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Item 9A. Controls and Procedures

2021-03-08 compared with 2020-07-06 · 130 added, 1215 removed, 114 unchanged (92% of the section changed)

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An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed under the supervision and with the participation of our management, including our CEO and CFO.

As a result of this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2019 because of certain material weaknesses in internal control over financial reporting, as further described below.

As a result of this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were not effective as of December 31, 2020 because of material weaknesses in internal control over financial reporting, as further described below.

Management's Report on Internal Control Over Financial Reporting

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Under the supervision and with the participation of our management, including our CEO and CFO, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the COSO framework.

Based on evaluation under these criteria, management determined, based upon the existence of the material weaknesses described below, that we did not maintain effective internal control over financial reporting as of December 31, 2019.

Based on evaluation under these criteria, management determined, as a result of the existence of the material weaknesses described below, that we did not maintain effective internal control over financial reporting as of December 31, 2020.

A material weakness (as defined in Rule 12b-2 under the Exchange Act) is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The Company previously disclosed material weaknesses in internal control over financial reporting as of December 31, 2018 in our Annual Report on Form 10-K for the year ended December 31, 2018.

The previously disclosed material weaknesses related to our control environment, risk assessment, control activities, information and communication, and monitoring activities.

The material weaknesses led to the delayed filing of our annual consolidated financial statements for the years ended December 31, 2018 and 2017 and the restatement of our financial statements for the year ended December 31, 2016.

As described below, while management has developed and implemented certain remediation actions to address the material weaknesses, further actions are still ongoing or have not been implemented for a sufficient amount of time to test and conclude on the effectiveness of the remediation actions as of December 31, 2019.

As a result, the material weaknesses continue to be present as of December 31, 2019.

The Company previously disclosed material weaknesses in internal control over financial reporting as of December 31, 2019 in our Annual Report on Form 10-K for the year ended December 31, 2019 related to our control environment and control activities.

As a result, material weaknesses corresponding to the control activities component of internal control as defined by COSO continue to be present as of December 31, 2020.

Management has reported to the Audit Committee the status of these remediation actions.

These control deficiencies could have resulted in other misstatements in financial statement accounts and disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that might not have been prevented or detected.

The Company identified material weaknesses corresponding to the control environment and control activities components of internal control as defined by COSO as described below:

Control Environment

The Company did not maintain an effective control environment based on the criteria established in the COSO framework.

Specifically, the Company identified control deficiencies that constitute material weaknesses, either individually or in the aggregate, relating to:

(i) appropriate organizational structure, reporting lines, and authority and responsibilities in pursuit of objectives, and (ii) holding individuals accountable for their internal control related responsibilities.

The Company identified material weaknesses corresponding to the control activities component of internal control as defined by COSO as described below:

Control Activities

The control deficiencies identified specific to the Control Activities COSO element constitute material weaknesses, either individually or in the aggregate, relating to:

(i) the operation of control activities and general information technology controls that contribute to the mitigation of risks and support achievement of objectives for a sufficient period of time during the year ended December 31, 2019 and (ii) deploying control activities through policies that establish what is expected and procedures that put policies into action.

Deficiencies in control activities contributed to the potential for there to have been material accounting errors in substantially all financial statements account balances and disclosures, specifically:

Information Technology General Controls (ITGC’s) for certain information technology systems and other ITGCs did not operate effectively for a sufficient period of time for the Company to rely on the accuracy and completeness of information on which certain business process controls (automated and manual) are dependent.

As a result, it is possible that the Company’s business process controls that depend on the accuracy and completeness of data or financial reports generated by the information technology system could be adversely affected due to the lack of operating effectiveness of ITGC’s.

There was a lack of robust, established and documented accounting policies and insufficiently detailed Company procedures to ensure controls operated as designed and policies were applied effectively to ensure material transactions were recorded in the financial statements.

The Company did not have adequate management documentation around the completeness and accuracy of data material to financial reporting of certain transactions including revenue recognition and completeness of inventory.

The Company, for certain processes, did not maintain adequate controls around segregation of duties within the revenue process.

Other application controls related to revenue were not evaluated because of ineffective ITGCs or failed due to inadequate evidentiary matter or controls did not operate in a consistent manner during the year ended December 31, 2019.

(i) the operation of control activities that contribute to the mitigation of risks and

support achievement of objectives for a sufficient period of time during the year ended December 31, 2020 and (ii) deploying control activities through policies that establish what is expected and procedures that put policies into action.

Deficiencies in control activities contributed to the potential for there to have been material accounting errors in several financial statement account balances and disclosures, specifically:

• The Company did not have adequate documentation to demonstrate the completeness and accuracy of data for certain transactions considered material for financial reporting, including revenue recognition and completeness of inventory.

• The Company, for certain processes, did not maintain adequate controls to enforce segregation of duties within the revenue process, including a lack of controls in place to verify the accuracy and legitimacy of sales orders for certain types of sales transactions.

• The Company did not design and maintain adequate controls to ensure that accounting for income tax provisions were appropriately recorded in accordance with GAAP.

The Company did not have adequate staffing resources to properly perform review of certain accounting determinations, including (but not limited to) the following:

review of significant assumptions for stock-based compensation expense, timely review of consignment inventory, the review of significant assumptions used to estimate accrued expenses.

The Company did not design and maintain adequate controls over the inventory process and related accounting assumptions, to ensure that accounting determinations related to inventory appropriately considered and recorded in accordance with GAAP, that the inventory balance was complete and accurate and that disclosures related to the inventory balance were appropriately reflected within the financial statements.

The Company’s controls over financial close and reporting did not operate effectively for a sufficient period of time to meet a variety of its financial reporting objectives which exposed the financial statements to potential for disclosure that did not meet the requirements of GAAP.

• The Company did not design and maintain adequate controls over the inventory process, to ensure that accounting determinations related to inventory were appropriately considered and recorded in accordance with GAAP, that the inventory balance was complete and accurate and that disclosures related to the inventory balance were appropriately reflected within the financial statements.

• The Company did not maintain adequate controls to enforce segregation of duties as it relates to payables and disbursements.

• The Company did not adequately document its evaluation of the significant business assumptions applied to its financial forecast, going concern and goodwill analyses, and did not have adequate procedures in place to validate the completeness and accuracy of the data utilized in these processes and associated dependent budget versus actual review controls.

• The Company did not develop and maintain adequate controls to verify the completeness and accuracy of revenue recognition associated with customer arrangements for which the Step 1 criteria for the determination of a contract under ASC 606 would not be satisfied until payment from the customer was received.

• The Company did not develop and maintain adequate controls related to the completeness and accuracy of accrued expenses associated with professional services, commissions, employee bonuses, and customer rebates.

BDO USA, LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of December 31, 2020.

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Remediation Plan and Status

Remediation of the identified material weaknesses and strengthening our internal control environment was an identified priority for us throughout 2019 and will continue to be a priority in 2020.

We will test the design and ongoing operating effectiveness of the new and existing controls in future periods.

Remediation of the identified material weaknesses and strengthening our internal control environment was a priority for us throughout 2020 and will continue to be a priority in 2021.

We will implement and then test the design and ongoing operating effectiveness of the new and existing controls in future periods.

The material weaknesses cannot be considered completely remediated until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

With continued oversight from the Audit Committee, the Company ' s management has designed and begun implementing changes in processes and controls to remediate the material weaknesses described above and has

improved the Company ' s internal control over financial reporting as follows:

With continued oversight from the Audit Committee, the Company's management has designed and commenced implementing changes in processes and controls to remediate the material weaknesses described above and has improved the Company's internal control over financial reporting as follows:

Control Environment

We previously disclosed management’s conclusions at the end of both 2018 and 2019 that the Company did not maintain an effective control environment based on the criteria established in the COSO framework.

Specifically, the Company identified control deficiencies that constituted material weaknesses, either individually or in the aggregate, relating to:

Through the completion of the following activities (some of which were confirmed to have been effectively implemented during 2019), the previously disclosed material weaknesses related to control environment have been remediated:

The Board created an Ethics and Compliance Committee consisting solely of independent directors which is responsible for reviewing the status of the Company's ethics and compliance program, reviewing and advising the Board regarding any open cases and trends that may impact the business, and recommending future initiatives to improve compliance performance and effectiveness.

Management reinforced the importance of integrity, accountability, and adherence to the redesigned internal controls, policies, and procedures through the adoption of a revised Code of Business Conduct Policy .

All Board members and employees, including executives, newly hired employees and agents are required to certify that they read and understood the policy upon hire and all said individuals then re-certify their reading and understanding of the policy annually thereafter.

The Company enhanced the onboarding training provided to newly hired salespeople to emphasize the importance of compliance with the various regulations specific to the Life Sciences industry to which the Company is subject.

The Company is implementing a policy to ensure required trainings are completed by relevant personnel.

Management began, and will continue, to schedule training sessions with the Company's Sales Department to ensure that they are familiar with the Company's current sales related policies and procedures, including those which are significant to the Company's financial reporting objectives.

All Board members, employees, including all executives, newly hired employees, and agents, are required to certify that they have read, understand and will abide by the Code upon hire and then re-certify the same annually thereafter.

The Company also enhanced the onboarding training provided to newly hired salespeople to emphasize the importance of compliance with the various regulations specific to the Life Sciences industry to which the Company is subject.

Management conducted and will continue to schedule training sessions with the Company's Sales Department to ensure that they are familiar with the Company's current sales related policies and procedures, including those which are significant to the Company's financial reporting objectives.

Portions of these training sessions are facilitated by the Chief Accounting Officer (“CAO”), who presents on topics such as the Company's current sales return policy, acceptable credit terms for customers, events that would trigger commission claw-backs, customer credit limit modification approval protocol, and the importance of proper revenue recognition.

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(a) each employee's responsibility to report any actual or apparent violations of law or ethical standards and any questionable accounting or auditing matters so that they may be investigated and dealt with appropriately, (b) management's commitment to ensuring that any employees communicating such an issue via the hotline will not be subject to retaliation, and (c) the Board of Directors’ oversight of complaints raised through the hotline to ensure appropriate actions are taken.

As of the date of the filing of this Form 10-K, the Company has hired a new Chief Financial Officer and a Chief Accounting Officer.

Furthermore, the Company intends to lessen its reliance on third-party consultants for its technical accounting needs during 2020 by transitioning roles currently assigned to outside consultants to full-time employees with similar technical accounting competencies.

Management plans to develop and implement a contract management policy that defines who is required to review new, extended, or amended contracts (including those with distributors and agents).

In addition to enhancing processes and controls over adoption of new accounting standards and the proper application of existing accounting standards, the Company enhanced the technical capabilities of its accounting department by leveraging third party consultants with expertise in GAAP, as well as by hiring a new Chief Financial Officer and expanding its full-time accounting leadership team by hiring a Chief Accounting Officer, and Director of SEC Reporting.

Furthermore, the Company lessened its reliance on third-party consultants for its technical accounting needs during 2020 by transitioning roles previously assigned to outside consultants to full-time employees with similar technical accounting competencies.

Management developed a contract management policy that defines who is required to review new, extended, or amended contracts (including those with distributors and agents).

This policy includes the implementation of a checklist for standard and non-standard contracts to ensure that the revenue recognition criteria are properly considered for each of the standard and non-standard contracts.

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See Transition in Revenue Recognition footnote disclosures.

Management collaborated with outside consultants possessing significant financial reporting and internal control expertise to perform an extensive review of the design of the Company's internal controls over financial reporting.

Beginning in 2018 and continuing through 2020, management collaborated with outside consultants possessing significant financial reporting and internal control expertise to perform an extensive review of the design of the Company's internal controls over financial reporting.

This review included the identification of internal control deficiencies and the development of remediation plans for each identified deficiency.

internal control deficiencies identified included (but were not limited to) the following:

improvements to the financial close and reporting process, accounting for satisfaction of performance obligations related to revenue recognition, calculation of inventory costing and related accuracy of inventory, accounting for income taxes, accurate calculation of stock-based compensation expense, timely review of consignment inventory and the development of quality estimates related to accrued expenses.

The Company is enhancing its financial close process by formalizing its accounting policies, introducing additional layers of independent reviews by appropriately qualified individuals, improving the precision and timeliness of reviews applied to various financial result analyses, and providing required education and training to the members of the finance department.

The Company is enhancing the design and adherence to controls addressing the accuracy and completeness of the accounting for income taxes, including retention of evidence of review and review of significant judgements to ensure proper application of GAAP.

Management is enhancing its oversight of the completeness and accuracy of data material to financial reporting by establishing criteria in the performance of controls to evaluate the accuracy and completeness of data.

These internal control deficiencies identified included (but were not limited to) the following:

accurate calculation of stock-based compensation expense, timely review of consignment inventory and the development of quality estimates related to accrued expenses.

The Company enhanced its financial close process by formalizing its accounting policies, introducing additional layers of independent reviews by appropriately qualified individuals, improving the precision and timeliness of reviews applied to various financial result analyses, and providing required education and training to the members of the finance department.

The Company enhanced the design and adherence to controls addressing the accuracy and completeness of the accounting for income taxes, including retention of evidence of review and review of significant judgements to ensure proper application of GAAP.

Management continued to enhance its oversight of the completeness and accuracy of data material to financial reporting by establishing criteria in the performance of controls to evaluate the accuracy and completeness of data.

Management is implementing required training for control owners specific to the evaluation of the accuracy and completeness of data used in control activities.

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Once user profiles and their associated permissions were reconfigured, management employed procedures to ensure the continued appropriateness of all applicable system and network access.

This objective was achieved through the performance of periodic user access reviews and the enhancement of procedures related to the granting and removing of system and network access, however, these controls have not operated for a sufficient period of time for management to evaluate the effectiveness of these remediated controls.

This objective was achieved through the performance of periodic user access reviews and the enhancement of procedures related to the granting and removing of system and network access.

Management modified its policy regarding the periodic review of sales to involve the Finance Department in an effort to enhance the Finance Department's awareness and oversight of sales activities in order to verify the validity and proper accounting treatment of sales transactions.

Risk Assessment

We previously disclosed that in 2018, management concluded there to be a material weakness in the Risk Assessment specific to the lack of an appropriate risk assessment, the lack of processes for communicating changes to risks throughout the organization and lack of policy to ensure the accounting department was aware of sales practices.

Through the completion of the following activities, the previously disclosed material weaknesses related to risk assessment have been remediated:

The Compliance function, led by the SVP and Chief Compliance Officer, has conducted several enterprise-wide risk assessments since 2018.

The results of those audits have been shared with the Ethics and Compliance Committee initially and regular updates have been provided on the Company’s risk assessment program.

Management developed a process to prepare and did prepare an annual comprehensive fraud risk assessment designed to evaluate risks related to fraudulent financial reporting, management override, potential loss of assets, and corruption.

The methodology adopted within this assessment is designed to evaluate the impact and likelihood of various fraud risks susceptible to the Company.

Such risks, if relevant, are then mapped to controls within the current risk environment.

Management developed a set of controls to identify and define its population of related parties, identify transactions with those related parties, and analyze such transactions to determine whether additional approval or financial statement disclosure is required.

The Company established a Disclosure Committee comprised of senior management representatives from all relevant departments within the organization.

Members of this committee were and are responsible for reviewing quarterly and annual SEC filings to ensure that the disclosures within the filings are reflective of the knowledge of the Company and the Company’s operations that each member of the committee brings to the review process.

The members of the committee met prior to each filing to discuss the completeness and accuracy of the document being filed, if applicable, suggest

additional disclosure, and once the Committee believed the disclosure to be appropriate, approved the draft filing for audit committee consideration.

The Company designed and implemented a variety of new controls, including monthly operational meetings amongst senior management that are attended by members of the accounting department, to ensure that the accounting department is aware of operational changes that may affect the Company's accounting policies.

On an annual basis (or more frequently, should a significant triggering event occur), the Company now performs a risk assessment designed to ensure that the scope of its Sarbanes-Oxley compliance program adequately reflects changes to the business and its operations.

If a significant triggering event occurs, the Company evaluates the key control activities related to the transaction or activity and determines that the related controls are within the scope of the Sarbanes-Oxley compliance program.

Information and Communication

We previously disclosed that in 2018, management concluded there to be a material weakness in the Company’s Information and Communications activities specific to the generation and provision of quality information as established under the requirements of COSO.

Through the completion of the following activities, the previously disclosed material weaknesses related to information and Communication have been remediated:

Management conducted required internal training courses over Sarbanes-Oxley regulations, the Company's internal control over financial reporting program and documentation evidencing the operation of controls for Company personnel and management involved in the execution of controls.

Management developed a regular cadence for reporting the results of control testing to the board of directors of the Company.

Management implemented quarterly required communications amongst relevant members of senior management in the form of certification surveys.

A control certification survey is distributed to obtain information regarding any internal control related issues or concerns that control owners may have, and additional certification surveys are distributed to Disclosure Committee members and key members of the sales department which address (to the best of their knowledge) whether the period's financial statements are free from either material misstatements, material misclassifications, or material omissions.

Monitoring Activities

We previously disclosed that in 2018, management concluded there to be a material weakness in the Company’s monitoring activities specific to the assessment of controls, the competency of those monitoring the control environment and the lack of adequate procedures to monitor when controls are overridden.

Through the completion of the following activities, the previously disclosed material weaknesses related to monitoring activities have been remediated:

Established its Internal Audit Department, led by a VP of Internal Audit under the direction of the audit committee.

The Internal Audit Department identified and hired internal resources with the appropriate level of competency, who are tasked with continually evaluating and monitoring the effectiveness of the Company's internal controls over financial reporting.

Management established a framework for identifying, communicating and remediating internal control deficiencies, which includes appropriate escalation of issues to appropriate stakeholders in the internal control framework and communication of remediation status, as relevant, to the board of directors on a regular basis.

Management led required training sessions with the Company's Sales Department to ensure that they are familiar with the Company's current sales related policies and procedures, including those which are significant to the Company's financial reporting objectives.

Portions of these training sessions were facilitated by the CAO, who presents on topics such as the Company's current sales return policy, acceptable credit terms for customers, events that would trigger commission claw-backs, customer credit limit modification approval protocol, and the importance of proper revenue recognition.

Changes in Internal Control Over Financial Reporting

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Other Information

Item 1.01 Entry into a Material Definitive Agreement.

Item 3.02 Unregistered Sales of Equity Securities.

Item 3.03 Material Modification to Rights of Security Holders.

Item 5.03 Amendments to Articles of Incorporation or Bylaws;

Change in Fiscal Year.

Issuance of $100 Million of Series B Convertible Preferred Stock

On June 30 , 2020, the Company entered into a Securities Purchase Agreement (the “ Purchase Agreement ” or “ Securities Purchase Agreement ”) with Falcon Fund 2 Holding Company, L.P.

(the “ EW Purchaser ”), an affiliate of EW Healthcare Partners, and certain funds managed by Hayfin Capital Management LLP (the “ Hayfin Purchasers ” and together with the EW Purchaser, the “ Purchasers ”), in connection with the offering, issuance, and sale of (1) 90,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “ Series B Preferred Stock ”) to the EW Purchaser for an aggregate purchase price of $90,000,000, and (2) 10,000 shares of Series B Preferred Stock in the aggregate to the Hayfin Purchasers for an aggregate purchase price of $10,000,000, in each case on the terms and subject to the conditions of the Purchase Agreement (such shares, the “ Purchased Shares ” and such transaction, the “ Preferred Stock Transaction ”).

Pursuant to the Purchase Agreement, the Company has filed an amendment to its articles of incorporation, as amended, setting forth the terms of the Series B Preferred Stock (the “ Preferred Stock Amendment ”).

The Company completed the closing of the sale and purchase of the Purchased Shares (the “ Preferred Stock Closing ”) on July 2 , 2020.

The offering and sale of the Purchased Shares was exempt from registration under the Securities Act of 1933, as amended (the “ Securities Act ”), pursuant to Section 4(a)(2) of the Securities Act and certain rules and regulations thereunder.

The shares of Common Stock issuable upon conversion of the shares of Series B Preferred Stock will be issued in reliance upon the exemption from registration in Section 3(a)(9) of the Securities Act.

The proceeds from the sale of the Purchased Shares have been or will be used to repay outstanding debt, as further described below, for working capital and general corporate purposes and to pay transaction fees, costs and expenses incurred in connection with the transactions contemplated by the Purchase Agreement.

Terms of the Purchase Agreement

The Purchase Agreement contains representations, warranties and covenants of the Company and the Purchasers customary for transactions of this type.

In addition, certain specific terms and conditions of the Purchase Agreement are described below.

Purchaser Director and Nominees

On the terms and subject to the conditions of the Purchase Agreement and the Preferred Stock Amendment, for so long as the EW Purchaser and its affiliates have beneficial ownership of (i) at least 10.0% of the total number of outstanding shares of common stock of the Company, par value $0.001 per share (“ Common Stock ”) (calculated on a fully-diluted, as converted basis) (a “ 10% Holder ”), the EW Purchaser will be entitled to designate two individuals to serve on the Board, and (ii) at least 5.0% but less than 10% of the total number of outstanding shares of Common Stock (calculated on a fully-diluted, as converted basis) (a “ 5% Holder ”), the EW Purchaser will be entitled to designate one individual to serve on the Board (such appointed directors, the “ Preferred Directors ”).

The Preferred Directors will not be members of any class of directors that is elected by the holders of shares of Common Stock (a “ Common Director ”).

However, the Board may, by notice to the EW Investor, either appoint such Preferred Director as a Common Director or nominate such director for election as a Common Director, provided that (i) no such appointment or nomination takes place such that such director would be up for election as a Common Director prior to the 2022 annual meeting of shareholders of the Company, and (ii) if anyone the EW Purchaser has designated to serve on the Board has been appointed or nominated as a Common Director prior to July 2 , 2022, then no other person designated by the EW Purchaser to serve on the Board may be appointed or nominated as a Common Director prior to July 2 , 2022.

From and after the time that no Series B Preferred Stock remains outstanding, the EW Purchaser’s right to designate directors in accordance with the preceding sentence will convert into a right, subject to the same ownership thresholds described above, to designate up to two individuals to be nominated by the Company to serve on the Board.

The initial Preferred Directors are Martin P.

Sutter and William A.

Hawkins, III, who were appointed to the Board of Directors effective as of July 2, 2020.

Lock-Up Period

The Purchasers may not transfer any of the Purchased Shares (or any Common Stock into which the Purchased Shares are convertible) for a period of two years after the Preferred Stock Closing (the “ Lock-Up Period ”), subject to certain customary exceptions.

After the Lock-Up Period, the Purchasers may transfer the Purchased Shares (or shares of Common Stock into which the Purchased Shares are convertible) to any person subject to certain limited restrictions designed to prevent transfers to competitors of the Company.

Subject to certain customary exceptions, the Purchasers are subject to a standstill provision which restricts them and their affiliates from taking certain actions without the consent of the board of directors (acting upon a majority vote of the directors other than the designees of the EW Purchaser to the board) including (i) acquiring any securities or material assets or businesses of the Company or its subsidiaries, (ii) proposing any merger, business combination, recapitalization, restructuring or other extraordinary transaction with the Company or its subsidiaries, (iii) initiating shareholder proposals or convening a shareholder’s meeting of the Company or its subsidiaries, (iv) soliciting proxies or otherwise seeking to influence, advise or direct the voting of capital stock of the Company, (v) influencing, advising, changing or controlling the management, board of directors, governing instruments, affairs or policies of the Company or any of its subsidiaries, and (vi) forming, joining or participating in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act), until (1) in the case of the EW Purchaser, the later of (x) July 2 , 2023, and (y) the date on which the EW Purchaser is no longer a 10% Holder nor a 5% Holder, and (2) in the case of the Hayfin Purchaser, July 2 , 2023.

Preemptive Rights

Subject to customary exceptions, so long as the EW Purchaser is a 10% Holder, if the Company intends to issue and sell equity securities to any person, then the EW Purchaser has the right to participate in such equity offering up to its pro-rata percentage of such equity securities (calculated on a fully-diluted, as converted basis).

Terms of the Series B Preferred Stock

Ranking and Liquidation Preference:

The Series B Preferred Stock ranks senior to Common Stock with respect to dividends and distributions on liquidation, winding-up, and dissolution.

Upon a liquidation, dissolution, or winding-up of the Company, each share of Series B Preferred Stock will be entitled to receive $1,000 per share (the “Purchase Price Per Share”), plus any accrued and unpaid dividends (the “Liquidation Preference”).

Conversion at Purchaser’s Option:

Each holder of Series B Preferred Stock (each a “Holder” and collectively, the “Holders”) will have the right, at its option, to convert its Series B Preferred Stock, in whole or in part, into a number of fully paid and non-assessable shares of Common Stock equal to the Purchase Price Per Share, plus any accrued and unpaid dividends, divided by $3.85 (the “Conversion Price”).

No Holder may convert its shares of Series B Preferred Stock into shares of Common Stock if such conversion would result in the Holder, together with its affiliates, holding more than 19.9% of the votes entitled to be cast at any stockholders meeting or beneficially owning in excess of 19.9% of the then-outstanding shares of Common Stock (the “Beneficial Ownership Cap”).

Mandatory Conversion:

The Series B Preferred Stock (including any accrued and unpaid dividends) will, subject to the Beneficial Ownership Cap, automatically convert into Common Stock at any time after July 2, 2023, provided that the Common Stock has traded at 200% or more of the Conversion Price for 20 out of 30 consecutive trading days and as of the close of trading on the trading day immediately prior to the date of conversion, the Common Stock has traded at 200% or more of the Conversion Price.

To the extent any Series B Preferred Stock cannot be converted due to operation of the Beneficial Ownership Cap, it shall remain outstanding and automatically convert at such time as such conversion would be permitted under the Beneficial Ownership Cap.

The Holders will be entitled to cumulative dividends at a rate of 4.0% per annum for the period ending June 30, 2021 and 6.0% per annum thereafter, in each case compounding quarterly in arrears.

The dividends are payable quarterly in whole or in part, in cash.

However, the Company may, at its option, elect to not pay such dividend and to instead accrue the amount of such dividend.

Accrued and unpaid dividends will be paid in cash or included in the conversion of the Series B Preferred Stock upon the occurrence of the Mandatory Conversion or the Company’s redemption of the Series B Preferred Stock.

Subject to certain exceptions, each share of Series B Preferred Stock is entitled to be voted on by the Holders and will vote on an as-converted basis as a single class with the Common Stock, subject to certain limitations on voting set forth in the related Articles of Amendment.

Consent Rights:

The following matters will require the approval of the majority of the outstanding Series B Preferred Stock, voting as a separate class:

- any changes to the rights, preferences, or privileges of the Series B Preferred Stock;

- amendments or restatements of any organizational document of the Company or its subsidiaries in a manner that materially, adversely and disproportionately affects the rights, preferences and privileges of the Series B Preferred Stock as compared to Common Stock;

- the authorization or creation of any class or series of senior or parity equity securities;

- the declaration of any dividends or any other distributions, or the repurchase or redemption, of any equity securities of the Company ranking junior to or on parity with the Series B Preferred Stock (subject to certain exceptions);

- prior to January 2, 2023 the sale, transfer, or other disposition of any assets, business, or operations for $25 million or more (other than sales of inventory in the ordinary course of business), or the purchase or acquisition of any assets, business, or operations for $75 million or more;

- prior to January 2, 2023, the merger or consolidation of the Company unless either (x) the surviving company will have no class of equity securities ranking superior in parity with the Series B Preferred Stock or (y) the Holders of the Series B Preferred Stock will receive in connection therewith consideration per share of Series B Preferred Stock valued at 200% or more of the Purchase Price Per Share;

- prior to January 2, 2023, commencing a voluntary case under any applicable bankruptcy, insolvency, or other similar law or consenting to the entry of an order for relief in an involuntary case under any such law, or effectuating any general assignment for the benefit of creditors;

- prior to the January 2, 2023, enter into any settlement agreement regarding the Company’s securities class action litigation.

Change of Control:

If the Company undergoes a Change of Control (as defined in the Preferred Stock Amendment), the Company will have the option to repurchase any or all of a Holder’s then-outstanding shares of Series B Preferred Stock for cash in an amount equal to the Liquidation Preference, plus all accrued and unpaid dividends, subject to the right of each Holder to convert its Series B Preferred Stock into Common Stock.

If the Company does not exercise such repurchase right, the Holder will have the option to (i) require the Company to repurchase any or all of its then-outstanding shares of Series B Preferred Stock for cash in an amount equal to the Liquidation Preference or (ii) convert its Series B Preferred Stock (including accrued and unpaid dividends) into Common Stock and receive its pro rata consideration thereunder.

Anti-dilution

The Conversion Price is subject to certain customary anti-dilution adjustments if the Company issues shares of Common Stock as a dividends or distribution on the Common Stock or effects a stock split or stock combination of the Common Stock.

The Conversion Price is also subject to a weighted average anti-dilution adjustment if the Company issues Common Stock (or securities convertible into Common Stock) at a price per share less than the Conversion Price within two years after Preferred Stock Closing but such adjustment may not result in a Conversion Price of less than $3.47.

Registration Rights Agreement

On July 2 , 2020, the Company and the EW Purchaser also entered into a registration rights agreement obligating the Company to register for resale shares of Common Stock issued upon conversion of its Series B Preferred Stock, which rights may be exercised from and after the date 90 days prior to the expiration of the Lock-Up Period.

In general, the Registration Rights Agreement provides the EW Purchaser with the right to request a shelf registration in respect of such resales (including up to two underwritten shelf takedowns (but no more than one in any twelve month period)), up to two demand registrations (but only if no shelf registration is then in effect covering the resale of all securities held by the EW Purchaser) and unlimited piggyback registration rights.

The foregoing descriptions of the Purchase Agreement, the terms of the Series B Preferred Stock, and the Registration Rights Agreement are not complete and are qualified in their entirety by reference to the full text of the Purchase Agreement and the Preferred Stock Amendment, and the Registration Rights Agreement, copies of which are filed as Exhibits 10.38, 3.3, and 10.39 to this Annual Report on Form 10-K and are incorporated herein by reference.

The Purchase Agreement contains representations and warranties by each of the parties to the Purchase Agreement, which were made only for purposes of that agreement and as of specified dates.

The representations, warranties, and covenants in the Purchase Agreement were made solely for the benefit of the parties to the Purchase Agreement;

are subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosure schedules;

may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts;

subject to standards of materiality applicable to the contracting parties that may differ from those applicable to investors.

Investors should not rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates.

Moreover, information concerning the subject matter of the representations, warranties, and covenants may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

$75 Million Loan Facility with Hayfin

The Company entered into a Loan Agreement, dated as of June 30 , 2020, (the “ Hayfin Loan Agreement ”), by and among the Company, certain of the Company’s subsidiaries, Hayfin Services LLP, as administrative agent and collateral agent, and other funds managed by Hayfin Capital Management LLP, that provides the Company with a senior secured term loan in an aggregate principal amount of $50 million (the “ Hayfin Term Loan ”), which was funded on July 2 , 2020 (the “ Hayfin Loan Closing Date ”), and an additional $25 million delayed draw term loan (the “ DD TL ” and together with the Hayfin Term Loan, the “ Loans ”) in the form of a committed facility that is available for drawdown from the Hayfin Loan Closing Date (as defined below) to the first anniversary thereof (the “ Hayfin Loan Transaction ”).

The Hayfin Loan Agreement does not provide for the issuance of warrants or other equity interests in the Company.

The proceeds of the Loans are permitted to be used for (i) working capital and general corporate purposes (including, without limitation, the funding of forecasted growth, compliance and capital expenditures initiatives), (ii) to consummate the refinancing of the BT Loan Agreement as defined and described below, and (iii) to pay transaction fees, costs and expenses incurred in connection with the Loan Agreement and related transactions.

The Loans, including any DD TL, if borrowed, mature on July 2, 2025 (the “ Maturity Date ”).

The Hayfin Term Loan and the DD TL have no fixed amortization (i.e.

accrued interest only is payable through the Maturity Date).

Interest Rate;

The Loans will bear interest at a per annum rate equal to LIBOR (subject to a “floor” of 1.5%) plus a margin of 6.75%.

Such margin is subject to step down after December 31, 2020 to 6.5% or 6.0% based on Total Net Leverage Ratio levels, as defined in the Hayfin Loan Agreement.

The Company paid an upfront fee of 2% of the aggregate amount of the Loans on the Hayfin Loan Closing Date.

The DD TL is subject to a commitment fee of 1% of the undrawn DD TL commitments, payable quarterly in arrears on the first day of each fiscal quarter.

Mandatory Prepayments .

A mandatory prepayment of the Loans is required upon (i) the incurrence of any indebtedness in breach of the Hayfin Loan Agreement, in an amount equal to 100% of the proceeds of such indebtedness, (ii) the occurrence of an event of default under the Hayfin Loan Agreement that results in an acceleration of the Loans, in an amount equal to the portion of the Loans accelerated together with all related outstanding amounts under the Hayfin Loan Agreement, (iii) a change of control, in an amount equal to the aggregate Loans together with all related outstanding amounts under the Hayfin Loan Agreement, and (iv) the receipt of proceeds for certain asset dispositions or insurance events, in an amount equal to the net proceeds thereof.

In addition, 50% of Excess Cash Flow, as defined in the Hayfin Loan Agreement, for any year is required to be applied to prepay the Loans, with step-downs to (i) 25% based on Total Net Leverage Ratio levels of less than 1.00:1.00, but greater than or equal to 0.50:1.00, and (ii) 0% based on Total Net Leverage Ratio levels of less than 0.50:1.00 as set out and defined in the Hayfin Loan Agreement.

Prepayment Penalties.

The Hayfin Loan Agreement imposes the following penalties with respect to any voluntary prepayment and any mandatory prepayment (other than pursuant to the Excess Cash Flow sweep or resulting from insurance events and, with respect to disposal actions, only to the extent they relate to a sale of all or substantially all of the assets and properties of the Company and its subsidiaries):

(i) make-whole during the first year after the Hayfin Loan Closing Date;

(ii) 102% after the first year but on or before the end of the second year after the Hayfin Loan Closing Date;

(iii) 101% after the second year but on or before the end of the third year after the Hayfin Loan Closing Date and (iii) par thereafter.

Representations;

Events of Default.

The Hayfin Loan Agreement contains customary representations and warranties by the Company and its subsidiaries, subject, in certain instances, to customary materiality, material adverse effect or knowledge qualifiers.

The Hayfin Loan Agreement also contains (a) certain affirmative and financial covenants that impose certain reporting and/or performance obligations on the Company and its subsidiaries, including (i) maximum Total Net Leverage Ratio (as defined in the Hayfin Loan Agreement) of 5.0x through December 31, 2020, stepping down to 4.5x through June 30 , 2021, stepping down to 4.0x through the Maturity Date, in each case tested quarterly;

and (ii) minimum Liquidity (as defined in the Hayfin Loan Agreement) of $10 million, an at-all-times covenant tested monthly;

(b) certain negative covenants that generally limit, subject to various exceptions, the Company and its subsidiaries from taking certain actions, including, without limitation, incurring indebtedness (including with respect to the incurrence of DD TL if the Total Net Leverage Ratio (pro forma for such DD TL) exceed 3.5x), making investments, incurring

liens, paying dividends and engaging in mergers and consolidations, sale and leaseback transactions and asset dispositions, and (c) customary events of default for financings of this type.

The Loans and other obligations under the Hayfin Loan Agreement may be declared due and payable upon the occurrence and during the continuance of any event of default and become automatically due and payable upon the occurrence of customary bankruptcy or insolvency events of default.

The summary set forth above is not intended to be complete and is qualified in its entirety by reference to the full text of the Hayfin Loan Agreement, which is filed as Exhibit 10.36 to this Annual Report.

The Hayfin Loan Agreement contains representations and warranties by each of the Company and its subsidiaries that are parties to the Hayfin Loan Agreement, which were made only for purposes of that agreement and as of specified dates.

The representations, warranties and covenants in the Hayfin Loan Agreement were made solely for the benefit of the lenders and agents parties to the Hayfin Loan Agreement;

are subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosure schedules;

may have been made for the purposes of allocating contractual risk between the parties to the Hayfin Loan Agreement instead of establishing these matters as facts;

and are subject to standards of materiality applicable to the applicable contracting parties that may differ from those applicable to investors.

Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates.

Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Hayfin Loan Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

Repayment and Termination of the Blue Torch Loan Agreement

Item 1.02 Termination of a Material Definitive Agreement.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Item 2.04 Trigger Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

On July 2 , 2020, the Company terminated the BT Loan Agreement and repaid the $72,013,859 outstanding balance of principal and accrued but unpaid interest under the BT Loan Agreement.

As a result of the early repayment of the loans under the BT Loan Agreement, the Company also paid a prepayment premium in the amount of $1,439,438.

The Company paid the outstanding balance, accrued but unpaid interest, and prepayment premium using a portion of the proceeds from the Preferred Stock Transaction and the Hayfin Loan Transaction.

Appointment of Two Directors

Item 5.02 Departure of Directors or Certain Officers;

Election of Directors;

Appointment of Certain Officers;

Compensatory Arrangements of Certain Officers.

Effective July 2 , 2020, pursuant to the terms of the Purchase Agreement and the Preferred Stock Amendment, the Company increased the size of the Board of Directors and appointed Martin P.

Sutter and William A.

Hawkins III to serve as Preferred Directors.

It is expected that each will serve on at least one committee of the Board of Directors, which have yet to be determined.

Each will have the same compensation arrangement as the Company’s other non-employee directors.

Appointment of New Director.

On March 4, 2021, the Board appointed Phyllis Gardner, M.D.

to the Board, effective immediately following the filing of this Annual Report on Form 10-K, as a Class II director to fill an existing vacancy.

There are no arrangements or understandings between Dr.

Gardner and any other person pursuant to which Dr.

Gardner was appointed to the Board.

There are no transactions in which Dr.

Gardner does not have any direct or indirect material interest in any transaction requiring disclosure under Item 404(a) of Regulation S-K.

Gardner will receive the same compensation as the Company’s other non-employee directors as described under “Executive Compensation—Director Compensation” in the Company’s definitive proxy statement filed with the Securities and Exchange Commission on October 15, 2020.

Gardner has spent over 35 years in academia, medicine and industry.

Gardner has served on the board of directors of several public and private companies, including Revance Therapeutics, Inc.

since 2006, Corium International, Inc.

from November 2007 to December 2018, CohBar, Inc.

from February 2019 to present.

Gardner has also served as an advisor to Change Health Care, Inc.

from April 2019 to present .

From June 1999 to July 2014, she served in various capacities including as an Adjunct Partner at Essex Woodlands Ventures, a growth equity firm that focuses on the healthcare industry (and a predecessor firm to EW Healthcare Partners, a holder of our Series B Preferred Stock).

Additionally, Dr.

Gardner has been a member of the Harvard Medical School Board of Fellows since April 2013 and is a scientific reviewer for the Cancer Prevention and Research Institute of Texas.

She began her academic medical career at Stanford University, where she has held several positions including Senior Associate Dean for Education and Student Affairs and remains today as Professor of Medicine.

From 1994 to 1998, she took a leave of absence from Stanford University to serve as Principal Scientist, Vice President of Research and Head of ALZA Technology Institute, a major drug delivery company.

Gardner holds a B.S.

from the University of Illinois and an M.D.

from Harvard University.

Restated Articles of Incorporation .

On March 4, 2021, the Board adopted restated articles of incorporation for the Company, which became effective on March 5 , 2021 upon acceptance for filing by the Secretary of State of the State of Florida.

The Company has filed the restated articles of incorporation as Exhibit 3.1 to this Annual Report on Form 10-K.

Directors, Executive Officers and Corporate Governance

Board of Directors

Set forth below is certain information regarding our current directors.

There are no family relationships among any of our directors or executive officers.

Kathleen Behrens

Terry Dewberry

AC = Audit Committee;

CC = Compensation Committee;

COB = Chairperson of the Board;

EC = Ethics & Compliance Committee;

NCG = Nominating and Corporate Governance Committee;

SL = Science and Research Liaison;

TBD = to be determined.

Pursuant to the terms of the Purchase Agreement and the Preferred Stock Amendment, the Company increased the size of the Board of Directors and appointed Martin P.

Sutter and William A.

Hawkins III to serve as Preferred Directors effective July 2, 2020.

It is expected that each will serve on at least one committee of the Board of Directors, which have yet to be determined.

The Board has not yet made a determination regarding the independence under the Nasdaq listing standards for director independence with respect to Mr.

Hawkins or Mr.

Barry , age 61.

Barry has served as a director of Sarepta Therapeutics, Inc.

(SRPT), a genetic medicine company, since June 2015, and he has been a Partner and Advisory Board member of the San Diego Padres since 2009.

Earlier in his career, he was a founding member of Eastbourne Capital Management LLC, a large equity hedge fund investing in a variety of industries, including health care, and served as the Managing General Partner and Portfolio Manager from 1999 to its close in 2010.

Prior to that, he was a Portfolio Manager and Managing Director of Robertson Stephens Investment Management, an investment company, from 1995 until 1999.

Before that, Mr.

Barry spent over 13 years in various roles in institutional equity and investment management firms, including Lazard Frères, Legg Mason and Merrill Lynch.

Barry has served as a Managing Member of GSM Fund, LLC, a fund established for the sole purpose of investing in Elcelyx Therapeutics, and previously served as a director of Elcelyx Therapeutics, Inc., a private pharmaceutical company, from 2013 until 2019.

Barry previously served as a director of Cluster Wireless, LLC, a software company, from 2011 until 2014, and of BlackLight Power, Inc.

(n/k/a Brilliant Light Power, Inc.), an energy research company, from 2009 until 2010.

Barry holds a B.A.

from Pennsylvania State University and is a member of its Shreyer’s Honors College Advisory Board.

Barry has served on the Board since June 2019 and was nominated as a director because of his substantial experience, including in the healthcare and biotechnology sectors.

Kathleen Behrens, Ph.D., age 67.

Behrens has worked as an independent life sciences consultant and investor since December 2009.

Behrens served as the Co-Founder, President and Chief Executive Officer, and as a director, of the KEW Group Inc., a private oncology services company, from January 2012 until June 2014.

Earlier in her career, Dr.

Behrens served as a general partner for selected venture funds for RS Investments, a mutual fund firm, from 1996 until December 2009.

Behrens worked at RS Investments, from 1996 to 2002, she served as a managing director at the firm and, from 2003 to December 2009, she served as a consultant to the firm.

During that time, Dr.

Behrens also served as a member of the President’s Council of Advisors on Science and Technology (PCAST) from 2001 to 2009 and as chairwoman of PCAST’s Subcommittee on Personalized Medicine, as well as the President, director and chairwoman of the National Venture Capital Association, an organization that advocates for public policy that supports the American entrepreneurial ecosystem, from 1993 until 2000.

Prior to that, she served as a general partner and managing director for Robertson Stephens & Co., an investment company, from 1983 through 1996.

Behrens has served as a member of the board of directors of each of Sarepta Therapeutics, Inc.

SRPT), a medical research and drug development company, since March 2009 (Chairwoman of the Board since April 2015) and IGM Biosciences, Inc.

IGMS), a clinical stage biotechnology company focused on creating and developing IgM antibodies, since January 2019.

She served as a director of Amylin Pharmaceuticals, Inc.

(formerly NASDAQ:

AMLN), a biopharmaceutical company, from 2009 until its sale in 2012 to Bristol-Myers Squibb Co.

Prior to that, she served on the board of directors of Abgenix, Inc.

(formerly NASDAQ:

ABGX), a biopharmaceutical company, from 2001 until the company was sold to Amgen, Inc.

From 1997 to 2005, Dr.

Behrens was a director of Science, Technology and Economic Policy for the National Research Council.

Behrens was also a Co-Founder of the Coalition for 21st Century Medicine, a trade association for new generation diagnostics companies.

Behrens holds a B.S.

in biology and a Ph.D.

in microbiology from the University of California, Davis.

Behrens has served on the Board since June 2019 and was nominated as a director because of her substantial experience in the financial services and biotechnology sectors, as well as in healthcare policy.

Bierman , age 67.

Bierman served as President and Chief Executive Officer and as a member of the board of directors of Owens & Minor, Inc.

OMI), a Fortune 500 company and a leading distributor of medical and surgical supplies, from September 2014 to June 2015.

Previously, he served in various other senior roles at Owens & Minor, including President and Chief Operating Officer from August 2013 to September 2014, Executive Vice President and Chief Operating Officer from March 2012 to August 2013, Executive Vice President and Chief Financial Officer from April 2011 to March 2012, and Senior Vice President and Chief Financial Officer from June 2007 to April 2011.

Earlier in his career Mr.

Bierman served as Executive Vice President and Chief Financial Officer at Quintiles Transnational Corp.

(formerly NASDAQ:

Quintiles was a market leader in providing product development and commercialization solutions to the pharmaceutical, biotech, and medical device industries.

As a member of management, he helped lead the successful privatization of the company in 2004.

Before joining Quintiles, Mr.

Bierman was a partner with Arthur Andersen LLP from 1988 to 1998.

Bierman currently serves on the board of directors of Tenet Healthcare Corporation (NYSE:

THC), a Fortune 100 company and a diversified healthcare services company operating more than 500 facilities, acute care hospitals and outpatient centers, throughout the United States.

He previously served on the board of directors of Team Health Holdings, Inc.

(formerly NYSE:

TMH) where as Independent Lead Director, he helped lead the successful privatization of the company in 2017.

Team Health is one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States.

Bierman earned his B.A.

from Dickinson College and his M.B.A.

at Cornell University’s Johnson Graduate School of Management.

Bierman has served on the Board since June 2019 and was nominated as a director because of his substantial operational and financial experience in the healthcare sector.

Terry Dewberry , age 76.

Dewberry is a private investor with significant experience at both the management and board levels in the healthcare industry.

He has extensive experience in corporate mergers and takeovers on both the buy and sell sides for consideration up to $5 billion.

Dewberry has served on the boards of directors of several publicly traded healthcare products and services companies, including Respironics, Inc.

RESP) (1998-2008), Matria Healthcare, Inc.

MATR) (2006-2008), Healthdyne Information Enterprises, Inc.

(1996-2002), Healthdyne Technologies, Inc.

(1993-1997), Home Nutritional Services, Inc.

(1989-1994) and Healthdyne, Inc.

From March 1992 until March 1996, Mr.

Dewberry was Vice Chairman of Healthdyne, Inc.

From 1984 to 1992, he served as President and Chief Operating Officer, and Executive Vice President of Healthdyne, Inc.

Dewberry received a Bachelor of Electrical Engineering from Georgia Institute of Technology in 1967 and a Master of Professional Accountancy from Georgia State University in 1972.

Dewberry has served on the Board since 2009 and was nominated as a director due to his extensive business and financial background and experience as a member of the boards of directors of other publicly traded companies and a member of the audit committee of at least one other public company.

Evans , age 73.

The Board named Mr.

Evans Lead Director on March 9, 2018, and he served as Chairman from July 2, 2018 through June 2019.

Evans has over 40 years of experience in the healthcare industry.

He is currently President of the International Health Services Group, an organization he founded to support health services development in underserved areas of the world.

Since 2009, he has served as a senior adviser with Jackson Healthcare, a consortium of companies that provide physician and clinical staffing, anesthesia management and information technology solutions for hospitals, health systems and physician groups.

In addition, Mr.

Evans is a Fellow in the American College of Healthcare Executives having previously served as Governor of the College from 2004 to 2007 and as Chairman Officer from 2008 to 2011.

In 2012, he attained the Board Leadership Fellow credential of the National Association of Corporate Directors.

Previously, Mr.

Evans was a senior officer with Hospital Corporation of America (HCA), having managed various HCA divisions and completing his service with the responsibility for operations in the Eastern half of the country.

Evans currently serves on the board of directors of Jackson Healthcare and WellStreet Urgent Care.

Evans also serves on the boards of nonprofit organizations including American International Health Alliance and FaithBridge Foster Care.

Evans has served on the Board since 2012 and was nominated as a director due to his healthcare management expertise.

Hawkins III , age 66.

Hawkins serves as a Senior Advisor to EW Healthcare Partners, a life sciences private equity firm.

Hawkins is the former Chairman and CEO of Medtronic, Inc., a global leader in medical technology.

Medtronic from 2002 until 2011.

After retiring from Medtronic, he served as President and Chief Executive Officer of Immucor, Inc., a private equity backed global leader in transfusion and transplant medicine from October 2011 to July 2015.

From 1998 to 2001 Mr.

Hawkins served as President and Chief Executive Officer of Novoste Corporation ( NASDAQ:NOVST ), an interventional cardiology company.

Prior to that, Mr.

Hawkins served in a variety of senior roles at American Home Products, a consumer, pharma and medical device company, Johnson & Johnson, a healthcare company, Guidant Corporation, a medical products company, and Eli Lilly and Company, a global pharmaceutical company.

Hawkins also serves as a director of Biogen Inc .

BIIB) , a biopharmaceutical company;

Avanos Medical, Inc .

(NYSE:AVNS), a medical technology company;

as Chairman of Bioventus, LLC;

as Chairman of 4 Tech;

and as a director of AskBio, Cirtec, Virtue Labs, Immucor, Inc., Cereius, Inc.

and Baebies, Inc., all of which are life science companies.

He previously served on the board of Thoratec Corporation.

Hawkins is Vice Chair of the Duke University Board of Trustees and is Chair of the Duke University Health System.

Hawkins was elected as a member of the AIMBE College of Fellows and the National Academy of Engineering.

He has a dual B.S.E.E.

degree in Electrical and Biomedical Engineering from Duke University and a M.B.A.

from the University of Virginia’s Darden School of Business.

Hawkins has significant leadership experience as a chief executive officer, significant knowledge of, and experience in, the healthcare industry and significant international experience.

He also has extensive governance and public company board experience.

( “Chuck” ) Koob , age 75.

Koob retired as a partner in the law firm of Simpson Thacher & Bartlett, LLP.

While at that firm, Mr.

Koob was the co-head of the Litigation Department and served on the firm’s Executive Committee.

Koob specialized in competition, trade regulation and antitrust issues.

Throughout his 37-year tenure, he represented clients before the Federal Trade Commission, the Antitrust Division of the Department of Justice, and numerous state and foreign competition authorities.

He received his B.A.

from Rockhurst College in 1966 and his J.D.

from Stanford Law School in 1969.

Koob serves on the board of Stanford Hospital and Clinics.

He previously served on the board of a private drug development company and MRI Interventions (OTCBB:

MRIC), a publicly traded medical device company.

Koob has served on the Board since 2008 and was nominated as a director due to his extensive legal expertise in representing both publicly traded and privately held businesses.

Todd Newton , age 57.

Newton has served as Chief Executive Officer and as a member of the board of directors of Apollo Endosurgery, Inc.

APEN), a medical device company, since July 2014.

Earlier in his career, Mr.

Newton served as Executive Vice President, Chief Financial Officer and Chief Operating Officer at ArthroCare Corporation (formerly NASDAQ:

ARTC), a medical device company, from 2009 to June 2014.

Prior to that, Mr.

Newton served in a number of executive officer roles, including President and Chief Executive Officer and as a director, at Synenco Energy, Inc., a Canadian oil sands company, from 2004 until 2008.

Newton was a Partner at Deloitte & Touche LLP, a professional services network and accounting organization, from 1994 to 2004.

Newton holds a B.B.A.

in accounting from The University of Texas at San Antonio.

Newton has served on the Board since June 2019 and was nominated as a director because of his significant experience in the medical device sector as well as strong executive leadership experience.

Sutter, age 65.

Since 1985, Mr.

Sutter has been the Co-Founder and a Managing Director of EW Healthcare Partners, previously known as Essex Woodlands Health Ventures, a healthcare-focused growth equity firm.

Sutter has been directly involved with more than 30 of EW Healthcare Partners’ portfolio company investments.

Educated in chemical engineering and finance, Mr.

Sutter has more than 35 years of management experience in operations, marketing, finance and venture capital.

Sutter holds a Bachelor of Science degree from Louisiana State University and a Master of Business Administration from the University of Houston.

He currently serves on the Boards of Abiomed, Inc.

ABMD), Bioventus LLC and Prolacta Bioscience.

He previously served on the boards of directors of the following EW Healthcare Partners’ portfolio investments:

ATS Medical (later acquired by Medtronic, Inc.);

BioForm Medical (later acquired by Merz GmbH & Co KGaA);

LifeCell (later acquired by Kinetic Concepts);

Francis Medical (later acquired by Kyphon, Inc./Medtronic, Inc.);

Confluent Surgical (later acquired by Tyco International/Covidien);

and Rinat Neurosciences (later acquired by Pfizer, Inc.).

We believe that Mr.

Sutter’s in-depth knowledge of the medical device industry, his skills as an investor in developing medical device companies, his extensive board experience and his position as a representative of a large stockholder in our Company qualify him to serve as a member of our Board of Directors.

Wright , age 62, joined the Company as its Chief Executive Officer on May 13, 2019.

Wright has more than 30 years of experience in the pharmaceutical, biotech and medical devices industries.

Most recently, Mr.

Wright served as a Partner at Signal Hill Advisors, LLC, a consulting practice, since February 2011.

Wright served as President and Chief Executive Officer of M2Gen Corp., a privately held cancer and health informatics company, between July 2017 and September 2018.

Prior to M2Gen Corp., Mr.

Wright served as Executive Vice President, Mergers and Acquisitions, Strategy and Innovation for Teva Pharmaceutical Industries Ltd.

(“ Teva ”), a pharmaceutical company specializing in generic medicines, from April 2015 until August 2017.

Before Teva, Mr.

Wright was the founding partner of The Ohio State University Comprehensive Cancer Drug Development Institute.

Wright also served as Chairman, Interim Chief Executive Officer and a director of Curaxis Pharmaceutical Corporation (“ Curaxis ”), a pharmaceutical company specializing in the development of drugs for the treatment

of Alzheimer’s disease and various cancers, from July 2011 to July 2012.

Curaxis had been experiencing financial difficulties prior to Mr.

Wright’s tenure and, as a result, the company filed for Chapter 11 bankruptcy in July 2012.

Wright has been a director of Agenus, Inc.

AGEN), an immune oncology company, since 2006 and its lead director since 2009.

Wright also serves as Chairperson of The Ohio State University Comprehensive Cancer Center Drug Development Institute, serves as director of The Ohio State Innovation Foundation and sits on The Ohio State University College of Pharmacy Dean’s Corporate Council.

Over his career, Mr.

Wright has served on boards of directors in North America, Europe and Asia.

Wright earned a Bachelor’s of Science in Marketing from The Ohio State University.

Wright has served on the Board since June 2019 and was nominated as a director to bring the perspective of the Chief Executive Officer on the Board and also for the benefit of his many years of experience in the healthcare and pharmaceutical industry.

Yeston is the Past President of the New England Surgical Society and currently serves as Active Senior Staff, Department of Surgery at Hartford Hospital.

During his association with Hartford Hospital, Dr.

Yeston previously served in various roles including Vice President of Academic Affairs, Director of Corporate Compliance, Vice President of Quality Management and Director of the Section on Critical Care Medicine, Department of Surgery.

In addition, Dr.

Yeston was responsible for the enterprise wide acquisition of all biomedical engineering technology.

Yeston has formerly served as Professor of Surgery at the University of Connecticut and the Assistant Dean, Medical Education at the University of Connecticut School of Medicine.

Prior to his associations with Hartford Hospital and the University of Connecticut, Dr.

Yeston served in various positions with the Boston University Medical Center including the Vice Chairman of the Department of Surgery, Associate Professor of Anesthesiology, Director Progressive Care Unit, and Associate Professor of Surgery.

Yeston has served on the Board since 2012 and was nominated as a director because of his in-depth understanding of healthcare issues from the perspective of the practitioner, academician, administrator and executive.

Audit Committee and Audit Committee Financial Expert

The following directors serve on the Audit Committee:

Todd Newton (Chair), James L.

Terry Dewberry, and Charles R.

Evans, each of whom satisfies NASDAQ’s independence standards for audit committee members.

The Board has determined that each of Messrs.

Bierman, Dewberry, and Newton is an “audit committee financial expert” as that term is defined by the SEC in Item 407(d)(5)(ii) of Regulation S-K.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, a copy of which is on our website at https://mimedx.gcs-web.com/corporate-governance/highlights .

Any amendments to or waivers of the Code of Business Conduct and Ethics that require disclosure under applicable law or listing standards will be disclosed on our website at www.mimedx.com .

We undertake to provide a copy to any person, without charge, upon written request to Secretary, MiMedx Group, Inc., 1775 West Oak Commons Court, NE Marietta, Georgia 30062.

Procedures by which Security Holders May Nominate Individuals for Election to the Board

To nominate a person for election as a director at an annual meeting of shareholders, the Company’s Amended and Restated Bylaws require that timely notice of the nomination in proper written form, including all required information as specified in the Amended and Restated Bylaws, be mailed to the Secretary, at 1775 West Oak Commons Court, NE, Marietta, Georgia 30062.

The Nominating and Corporate Governance Committee will consider for nomination candidates recommended by shareholders on the same basis as candidates recommended by members of the Board or other sources.

Any proposed director candidate shall satisfy the criteria for Board membership set forth in the charter of the Nominating and Corporate Governance Committee or otherwise approved by the Nominating and Corporate Governance Committee and the Board from time to time.

Cooperation Agreement

The Company entered into a Cooperation Agreement, dated as of May 29, 2019 (the “ Cooperation Agreement ”), with M.

Kathleen Behrens, K.

Todd Newton, Richard J.

Barry, Prescience Partners, LP, a Delaware limited partnership (“ Prescience Partners ”), its affiliates and Eiad Asbahi (Prescience Partners, together with Prescience Point Special Opportunity LP, Prescience Capital, LLC, Prescience Investment Group, LLC d/b/a Prescience Point Capital Management LLC and Mr.

Asbahi, “ Prescience Point ”;

Prescience Point, Dr.

Barry and Mr.

Newton collectively, the “ Investor Group ”).

With certain exceptions relating to breaches of the Cooperation Agreement, the Cooperation Agreement terminates at least five business days after the Company or the Investor Group delivers notice of termination (the “ Termination Date ”) following the date of the 2020 Annual Meeting.

Pursuant to the Cooperation Agreement, the Company nominated Dr.

Newton and Mr.

Wright as three Class II director candidates for election to the Board at the 2018 Annual Meeting.

The 2018 Annual Meeting was duly held on June 17, 2019, and Dr.

Newton, and Mr.

Wright were elected to the Board.

The Board also appointed Mr.

Bierman as Class III directors pursuant to the Cooperation Agreement.

The Cooperation Agreement further provides for the Company and Prescience Point to identify and mutually agree upon an individual (the “ Mutual Designee ”) to stand for election as a Class III director at the 2019 Annual Meeting.

As of the date of this Form 10-K, the Board and Prescience Point have yet to identify the Mutual Designee for election as Class III directors at the 2019 Annual Meeting (which will be held in 2020).

The Cooperation Agreement provides Prescience Point with certain other rights with respect to designating replacement Board nominees and with respect to the designated directors’ service on certain Board committees, as long as Prescience Point holds more than 5.0% of the outstanding shares of Common Stock.

The Cooperation Agreement contains customary standstill restrictions, and through the Termination Date and subject to certain exceptions, Prescience Point is required to vote all of its shares of Common Stock at any annual or special meeting, and any consent solicitation of the Company’s shareholders, in accordance with the recommendations of the Board.

Pursuant to the Cooperation Agreement, the Company reimbursed Prescience Point for $500,000 of its reasonable, documented out-of-pocket fees and expenses incurred in connection with the matters related to the 2018 Annual Meeting.

Executive Officers

The following persons currently serve as our executive officers:

Wright , 62, became the Company’s Chief Executive Officer in May 2019.

The biography for Mr.

Wright can be found under the heading “Board of Directors” above.

Carlson, age 56, was appointed Chief Financial Officer in March 2020.

He joined the Company as Executive Vice President - Finance in December 2019.

From 2017 to 2018, Mr.

Carlson served as Chief Operating Officer at Brighthouse Financial, Inc., where he helped establish the $200 billion (assets) U.S.

life and annuity insurance company as a separate entity following its August 2017 spin-off from MetLife, Inc., one of the world’s leading financial services companies.

He was the Chief Accounting Officer at MetLife, Inc.

from 2009 to 2017 where his global responsibilities included accounting, financial planning, tax, and investment finance.

Prior to joining MetLife in 2009, Carlson was the Corporate Controller at Wachovia Corporation.

He currently serves as a director of White Mountains Insurance Company (NYSE:

Carlson holds a Bachelor of Science from Wake Forest University and is a trustee of the university.

He is licensed as a certified public accountant in North Carolina and New York.

Graves, age 55, was appointed Chief Compliance Officer in July 2018.

Prior to joining the Company, he served as the U.S.

leader for the global Patient Experience & Value function in the neurology division of UCB, Inc., a biopharmaceutical company.

From 2011 to 2015, he was UCB’s Deputy Compliance Officer involved in all aspects of compliance including the implementation and management of the company’s corporate integrity agreement.

Prior to that, Graves was Senior Director in the Office of Ethics and Compliance for the Pharmaceutical Products Division of Abbott Laboratories, as well as Deputy Ethics & Compliance Officer for Takeda Pharmaceuticals North America, Inc.

and TAP Pharmaceutical Products, Inc.

Prior to his pharmaceutical and biotech career, he practiced labor and employment law.

Graves holds a B.A.

in Criminology and Law, and a J.D., from the University of Florida as well as an MBA from the University of Chicago Booth School of Business.

“Butch” Hulse IV , age 47, has served as General Counsel since December 2019.

Prior to joining the Company, Mr.

Hulse was a member of Dykema Gossett, PLLC, a national law firm since 2017.

Prior thereto, he was with Acelity, LP, Inc.

(formerly Kinetic Concepts, Inc.), a global medical technology company with leadership positions in advanced wound care, surgical solutions and regenerative medicine, from 2008 to 2017 in a variety of roles of increasing responsibility.

From 2013 to 2017, he served as Acelity’s Chief Compliance Officer and Senior Vice President for Enterprise Risk Management, Quality, and Regulatory.

Prior to that, he served as Division General Counsel for Acelity’s advanced wound care business unit and as Associate General Counsel for litigation matters.

Hulse holds a Bachelor of Arts from Angelo State University and a J.D.

from the Baylor University School of Law.

Turner , age 55, has served as Senior Vice President, Operations and Procurement since April 2017.

Turner oversees supply chain including donor recovery services, procurement, processing, and facilities.

Turner joined the Company in April 2016 as Vice President, Procurement.

Prior to joining the Company, Mr.

Turner served as a director with Alvarez & Marsal North America, LLC in their Corporate Performance Improvement group from October 2015 until March 2016.

Prior thereto, Mr.

Turner served as Vice President, Supply Chain, with Larson-Juhl, a Berkshire Hathaway company, from June 2013 until September 2015.

Additionally, Mr.

Turner has more than 20 years of Supply Chain and Procurement leadership in life sciences at Shionogi and Johnson & Johnson, spanning the consumer, medical device, and pharmaceutical sectors domestically and overseas.

Turner holds a Bachelor of Science in Commerce & Engineering from Drexel University and a President / Key Executives MBA from Pepperdine University.

Information required by this Item will be contained in our definitive proxy statement relating to our 2021 Annual Meeting of Shareholders under the captions “Executive Officers,” “Election of Directors” and “Delinquent Section 16(a) Reports,” or similar captions which are incorporated herein by reference.

Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

The Compensation Committee is responsible for evaluating and determining the compensation paid to the executive officers who are listed in the Summary Compensation Table (the “ NEOs ”).

All components of compensation for the NEOs are then recommended by the Compensation Committee for approval by the Board.

This Compensation Discussion and Analysis (“ CD&A ”) pertains to 2019 compensation.

For 2019, the Company’s NEOs were:

Wright joined MiMedx as Chief Executive Officer on May 13, 2019.

Coles served as Interim Chief Executive Officer from July 2, 2018 until May 13, 2019.

He was an employee of Alvarez & Marsal North America, LLC.

We paid Alvarez & Marsal for Mr.

Cole’s services, as described below under “Agreements with Our Executive Officers-Agreement with Alvarez & Marsal to Employ Mr.

Edward Borkowski.

Borkowski served as Executive Vice President and Interim Chief Financial Officer from June 7, 2018 until his resignation on November 15, 2019.

Subsequently, he served as Acting Chief Financial Officer through March 17, 2020 pursuant to a Separation and Transition Services Agreement, as described below under “Agreements with Our Executive Officers - Agreement with Mr.

Carlson joined the Company as Executive Vice President - Finance in December 2019.

He became Chief Financial Officer in March 2020.

Landy served as Executive Vice President and Chief Strategy Officer from December 5, 2018 until the Company eliminated this role effective September 16, 2019 (which terminated his employment).

Turner has served as Senior Vice President—Operations & Procurement since December 5, 2018 and continues to serve in such role.

Prior Say-on-Pay Proposal and Shareholder Support

The Company conducted an advisory say-on-pay vote at the 2016 annual meeting of shareholders, where approximately 95% of the votes cast were in favor of the proposal.

The Board and Compensation Committee reviewed these final vote results together with the other factors and data discussed in this Compensation Discussion and Analysis and determined that, given the significant level of support of the Company’s approach to compensation by its shareholders, no changes to its executive compensation policies and related decisions were necessary at such time.

The next shareholder vote with respect to say-on-pay and the frequency of the say-on-pay vote will occur at the 2019 Annual Meeting, which will be held in 2020.

The Board intends to recommend annual say-on-pay votes to allow for more timely shareholder feedback.

Compensation Philosophy

MiMedx’s executive compensation philosophy is based on the belief that competitive compensation is essential to attract and retain highly-qualified executives and incentivize them to achieve the Company’s operational and financial goals.

In line with this philosophy, the Company’s practice is to provide total compensation that is competitive with comparable positions at peer organizations.

The compensation program is based on individual and organizational performance and includes components that reinforce the Company’s incentive and retention-related compensation objectives.

The principal components of compensation for MiMedx’s NEOs are base salary, annual cash incentives and long-term equity incentives.

Cash incentives are included to encourage and reward effective performance relative to the Company’s near-term plans and objectives.

Equity incentives are included to promote longer-term focus, to help retain key contributors and to align the interests of the Company’s executives and shareholders.

Pay-Setting Process

Compensation Consultant

Beginning in mid-2018, the Compensation Committee engaged an independent executive compensation consulting firm, Meridian Compensation Partners, LLC (“ Meridian ”), to provide compensation consulting services relating to (1) NEO compensation, (2) peer group composition and practices, (3) incentives design, (4) compensation governance, (5) amount and form of director compensation and (6) alternatives to equity compensation.

Meridian’s services were provided only to the Compensation Committee, and the Compensation Committee determined that Meridian’s work did not raise any conflict of interest.

In October, 2019, following changes in the membership of the Compensation Committee and the Board, the Compensation Committee engaged a new, independent executive compensation consulting firm, Aon Consulting, Inc.

through its Radford subdivision (“ Radford ”), to replace Meridian and to provide compensation consulting services relating to (1) NEO compensation, (2) peer group composition and practices, (3) incentives design, (4) compensation governance, (5) amount and form of director compensation and (6) alternatives to equity compensation.

Radford’s services were provided only to the Compensation Committee, and the Compensation Committee determined that Radford’s work did not raise any conflict of interest.

Use of a Peer Group

In making compensation decisions, the Compensation Committee has considered the recommendations of the CEO and of a senior HR executive, which, in turn, have been informed by a compensation analysis of the practices of peer group companies, which are publicly-traded companies in the medical device, pharmaceuticals, biotechnology and life sciences sectors of the healthcare industry.

The peer group was determined primarily using organizational criteria, revenue, market capitalization, and industry sector.

Organizational criteria include number of employees as well as qualitative factors such as industry, markets, and development stage.

The data from the peer group companies for the NEOs provides the Compensation Committee with a benchmark that it views as a point of reference, but not as a determining factor, for the compensation of the NEOs.

In 2019, the Company’s peer group was as follows:

Abiomed, Inc.

Geron Corporation

Acorda Therapeutics, Inc.

Halozyme Therapeutics, Inc.

Momenta Pharmaceuticals, Inc.

AMAG Pharmaceuticals, Inc.

ImmunoGen, Inc.

Newlink Genetics Corp.

Array BioPharma, Inc.

Infinity Pharmaceuticals, Inc.

OPKO Health, Inc.

CryoLife, Inc.

Insulet Corporation

Osiris Therapeutics, Inc.

Insys Therapeutics, Inc.

Seattle Genetics, Inc.

Exelixis, Inc

Ionis Pharmaceuticals, Inc.

Spectrum Pharmaceuticals, Inc.

Genomic Health, Inc.

Ironwood Pharmaceuticals, Inc.

Vanda Pharmaceuticals, Inc.

Wright Medical Group, Inc.

In order to compete effectively for top executive-level talent, the Compensation Committee generally targets cash compensation for the NEOs between the 50th and 60th percentile and long-term equity compensation between the 60th and 75th percentile of compensation paid to similarly-situated executives of the companies comprising the peer group.

However, in practice and in the case of 2019, total compensation actually awarded by the Compensation Committee has generally lagged these targets primarily due to the award of below-median long-term incentives.

Although peer data and compensation survey data are useful guides for comparative purposes, the Compensation Committee believes that a successful compensation program also requires the application of judgment and subjective determinations of individual performance.

In that regard, the Compensation Committee applies its judgment in reconciling the program’s objectives with the realities of attracting and retaining key employees.

2019 Compensation Components

Base Salaries

MiMedx employees, including its NEOs, are paid a base salary commensurate with the responsibilities of their positions, the skills and experience required for the position, their individual performance, business performance, labor market conditions, and with reference to peer company salary levels.

Base salaries may be increased depending on the compensation of comparable positions within the peer group companies and published compensation surveys, the executive’s responsibilities, skills, expertise, experience and performance, the executive’s contributions to the Company’s results, and the overall performance of the Company compared to its peer group and other participants within the industry.

In determining the increases, the Compensation Committee relies on judgment about each individual, as well as on recommendations from its compensation consultant and senior management, rather than applying a stated formula.

Base salaries to the NEOs in 2019 were as follows:

Revised Base Salary (1)

During 2019, in recognition of Mr.

Borkowski’s assumption of the duties of Interim Chief Financial Officer, the Board increased Mr.

Borkowski’s base salary to $600,000.

The Board also increased Mr.

Landy’s base salary to $455,000 and Mr.

Turner’s to $355,000 during 2019 following their assumption of increased responsibilities.

Annual Non-Equity Incentive Awards

Historically, the Company has adopted an annual non-equity incentive plan in which the NEOs participate.

Through this plan, the Company delivers a target bonus opportunity expressed as a percentage of each executive’s base salary as shown below.

During 2019, following Mr.

Borkowski’s assumption of the duties of Interim Chief Financial Officer, the Board increased Mr.

Borkowski’s target annual incentive from 60% to 65% of his base salary.

Target Annual Incentive as a

The Company made payments to Mr.

Borkowski pursuant to Separation and Transition Services Agreement in lieu of, among other things, his annual incentive.

Carlson joined the Company effective December 16, 2019 and therefore was not eligible for an annual incentive for 2019.

The Company eliminated Mr.

Landy’s role during 2019 and made payments to him in 2020 equal to one times his base salary and target annual incentive.

However, 2019 was a year of rapid and significant change for the Company.

Ultimately, the Board did not approve an annual incentive plan for 2019 due to the following factors:

a rapidly changing financial forecast following adverse insurance coverage decisions relating to the Company’s products in late 2018 and the reduction in force in December 2018;

the failure to complete the audit of the financial statements for the year ended December 31, 2018, which also affected the Company’s ability to establish meaningful quantitative goals for 2019;

the adoption of a new strategic plan which addressed the changing regulatory landscape for several of the Company’s products and investments related to future BLA products;

• changes in several of the Company’s key officers, including its CEO and CFO.

Nevertheless, the Board determined that it was important to grant bonuses for 2019 in recognition of extraordinary efforts during the year, to retain key leaders during a period of significant change and risk, and for internal pay equity.

For 2019, the Board authorized the Company to pay discretionary bonuses to each of the NEOs who was still employed by the Company at the end of the year equal to 96% of each NEO’s target annual incentive as follows:

Wright - $720,000;

Turner - $136,320.

Carlson joined the Company on December 15, 2019 and was not eligible for an annual incentive award in 2019.

For 2020, the Committee and the Board have adopted a managing incentive plan (“MIP”), which is an annual cash incentive plan designed to incentivize and reward achievement of the current year’s financial and operational goals with three equally-weighted performance criteria - revenue, Adjusted EBITDA, and individual performance goals.

Potential payouts under the 2020 MIP are capped at 1.5 times an executive’s target bonus.

Long-Term Equity Incentives

All equity incentive awards are granted under the Company’s 2016 Equity and Cash Incentive Plan (the “ 2016 Plan ”), which was approved by shareholders in 2016.

The 2016 Plan is designed to align the interests of the Company’s Named Executive Officers and other MiMedx officers, members of management and key employees with the interests of the Company’s shareholders, and serve as a key retention tool.

Restricted stock vests over a period of time, generally pro rata annually over three years.

The Company generally makes its an annual equity grant to a broad group of its management employees, including the NEOs in February or March of each year .

The Company also typically grants restricted stock to certain newly-hired executive officers in connection with the commencement of their employment by the Company.

The Committee believes that equity grants are a positive motivator for the Company’s officers, management and key employees to focus their strategy and efforts on the Company’s long-term goals.

Working toward the long-term growth of the price of the Company’s stock produces the ultimate financial gain for the executives’ equity awards and increase in value for the Company’s shareholders.

In recent years, the Compensation Committee has granted only restricted stock awards, rather than a mix of stock and stock options to conserve the number of shares available under the 2016 Plan.

The Compensation Committee believes that restricted stock awards are an effective form of equity compensation because the vesting period is a strong retention tool for NEOs and other key executives.

Restricted stock awards increase in value as the Company’s stock price increases over time, but they also continue to have value in the event of a stock price decline.

Thus, unlike stock options, restricted stock does not lose its retention value in the event of a decline in stock price.

All awards of restricted stock granted to Named Executive Officers in 2019 were approved by the Compensation Committee for recommendation to the full Board for approval.

All awards of restricted stock granted to all other eligible participants in the 2016 Plan were determined and approved by the Compensation Committee.

In determining the approved level of equity grants, the Compensation Committee considers the individual’s target annual long-term incentive value, the Company’s overall option “overhang,” the employee’s level of responsibility and performance, prior equity awards, comparative compensation information, and the anticipated expense to the Company.

For 2019, all awards of restricted stock were dated and priced as follows:

All awards of restricted stock to current employees were granted and priced as of the close of the business day on which the Committee approved the grant.

All awards of restricted stock granted to newly-hired employees were granted and priced as of the later of the business day on which the Board approved such grants or the date of employment.

The Committee establishes vesting schedules for awards under the 2016 Plan at the time of the grant.

To optimize the retention value of the awards and to orient recipients to the achievement of longer-term goals, objectives and success, awards typically vest in three equal installments on the first, second and third anniversaries of the Grant Date.

The Company generally makes its an annual equity grant to a broad group of its management employees, including the Named Executive Officers, in February or March of each year.

In 2019, all equity-based awards were issued under plans previously approved by the Company’s shareholders.

2019 Restricted Stock Grants to Named Executive Officers

The Compensation Committee’s philosophy with respect to annual grants is to benchmark long-term equity incentive awards at the 60th to 75th percentile of awards to similarly-situated executives of companies in the peer group.

However, the actual amount of equity awards granted to the NEOs in 2019 was less than the benchmark target grant value in order to conserve the number of shares available for awards under the 2016 Plan.

In general, in determining the level of equity grants, the Compensation Committee considers the individual’s target annual long-term incentive value, the Company’s unexercised and unvested grants, the employee’s level of responsibility and performance, prior equity awards, comparative compensation information, and the anticipated expense to the Company.

Grants to Current Officers

On February 21, 2019, the Company granted Mr.

Borkowski 203,305 shares of restricted stock that were required to be granted to him pursuant to the Company’s agreement with him.

On April 26, 2019, the Company granted each of Messrs.

Landy and Turner 279,271 and 52,067 shares of restricted stock, respectively.

It made no grant to its then-CEO, Mr.

Coles, because he was an employee of Alvarez & Marsal.

The grant to Mr.

Turner vest pro rata annually over three years.

Grants to Newly-Hired Officers

In addition to the annual grants described above, the Company made certain grants of restricted stock to newly-hired employees during 2019.

On May 6, 2019, the Company granted Mr.

Wright 681,818 shares of restricted stock upon his appointment as Chief Executive Officer , scheduled to vest pro rata annually over three years ;

refer to the discussion “ Agreement with Mr.

Wright ” below.

In addition, in connection with the commencement of Mr.

Carlson’s employment with the Company, the Company made a $350,000 restricted stock grant to Mr.

Carlson on December 16, 2019 that vests pro rata annually over three years, and a $1 million restricted stock grant that vests upon the achievement of each of four discrete performance goals ;

refer to the discussion “ Agreement with Mr.

Carlson ” below.

Each of these awards will be settled in a number of shares of common stock based on our stock 30 days after the Company first becomes current with its SEC reporting obligations .

Agreements with our Executive Officers

Agreement with Alvarez & Marsal to employ Mr.

The Board appointed Mr.

Coles as Interim Chief Executive Officer of the Company, effective as of July 2, 2018.

In connection with his appointment, the Company entered into an engagement letter with Alvarez & Marsal North America, LLC (“ A&M ”), where Mr.

Coles had been employed since 1997, providing for Mr.

Coles’ services and the services of additional A&M employees as needed to assist Mr.

Coles in the execution of his duties.

Under the terms of the engagement letter, during his service at the Company, Mr.

Coles continued to be employed by A&M and was not entitled to receive any compensation directly from the Company or participate in any of the Company’s employee benefit plans.

The Company instead paid A&M an hourly rate of $975 per hour for Mr.

Coles’ services.

In 2019, the Company paid A&M $908,663 for Mr.

Coles’ services.

Coles resigned on May 13, 2019 upon the hiring of Mr.

Wright as our permanent Chief Executive Officer.

Agreement with Mr.

In connection with his appointment as Chief Executive Officer in May 2019, Mr.

Wright entered into a letter agreement (the “Letter Agreement”) with the Company that provides for an annual base salary of $750,000.

The Company agreed in the Letter Agreement that he will be eligible to participate in the MIP with an annual target cash bonus amount equal to one hundred percent (100%) of his base salary.

The Letter Agreement also provided for a special one-time signing bonus of $500,000, which was subject to repayment in full in the event that Mr.

Wright resigned without “good reason” or had his employment terminated by the Company for “cause,” in each case within 12 months following the commencement of his employment with the Company.

The Letter Agreement also provides that Mr.

Wright’s MIP bonus would not be prorated for 2019, and that the Compensation Committee of the Board had approved and recommended to the Board for approval a minimum payout of not less than fifty percent (50%) of what his target bonus would have been if the Board had adopted the 2019 MIP.

For 2019, the Company paid Mr.

Wright a discretionary bonus in lieu of his target MIP bonus, as discussed above under “Annual Non-Equity Incentive Awards.”

In addition, pursuant to the Letter Agreement, the Company granted Mr.

Wright a restricted stock award with a value of $3,375,000 as of the date that Mr.

Wright commenced employment with the Company, which vests pro rata annually over three years and is subject to the terms and conditions of the 2016 Plan.

In addition, the Letter Agreement provides that, following 2019, Mr.

Wright will have a target long-term incentive award in an amount equal to four hundred and fifty percent (450%) of his then-current annual base salary.

The Letter Agreement further provided that in the event of the termination of Mr.

Wright’s employment by the Company other than for “cause” or by Mr.

Wright for “good reason,” Mr.

Wright will be eligible to receive the following, subject to the execution and non-revocation of a release of claims (and continued compliance with any applicable restrictive covenant obligations):

(i) a severance payment equal to 24 months of his then-current annual base salary plus two times his then-current annual target bonus amount and (ii) provided that Mr.

Wright timely elects continued coverage under COBRA, continued participation in applicable Company benefit plans for him and his eligible dependents at active employee rates for 24 months following the termination of Mr.

Wright’s employment.

Notwithstanding the foregoing, in the event that Mr.

Wright’s employment with the Company is terminated following a “change in control” for reasons other than death, disability, retirement, termination by the Company for “cause” or termination by Mr.

Wright without “good reason,” Mr.

Wright will be eligible to receive the following, subject to the execution and non-revocation of a release of claims (and continued compliance with any applicable restrictive covenant obligations):

(i) a severance payment equal to 30 months of his then-current annual base salary plus 2.5 times his then-current annual target bonus amount, (ii) provided that Mr.

Wright’s employment and (iii) continued participation in life or other similar insurance or death benefit plans (excluding short-term or long-term disability insurance) for 30 months following the termination of Mr.

Wright’s employment and at the Company’s expense.

The Letter Agreement also entitles Mr.

Wright to certain relocation and commuting benefits.

Agreements with Mr.

The Board appointed Mr.

Borkowski, an Executive Vice President of the Company, as interim Chief Financial Officer effective June 6, 2018.

Borkowski received an annual salary of $550,000 and a target annual performance bonus of 60% of his base salary.

The Board increased his salary and target bonus to $600,000 and 65%, respectively, during 2019.

The Company awarded Mr.

Borkowski two restricted stock grants on February 21, 2019:

one for 100,000 shares, one-third of which vested immediately and the other two-thirds were to vest ratably over a two-year period from the date of grant;

and the other for 103,305 shares was to vest ratably over a two-year period from the date of grant.

These awards were contemplated, but not granted, at the time Mr.

Borkowski joined the Company.

The Company made these grants with an abbreviated vesting schedule to approximate the result as if they had been granted as originally agreed because the grants were made nearly a year later than agreed.

In addition, the Company agreed to provide Mr.

Borkowski severance, both in connection with a change in control and other than in connection with a change in control.

The Company entered into a double-trigger Change in Control Severance Agreement with Mr.

Borkowski, which provided for severance payments equal to 1.75 times his base salary and target bonus;

and continuation of benefits for the period for which the severance is computed.

The Company also entered into a severance agreement with Mr.

Borkowski that was not conditioned upon a change in control and which provided for severance payments equal to 1.0 times his annual base salary plus target bonus, plus continuation of benefits for the period for which the severance is computed, if his employment was terminated for qualifying reasons.

Borkowski was also eligible for relocation benefits.

On November 18, 2019, the Company entered into a Separation and Transition Services Agreement (the “Transition Agreement”) with Mr.

Borkowski pursuant to which (i) he resigned as Executive Vice President and Interim Chief Financial Officer of the Company, as well as from any and all officer, director or other positions that he held with the Company and its affiliates, effective November 15, 2019, (ii) he agreed to perform the duties of the Acting Chief Financial Officer with respect to filing the 2018 Form 10-K and assist with the transition of his duties, and (iii) until March 31, 2020, he agreed to provide services as may be requested by the Company with respect to matters related to the 2018 Form 10-K and the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2019.

The Agreement provided for the Company to make special payments to Mr.

Borkowski in installments as follows:

(i) $1,700,000, which was paid within seven business days following the Transition Agreement, (ii) $1,750,000 which was paid following the filing of the 2018 Form 10-K with the SEC;

and (iii) after March 31, 2020, $500,000 which was paid following the execution and delivery of a supplemental release by Mr.

These payments were, among other things, in lieu of his equity grant and annual incentive for 2019.

Borkowski forfeited all restricted stock owned by him which had not already vested, and all other claims to stock and other benefits.

The Agreement also includes terms and conditions governing the Company’s and Mr.

Borkowski’s general release of claims and other customary provisions.

Agreement with Mr.

The Company entered into an agreement with Mr.

Carlson effective December 16, 2019 to employ him as Executive Vice President - Finance.

The Company later named Mr.

Carlson Chief Financial Officer effective March 18, 2020.

Pursuant to the Company’s agreement with Mr.

Carlson, he receives an annual base salary of $525,000 and will be eligible for a target annual incentive of fifty-five percent (55%) of his base salary and a target long-term incentive equal to two hundred percent (200%) of his base salary.

In addition, he received (i) a special one-time signing bonus of $50,000 (which is subject to repayment in full in the event that he resigns or has his employment terminated by the Company within 12 months following the commencement of his employment with the Company), (ii) a restricted stock grant with a value of $350,000 which vests pro rata annually over three years, and (iii) a restricted stock grant with a value of $1,000,000, which vests upon the achievement of each of four discrete performance goals.

Agreement with Mr.

On September 16, 2019, the Company eliminated the position of Chief Strategy Officer and terminated the employment of Mr.

Landy without cause.

Effective April 23, 2020, the Company entered into a Termination Agreement with Mr.

Landy pursuant to which the Company will pay Mr.

Landy twelve (12) months of his salary ($425,000) and target bonus (50%) that was in effect on the day his position was eliminated.

Additional Compensation Practices and Policies

The Company generally does not provide executive officers with perquisites and other personal benefits beyond the Company benefits offered to similarly situated employees, with the following exception:

when the Company hosts performance incentive trips for its best-performing sales people, it requires certain executives to attend and assumes the incremental cost if the executive’s spouse attends, and when this occurs the Company reports the aggregate incremental travel expenses of the spouse as a perquisite.

Also, during the Company’s transition, when its ability to attract and retain executives was reduced, the Company agreed to reimburse certain executives (Messrs.

Wright and Borkowski) for commuting and transportation expenses between their respective homes and our corporate headquarters, temporary lodging, relocation and rental car expenses, and paid a tax-gross up on these amounts.

Stock Ownership Guidelines

The Board has adopted stock ownership guidelines that apply to the NEOs.

Under the guidelines, covered persons are required to own stock, including unvested time-based restricted stock, equal to certain multiples of their annual cash compensation:

Person Subject to Policy

General Counsel

Until such time as the NEO reaches his or her applicable threshold and subject to certain exceptions, the NEOs are required to hold 100% of the shares of Common Stock awarded to him/her from the Company or received upon vesting of restricted stock and upon exercise of stock options (net of any shares utilized to pay for tax withholding and any exercise price).

However, the Board has suspended the stock ownership guidelines until the Company becomes current in its SEC reporting obligations since subject persons may be prohibited by applicable insider trading laws from buying or selling Company securities.

We expect to implement similar requirements once the Company’s officers are permitted to buy Company stock.

Recoupment of Compensation

The Board adopted a recoupment (clawback) policy, effective April 1, 2016, covering executive officers of the Company.

The policy provides that if the Company is required to restate its financial results due to material noncompliance with financial reporting requirements under the securities laws, the Compensation Committee may seek reimbursement of any cash or equity-based bonus or other incentive compensation paid or awarded to the officer or effect cancellation of previously granted equity awards to the extent the bonus or incentive compensation was based on erroneous financial data and was in excess of what would have been paid to the officer under the restatement.

With the completion of the restatement of Company’s previously issued consolidated financial statements and financial information, the Compensation Committee has reviewed the annual non-equity incentive awards paid to executive officers based on financial performance for the years 2015 and 2016, and the amounts that would have been paid to such officers under the restated financial statements.

In addition, the Compensation Committee has reviewed the annual non-equity incentive awards paid to executive officers for 2017 and 2018 (which had never been published and therefore technically not restated), and the amounts that would have been paid to such officers under the corrected financial statements.

This review determined that the Company paid annual non-equity incentive awards between 2015 and 2018 to the following persons in excess of what would have been paid to such executive officers under the restated or revised financial metrics, by the following, aggregate amounts:

our former Chief Executive Officer, Mr.

Petit - $468,504;

our former Chief Financial Officer, Mr.

Senken - $215,550;

our former President, Mr.

Taylor - $356,555;

our former General Counsel, Ms.

Haden - $183,725;

our former Interim Chief Financial Officer, Mr.

Borkowski - $88,000;

our former Chief Strategy Officer, Mr.

Landy - $31,267;

Turner - $28,933.

(The Company did not grant any equity awards based on incorrect financial metrics.)

The Compensation Committee notes that the Company effectively recovered $26.3 million of vested, unexercised options and unvested restricted stock as a result of the Board’s determination in September 2018 that the terminations of employment of Messrs.

Petit, Senken and Taylor were “for cause,” which resulted in the forfeiture of those awards.

Under the Plans, all unvested restricted stock awards and vested and unvested stock option awards were forfeited, as follows:

Value on 9/20/2018

at $6.20 per share

Unvested Restricted

Stock Forfeited

Value on 9/20/2018

at $6.20 per share

$12.1 million

$14.3 million

$22.0 million

$26.3 million

(The value of forfeited options is based on the closing price of Common Stock on the date of forfeiture, which was $6.20 per share on September 20, 2018, less the exercise price.

The value of forfeited restricted stock is based on the closing price of Common Stock on the date of forfeiture.)

The Compensation Committee also notes that on November 26, 2019, the SEC filed suit against Messrs.

Petit, Senken and Taylor in the U.S.

District Court for the Southern District of New York, including claims for relief as to Messrs.

Petit and Senken for the disgorgement of all bonuses and all incentive-based and equity-based compensation pursuant to Section 304 of the Sarbanes-Oxley Act of 2002, among other claims for relief.

The Committee further notes that Messrs.

Landy and Turner only became executive officers in December 2018 and therefore were subject to the policy for less than one month.

In view of the pending criminal trials against Messrs.

Petit and Taylor, and the SEC’s civil claims against Messrs.

Petit, Taylor, and Senken, the Compensation Committee has not yet reached a final determination as to whether or how to recoup the amounts previously paid to these executives or to the other executives.

Anti-Hedging and Anti-Pledging Policies

Hedging transactions may permit the ownership of Company securities without the full risks and rewards of ownership.

If a director, officer or employee engages in hedging transactions with respect to Company securities, he or she may no longer have the same objectives as the Company’s other shareholders.

For this reason, the Company prohibits directors, officers and employees from engaging in hedging transactions in Company securities , subject to exceptions that may be granted in the sole discretion of the Company’s General Counsel in limited circumstances.

Securities held in a margin account as collateral for a margin loan may be sold by the broker without the customer’s consent if the customer fails to meet a margin call.

Similarly, securities pledged as collateral for a loan may be sold if the borrower defaults on the loan, including at a time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company securities.

For these reasons, the Company prohibits directors, officers and other employees from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Compensation Risk Assessment

On an ongoing basis, the Compensation Committee considers the risks inherent in the Company’s compensation programs.

With the change in the structure of the annual non-equity incentive compensation awards in late 2018, which de-emphasized revenue, the Compensation Committee believes that our compensation policies and practices do not encourage excessive and unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on the Company.

The Compensation Committee believes that the design of our compensation policies and practices encourages our employees to remain focused on both our short- and long-term goals.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed the Compensation Discussion and Analysis in this Annual Report and discussed it with management.

Based on its review and discussions with management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Annual Report and in the proxy statement for the Company’s 2019 annual meeting of shareholders.

This report is provided by the following independent directors, who comprise the Compensation Committee:

Barry, Chair (member of the Committee since June 2019)

Bierman (member of the Committee since July 2019)

Yeston (member of the Committee since September 2012)

CEO Pay Ratio

In 2019, we paid total annual compensation to our median employee of $62,995.

The annual total compensation of our CEO in 2019, as reported in the Summary Compensation Table, was $5,069,353.

Based on this information, for 2019 the ratio of the annual total compensation of our CEO to the median annual total compensation of all employees was 80 to 1.

(We note that the compensation paid to our CEO for 2019 was for a partial year, and we estimate that he would have received approximately$5,372,238 over the course of a full year, which equates to a ratio of 85 to 1.) We determined our median employee using all income as shown in Form W-2 box 1 for all employees other than our CEO, based on information as of December 31, 2019.

As permitted by SEC rules, we excluded all non-U.S.

employees in determining the median employee, which consisted of a single employee in Canada.

The total number of U.S.

employees as of December 31, 2019 was 696.

2019 SUMMARY COMPENSATION TABLE

Principal Position

Incentive Plan

All Other (8)

Chief Executive Officer

David Coles, (2)

Former Interim

Chief Executive Officer

Edward Borkowski, (3)

EVP and Interim

Chief Financial Officer

EVP - Finance

Mark Landy, (5)

Chief Strategy Officer

SVP, Operations & Procurement

The Board appointed Mr.

Wright as Chief Executive Officer effective May 13, 2019.

Coles served as Interim Chief Executive Officer from July 2, 2018 until May 12, 2019.

The Company paid his employer, A&M, $908,663 and $1,147,751 for Mr.

Coles’ services in 2019 and 2018, respectively.

Borkowski served as Interim Chief Financial Officer from June 6, 2018 until his resignation effective November 15, 2019.

Subsequently, he served as Acting Chief Financial Officer.

The Board appointed Mr.

Carlson EVP - Finance effective December 16, 2019.

The Company later named Mr.

Carlson Chief Financial Officer effective March 18, 2020.

Landy served as Executive Vice President and Chief Strategy Officer from December 5, 2018 until the Company eliminated this position on September 16, 2019.

Reflects a one-time $500,000 cash signing bonus.

Wright and Turner also received discretionary bonuses in 2020 in lieu of their 2019 annual incentive in the amounts of $720,000 and $136,320, respectively.

Represents the aggregate grant date fair value of awards of restricted stock made to the executive officer in accordance with FASB ASC Topic 718.

The restricted stock awards vest pro rata annually over a three-year period.

Represents the following amounts:

(a) commuting expenses:

Wright - $18,135;

Borkowski - $43,733;

(b) reimbursement for travel expenses for their spouses to attend certain work-related events:

Borkowski - $5,098;

Landy - $3,924;

Borkowski - $4,000,000 (including $2,250,000 to be paid to him or on his behalf in 2020);

Landy - $687,750 (paid in 2020);

Wright - $1,442;

Borkowski - $4,659;

Turner - $6,059;

and (d) tax gross-up on commuting expenses:

Wright $7,662;

Borkowski $42,441.

Does not include $2,250,000 paid to Mr.

Borkowski in 2020 pursuant to the Separation and Transition Services Agreement between the Company and him.

See “Compensation, Discussion & Analysis - Agreements with Mr.

Borkowski , above .

GRANTS OF PLAN-BASED AWARDS FOR 2019

The following table provides information regarding grants of plan-based awards to the Company’s NEOs during 2019.

Estimated Future Payouts Under

Non-Equity Incentive Plan Awards (1)

The Board never formally approved the annual incentive plan in 2019.

Refer to discussion of “annual incentive plan” in the Compensation Discussion & Analysis, above.

Represents restricted stock awards granted under the 2016 Plan.

The shares of restricted stock generally vest ratably over three years from the grant date.

The amounts shown reflect the grant date fair market values of the awards computed in accordance with FASB ASC Topic 718—“Compensation-Stock compensation.”

As discussed under “Compensation Discussion and Analysis,” Messrs.

Landy and Borkowski forfeited all unvested restricted stock held by them upon the termination of their employment during 2019.

Represents performance-based restricted stock units.

OUTSTANDING EQUITY AWARDS ON DECEMBER 31, 2019

The following table shows the number of shares covered by exercisable and un-exercisable options and unvested restricted stock awards held by the Company’s NEOs on December 31, 2019.

As discussed in the CD&A, Messrs.

Landy and Borkowski forfeited all unvested restricted stock held by them upon the termination of their employment during 2019.

Option Awards

Unexercisable

Securities (1)

Calculated based on a closing stock price of $7.58 per share on December 31, 2019.

A portion vested on June 7, 2020, and the remaining balance is scheduled to vest on June 7, 2021 and 2022.

Reflects (a) a time-vested restricted stock grant with a value of $350,000 which vests pro rata annually over three years on December 16, 2020, 2021, and 2022;

and (b) a performance-vested restricted stock unit grant with a value of $1,000,000, which vests upon the achievement of each of four discrete performance goals.

The remaining balance vested on February 22, 2020.

The remaining balance is scheduled to vest on February 22, 2021.

The remaining balance is scheduled to vest in two installments on December 11, 2020 and 2021.

A portion vested on April 26, 2020, and the remaining balance is scheduled to vest in on April 26, 2021 and 2022.

2019 OPTION EXERCISES AND STOCK VESTED TABLE

The following table provides information concerning each exercise of stock options and each vesting of restricted stock during 2019, on an aggregated basis with respect to each of the Company’s NEOs.

Option Awards

on Vesting (1)

Represents the number of shares acquired on vesting multiplied by the closing price of Common Stock on the vesting date.

2019 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

This section describes additional payments that the Company would make to the NEOs assuming a hypothetical termination of employment occurred on December 31, 2019 under various scenarios.

We did not include Messrs.

Coles or Borkowski in the table below because they voluntarily resigned their employment before December 31, 2019.

See “Compensation Discussion and Analysis - Agreements with Our Executive Officers” for a discussion of certain severance payments to and arrangements made with Messrs.

Borkowski and Landy.

The Company’s agreement with Mr.

Wright provides for, and its agreement with Mr.

Landy provided for, compensation to the executive in the event the executive’s employment with the Company is terminated involuntarily without “Cause” (as defined in the agreement), or if the executive voluntarily terminates employment for “Good Reason” (as defined in the agreement).

The compensation payable under the agreements is a lump sum severance payment equal to a multiple of two times in the case of Mr.

Wright, or one time in the case of Mr.

Landy, the executive’s annual base salary and targeted base bonus as of the date of termination.

In addition, following termination of employment, he is entitled to receive life, health insurance coverage (subject to a COBRA election), and certain other fringe benefits equivalent to those in effect at the date of termination for period of 24 months in the case of Mr.

Wright, or 12 months in the case of Mr.

The Company’s agreements with Messrs.

Wright and Turner provide for compensation to the executive in the event the executive’s employment with the Company is terminated following the consummation of a “change-in-control” for reasons other than the executive’s death, disability or for “Cause” (as defined in the respective agreements), or if the executive voluntarily terminates employment for “Good Reason” (as defined in the respective agreements).

The compensation payable under the agreements is a lump sum severance payment equal to a multiple of the executive’s annual base salary and targeted base bonus as of the date of the change-in-control.

The multiples are 2.5 and 0.5 Messrs.

Wright and Turner, respectively.

In addition, following termination of employment, these executives are entitled to receive life, health insurance coverage (subject to a COBRA election), and certain other fringe benefits equivalent to those in effect at the date of termination for periods of 30 months and 6 months for Messrs.

Wright and Turner, respectively.

The agreements require the executive to comply with certain covenants that preclude the executive from competing with the Company or soliciting customers or employees of the Company for a period following termination of employment equal to the period for which fringe benefits are continued under the applicable agreement.

The agreements expire three years after a change in control of the Company or any successor to the Company.

Upon a “change in control,” as defined in the 2006 Plan and subject to any requirements of Section 409A of the Internal Revenue Code of 1986, as amended, all outstanding awards vest and become exercisable.

The Compensation Committee has discretion whether to provide that awards granted under the 2016 Plan will vest upon a “change in control.” Thus far, the Committee has exercised such discretion and provided for full vesting upon a change in control for all awards granted under the 2016 Plan to NEOs to date.

2019 POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

for Good Reason

Involuntary or for

Good Reason with

Change in Control

cash severance

estimated benefits

estimated value of accelerated equity awards

cash severance

estimated benefits

estimated value of accelerated equity awards

cash severance

estimated benefits

estimated value of accelerated equity awards

cash severance

estimated benefits

estimated value of accelerated equity awards

Includes (a) annual base salary as of December 31, 2019, plus (b) annual targeted bonus for the year ended December 31, 2019, times the multiple applicable to the NEO.

Payable only in the event the executive’s employment is terminated without cause or for “good reason” within three years following a change in control.

Includes (a) the estimated value of medical, dental, vision and life insurance, plus (b) the employer’s cost of FICA for the duration of the severance period.

Includes the value of unvested restricted stock based on the December 31, 2019 stock price, the vesting of which is deemed accelerated to December 31, 2019.

If the Participant’s employment with the Company terminated on account of the Participant’s death or disability, the shares shall become vested and non-forfeitable on termination of the Participant’s employment with the Company on account of the Participant’s death or disability.

Landy’s employment actually terminated on September 16, 2009 when the Company eliminated his position.

2019 DIRECTOR COMPENSATION

The Company compensates non-employee directors with a mix of equity and cash.

Directors who are full-time Company employees do not receive any compensation for their service as directors or as members of Board committees.

The Company compensates non-employee directors at approximately the median of peer practices.

The 2016 Plan imposes limits on awards to directors for their service as directors of (i) 125,000 shares granted during any calendar year and (ii) a maximum of $300,000 for any consecutive 12-month period for awards stated with reference to a specific dollar amount.

Equity Compensation

Upon initial election or appointment to the Board, each non-employee director receives a one-time grant of restricted shares of Common Stock valued at $50,000, plus a prorated portion of the prior year’s annual grant (based on the number of months between the date of appointment to the Board and targeted date for the next annual meeting of shareholders).

This grant vests on the first anniversary of the grant date.

In addition, each non-employee director receives an annual grant of restricted shares of Common Stock valued at $175,000.

The Board usually makes this grant on the date of the annual meeting of shareholders, and it vests on the earlier of the next annual meeting or the first anniversary of the grant date.

Because, in 2019, the Restatement was incomplete and there was incomplete information publicly available about the Company, the Board made its annual grants in the form of restricted stock units, initially denominated in cash but which will be converted to a number of shares of common stock based on the stock price on the date thirty (30) days following the date the Company first becomes current with its SEC reporting obligations.

The Board altered its grant practices in an attempt to ensure that the grants are based on a reliable price for the Company’s stock and which reflects all available information and current financial statements, to prevent the possibility of a windfall, and to ensure alignment with shareholders.

Due to the pending Audit Committee investigation in early 2018 and the expectation that the Company’s financial statements might need to be restated, the Board did not make the expected $175,000 equity grant to directors in 2018.

Instead, on June 13, 2019 (prior to the election or appointment of Dr.

Behrens and Messrs.

Barry, Bierman and Newton to the Board), the Board, in its capacity as Administrator of the 2006 Plan, modified all options then outstanding held by non-employee directors under the Company’s Assumed 2006 Stock Incentive Plan, as amended and restated as of February 25, 2014 (the “ 2006 Plan ”), such that all options held by incumbent directors who served on the Board prior to the Company’s 2018 annual meeting of shareholders would expire on the original expiration date of such options, rather than on the first to occur of (i) three months following the date of termination of a director’s service on the Board for any reason and (ii) the expiration date of the option.

The modification resulted in an incremental expense charge under GAAP, which varied by director based upon the number of outstanding options then held by the director as well as other factors.

The incremental fair value of such modified options has been included in the table below in the column, “Options.”

The Nominating and Corporate Governance Committee has adopted stock ownership guidelines for the Company’s non-employee directors to better align the interests of non-employee directors with shareholders.

The guidelines require non-employee directors to own shares of Common Stock with a value equal to or greater than three times their annual gross cash compensation.

Newly elected directors have three years from the date of election to the Board to comply with the ownership guidelines.

Shares must be owned directly by the director or the director’s immediate family members residing in the same household, held in trust for the benefit of the non-employee director or the director’s immediate family or owned by a partnership, limited liability company or other entity to the extent of the director’s interest therein (including the interests of the director’s immediate family members residing in the same household) provided that the individual has the power to vote or dispose of the shares.

Unvested shares of restricted stock and unexercised stock options (vested or unvested) do not count toward satisfaction of the guidelines.

The Board has suspended application of these stock ownership guidelines because the Company is not current in its SEC reporting obligations and the Company’s insider trading policy prevents the non-employee directors from buying or selling shares of Common Stock at this time.

Cash Compensation

In 2019, the Company also paid the following cash amounts to non-employee directors:

Audit Committee

Compensation Committee

Nominating and Corporate Governance

Science and Research Liaison

Ethics and Compliance Committee

Special Litigation Committee (ad hoc)

In addition, for 2019, the Board paid excess meeting fees, subject to a cap, once the number of meetings for a particular body exceeded a threshold, as follows:

Supplemental Meeting Fees

Per Meeting Fee

Supplemental Meeting Fee Cap

Board Meetings

$1,250 Member

$30,000 Chair

$15,000 Member

Audit Committee

$1,000 Member

$24,000 Chair

$12,000 Member

Compensation;

Science & Research liaison;

Special Litigation (ad hoc)

Nominating & Governance;

Ethics & Compliance

The following table provides information concerning compensation of the Company’s non-employee directors who served in 2019.

Kathleen Behrens

Terry Dewberry

The following directors had stock options outstanding as of December 31, 2019:

Papasan - 87,000;

Koob - 75,000;

and Bleser, Dewberry, Evans, Hack, Koob, and Yeston—each with 60,000.

In addition, on December 31, 2019 each of Messrs.

Barry, Bierman, and Newton, and Ms.

Behrens, had restricted stock units with a value of $225,000, and each of Messrs.

Dewberry, Evans, Koob and Yeston had restricted stock units with a value of $175,000.

Aguilar resigned from the Board on September 19, 2019.

The terms of Mr.

Bleser and Mr.

Hack expired on June 17, 2019 following the 2018 Annual Meeting.

Papasan resigned from the Board on June 17, 2019 following the 2018 Annual Meeting.

Reflects incremental fair value of options as a result of modifications effective on June 13, 2019:

Bleser - $89,437;

Dewberry - $82,019;

Hack $89,437;

Papasan $105,073;

Evans, Koob and Yeston - $0.

Reflects grant of $175,000 restricted stock unit award to all directors serving after June 17, 2019.

Reflects grant of $50,000 restricted stock unit award to new directors.

Yeston serves as the Science and Research liaison to the Board and as the Chairman of the ad hoc special litigation committee.

Information required by this Item will be contained in our definitive proxy statement relating to our 2021 Annual Meeting of Shareholders under the caption “Executive Compensation,” or similar caption which is incorporated herein by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

EQUITY COMPENSATION PLAN INFORMATION

The following table provides information about the Company’s equity compensation plans as of December 31, 2019.

Plan Category

Number of securities

to be issued upon

outstanding options,

warrants and rights

Weighted average

exercise price of

outstanding options,

warrants and rights

Number of securities

remaining available

for future issuance

compensation plans

Equity compensation plans

approved by security holders

Equity compensation plans

not approved by security holders

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following tables sets forth certain information regarding the Company’s capital stock, beneficially owned by each person known to the Company to beneficially own more than 5% of the outstanding shares of Common Stock, each NEO, each director, and all directors and executive officers as a group.

Unless otherwise indicated below the address of those identified in the table is c/o MiMedx Group, Inc., 1775 West Oak Commons Court, NE, Marietta, Georgia 30062.

SERIES B CONVERTIBLE PREFERRED STOCK

Name of Beneficial Owner

Shares of Series B Convertible Preferred Stock

Shares of Common Stock Into Which They May Convert (b)

Voting Percentage (c)

EW Healthcare Partners (a)

Represents shares of Common Stock issuable upon conversion of 90,000 shares of Series B Preferred Stock owned by Falcon Fund 2 Holding Company, L.P., a partnership controlled by EW Healthcare Partners.

EW Healthcare Partners Fund 2-UGP, LLC, the general partner of Falcon Fund 2 Holding Company, L.P., may also be deemed to have sole voting and investment power with respect to such shares of Common Stock.

EW Healthcare Partners Fund 2-UGP, LLC disclaims beneficial ownership of such shares of Common Stock except to the extent of its pecuniary interest therein.

Sutter, Scott Barry, Ronald W.

Eastman, Petri Vainio and Steve Wiggins are each a manager and collectively the managers of EW Healthcare Partners Fund 2-UGP, LLC.

Each of the managers may be deemed to exercise shared voting and investment power with respect to such shares.

Each manager disclaims beneficial ownership of such shares of Common Stock except to the extent of his pecuniary interest therein.

Sutter is a member of the Company’s Board of Directors.

The principal address of the EW Healthcare Partners entities and each of the managers is 21 Waterway Avenue, Suite 225, The Woodlands, Texas 77380.

For purposes of this table the conversion price is presumed to be $3.85.

Percentage ownership set forth in the table is based on 110,328,875 shares of Common Stock outstanding on June 25, 2020 , plus 2,359,043 shares deemed outstanding pursuant to Rule 13d-3 under the Exchange Act, which includes 25,022,299 shares of Common Stock to be issued upon conversion of the Series B Stock.

Name of Beneficial Owner

Ownership (1)

Prescience Investment Group, LLC (2)

Group One Trading, LP (3)

NEOs, Executive Officers, and Directors

Ownership (1)

Kathleen Behrens, Ph.D.

Borkowski (6)

David Coles (8)

Terry Dewberry (9)(10)

Evans (10)(11)

Koob (10)(12)

Mark Landy (13)

Todd Newton (4)

Yeston (10)(16)

Total Directors and Executive Officers (18) (15 persons)

The beneficial ownership set forth in the table is determined in accordance with SEC rules.

The percentage of beneficial ownership is based on 110,328,875 shares of Common Stock outstanding on June 25, 2020 , plus 2,359,043 shares deemed outstanding pursuant to Rule 13d-3 under the Exchange Act and 25,974,026 shares deemed outstanding upon conversion of the Company’s Series B Preferred Stock at $3.85 per share.

See notes (b) and (c), above.

On May 30, 2019, Prescience Investment Group, LLC filed an amendment to its Schedule 13D indicating shared voting power and dispositive power over 7,618,335 shares, shared voting power and dispositive power over 4,888,652 shares by Prescience Partners, LP, shared voting power and dispositive power over 1,845,539 shares by Prescience Point Special Opportunity LP, and shared voting power and dispositive power over 6,734,191 shares by Prescience Capital, LLC.

The address for Prescience Investment Group, LLC is 1670 Lobdell Avenue, Suite 200, Baton Rouge, LA 70806.

According to the most recent Schedule 13G filed with the SEC on January 31, 2019, Group One Trading, LP had sole voting and dispositive power with respect to 6,379,103 shares.

The address for Group One Trading, LP is 440 South LaSalle St, Ste.

3232, Chicago, IL 60605

Does not include restricted stock units granted on October 22, 2019 with a value of $225,000 which will be settled in Common Stock based on a stock price determined after the 2019 annual meeting of shareholders and after the Company becomes current in its reporting obligations.

Reflects beneficial ownership of shares held by the Richard and Susan Barry Family Trust.

Borkowski resigned as Executive Vice President and Interim Chief Financial Officer effective November 15, 2019.

Carlson joined the Company as Executive Vice President, Finance, on December 16, 2019.

Does not include 140,844 restricted stock units granted on December 16, 2019 that will vest based upon the achievement of certain performance criteria.

Coles served as Interim Chief Executive Officer until May 13, 2019.

Includes 60,000 shares issuable upon the exercise of options.

Does not include restricted stock units granted on October 22, 2019 with a value of $175,000 which will be settled in Common Stock based on a stock price determined after the 2019 annual meeting of shareholders and after the Company becomes current in its reporting obligations.

Includes 60,000 shares issuable upon the exercise of options.

Includes 1,375,627 shares held by a trust and 60,000 shares issuable upon the exercise of options.

The Company eliminated Mr.

Landy's position of Chief Strategy Officer effective September 16, 2019.

Does not include restricted stock units granted on February 18, 2020 with a value of $284,000 which will be settled in Common Stock based on a stock price determined after the Company becomes current in its reporting obligations.

Does not include restricted stock units granted on February 18, 2020 with a value of $3,375,000 which will be settled in Common Stock based on a stock price determined after the Company becomes current in its reporting obligations.

Includes 60,000 shares issuable upon the exercise of options.

For purposes of this table all shares of Series B Preferred Stock are deemed to have converted to Common Stock at $3.85 per share.

Effective July 2 , 2020, pursuant to the terms of the Purchase Agreement and the Preferred Stock Amendment, the Company increased the size of the Board of Directors and appointed Martin P.

Sutter and William A.

Hawkins III to serve as Preferred Directors.

Sutter is deemed to own beneficially shares controlled by EW Healthcare Partners.

See notes (b), (c) and (1), above.

Represents the ownership of only those persons currently serving as a director or executive officer of the Company.

Information required by this Item will be contained in our definitive proxy statement relating to our 2021 Annual Meeting of Shareholders under the captions “Stock Ownership,” “Executive Compensation,” and “Equity Compensation Plan Information,” or similar captions which are incorporated herein by reference.

Certain Relationships and Related Transactions, and Director Independence

Policies and Procedures for Approval of Related Party Transactions

Under its charter, the Audit Committee is responsible for reviewing and approving all transactions or arrangements between the Company and Section 16 reporting persons and any of their respective affiliates, associates or related parties.

In determining whether to approve or ratify a related party transaction, the Audit Committee considers all relevant facts and circumstances available to it, such as:

• Whether the terms of the transaction are fair to the Company and at least as favorable to the Company as would apply if the transaction did not involve a related party;

• Whether there are demonstrable business reasons for the Company to enter into the transaction;

• Whether the transaction would impair the independence of an outside director;

Whether the transaction would present an improper conflict of interest for any director or executive officer, taking into account the size of the transaction, the direct or indirect nature of the related party’s interest in the transaction and the ongoing nature of any proposed relationship, and any other factors the Audit Committee deems relevant.

Related Party Transactions

The Company has employed Thomas Koob as its Chief Scientific Officer (a non-executive officer) since 2006.

Thomas Koob is the brother of a director, Charles Koob.

Subsequent to the Company’s employment of Thomas Koob, Charles Koob was appointed as a director of the Company in March 2008.

In 2019, the Company paid Thomas Koob an annual salary of $235,210 and provided equity, incentive compensation and other compensation of $155,957.

The Company employs Simon Ryan, the brother-in-law of its former General Counsel, Alexandra O.

Haden (who resigned from the Company effective August 12, 2019), as a sales representative.

In 2019, the Company paid Mr.

Ryan total compensation of $152,126, consisting of a salary of $95,000 and sales commissions, equity and other compensation of $57,126.

Director Independence

Although the Common Stock is no longer listed on NASDAQ due to the Company’s failure to timely file periodic reports, the Board continues to comply with NASDAQ’s listing standards with respect to Board independence.

NASDAQ listing standards require that a majority of the members of the Board be independent, which means that they are not officers or employees of the Company and are free of any relationship that would interfere with the exercise of their independent judgment.

The Board has determined that Dr.

Behrens and Messrs.

Barry, Bierman, Dewberry, Evans, Newton, and Yeston are “independent” under NASDAQ listing standards.

Compensation Committee Interlocks and Insider Participation

During 2019, the following persons served on the Compensation Committee:

Barry, James L.

Bierman, Joseph G.

Bleser, Larry W.

Papasan, and Neil S.

No member of the Compensation Committee is or has been an officer or employee of the Company.

During 2019, none of the Company’s executive officers served on the board of directors or compensation committee of any other entity that had an executive officer that serves on the Company’s Board or Compensation Committee.

Information required by this Item will be contained in our definitive proxy statement relating to our 2021 Annual Meeting of Shareholders under the captions “Certain Relationships and Related Party Transactions,” and "Election of Directors" or similar captions which are incorporated herein by reference.

Principal Accounting Fees and Services

Audit Firm Fees

The Audit Committee’s duties include pre-approving audit and non-audit services provided to the Company by the Company’s independent registered public accounting firm, BDO USA, LLP (“ BDO ”).

All of the services in respect of 2019 and 2018 under the Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees categories below were pre-approved by the Audit Committee.

December 31, 2019

Year Ended (1)

December 31, 2018

Audit Fees (2)

Audit-Related Fees (3)

All Other Fees

The Company engaged BDO in May 2019 to audit its financial statements for the years ended December 31, 2018, 2017, and 2016.

Total fees incurred by BDO were $7.3 million and were apportioned equally to each of the three years for the purposes of this tabular presentation.

The Company paid or incurred these fees in 2019.

This category includes fees for the audit of the Company’s annual financial statements and review of financial statements included in its quarterly reports on Form 10-Q.

This relates to BDO’s audit of the Company’s 401(k) plan.

Information required by this Item will be contained in our definitive proxy statement relating to our 2021 Annual Meeting of Shareholders under the captions “Ratification of Appointment of Independent Registered Public Accounting Firm” and “Election of Directors,” or similar captions which are incorporated herein by reference.

Exhibits, Financial Statement Schedules

Documents filed as part of this report:

Financial Statements

Financial Statement Schedule:

(a) Documents filed as part of this report:

(i) Financial Statements

(ii) Financial Statement Schedule:

The following Financial Statement Schedule is filed as part of this Report:

Schedule II Valuation and Qualifying Accounts for the years ended December 31, 2020, 2019 and 2018

(iii) Exhibits

See Item 15(b) below.

3 unchanged sentences

## Certain exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K, but a copy will be furnished supplementally to the Securities and Exchange Commission upon request.

Articles of Incorporation, together with Articles of Amendment effective each of May 14, 2010;

August 8, 2012, November 8, 2012;

and May 15, 2015 ( incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-K filed on March 1, 2017 ).

Articles of Amendment to the Articles of Incorporation effective November 6, 2018 ( incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-A filed on November 7, 2018 ).

Articles of Amendment to the Articles of Incorporation of MiMedx Group, Inc., effective July 1, 2020 .

3.1# Restated Articles of Incorporation, adopted March 4, 2021, effective March 5, 2021.

3.2 Bylaws of MiMedx Group, Inc., as amended and restated as of October 3, 2018 ( incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K filed on October 4, 2018 ).

The description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 .

Technology License Agreement dated January 29, 2007 between MiMedx, Inc., Shriners Hospitals for Children and University of South Florida Research Foundation ( incorporated by reference to Exhibit 10.32 to the Registrant’s Form 8-K filed on February 8, 2008 ).

4.1 The description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934, incorporated by reference to Registration Sta t ement on Form 8- A filed November 2, 2020 .

10.1## Loan Agreement dated as of June 30, 2020 by and among MiMedx Group, Inc., certain subsidiaries of MiMedx Group, Inc.

parties thereto, the Lenders from time to time party hereto, Hayfin Services LLP, as administrative agent for the Lenders and as collateral agent for the Secured Parties, incorporated by reference to Exhibit 10.36 to Annual Report on Form 10-K filed July 6, 2020.

10.2## Loan Agreement, dated June 10, 2019, by and between MiMedx Group, Inc., the other guarantors party thereto, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent ( incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K Filed June 11, 2019 ).

10.3 First Amendment, dated as of April 22, 2020, to Loan Agreement, dated June 10, 2019, by and between MiMedx Group, Inc., the other guarantors party thereto, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent ( incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed April 27, 2020 ).

10.4## Securities Purchase Agreement, dated as of June 30, 2020, by and between MiMedx Group, Inc., Falcon Fund 2 Holding Company, L.P.

and certain other investors, incorporated by reference to Exhibit 10.3 8 to Annual Report on Form 10-K filed July 6, 2020 .

10.5 Registration Rights Agreement dated as of July 2, 2020, by and between MiMedx Group, Inc.

and Falcon Fund 2 Holding Company, L.P., incorporated by reference to Exhibit 10.39 to Annual Report on Form 10-K filed July 6, 2020 .

10.6 Lease effective May 1, 2013 between Hub Properties of GA, LLC and MiMedx Group, Inc.

13 unchanged sentences

2006 Assumed Stock Incentive Plan ( incorporated by reference to Exhibit 10.3 to the Registrant’s Form 10-K filed on March 4, 2014 ).

2016 Equity and Cash Incentive Plan ( incorporated by reference to Appendix A to the Registrant’s Definitive Proxy Statement on Schedule 14A filed on April 12, 2016 ).

10.14* 2016 Equity and Cash Incentive Plan, as amended and restated through October 2, 2020, incorporated by refer e nce to Exhibit 4.6 to Registration Statement on Form S-8 filed December 17, 2020 .

10.15* Form of Incentive Stock Option Agreement under the MiMedx Group, Inc.

8 unchanged sentences

10.20* Form of Director Restricted Stock Unit Award Agreement ( incorporated by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K filed March 17, 2020 ).

Consulting Agreement with Alexandra O.

Haden dated August 27, 2019 ( incorporated by reference to Exhibit 10.26 to the Registrant’s Annual Report on Form 10-K filed March 17, 2020 ).

Cooperation Agreement dated as of May 29, 2019 among MiMedx Group, Inc., M.

Kathleen Behrens Wilsey, K.

Todd Newton, Richard J.

Barry, Prescience Partners, LP, Prescience Point Special Opportunity LP, Prescience Capital LLC, Prescience Investment Group, LLC d/b/a Prescience Point Capital Management LLC and Eiad Asbahi ( incorporated by reference to Exhibit 10.32 to the Registrant’s Form 8-K filed on May 30, 2019 ).

Loan Agreement, dated June 10, 2019, by and between MiMedx Group, Inc., the other guarantors party thereto, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent ( incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K Filed June 11, 2019 ).

First Amendment, dated as of April 22, 2020, to Loan Agreement, dated June 10, 2019, by and between MiMedx Group, Inc., the other guarantors party thereto, the lenders party thereto and Blue Torch Finance LLC, as administrative agent and collateral agent ( incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed April 27, 2020 ).

Form of Change in Control Severance Compensation and Restrictive Covenant Agreement ( incorporated by reference to Exhibit 10.24 to the Registrant’s Form 8-K filed on May 30, 2019 ).

Form of (Non-change in Control) Executive Severance Agreement ( incorporated by reference to Exhibit 10.25 to the Registrant’s Form 8-K filed on May 30, 2019 ).

Form of Indemnification Agreement ( incorporated by reference to Exhibit 10.65 to the Registrant’s Form 8-K filed July 15, 2008 ).

Form of Employee Inventions and Assignment Agreement ( incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K/A filed on June 12, 2018 ).

Form of Confidentiality and Non-Solicitation Agreement ( incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K/A filed on June 12, 2018 ).

Form of Non-Competition Agreement ( incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K/A filed on June 12, 2018 ).

10.21* Form of Employee (Time-Vested) Restricted Stock Unit Award Agreement, incorporated by reference to Exhibit 10.3 3 to Annual Report on Form 10-K filed July 6, 2020.

10.22* Form of Employee (Performance-Vested, uncertain number of shares) Restricted Stock Unit Award Agreement, incorporated by reference to Exhibit 10.3 4 to Annual Report on Form 10-K filed July 6, 2020 .

10.23* Form of Employee (Performance-Vested, certain number of shares) Restricted Stock Unit Award Agreement, incorporated by reference to Exhibit 10.35 to Annual Report on Form 10-K filed July 6, 2020 .

10.24* Form of Non-Employee Restricted Stock Award Agreement (vest into retirement), incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-Q filed August 4, 2020 .

10.25*# Form of Employee (Time-Vested) Restricted Stock Unit Award Agreement.

10.26* Letter Agreement dated April 10, 2019 between MiMedx Group, Inc.

1 unchanged sentence

Wright ( incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed on May 9, 2019 ).

Engagement Letter dated July 2, 2018 between MiMedx Group, Inc.

and Alvarez & Marsal North America, LLC ( incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K/A filed on July 11, 2018 ).

10.27* Employment Offer Letter between the Company and Peter M.

Carlson, as amended and restated on April 29, 2020.

Carlson, as amended and restated on April 29, 2020, incorporated by re ference to Exhibit 10.29 to Annual Report on Form 10-K filed July 6, 2020 .

10.28* Employment Offer Letter between the Company and William F.

Hulse IV as of November 4, 2019.

Hulse IV as of November 4, 2019, i ncorporated by reference to Exhi bit 10.

30 to Annual Rep ort on For m 10-K filed July 6, 2020 .

10.29* Employment Offer Letter between the Company and Rohit Kashyap dated as of July 23, 2020, incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q filed August 4, 2020 .

10.30* Employment Offer Letter between the Company and Robert B.

Stein effective August 1, 2020, incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q filed August 4, 2020 .

10.31* Employment Offer Letter between the Company and William L.

Phelan dated as of April 30, 2020, incorporated by reference to Exhibit 10.3 7 to Annual Report on Form 10-K filed July 6, 2020 .

10.32* Employment Offer Letter dated April 3, 2018 between MiMedx Group, Inc.

3 unchanged sentences

Borkowski ( incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed November 20, 2019 ).

Form of Employee (Time-Vested) Restricted Stock Unit Award Agreement .

Form of Employee (Performance-Vested, uncertain number of shares) Restricted Stock Unit Award Agreement .

Form of Employee (Performance-Vested, certain number of shares) Restricted Stock Unit Award Agreement .

Loan Agreement dated as of June 30, 2020 by and among MiMedx Group, Inc., certain subsidiaries of MiMedx Group, Inc.

parties thereto, the Lenders from time to time party hereto, Hayfin Services LLP, as administrative agent for the Lenders and as collateral agent for the Secured Parties.

Employment Offer Letter between the Company and William L.

Phelan dated as of April 30, 2020.

Securities Purchase Agreement, dated as of June 30, 2020 , by and between MiMedx Group, Inc., Falcon Fund 2 Holding Company, L.P.

and certain other investors.

Registration Rights Agreement dated as of July 2, 2020 , by and between MiMedx Group, Inc.

and Falcon Fund 2 Holding Company, L.P.

Letter from Cherry Bekaert LLP dated August 9, 2017 ( incorporated by reference to Exhibit 16.1 to Current Report on Form 8-K filed August 10, 2017 ).

Letter from Ernst & Young LLP dated December 7, 2018 ( incorporated by reference to Exhibit 16.1 to Current Report on Form 8-K filed December 7, 2018 ).

10.34* Form of Key Employee Retention and Restrictive Covenant Agreement, incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed December 21 , 2020.

10.35*# 2020 Management Incentive Plan.

10.36* Management Incentive Plan, incorporated by reference to Exhibit 10.2 to Current Report on Form 8-K filed December 21 , 2020 .

10.37* Form of Indemnification Agreement ( incorporated by reference to Exhibit 10.65 to the Registrant’s Form 8-K filed July 15, 2008 ).

10.38 Technology License Agreement dated January 29, 2007 between MiMedx, Inc., Shriner's Hospitals for Children and University of South Florida Research Foundation ( incorporated by reference to Exhibit 10.32 to the Registrant’s Form 8-K filed on February 8, 2008 ).

10.39 Cooperation Agreement dated as of May 29, 2019 among MiMedx Group, Inc., M.

Kathleen Behrens Wilsey, K.

Todd Newton, Richard J.

21.1# Subsidiaries of MiMedx Group, Inc.

5 unchanged sentences

32.2# Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

101.INS# XBRL Instance Document

101.SCH# XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF# XBRL Taxonomy Extension Definition Linkbase Document

101.LAB# XBRL Taxonomy Extension Label Linkbase Document

101.PRE# XBRL Taxonomy Extension Presentation Linkbase Document

Form 10-K Summary

2 unchanged sentences

MIMEDX GROUP, INC.

March 8, 2021 By:

Chief Financial Officer and Principal Financial Officer

4 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature / Name

Signature / Name Title Date

/s/ Timothy R.

Chief Executive Officer and Director

(Principal Executive Officer)

Chief Financial Officer

(Principal Financial Officer)

Wright Chief Executive Officer and Director March 8, 2021

Wright (Principal Executive Officer)

Carlson Chief Financial Officer March 8, 2021

Carlson (Principal Financial Officer)

/s/ William L.

Senior Vice President and Chief Accounting Officer

(Principal Accounting Officer)

Kathleen Behrens

Chair of the Board (Director)

Phelan Senior Vice President and Chief Accounting Officer March 8, 2021

Phelan (Principal Accounting Officer)

Kathleen Behrens Chair of the Board (Director) March 7, 2021

Kathleen Behrens

/s/ Richard J.

Terry Dewberry

/s/ Charles R.

/s/ Charles E.

Bierman Director March 7, 2021

/s/ Michael A.

Giuliani Director March 7, 2021

/s/ William A.

Hawkins III Director March 7, 2021

Laurencin Director March 8, 2021

Todd Newton Director March 7, 2021

/s/ Martin P.

Sutter Director March 8, 2021

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

What changed 10-K

Item 9A. Controls and Procedures