or lock-up agreements (which may be waived, with or without notice, by Piper Sandler &

and Cowen and Company, LLC) but will become eligible to be sold at various times beginning 180 days after the date of the Prospectus,

unless held by one of our affiliates, in which case the resale of those securities will be subject to volume limitations under

Rule 144 of the Securities Act of 1933, as amended, or the Securities Act.

Because Deerfield may not be deemed an “affiliate”

for purposes of Rule 144, up to approximately 2.4 million shares of Class B common stock that Deerfield holds may become

freely tradable and not subject to volume limitations following the 180-day lock-up period.

Moreover, as of the date of this Quarterly

Report, holders of an aggregate of up to approximately 7.1 million shares of our common stock have rights, subject to certain conditions

and limitations, to require us to file registration statements covering their shares or to include their shares in registration

statements that we may file for ourselves or other stockholders, until such rights terminate pursuant to the terms of our Investor

Rights Agreement.

We also intend to register all shares of Class A common stock that we may issue under our equity compensation

Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations

applicable to affiliates and the lock-up agreements.

The market price of our common stock may

drop significantly when the restrictions on resale by our existing stockholders lapse or when we are required to register the sale

of our stockholders’

remaining shares of our common stock.

A decline in the trading price of our common stock might impede

our ability to raise capital through the issuance of additional shares of our Class A common stock or other equity securities

and may impair your ability to sell shares of our common stock at a price higher than the price you paid for them or at all.

The dual class structure of our common

stock and the option of the holders of shares of our Class B common stock to convert into shares of our Class A common

stock may limit your ability to influence corporate matters.

Our Class A common stock has one

vote per share, while our Class B common stock is non-voting.

Nonetheless, each share of our Class B common stock may

be converted at any time into one share of Class A common stock at the option of its holder, subject to the limitations provided

for in our certificate of incorporation that prohibit the conversion of our Class B common stock into shares of Class A

common stock to the extent that, upon such conversion, such holder would beneficially own in excess of 4.9% of any class of our

securities registered under the Exchange Act.

Consequently, if holders of Class B common stock exercise their option to make

this conversion, such exercise will have the effect of increasing the relative voting power of those prior holders of our Class B

common stock (subject to the ownership limitation described in the previous sentence) and increasing the number of outstanding

shares of our voting common stock, and correspondingly decreasing the relative voting power of the current holders of our Class A

common stock, which may limit your ability to influence corporate matters.

Because our Class B common stock is generally

non-voting, stockholders who own more than 10% of our common stock overall but 10% or less of our Class A common stock will

not be required to report changes in their ownership from transactions in our Class B common stock pursuant to Section 16(a) of

the Securities Exchange Act of 1934, as amended, or the Exchange Act, and would not be subject to the short-swing profit provisions

of Section 16(b) of the Exchange Act.

You may be diluted by the future

issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise.

As of November 18, 2020, we had 192,908,040

shares of Class A common stock authorized but unissued and 16,865,838 shares of Class B common stock authorized but unissued.

We are authorized under our certificate of incorporation to issue these shares of common stock and other securities convertible

into or exercisable or exchangeable for shares of our common stock for the consideration and on the terms and conditions established

by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise.

As of November 18,

2020, we had 287,395 shares of our Class A common stock issuable upon the exercise of outstanding options under our 2015 Plan

at a weighted average exercise price of 

$6.43 per share, 164,071 of which were vested as of such date, 736,790 shares of

Class A common stock issuable upon the exercise of stock options and the settlement of RSUs granted under our 2020 Plan to

certain of our executive officers, employees and consultants, with respect to such stock options, at a weighted average exercise

price of 

$17.00 per share, 899,210 additional shares of our Class A common stock reserved for future issuance under

our 2020 Plan, not including the additional shares of Class A common stock that will be reserved for future issuance under

our 2020 Plan pursuant to provisions in the 2020 Plan that automatically increase the number of shares of our Class A common

stock reserved for future issuance thereunder, and 143,150 shares of our Class A common stock that will become available for

future issuance under our 2020 ESPP, not including the additional shares of Class A common stock that will be reserved for

future issuance under our 2020 ESPP pursuant to provisions in the 2020 ESPP that automatically increase the number of shares of

our Class A common stock reserved for future issuance thereunder.

Any additional shares of common stock that we issue, including

under our 2020 Plan, 2020 ESPP or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership

and voting power held by investors who purchase our common stock.

In the future, we may also issue additional securities if we

need to raise capital, including, but not limited to, in connection with acquisitions, which could constitute a material portion

of our then-outstanding shares of our common stock.

We are an “emerging growth

company”

and a “smaller reporting company,”

and the reduced disclosure requirements applicable to emerging growth

companies and smaller reporting companies may make our common stock less attractive to investors.

We are an “emerging growth company,”

as defined in the JOBS Act, and a “smaller reporting company,”

as defined in Rule 12b-2 under the Exchange Act.

Emerging growth companies and smaller reporting companies may take advantage of certain exemptions from various reporting requirements

that are applicable to other publicly-traded entities that are not emerging growth companies or smaller reporting companies.

With respect to emerging growth companies,

these exemptions include:

the option to present only two years of audited financial statements , in addition to any required

unaudited interim financial statements, with a correspondingly reduced Management’s Discussion and Analysis of Financial

Condition and Results of Operations;

not being required to comply with the auditor attestation requirements of Section 404 of the

Sarbanes-Oxley Act;

not being required to comply with any requirement that may be adopted by the Public Company Accounting

Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information

about the audit and the financial statements (i.e., an auditor discussion and analysis);

not being required to submit certain executive compensation matters to stockholder advisory votes,

such as “say-on-pay,”

“say-on-frequency”

and “say-on-golden parachutes”;

not being required to disclose certain executive compensation related items such as the correlation

between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee

compensation.

We have elected to take advantage of certain

of these reduced disclosure obligations and may elect to take advantage of other reduced reporting requirements in the future.

As a result, the information that we provide to our stockholders may be different than the information you might receive from other

public reporting companies in which you hold equity interests.

In addition, the JOBS Act permits emerging growth companies to delay

adopting new or revised accounting standards until such time as those standards apply to private companies.

We have elected to

use this extended transition period for complying with new or revised accounting standards until the earlier of the date we (i) are

no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided

in the JOBS Act.

As a result, our consolidated financial statements and the reported results of operations contained therein may

not be directly comparable to those of other public companies.

We cannot predict whether investors will find our common stock less

attractive because of our reliance on these exemptions.

If some investors do find our common stock less attractive, there may be

a less active trading market for our Class A common stock and our stock price may be reduced or more volatile.

We will remain an emerging growth company,

and will be able to take advantage of the foregoing exemptions, until the earliest of:

(i) the last day of the first fiscal

year in which our annual gross revenues are $1.07 billion or more;

(ii) the last day of 2025;

(iii) the date that we

become a “large accelerated filer”

as defined in Rule 12b-2 under the Exchange Act, which would occur if the market

value of our common equity held by non-affiliates is $700 million or more as of the last business day of our most recently completed

second fiscal quarter;

or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities

during the previous three years.

Even after we cease to be an emerging growth

company, we will still be a smaller reporting company until such time as (i) we determine that the market value of the voting

and non-voting shares held by non-affiliates is $250 million or more but less than $700 million as of the last business day of

our second fiscal quarter and our annual revenues are $100 million or more during our most recently completed fiscal year, or (ii) the

market value of the voting and non-voting shares held by non-affiliates is $700 million or more measured on the last business day

of our second fiscal quarter.

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may

continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies, including

reduced financial and executive compensation disclosure.

In addition, even if we cease to be an emerging growth company, we will

remain exempt from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act provided we do not qualify

as an “accelerated filer”

as defined in Rule 12b-2 under the Exchange Act, which would occur if our annual revenue

was $100 million or more during our most recently completed fiscal year and the market value of our common equity held by non-affiliates

is $75 million or more as of the last business day of our most recently completed second fiscal quarter, and only after we have

been subject to the reporting requirements of the Exchange Act for a period of at least 12 calendar months.

We will incur increased costs as

a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives

and corporate governance practices.

As a public company, and particularly after

we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur

as a private company.

The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements

of The Nasdaq Global Market and other applicable securities rules and regulations impose various requirements on public companies,

including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

management and other personnel will need to devote a substantial amount of time to these compliance initiatives, which will divert

their attention away from our core business operations and revenue-producing activities.

Moreover, these rules and regulations

will increase our legal and financial compliance costs and will make some activities more time-consuming and costly.

we expect that these rules and regulations may make it more difficult and more expensive for us to obtain director and officer

liability insurance, which in turn could require us to incur substantially higher costs to obtain the same or similar coverage

or accept reduced policy limits and coverage, which in turn could also make it more difficult for us to attract and retain qualified

individuals to serve on our board of directors and as our executive officers.

We cannot predict or estimate the amount

of additional costs we may incur or the timing of such costs.

These rules and regulations are often subject to varying interpretations,

in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance

is provided by regulatory and governing bodies.

This could result in continuing uncertainty regarding compliance matters and higher

costs necessitated by ongoing revisions to disclosure and governance practices.

In addition, if we fail to comply with these rules and

regulations, we could be subject to a number of penalties, including the delisting of our Class A common stock, fines, sanctions

or other regulatory action or civil litigation.

Failure to comply with requirements

to design, implement and maintain effective internal control over financial reporting could have a material adverse effect on our

business and stock price.

As a public company, we are required to

evaluate our internal control over financial reporting in a manner that meets the standards of publicly traded companies required

by Section 404(a) of the Sarbanes-Oxley Act, or Section 404.

As a public company, we have significant

requirements for enhanced financial reporting and internal controls.

The process of designing, implementing and maintaining effective

internal controls is a continuous effort that will require us to anticipate and react to changes in our business and the economic

and regulatory environments.

In this regard, we will need to continue to dedicate internal resources, potentially engage outside

consultants, adopt a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue

steps to improve control processes as appropriate, validate through testing whether such controls are functioning as documented,

and implement a continuous reporting and improvement process for internal control over financial reporting.

If we are unable to

establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting

obligations on a timely basis, result in material misstatements in our consolidated financial statements and adversely affect our

operating results.

In addition, we will be required, pursuant to Section 404, to furnish a report by our management on, among

other things, the effectiveness of our internal control over financial reporting in the second annual report following the closing

This assessment will need to include disclosure of any material weaknesses identified by our management in our internal

control over financial reporting.

The rules governing the standards that must be met for our management to assess our internal

control over financial reporting are complex and require significant documentation and testing.

Testing and maintaining internal

controls may divert our management’s attention from other matters that are important to our business.

In addition, once we

are no longer an emerging growth company, provided we then qualify as an “accelerated filer”

as defined in Rule 12b-2

under the Exchange Act, we will be required to include in the annual reports that we file with the SEC an attestation report on

our internal control over financial reporting issued by our independent registered public accounting firm.

In connection with the implementation of

the necessary procedures and practices related to internal control over financial reporting, we may identify deficiencies that

we may not be able to remediate in time to meet the deadline imposed by the Sarbanes-Oxley Act for compliance with the requirements

of Section 404.

In addition, we may encounter problems or delays in completing the remediation of any deficiencies identified

by our independent registered public accounting firm in connection with the issuance of their attestation report.

or the subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal controls

over financial reporting that are deemed to be material weaknesses.

Any material weaknesses could result in a material misstatement

of our annual or quarterly consolidated financial statements or disclosures that may not be prevented or detected.

Furthermore, we may not be able to conclude,

on an ongoing basis, that we have effective internal control over financial reporting in accordance with Section 404, or our

independent registered public accounting firm may not be able to issue an unqualified attestation report once we become subject

to the corresponding requirement under Section 404.

If either we are unable to conclude that we have effective internal control

over financial reporting or our independent registered public accounting firm is unable to provide us with an unqualified report,

investors could lose confidence in our reported financial information, which could have a material adverse effect on the trading

price of our Class A common stock.

Provisions in our certificate of

incorporation and bylaws and under Delaware law could make an acquisition of our company, which may be beneficial to our stockholders,

more difficult and may prevent attempts by our stockholders to replace or remove our current management.

Provisions in our certificate of incorporation

and our bylaws may discourage, delay or prevent a merger, acquisition or other change in control of our company that stockholders

may consider favorable, including transactions in which you might otherwise receive a premium for your shares.

These provisions

could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing

the market price of our Class A common stock.

In addition, because our board of directors is responsible for appointing the

members of our management team, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove

our current management by making it more difficult for stockholders to replace members of our board of directors.

Among other things,

these provisions include those establishing:

a classified board of directors with three-year staggered terms, which may delay the ability of

stockholders to change the membership of a majority of our board of directors;

no cumulative voting in the election of directors, which limits the ability of minority stockholders

to elect director candidates;

the exclusive right of our board of directors to elect a director to fill a vacancy created by

the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from filling

vacancies on our board of directors;

the ability of our board of directors to authorize the issuance of shares of preferred stock and

to determine the terms of those shares, including preferences and voting rights, without stockholder approval, which could be used

to significantly dilute the ownership of a hostile acquirer;

the ability of our board of directors to alter our bylaws without obtaining stockholder approval;

the required approval of the holders of at least two-thirds of the shares entitled to vote at an

election of directors to adopt, amend or repeal our bylaws or repeal the provisions of our certificate of incorporation regarding

the election and removal of directors;

a prohibition on stockholder action by written consent, which forces stockholder action to be taken

at an annual or special meeting of our stockholders;

the requirement that a special meeting of stockholders may be called only by the chairman of the

board of directors, the chief executive officer, the president or the board of directors, which may delay the ability of our stockholders

to force consideration of a proposal or to take action, including the removal of directors;

advance notice procedures that stockholders must comply with in order to nominate candidates to

our board of directors or to propose matters to be acted upon at a stockholders’

meeting, which may discourage or deter a

potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise

attempting to obtain control of us.

Moreover, because we are incorporated in

Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware, or DGCL,

which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period

of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock,

unless the merger or combination is approved in a prescribed manner.

Our certificate of incorporation

designates specific courts as the exclusive forum for certain litigation that may be initiated by 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 certificate of incorporation provides

that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will

be the exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a

claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders,

(iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws,

(iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws or (v) any

action asserting a claim governed by the internal affairs doctrine;

provided that, the exclusive forum provision will not apply

to suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, the rules and regulations

thereunder or any other claim for which the federal courts have exclusive jurisdiction;

and provided further that, if and only

if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action

may be brought in another state or federal court sitting in the State of Delaware.

Our certificate of incorporation further provides

that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of

America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting

a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring any interest in shares

of our capital stock shall be deemed to have notice of and to have consented to the provisions of our certificate of incorporation

described above.

We believe these provisions benefits us

by providing increased consistency in the application of Delaware law by chancellors particularly experienced in resolving corporate

disputes and in the application of the Securities Act by federal judges, as applicable, efficient administration of cases on a

more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.

However, these provisions

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 or agents, which may discourage such lawsuits against us and our directors, officers and

other employees and agents.

Because we do not anticipate paying

any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

We have never declared or paid any cash

dividends on our common stock.

We currently anticipate that we will retain future earnings for the development, operation and expansion

of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future.

As a result, capital appreciation,

if any, of our common stock would be your sole source of gain on an investment in our common stock for the foreseeable future.

We could be subject to securities

class action litigation.

In the past, securities class action litigation

has often been brought against a company following a decline in the market price of its securities.

This risk is especially relevant

for us because medical device companies have experienced significant stock price volatility in recent years.

If we face such litigation,

it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

General Risk Factors

Uncertainty relating to the LIBOR

calculation process and potential phasing out of LIBOR after 2021 may adversely affect the market value of our current or future

debt obligations.

The London Inter-bank Offered Rate, or

LIBOR, and certain other interest “benchmarks”

may be subject to regulatory guidance and/or reform that could cause

interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated

consequences.

The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to stop

encouraging or requiring banks to submit LIBOR rates after 2021, and it is unclear if LIBOR will cease to exist or if new methods

of calculating LIBOR will evolve.

If LIBOR ceases to exist or if the methods of calculating LIBOR change from their current form,

there may be adverse impacts on the financial markets generally and interest rates on borrowings under our Term Loan Facility and

Revolving Credit Facility may be adversely affected.

Changes in accounting standards and

subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect

our business, financial condition and results of operations.

GAAP, and related accounting pronouncements,

implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business are highly

These matters include, but are not limited to, revenue recognition, leases, income taxes, impairment of goodwill and long-lived

assets and equity-based compensation.

Changes in these rules, guidelines or interpretations could significantly change our reported

or expected financial performance or financial condition.

In addition, the preparation of financial

statements in conformity with GAAP requires management to make assumptions, estimates and judgments that affect the amounts reported

in our consolidated financial statements and accompanying notes.

We base our estimates and judgments on historical experience and

on various other assumptions that we believe to be reasonable under the circumstances.

The results of these estimates form the

basis for making judgments about the carrying values of assets, liabilities and equity, and the amount of net sales and expenses

that are not readily apparent from other sources.

Our operating results may be adversely affected if our assumptions change or

if actual circumstances differ from those in our assumptions, which could cause our operating results to fall below the expectations

of securities analysts and investors, resulting in a decline in our stock price.

Our disclosure controls and procedures

may not prevent or detect all errors or acts of fraud.

We have designed our disclosure controls

and procedures to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange

Act is accumulated and communicated to management, and recorded, processed, summarized and reported within the time periods specified

in the rules and forms of the Securities and Exchange Commission, or the SEC.

We believe that any disclosure controls and

procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives

of the control system are met.

These inherent limitations include the

realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

Additionally,

controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override

of the controls.

Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may

occur and not be detected.

If our operating and financial performance

in any given period does not meet the guidance we provide to the public, the market price of our Class A common stock may

We may, but are not obligated to, provide

public guidance on our expected operating and financial results for future periods.

Any such guidance will be comprised of forward-looking

statements subject to certain risks and uncertainties similar to those described in this Quarterly Report and any additional risks

and uncertainties described from time to time in our public filings or other public statements.

Our actual results may not always

be in line with or exceed any guidance we have provided, especially in times of economic uncertainty.

Even if we do issue public

guidance, there can be no assurance that we will continue to do so in the future.

If, in the future, we provide guidance, and our

operating and/or financial results for a particular period do not meet such guidance or the expectations of investment analysts,

or if we reduce, withdraw or otherwise change our guidance for future periods, or stop providing guidance, the market price of

our Class A common stock will likely decline.

If securities or industry analysts

do not publish research or reports about our business, or if they issue an adverse or misleading opinion regarding our Class A

common stock, our stock price and trading volume would likely decline.

The trading market for our Class A

common stock will be influenced by the research and reports that industry or securities analysts publish about us and our business.

We do not control these analysts.

As a newly public company, we may be slow to attract research coverage and the analysts, who

publish information about our Class A common stock, will have had relatively little experience with us or our industry, which

could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates.

If no or few securities or industry analysts commence coverage of us, the trading price for our stock would be negatively impacted.

In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us issue an adverse or misleading

opinion regarding us, our business model, our financial performance, our stock price or otherwise, our stock price would likely

If one or more of these analysts ceases coverage of us or fails to publish reports on us regularly, we could lose visibility

in the financial markets, which in turn could cause our stock price or trading volume to decline and result in the loss of all

or a part of your investment in us.

of our Annual Report.

factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and the

price of our common stock.

There have been no material changes in our risk factors to those included in our Annual Report.

Unregistered Sales of Equity Securities and Use of Proceeds.

Defaults Upon Senior Securities.

Mine Safety Disclosures.

Not applicable.

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-Q

Item 1A. Risk Factors