MIMEDX GROUP, INC. 10-K

Item 8. Financial Statements and Supplementary Data Index to Financial Statements Report of Deloitte & Touche LLP, Independent Registered Public Accounting Firm (PCAOB ID: 34 ) F- 2 Consolidated Balance Sheets – As of December 31, 2025 and 2024 F- 4 Consolidated Statements of Operations – For the years ended December 31, 2025, 2024 and 2023 F- 5 Consolidated Statements of Cash Flows – For the years ended December 31, 2025, 2024 and 2023 F- 6 Consolidated Statements of Stockholders’ Equity – For the years ended December 31, 2025, 2024 and 2023 F- 7 Notes to Consolidated Financial Statements F- 8 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of MiMedx Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of MiMedx Group, Inc. and subsidiaries (the "Company") as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity (deficit), and cash flows, for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 25, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Net Sales - Revenue Recognition — Refer to Note 2 in the financial statements Critical Audit Matter Description The Company sells its products primarily to individual customers and independent distributors (collectively referred to as “customers”). Customers obtain and use products either through ship and bill sales or consignment arrangements. Under ship and bill arrangements, the Company retains possession of the product until the customer submits an order and the product ordered is shipped to the customer. Under consignment arrangements, the customer takes possession of the product, but the Company retains title until the implantation, or application of the Company’s product to the end user. The Company recognizes revenue as performance obligations are fulfilled, which generally occurs upon the shipment of product to the customers for ship and bill orders or upon implantation for consignment sales. We identified the timing of revenue recognition for ship and bill and consignment sales at or near year end as a critical audit matter because of the judgments involved in evaluating that the performance obligations are fulfilled. This required a higher degree of audit effort and auditor judgment when performing audit procedures and evaluating the results of these procedures. F-2 How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the timing of revenue recognition transactions included the following, among others: • We tested the effectiveness of controls over the recognition of ship and bill and consignment sales at or near year end. • We created data visualizations using a detail of all revenue transactions and evaluated trends in the transactional revenue data with emphasis on activity at or near year end. • We evaluated and tested corollary relationships between revenue and related accounts. • We evaluated the appropriateness and consistency of the methods and assumptions utilized by management to estimate consignment revenue. • We tested a sample of consignment revenue transactions accrued as of year-end and evaluated whether the transactions were recorded in the correct period. • We tested a sample of ship and bill revenue transactions close to period end by agreeing the amounts recognized to source documents and evaluating whether the transaction was recorded in the correct period. • We tested a sample of sale refunds issued after year end by agreeing to documents supporting the authorization for the issuance of the refund and evaluating if the refund was recorded in the correct period. /s/ Deloitte & Touche LLP Atlanta, Georgia February 25, 2026 We have served as the Company's auditor since 2021. F-3 MIMEDX GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 166,121 $ 104,416 Accounts receivable, net 75,707 55,828 Inventory 25,340 23,807 Other current assets 10,303 7,835 Total current assets 277,471 191,886 Property and equipment, net 4,713 5,944 Deferred tax assets 19,596 28,306 Goodwill 19,441 19,441 Intangible assets, net 14,158 11,626 Other assets 7,274 6,712 Total assets $ 342,653 $ 263,915 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long term debt $ 1,500 $ 1,000 Accounts payable 14,528 7,409 Accrued compensation 31,065 23,667 Accrued expenses 11,383 9,012 Other current liabilities 5,790 4,507 Total current liabilities 64,266 45,595 Long term debt, net 16,467 17,830 Other liabilities 5,372 7,383 Total liabilities $ 86,105 $ 70,808 Stockholders’ equity Common stock; $ .001 par value; 250,000,000 shares authorized, 148,093,920 issued and outstanding at December 31, 2025 and 146,932,032 issued and outstanding at December 31, 2024 148 147 Additional paid-in capital 299,081 284,219 Accumulated deficit ( 42,681 ) ( 91,259 ) Total stockholders’ equity 256,548 193,107 Total liabilities and stockholders’ equity $ 342,653 $ 263,915 See notes to the consolidated financial statements. F-4 MIMEDX GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Net sales $ 418,630 $ 348,879 $ 321,477 Cost of sales 73,013 60,073 54,634 Gross profit 345,617 288,806 266,843 Operating expenses: Selling, general and administrative 266,194 225,087 211,124 Research and development 15,097 12,341 12,665 Investigation, restatement and related — ( 8,698 ) 5,176 Amortization of intangible assets 439 765 762 Impairment of intangible assets — 446 — Operating income 63,887 58,865 37,116 Other income (expense), net Interest income (expense), net 2,933 ( 1,006 ) ( 6,457 ) Other expense, net ( 558 ) ( 565 ) ( 26 ) Income from continuing operations before income tax 66,262 57,294 30,633 Income tax provision (expense) benefit from continuing operations ( 17,684 ) ( 15,296 ) 36,806 Net income from continuing operations 48,578 41,998 67,439 Income (loss) from discontinued operations, net of tax — 421 ( 9,211 ) Net income $ 48,578 $ 42,419 $ 58,228 Net income available to common stockholders from continuing operations $ 48,578 $ 41,998 $ 55,796 Basic net income (loss) per common share: Continuing operations $ 0.33 $ 0.29 $ 0.48 Discontinued operations — — ( 0.08 ) Basic net income per common share: $ 0.33 $ 0.29 $ 0.40 Diluted net income (loss) per common share: Continuing operations $ 0.32 $ 0.28 $ 0.43 Discontinued operations — — ( 0.06 ) Diluted net income (loss) per common share: $ 0.32 $ 0.28 $ 0.37 Weighted average common shares outstanding - basic 147,793,069 146,979,354 116,495,810 Weighted average common shares outstanding - diluted 149,724,507 149,049,197 145,962,462 See notes to the consolidated financial statements. F-5 MIMEDX GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net income from continuing operations $ 48,578 $ 41,998 $ 67,439 Adjustments to reconcile net income from continuing operations to net cash flows provided by operating activities from continuing operations: Share-based compensation 16,396 16,933 16,959 Depreciation and amortization 14,881 6,041 3,427 Deferred income taxes 8,710 12,472 ( 37,802 ) Credit loss expense 6,515 595 1,449 Non-cash lease expenses 1,262 1,310 1,268 Shares received in settlement of litigation — ( 9,300 ) — Loss on extinguishment of debt — 1,401 — Other 641 1,112 613 Increase (decrease) in cash resulting from changes in: Accounts receivable ( 26,394 ) ( 2,552 ) ( 12,237 ) Inventory ( 1,533 ) ( 2,357 ) ( 7,838 ) Other assets ( 8,818 ) ( 352 ) 1,252 Accounts payable 2,119 ( 1,410 ) 783 Accrued compensation 8,986 2,896 1,829 Accrued expenses 2,371 ( 789 ) ( 1,708 ) Other liabilities 289 ( 870 ) ( 497 ) Net cash flows from operating activities of continuing operations 74,003 67,128 34,937 Net cash flows used in operating activities of discontinued operations — ( 930 ) ( 8,162 ) Net cash flows provided by operating activities 74,003 66,198 26,775 Cash flows from investing activities: Cash paid for acquisitions ( 3,764 ) ( 7,862 ) — Purchases of equipment ( 1,033 ) ( 1,683 ) ( 1,987 ) Other investments ( 2,089 ) ( 38 ) ( 168 ) Net cash flows used in investing activities ( 6,886 ) ( 9,583 ) ( 2,155 ) Cash flows from financing activities: Stock repurchased for tax withholdings on vesting of restricted stock ( 3,118 ) ( 2,641 ) — Cash paid for Profit Share Payment (Note 14) ( 1,294 ) ( 80 ) — Proceeds from Citizens Revolving Credit Facility — 30,000 — Proceeds from Citizens Term Loan — 19,783 — Prepayment premium on previous term loan — ( 500 ) — Deferred financing cost — ( 1,101 ) — Repayment of previous term loan — ( 50,000 ) — Repayment of Citizens Revolving Credit Facility — ( 30,000 ) — Principal payments on Citizens Term Loan Facility ( 1,000 ) ( 1,000 ) — Proceeds from exercise of stock options — 1,397 997 Repurchase of Series B Preferred Shares — — ( 9,515 ) Other — ( 57 ) ( 52 ) Net cash flows used in financing activities ( 5,412 ) ( 34,199 ) ( 8,570 ) Net change in cash 61,705 22,416 16,050 Cash and cash equivalents, beginning of period 104,416 82,000 65,950 Cash and cash equivalents, end of period $ 166,121 $ 104,416 $ 82,000 See notes to the consolidated financial statements. F-6 MIMEDX GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (in thousands, except share data) Common Stock Additional Paid-in Treasury Stock Accumulated Shares Amount Capital Shares Amount Deficit Total Balance at December 31, 2022 113,705,447 $ 114 $ 173,804 — $ — $ ( 191,906 ) $ ( 17,988 ) Share-based compensation expense — — 17,178 — — — 17,178 Restricted stock shares canceled/forfeited — — 378 90,367 ( 378 ) — — Exercise of stock options 130,129 — 885 ( 17,032 ) 112 — 997 Employee stock purchase plan 444,809 — 1,367 — — — 1,367 Issuance of restricted stock 2,185,604 2 ( 268 ) ( 73,335 ) 266 — — Repurchase of Series B Preferred Stock — — ( 4,935 ) — — — ( 4,935 ) Conversion of Series B Preferred Stock 29,761,650 30 87,840 — — — 87,870 Net income — — — — — 58,228 58,228 Balance at December 31, 2023 146,227,639 $ 146 $ 276,249 — $ — $ ( 133,678 ) $ 142,717 Share-based compensation expense — — 16,933 — — — 16,933 Employee stock purchase plan 245,640 — 1,582 — — — 1,582 Exercise of stock options 207,686 — 1,397 — — — 1,397 Shares received in settlement of litigation ( 1,200,000 ) ( 1 ) ( 9,299 ) — — — ( 9,300 ) Issuance of restricted stock, net 1,451,067 2 ( 2,643 ) — — — ( 2,641 ) Net income — — — — — 42,419 42,419 Balance at December 31, 2024 146,932,032 $ 147 $ 284,219 — $ — $ ( 91,259 ) $ 193,107 Issuance of restricted stock, net 882,093 1 ( 3,119 ) — — — ( 3,118 ) Share-based compensation expense — — 16,396 — — — 16,396 Employee stock purchase plan 279,795 — 1,585 — — — 1,585 Net income — — — — — 48,578 48,578 Balance at December 31, 2025 148,093,920 $ 148 $ 299,081 — $ — $ ( 42,681 ) $ 256,548 See notes to the consolidated financial statements. F-7 MIMEDX GROUP, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Nature of Business MiMedx Group, Inc. (together with its subsidiaries, except where the context otherwise requires, “ MIMEDX ,” or the “ Company ”) is a pioneer and leader focused on helping humans heal. With nearly two decades of experience helping clinicians manage chronic and other hard-to-heal wounds, MIMEDX provides a leading portfolio of products for applications in the wound care, burn, and surgical sectors of healthcare. The Company’s vision is to be the leading global provider of healing solutions through relentless innovation to restore quality of life. All of the Company’s products sold in the United States are regulated by the United States Food and Drug Administration (“ FDA ”). The Company’s product portfolio and product development focuses on Wound and Surgical markets. The Company’s business is focused primarily on the United States of America but the Company also has a growing commercial presence in several international locations, including Japan. 2. Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of MiMedx Group, Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. Reclassifications Certain prior period amounts in the consolidated financial statements and accompanying notes have been deemed immaterial and reclassified to conform to the current period’s presentation. Use of Estimates The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“ GAAP ”). GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported consolidated statements of operations during the reporting period. Actual results could differ from those estimates. Significant estimates include estimated useful lives and potential impairment of property and equipment, estimates of impairment for goodwill and intangible assets, estimates of useful lives for intangible assets, estimates of loss for contingent liabilities, estimate of allowance for credit losses, estimates of fair value of share-based payment awards, estimates of the probable level of achievement of performance conditions associated with the vesting of share-based payment awards, estimates of returns and allowances, estimate of fair value of the remaining Profit Share Payments (as defined below), determination of fair value of hybrid instruments valued under the Fair Value Option, and valuation of deferred tax assets. Segment Reporting The application of GAAP requires the use of the “management approach” model for segment reporting. The management approach model is based on the way a company’s chief operating decision maker (“ CODM ”) organizes segments within the Company for which separate financial information is available regarding resource allocation and assessing performance. The Company has concluded that its Chief Executive Officer (“ CEO ”) is its CODM. The Company reassesses the existence of operating segments when facts and circumstances suggest that there may have been a change in the way that the Company is managed. The Company assessed that the CODM assesses performance and resources as one reportable segment. Refer to Note 16, Segment Information, for further discussion. Cash and Cash Equivalents Cash and cash equivalents include cash held at various banks. The Company considers all highly-liquid investments purchased with an original maturity of three months or less at the date of purchase and funds held in money market accounts to be cash equivalents. F-8 Market Concentrations and Credit Risk The Company places its cash and cash equivalents on deposit with U.S.-based financial institutions. The U.S. Federal Deposit Insurance Corporation (“ FDIC ”) provides insurance coverage for deposits up to $250,000 for substantially all depository accounts. As of December 31, 2025 and 2024, the Company had cash and cash equivalents of $ 165.9 million and $ 103.7 million, respectively, in excess of the insured amounts in three depository institutions. Accounts Receivable Accounts receivable represent amounts due from customers for which revenue has been recognized. Generally, the Company does not require collateral or any other security to support its receivables. Accounts receivable is presented net of the Company’s allowance for credit losses. The allowance for credit losses is calculated based on the Company’s current expectations for credit losses, which is generally informed by historical collection patterns. The Company’s policy to reserve for potential bad debts based on the age of the individual receivable and the character of the customer, as well as customer-specific qualitative factors, such as bankruptcy proceedings. The Company manages credit risk by routinely performing credit checks on customers prior to sales. Individual receivables are written off after all reasonable efforts to collect the funds have been made. Actual write-offs may differ from the amounts reserved. Inventory Inventory is valued at the lower of cost or net realizable value. Costs of inventory sold are recognized using the first–in, first-out (“ FIFO ”) method. Inventory manufactured by the Company is tracked through raw material, work-in-process, and finished goods stages as the product progresses through various production steps and stocking locations. Labor and overhead costs are absorbed through the various production processes up to when the work order closes. Inventory purchased from third-party manufacturers is included in finished goods inventory. Historical yields and normal capacities are utilized in the calculation of production overhead rates. Inventory is written down to the lower of cost or net realizable value to reflect slow-moving inventory as well as inventory no longer needed due to diminished demand or regulatory action. Property and Equipment Property and equipment are recorded at cost and depreciated on a straight-line method over their estimated useful lives, principally three to seven years . Leasehold improvements are depreciated on a straight-line method over the shorter of the estimated useful lives and the remaining lease term. Intangible Assets, Net Intangible assets are assets which lack physical substance and (a) grant the Company with a legal right or (b) are capable of being separated and sold. Intangible assets acquired outside of a business combination are capitalized based on the cost to acquire the assets, allocated pro rata based on the fair value of the individual assets acquired. Any contingent consideration issued in connection with an acquisition of assets is capitalized at the time at which all contingencies regarding its payment are resolved. The Company amortizes the capitalized cost of finite-lived intangible assets over a period generally reflective of the anticipated contributions to cash flow generation. Amortization of intangible assets is recorded as part of cost of sales or operating expenses in the consolidated statements of operations depending on the nature of the underlying intangible asset and the manner that it supports the Company’s operations. Impairment of Long-lived Assets The Company evaluates the recoverability of its long-lived assets (property, equipment, right of use, and intangible assets with finite lives) whenever adverse events or changes in business climate indicate that the expected undiscounted future cash flows from the related assets may be less than their carrying amounts. When a situation arises which results in a conclusion that it is more likely than not that an asset is not recoverable, the Company estimates cash flows expected to be derived from the continuing use and eventual disposition of the asset. If the sum of those undiscounted cash flows does not exceed the net book value of the asset, the Company estimates the fair value of the asset. Impairment loss is recorded to the extent that the net book value exceeds the fair value of the asset. F-9 Impairment reviews are based on an estimated future cash flow approach that requires significant judgment with respect to future revenue and expense growth rates, selection of appropriate discount rate (as applicable), asset groupings, and other assumptions and estimates. The Company uses estimates that are consistent with its business plans and a market participant view of the assets being evaluated. Actual results may differ from these estimates. Goodwill and Indefinite-lived Intangible Assets The Company assesses goodwill for impairment at least annually on October 1 and more frequently whenever events or substantive changes in circumstances indicate that it is more likely than not that goodwill is impaired. In performing the goodwill impairment test, the Company first assesses qualitative factors to determine the existence of impairment. If the qualitative factors indicate that the carrying value of a reporting unit exceeds its fair value, the Company proceeds to a quantitative test to measure the existence and amount, if any, of goodwill impairment. The Company may also choose to bypass the qualitative assessment and proceed directly to the quantitative test. In performing the quantitative test, impairment loss is recorded to the extent that the carrying value of the reporting unit exceeds its assessed fair value. The Company determines the fair value of reporting units using the income and market approaches, as applicable. Under the income approach, the fair value of a reporting unit is the present value of its future cash flows as viewed from the lens of a hypothetical market participant in an orderly transaction. These future cash flows are derived from expectations of revenue, expenses, tax deductions and credits, working capital flows, capital expenditures, and other projected sources and uses of cash, as applicable. Value indications are developed by discounting expected cash flows to their present value using a discount rate commensurate with the risks associated with the reporting unit subject to testing. Under the market approach, the Company uses market multiples derived from various comparable companies based on measures salient to investors in those companies. Impairment loss is recorded to the extent the carrying value of a reporting unit exceeds the fair value. No impairment loss is recognized if the fair value of the reporting unit exceeds the carrying value. Leases The Company determines if a contract is, or contains, a lease at inception. Leases provide the Company with the right to control an underlying asset for a contractual term, subject to certain renewal and other rights, in exchange for a series of stipulated cash flows. Right of use (“ ROU ”) assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company calculates the present value of lease payments by discounting the lease payments using the Company’s incremental borrowing rate for a collateralized or secured borrowing over a term equivalent to that of the lease. Lease payments that vary according to an index or rate are measured using the index or rate at lease inception. The lease term and applicable payments include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options. This determination is reassessed as new information arises and is accounted for prospectively. As an accounting policy election, the Company does not capitalize leases having initial terms of 12 months or fewer. The Company has made an accounting policy election not to separate lease components from non-lease components in the event that the agreement contains both. Modifications to existing leases are recognized on the modification date. In such cases, the lease liability is remeasured based on the estimated present value of lease payments from the modification date. The difference between the lease liability immediately before and immediately after lease modification is reflected as an equal and offsetting adjustment to the associated ROU asset. Operating lease right of use assets and the related liabilities are included in other assets, other current liabilities, and other liabilities, respectively, in the consolidated balance sheets. Lease expense associated with operating leases is recognized, straight-line, over the lease term. The Company does not recognize interest expense from operating lease liabilities. The Company did not have any finance lease assets or liabilities as of December 31, 2025 or 2024. Treasury Stock Except for shares retired by the Company upon repurchase, shares repurchased by the Company are recorded as treasury stock at the cost to acquire such shares. Subsequent issuances of shares held in treasury are assumed to be released on a FIFO basis. During 2025 and 2024, all shares repurchased were retired. F-10 Contingencies The Company is or has been subject to various patent challenges, product liability claims, government investigations, former employee matters, and other legal proceedings. See Note 14, Commitments and Contingencies , for discussion of material matters. Legal fees and other expenses related to litigation are expensed as incurred and included in selling, general and administrative expenses or, prior to 2025, investigation, restatement and related expenses in the consolidated statements of operations, depending on the nature of the matter. The Company records an accrual for settlement costs and other contingencies in the consolidated financial statements when the Company determines that a loss is both probable and reasonably estimable. Subsequent revisions to the Company’s accrual are made as new information emerges and are accounted for prospectively. The Company discloses all ongoing legal matters for which a loss is reasonably possible, regardless of whether an estimate can be reasonably determined. Due to the fact that legal proceedings and other contingencies are inherently unpredictable, the Company’s estimates of the probability and amount of any such liabilities involve significant judgment regarding future events. The actual costs of resolving a claim may be substantially different from the amount of reserve the Company recorded. The Company records a receivable from its insurance carriers only when the resolution of any dispute has been reached and realization of the amounts equal to the potential claim for recovery is considered probable. Any recovery of an amount in excess of the related recorded contingent loss will be recognized only when all contingencies relating to recovery have been resolved. Revenue Recognition The Company sells its products primarily to individual customers and independent distributors (collectively referred to as “ customers ”). Customers obtain and use products either through ship and bill sales or consignment arrangements. Under ship and bill arrangements, the Company retains possession of the product until the customer submits an order. Upon approval of the sales order, the Company ships product to the customer and invoices them for the product sold. Under consignment arrangements, the customer takes possession of the product, but the Company retains title until the implantation or application of the Company’s product to the end user. The Company recognizes revenue as performance obligations are fulfilled, which generally occurs upon the shipment of product to the customers for ship and bill orders or upon implantation for consignment sales. Revenue is recognized based on the consideration the Company expects to receive from the sale. This consists of the gross selling price of the product, less any discounts, rebates or other amounts paid to customers, fees paid to Group Purchasing Organizations (“ GPOs ”), and returns (collectively, “ deductions ” or “ sales deductions ”). Gross selling price is a standard set by the Company for all customers unless a contract governing the sale provides for a specified price. Sales deductions are specified in individual contracts with customers. The Company estimates the total sales deductions which a specific customer will achieve over the relevant term and applies the reduction to sales as they are made throughout the period. Sales deductions owed to customers and other parties are accrued and recorded in accrued expenses on the consolidated balance sheets. The Company acts as the principal in all of its customer arrangements and records revenue on a gross basis. Shipping is considered immaterial in the context of the overall customer arrangement, and damages or loss of goods in transit are rare. Therefore, shipping is not deemed a separately recognized performance obligation and the Company has elected to treat shipping costs as activities to fulfill the promise to transfer the product. The Company maintains a returns policy that allows its customers to return product that is damaged or non-conforming, ordered in error, or due to a recall. The estimate of the provision for returns is based upon historical return activity, including discrete events which could cause or have historically caused changes in return patterns. The Company’s payment terms for customers are typically 30 to 60 days from receipt of title of the goods. Cost of Sales Cost of sales includes all costs directly related to bringing the Company’s products to their final selling destination. Amounts include direct and indirect costs to manufacture products including raw materials, personnel costs and direct overhead expenses necessary to convert collected tissues into finished goods, costs to acquire product from third-party manufacturers, product testing costs, quality assurance costs, facility costs associated with the Company’s manufacturing and warehouse facilities, including depreciation, amortization of certain intangible assets, freight charges, costs to operate equipment and other shipping and handling costs for products shipped to customers. F-11 The Company obtains raw material in the form of human placenta donations from participating mothers who give birth via scheduled Caesarean section. Research and Development Costs Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These expenses generally represent costs associated with the Company’s clinical trials as well as costs associated with new product development and pilot production. These costs are expensed as incurred. Advertising Expense Advertising expense consists primarily of print media promotional materials. Advertising costs are expensed as incurred. Advertising expense for the year ended December 31, 2025, 2024, and 2023 was $ 0.5 million, $ 0.6 million, and $ 0.6 million respectively. Income Taxes Income tax provision, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management’s best assessment of estimated current and future taxes to be paid. The Company is subject to income taxes in the United States and numerous states. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The Company recognizes deferred tax assets to the extent that it believes these assets are more likely than not to be realized. The Company evaluates the realizability of its deferred tax assets quarterly. In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, results of recent operations, and changes in tax laws. In projecting future taxable income, the Company begins with historical results and incorporates assumptions about the amount of future state and federal pretax operating income adjusted for items that do not have tax consequences. The assumptions about future taxable income require significant judgment and are consistent with the plans and estimates the Company uses to manage the underlying business. In evaluating the objective evidence that historical results provide, management considers three years of cumulative income exclusive of items that will not recur, such as discontinued operations. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the tax provision expense (benefit) in the period that includes the enactment date. The calculation of income tax liabilities involves uncertainties in the application of complex tax laws and regulations both for U.S. federal income tax purposes and across numerous state jurisdictions. Accounting Standards Codification (“ ASC ”) Topic 740, Income Taxes , states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company records unrecognized tax benefits within other current liabilities on the consolidated balance sheets and adjusts these liabilities when management’s judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from management’s current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to the deferred tax asset or income tax expense in the period in which new information is available. The Company records uncertain tax positions on the basis of a two-step process whereby (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position, and (2) for those tax positions that meet the more-likely-than-not recognition threshold, it recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the consolidated statements of operations. Accrued interest and penalties, if any, are included within the other liabilities line in the consolidated balance sheets and recorded as a component of income tax expense. F-12 Share-based Compensation The Company grants share-based awards to employees and members of the Company’s Board of Directors (the “ Board ”). Awards to employees and the Board are generally made annually. Grants are issued outside of the annual cadence for certain new hires, promotions, and other events. The Company has two share-based compensation plans which provide for the granting of equity awards, including qualified incentive and non-qualified stock options and restricted stock awards. The Company has three types of awards to employees and directors that are outstanding as of December 31, 2025: restricted stock units (“ RSUs ”), performance stock units (“ PSUs ”), and stock options. The amount of expense to be recognized is determined by the fair value of the award using inputs available as of the grant date. The basis of fair value for RSUs and PSUs is the closing stock price on the date of the grant. The fair value of stock options is determined based on an appropriate option pricing model using inputs available as of the grant date, generally using a Black-Scholes model. In each case, the fair value is adjusted for the presence of a market condition using an appropriate pricing model. For awards with service-based vesting conditions only, the Company recognizes the grant date fair value as share-based compensation expense on a straight-line basis through the vesting date of the last tranche of the award. For awards which are subject to a condition other than a service condition, the Company recognizes stock-based compensation expense using the graded-vesting method, treating each tranche as if it were a separately-granted award and recognizing expense through the vesting date of each individual tranche. In each case, the Company recognizes share-based compensation expense to the extent that vesting is “probable.” The Company recognizes the cumulative effect of changes in the probable outcome of an award in the period in which the changes occur. The resolution of a market condition is not subsequently considered in expense recognition. Consequently, the Company could recognize expense for awards that do not ultimately vest. Basic and Diluted Net Income per Common Share Basic net income per common share is calculated as net income from continuing operations available to common stockholders divided by weighted average common shares outstanding for the applicable period. Net income from continuing operations available to common stockholders is calculated by adjusting net income for dividends on the Company’s historical Series B Convertible Preferred Stock (“ Series B Preferred Stock ”), which fully converted during 2023. This amount is divided by the weighted average common shares outstanding during the period. Weighted average common shares outstanding is calculated as shares of the Company outstanding adjusted for the portion of the period for which they are outstanding. Unvested non-option share awards are excluded from the calculation of weighted average common shares outstanding until they have vested. Unexercised stock options are excluded from the calculation of weighted average common shares outstanding until they are exercised. Diluted net income per common share adjusts basic net income per common share for convertible securities, options, equity incentive awards, and other share-based payment awards which have yet to vest and vest only upon the satisfaction of a service condition. Equity incentive awards and options that are subject to a performance or market condition are included only if the performance or market condition would be satisfied if the end of the applicable period were the end of the performance period. In any case, these adjustments are reflected in the calculation of diluted net income per common share to the extent that they reduce basic net income from continuing operations per common share. Basic and diluted net income (loss) per common share from discontinued operations is evaluated using the same denominator as basic and diluted net income per common share from continuing operations even if the dilutive adjustments are antidilutive to the calculation of the former. The Company used the if-converted method to calculate the dilutive effect of the historical Series B Preferred Stock. The if-converted method assumes that convertible securities are converted at the later of the issuance date and the beginning of the period. If the hypothetical conversion of convertible securities, and the consequential avoidance of any accumulated preferred dividends, would decrease basic net income from continuing operations per common share, these effects are incorporated in the calculation of diluted net income from continuing operations per common share, adjusted for the portion of the period the securities were outstanding. The Company uses the treasury stock method to calculate the dilutive effect of options, non-option share awards, and certain other share-based payments. The treasury stock method assumes that the proceeds from exercise are used to repurchase F-13 common shares at the weighted average market price during the period, increasing the denominator for the net effect of shares issued upon exercise less hypothetical shares repurchased. Fair Value of Financial Instruments and Fair Value Measurements The respective carrying value of certain on-balance sheet financial instruments approximated their fair values due to the short-term nature and type of these instruments. These financial instruments include cash and cash equivalents, accounts receivable, notes receivable, and certain other financial assets and liabilities. The Company measures certain non-financial assets at fair value on a non-recurring basis. These non-recurring valuations include evaluating assets such as long-lived assets, and non-amortizing intangible assets for impairment, allocating value to assets in an acquired asset group, and accounting for business combinations. The Company uses the fair value measurement framework to value these assets and reports these fair values in the periods in which they are recorded or written down. Financial instruments measured at fair value are recorded in accordance with the fair value measurement framework. The fair value measurement framework includes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair values in their broad levels. These levels from highest to lowest priority are as follows: • Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: Quoted prices in active markets for similar assets or liabilities or observable prices that are based on inputs not quoted on active markets, but corroborated by market data; • Level 3: Unobservable inputs or valuation techniques that are used when little or no market data is available. The determination of fair value and the assessment of a measurement’s placement within the hierarchy require judgment. Level 3 valuations often involve a higher degree of judgment and complexity. Level 3 valuations may require the use of various valuation methodologies which incorporate unobservable inputs, management estimates, and assumptions. Management’s assumptions could vary depending on the asset or liability valued and the valuation method used. Such assumptions could include: estimates of prices, earnings, costs, actions of market participants, market factors, or the weighting of various valuation methods. The Company may also engage external advisors to assist it in determining fair value, as appropriate. Although the Company believes that the recorded fair value of its financial instruments is appropriate, these fair values may not be indicative of net realizable value or reflective of future fair values. Recently Adopted Accounting Pronouncements Accounting Standards Update 2023-09 - Income Taxes In December 2023, the Financial Accounting Standards Board (“ FASB ”) issued Accounting Standards Update (“ ASU ”) 2023-09, “Improvement to Income Tax Disclosures (Topic 740)”, which requires additional disclosures for income tax rate reconciliations, income taxes paid, and certain other tax disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Adoption is required for annual periods beginning after December 15, 2024. The Company adopted this standard prospectively during the year ended December 31, 2025. Refer to Note 12, Income Taxes . Recently Issued Accounting Pronouncements Not Yet Adopted Accounting Standards Update 2024-04 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40),” which requires disaggregated disclosure of certain income statement expenses within the footnotes to the financial statements. ASU 2024-03 is intended to address requests from investors for more detailed information about the types of expenses in commonly presented expense captions such as cost of sales, selling, general and administrative expenses, and research and development. Adoption is required for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027. The Company is currently evaluating the impact of this standard on its consolidated financial statements. F-14 All other ASUs issued and not yet effective as of December 31, 2025, and through the date of this report, were assessed and determined to be either not applicable or are expected to have minimal impact on the Company’s current and future financial position and results of operations. 3. Accounts Receivable, Net Accounts receivable, net, consists of the following (in thousands): December 31, 2025 2024 Accounts receivable, gross $ 84,410 $ 58,960 Allowance for credit losses ( 8,703 ) ( 3,132 ) Accounts receivable, net $ 75,707 $ 55,828 Activity related to the Company’s allowance for credit losses for the year ended December 31, 2025 and 2024 was as follows (in thousands): Allowance for credit losses Balance at December 31, 2023 $ 3,144 Credit loss expense 595 Write-offs ( 607 ) Balance at December 31, 2024 3,132 Credit loss expense 6,515 Write-offs ( 944 ) Balance at December 31, 2025 $ 8,703 Credit loss expense for the year ended December 31, 2025 reflects credit quality concerns resulting from changes in Medicare reimbursement for skin substitutes, which went into effect on January 1, 2026. 4. Inventory Inventory consists of the following (in thousands): December 31, 2025 2024 Raw materials $ 1,221 $ 1,010 Work in process 8,666 8,580 Finished goods 15,453 14,217 Inventory $ 25,340 $ 23,807 F-15 5. Property and Equipment, Net Property and equipment, net, consists of the following (in thousands): December 31, 2025 2024 Lab and clean room equipment $ 15,739 $ 15,549 Furniture and office equipment 2,008 1,951 Leasehold improvements 8,977 8,213 Construction in progress 612 686 Asset retirement cost 875 867 Property and equipment, gross 28,211 27,266 Less: accumulated depreciation ( 23,498 ) ( 21,322 ) Property and equipment, net of accumulated depreciation $ 4,713 $ 5,944 Depreciation expense for each of the years ended December 31, 2025, 2024, and 2023 was recorded in certain captions of the consolidated statements of operations for those periods in the amounts shown in the table below (in thousands): Year Ended December 31, 2025 2024 2023 Cost of sales $ 1,297 $ 1,408 $ 1,569 Selling, general, and administrative expense 570 544 795 Research and development expense 397 327 301 Total $ 2,264 $ 2,279 $ 2,665 6. Leases The Company has leases for corporate offices and manufacturing facilities. None of the Company’s leases require any contingent rental payments, impose any financial restrictions, or contain any residual value guarantees. Supplemental balance sheet information related to the Company’s leases, including the financial statement caption in which the amounts are presented, is as follows (amounts in thousands, except lease term and discount rate): Operating Leases December 31, 2025 2024 Assets Other assets $ 4,344 $ 5,606 Liabilities Other current liabilities $ 1,320 $ 1,307 Other liabilities 3,245 4,705 Total liabilities $ 4,565 $ 6,012 Weighted-average remaining lease term (years) 3.4 4.3 Weighted-average discount rate 6.9 % 6.9 % The Company had no finance lease obligations or associated right of use assets outstanding as of December 31, 2025. Information related to lease costs are as follows (amounts in thousands): F-16 Year Ended December 31, 2025 2024 2023 Operating lease cost $ 1,625 $ 1,478 $ 1,532 Amortization of finance lease ROU assets — 51 47 Interest expense on finance lease liabilities — 2 7 Maturities of lease liabilities are as follows (amounts in thousands): Year Ending December 31, Operating Leases 2026 $ 1,585 2027 1,355 2028 1,346 2029 794 Thereafter — Total lease payments 5,080 Less: imputed interest ( 515 ) Lease liability $ 4,565 Asset Retirement Obligations Certain lease agreements require the Company to return designated areas of leased space to its original condition upon termination of the lease agreement, for which the Company records an asset retirement obligation and a corresponding capital asset in an amount equal to the estimated fair value of the obligation. In subsequent periods, the asset retirement obligation is accreted for the change in its present value and the capitalized asset is depreciated, both over the term of the associated lease agreement. Asset retirement obligations of $ 1.3 million and $ 1.2 million are included in other liabilities in the consolidated balance sheets as of both December 31, 2025 and 2024, respectively. 7. Intangible Assets, Net Intangible assets, net, are summarized as follows (in thousands): December 31, 2025 December 31, 2024 Gross Carrying Amount Accumulated amortization Net Carrying Amount Gross Carrying Amount Accumulated amortization Net Carrying Amount Amortized intangible assets Patents and know-how $ 10,666 $ ( 8,843 ) $ 1,823 $ 10,320 $ ( 8,488 ) $ 1,832 Supplier relationships 12,660 ( 2,678 ) 9,982 7,659 ( 1,147 ) 6,512 Tradenames and trademarks 12,497 ( 12,497 ) — 2,937 ( 1,850 ) 1,087 Licenses 1,500 ( 188 ) 1,312 1,000 ( 104 ) 896 Total amortized intangible assets $ 37,323 $ ( 24,206 ) $ 13,117 $ 21,916 $ ( 11,589 ) $ 10,327 Unamortized intangible assets Tradenames and trademarks $ 1,008 $ 1,008 $ 1,008 $ 1,008 Patents in process 33 33 291 291 Total intangible assets $ 38,364 $ 14,158 $ 23,215 $ 11,626 Amortization expense and impairment expense for the years ended December 31, 2025, 2024, and 2023, is summarized in the table below (amounts in thousands): F-17 Year ended December 31, 2025 2024 2023 Amortization of intangible assets Cost of sales $ 12,178 $ 2,997 $ — Operating expense 439 765 762 Total amortization of intangible assets $ 12,617 $ 3,762 $ 762 There was no impairment of intangible assets during the years ended December 31, 2025 and 2023. The impairment of intangible assets in the amount of $ 0.4 million in 2024 related to patents which were abandoned. Expected future amortization of intangible assets as of December 31, 2025, is as follows (in thousands): Estimated Amortization Year Ending December 31, Expense 2026 $ 3,695 2027 2,848 2028 2,846 2029 1,690 2030 1,265 Thereafter 773 Total amortization expense $ 13,117 8. Accrued Expenses Accrued expenses consist of the following (in thousands): December 31, 2025 2024 External commissions $ 5,390 $ 3,843 Estimated returns 2,435 1,990 Accrued rebates 1,130 1,223 Legal costs 978 459 Other 1,450 1,497 Total $ 11,383 $ 9,012 9. Long Term Debt, Net Citizens Credit Agreement On January 19, 2024 (the “ Closing Date ”), the Company entered into a Credit Agreement (the “ Citizens Credit Agreement ”) with certain lenders party thereto, and Citizens Bank, N.A. as administrative agent (the “ Agent ”). The Citizens Credit Agreement provides for senior secured credit facilities in an aggregate principal amount of up to $ 95.0 million consisting of: (i) a $ 75.0 million senior secured revolving credit facility (the “ Revolving Credit Facility ”) with a $ 10.0 million letter of credit sublimit and a $ 10.0 million swingline loan sublimit, and (ii) a $ 20.0 million senior secured term loan facility (the “ Term Loan Facility ” and, together with the Revolving Credit Facility, the “ Credit Facilities ”). All obligations are required to be paid in full on January 19, 2029 (the “ Maturity Date ”). F-18 At the Company’s option, borrowings under the Citizens Credit Agreement (other than any swingline loan) will bear interest at a rate per annum equal to (i) the Alternate Base Rate, as defined therein, or (ii) a Term Secured Overnight Financing Rates (“ SOFR ”), as defined therein, in each case plus an applicable margin ranging from 1.25 % and 2.50 % with respect to Alternate Base Rate borrowings and 2.25 % and 3.50 % for Term SOFR borrowings, plus a fallback provision of 0.1 %. Swingline loans will bear interest at a rate per annum equal to one-month Term SOFR plus the applicable margin. The Term Loan Facility carried an interest rate of 6.1 % as of December 31, 2025 . The applicable margin is determined based on the Company’s consolidated total net leverage ratio. The Company is required to pay a quarterly commitment fee on any unused portion of the Revolving Credit Facility, letter of credit fees, and other customary fees to the Agent and the Lenders. The Company must make mandatory prepayments in connection with certain asset dispositions and casualty events, subject in each case to customary reinvestment rights. The Company may prepay borrowings under the Credit Facilities at any time, without premium or penalty, and may, at its option, reduce the aggregate unused commitments under the Revolving Credit Facility in whole or in part, in each case subject to the terms of the Credit Agreement. The Company must also comply with certain financial covenants, including a maximum total net leverage ratio and a minimum consolidated fixed charge coverage ratio, as well as other customary restrictive covenants. As of December 31, 2025, the Company is in compliance with all financial covenants under the Citizens Credit Agreement. The balance of the Term Loan Facility as of December 31, 2025 and 2024 was as follows (amounts in thousands): December 31, 2025 December 31, 2024 Current portion of long term debt Long term debt, net Current portion of long term debt Long term debt, net Outstanding principal $ 1,500 $ 16,500 $ 1,000 $ 18,000 Deferred financing costs — ( 6 ) — ( 33 ) Original issue discount — ( 27 ) — ( 137 ) Total $ 1,500 $ 16,467 $ 1,000 $ 17,830 Interest expense related to the Term Loan Facility was $ 1.6 million and $ 1.9 million for the years ended December 31, 2025 and 2024, respectively. The Company previously maintained a separate term loan facility, which was terminated in January 2024 in connection with the Debt Refinancing Transactions and the execution of the Citizens Credit Agreement. Interest expense related to the prior term loan facility was $ 6.6 million for the year ended December 31, 2023. All such amounts are reflected within interest income (expense), net on the consolidated statements of operations. Interest income (expense), net for the year ended December 31, 2023 reflects the impact of the prior term loan facility. Interest expense related to the Revolving Credit Facility included in interest income (expense), net in the consolidated statements of operations. Interest Expense related to the Revolving Credit Facility was $ 0.4 million and $ 0.4 million for the year ended December 31, 2025 and 2024, respectively. Scheduled principal payments due on the Term Loan Facility, by year, as of December 31, 2025 through maturity are as follows (in thousands): Year ending December 31, Principal 2026 $ 1,500 2027 1,500 2028 2,000 2029 13,000 Long term debt $ 18,000 As of December 31, 2025, the fair value of the Term Loan Facility was $ 17.1 million. This valuation was calculated based on a series of Level 2 and Level 3 inputs, including a discount rate based on the credit risk spread of debt instruments of similar risk character in reference to U.S. Treasury instruments with similar maturities, with an incremental risk premium for risk factors specific to the Company. Fair value was calculated by discounting the remaining cash flows associated with the Term Loan Facility to December 31, 2025 using this discount rate. F-19 10. Net Income Per Common Share Net income per common share is calculated using two methods: basic and diluted. Basic Net Income Per Common Share The following table provides a reconciliation of net income from continuing operations and calculation of basic net income per common share for each of the years ended December 31, 2025, 2024, and 2023 (in thousands, except share and per share amounts): Year ended December 31, 2025 2024 2023 Net income from continuing operations $ 48,578 $ 41,998 $ 67,439 Income (loss) from discontinued operations, net of tax — 421 ( 9,211 ) Net income 48,578 42,419 58,228 Adjustments to reconcile to net income available to common stockholders: Accumulated dividend on previously converted Series B Preferred Stock — — 6,753 Preferred share repurchase in excess of book value — — 4,890 Total adjustments — — 11,643 Net income available to common stockholders from continuing operations $ 48,578 $ 41,998 $ 55,796 Weighted average common shares outstanding 147,793,069 146,979,354 116,495,810 Basic net income (loss) per common share: Continuing operations $ 0.33 $ 0.29 $ 0.48 Discontinued operations — — ( 0.08 ) Basic net income per common share $ 0.33 $ 0.29 $ 0.40 Diluted Net Income Per Common Share The following table sets forth the computation of diluted net income per common share (in thousands, except share and per-share amounts): F-20 Year ended December 31, 2025 2024 2023 Net income available to common stockholders from continuing operations $ 48,578 $ 41,998 $ 55,796 Adjustments: Dividends on previously converted Series B Preferred Stock — — 6,466 Preferred share repurchase in excess of book value — — 5,177 Less: antidilutive adjustments — — ( 5,177 ) Total adjustments — — 6,466 Numerator Net income available to common stockholders from continuing operations 48,578 41,998 62,262 Income (loss) from discontinued operations, net of tax — 421 ( 9,211 ) Weighted average common shares outstanding 147,793,069 146,979,354 116,495,810 Adjustments: Potential common shares (a) Previously converted Series B Preferred Stock — — 27,457,905 Restricted stock unit awards 1,252,226 1,447,217 1,452,153 Outstanding stock options 526,105 473,015 396,779 Performance stock unit awards 153,107 149,611 137,425 Restricted stock awards — — 22,136 Employee stock purchase plan — — 254 Total adjustments 1,931,438 2,069,843 29,466,652 Weighted average common shares outstanding adjusted for potential common shares 149,724,507 149,049,197 145,962,462 Diluted net income (loss) per common share: Continuing operations $ 0.32 $ 0.28 $ 0.43 Discontinued operations 0.00 0.00 ( 0.06 ) Diluted net income per common share $ 0.32 $ 0.28 $ 0.37 (a) Weighted average common shares outstanding for the calculation of diluted net loss per common share does not include the following adjustments for potential common shares below because their effects were determined to be anti-dilutive for the periods presented: Year Ended December 31, 2025 2024 2023 Repurchase of Series B Preferred Stock — — 1,219,348 11. Equity Stock-Based Compensation Awards The Company has two share-based compensation plans which provide for the granting of equity awards, including qualified incentive and non-qualified stock options and restricted stock awards: the MiMedx Group, Inc. 2016 Equity and Cash Incentive Plan Amended and Restated through March 2, 2023 (the “ 2016 Plan ”), which was approved by shareholders on May 18, 2016, and the MiMedx Group, Inc. Assumed 2006 Stock Incentive Plan (the “ Prior Incentive Plan ”). During the years ended December 31, 2025, 2024, and 2023 the Company used only the 2016 Plan to make grants. The 2016 Plan permits the grant of equity awards to the Company’s employees, directors, consultants and advisors for up to 21,350,000 share s o f the Company’s common stock plus (i) the number of shares of the Company’s common stock that remain available for issuance under the Prior Incentive Plan, and (ii) the number of shares that are represented by outstanding awards that later become available because of the expiration or forfeiture of the award without the issuance of the underlying shares. Awards granted under the 2016 Plan are subject to a vesting schedule as set forth in each individual agreement. F-21 A summary of share-based compensation expense recognized for each of the years ended December 31, 2025, 2024, and 2023 is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cost of sales $ 2,071 $ 1,546 $ 1,533 Selling, general and administrative 13,602 14,646 14,776 Research and development 723 741 650 Total share-based compensation 16,396 16,933 16,959 Income tax benefit, before consideration of valuation allowance ( 4,099 ) ( 4,233 ) ( 4,240 ) Total share-based compensation, net of tax benefit $ 12,297 $ 12,700 $ 12,719 Stock Options The Company grants stock options to certain of its employees. Each stock option granted reflects the right to purchase one share of stock for a stipulated price. Except for the CEO Performance Option (as defined and explained below), all of the Company’s stock options outstanding as of December 31, 2025 vest exclusively based on continued service to the Company through each relevant vesting date. All stock options outstanding vest in four equal annual tranches. A summary of stock option activity for the year ended December 31, 2025 is presented below: Number of Shares Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in years) Aggregate Intrinsic Value Outstanding at January 1, 2025 4,055,526 $ 4.21 Granted 371,249 8.30 Exercised — — Unvested options forfeited ( 35,336 ) 8.50 Vested options expired ( 24,478 ) 9.63 Outstanding at December 31, 2025 4,366,961 4.49 4.34 11,083 Exercisable at December 31, 2025 726,031 $ 4.41 4.23 $ 1,858 With the exception of the CEO Performance Option (as defined and explained below), all options granted during the years ended December 31, 2025, 2024 and 2023 were valued using a Black-Scholes model. The below table reflects the material inputs used to value the options granted during those periods (exclusive of the CEO Performance Option). Year ended December 31, 2025 2024 2023 Stock price on grant date $ 8.30 $ 8.63 $ 6.44 Exercise price $ 8.30 $ 8.63 $ 6.44 Expected term (years) 4.75 4.75 4.75 Risk-free interest rate 4.0 % 4.2 % 4.3 % Expected volatility (annualized) 64 % 66 % 77 % Dividend yield — % — % — % Weighted average grant date fair value $ 4.62 $ 4.93 $ 4.10 There were no options exercised during the year ended December 31, 2025. The intrinsic values of the options exercised during the years ended December 31, 2024 and 2023 were $ 0.2 million and $ 0.2 million, respectively. Cash received from option exercise under all share-based payment arrangements for the years ended December 31, 2024 and 2023 was $ 1.4 million and $ 1.0 million, respectively. The actual tax benefit for the tax deductions from option exercise of the share-based payment F-22 arrangements totaled $ 0.1 million and $ 0.2 million, respectively, for the years ended December 31, 2024 and 2023. The Company has a policy of using its available repurchased treasury stock, if any, to satisfy option exercises prior to the issuance of new shares of common stock. There was $ 2.9 million unrecognized compensation expense related to unvested stock options at December 31, 2025, which is expected to be recognized over 2.41 years. Restricted Stock Units The Company grants RSUs to certain employees and to its Board of Directors. RSUs reflect contracts reflecting the right to receive one share of Common Stock on a specified date, provided the recipient continues to provide service to the Company through that date. RSUs generally vest over a one - to three-year period. Prior to 2024, the Company’s RSUs granted to its employees granted in three equal tranches on the first three anniversary dates of the date of grant. Beginning in 2024, RSUs granted to employees generally vest in a single tranche on the third anniversary date of the date of grant. Awards granted to the Company’s Board of Directors vest in a single tranche generally on the first anniversary date of the date of grant. Historically, the Company also granted Restricted Stock Awards (“ RSAs ”) to employees. RSAs conferred one share of common stock to the recipient which was returnable if the associated vesting conditions were not satisfied. The RSAs had similar vesting conditions to RSUs. The last of the Company’s RSAs vested during the year ended December 31, 2023. The Company did not grant any RSAs during the year ended December 31, 2025, nor does it have any unvested RSAs outstanding as of December 31, 2025. A summary of RSU activity for the year ended December 31, 2025 is presented below: Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2025 3,511,823 $ 6.46 Granted 1,960,771 7.86 Vested ( 1,201,374 ) 5.32 Forfeited ( 260,657 ) 7.14 Unvested at December 31, 2025 4,010,563 $ 7.45 The total fair value of RSUs and RSAs vested during the years ended December 31, 2025, 2024 and 2023, was $ 6.4 million $ 10.9 million, and $ 10.3 million, respectively. As of December 31, 2025, there was $ 16.7 million of unrecognized stock-based compensation expense related to RSUs which is expected to be recognized over 1.85 years. Performance Stock Units The Company grants PSUs to certain employees, primarily its Executive Leadership Team. Like RSUs, PSUs reflect the right to receive one share of Common Stock. However, in addition to providing continued service to the Company, PSUs contain additional vesting conditions which are based on the achievement of specified performance. As of December 31, 2025, all performance conditions associated with PSUs are specified net sales targets of varying levels. In each case, the PSU agreements allow for vesting in excess of the number of shares granted. In all cases, except for the CEO Performance PSUs (as defined and explained below), achievement of performance conditions alone can expand the award by up to 150 %. Certain of these PSUs are subject to Total Shareholder Return provisions which can limit or expand the number of shares conferred upon the recipient. PSUs also require the recipient to provide continuous service through a specified date or event. F-23 A summary of PSU activity for the year ended December 31, 2025 is presented below: PSU Number of Shares Weighted-Average Grant Date Fair Value Unvested at January 1, 2025 4,177,804 $ 4.44 Granted 667,619 8.92 Achievement Adjustment 16,986 4.62 Vested ( 76,510 ) 4.62 Forfeited ( 83,504 ) 7.15 Unvested at December 31, 2025 4,702,395 $ 5.03 The total fair value of PSUs vested during the year ended December 31, 2025 was $ 0.6 million. No PSUs vested during the years ended December 31, 2024 and 2023. As of December 31, 2025, there was $ 2.7 million of unrecognized stock-based compensation expense related to unvested PSUs, which is expected to be recognized over 1.17 years. These amounts reflect the level of vesting determined to be “probable” for all unvested PSU awards as of December 31, 2025. Any subsequent adjustments to expense would be reflected as a cumulative catch-up adjustment in the period of the re-evaluation. If all unvested PSUs were determined to be probable of vesting to their maximum extent, it would result in a cumulative catch-up adjustment of $ 17.1 million as of December 31, 2025. Conversely, the determination that none of the unvested PSUs are probable of vesting would result in a benefit of $ 7.6 million. CEO Performance Grant On January 27, 2023, the Board of Directors appointed Joseph H. Capper to serve as the Company’s Chief Executive Officer. The Company entered into a Letter Agreement with Mr. Capper that included, among other things, a grant of 3,300,000 PSUs (the “ CEO Performance PSUs ”) and a non-qualified stock option (the “ CEO Performance Option ”, collectively with the CEO Performance PSUs, the “ CEO Performance Grant ”) for 3,600,000 shares of the Company’s common stock. In addition to continued employment with the Company, the occurrence and extent of vesting of each component of the CEO Performance Grant is dependent upon the Company’s operating and share price performance: the CEO Performance PSUs vest on the basis of achieved revenue growth, while the CEO Performance Option vests on the basis of share price appreciation. CEO Performance PSUs The CEO Performance PSUs vest in a single tranche on the earlier of the filing date of the Company’s 2026 Annual Report on Form 10-K and March 15, 2027. The occurrence and extent of vesting depends on the Company’s compound annual growth rate (“ CAGR ”) achieved with respect to its revenue growth between the year ended December 31, 2022 and the year ending December 31, 2026. The PSUs may vest with respect to 50 % to 200 % of the granted number of PSUs, depending on the extent of CAGR achievement. Failure to achieve the CAGR associated with 50 % of achievement would result in no vesting. Management determined the probable level of vesting using internally-developed forecasts for the relevant period representing the Company’s best estimate for revenue, with a factor applied to calculate the highest level of CAGR evaluated to be probable of occurring based on that estimate. The Company recognized $ 1.0 million of expense related to the CEO Performance PSUs during year ended December 31, 2025. The cumulative expense recognized related to the CEO Performance PSUs was $ 5.2 million as of December 31, 2025. CEO Performance Option The CEO Performance Option grants Mr. Capper the right to purchase up to 3,600,000 shares of common stock for $ 3.70 per share. The CEO Performance Option vests based on the satisfaction of service and market conditions. Mr. Capper may vest in 25 % of the CEO Performance Option on each of the first four anniversary dates of the date of grant provided that he remains employed by the Company and provided that specified share price goals are achieved at any point between the date of grant and January 31, 2027. There are three separate share price goals associated with the CEO Performance Option. If specified share price goals are met at one level, one-third of the option may vest, at a second level, a further one-third may vest, and at a third F-24 level, the full amount of the option may vest. Satisfaction of the share price goals is based on the average of the closing price of the Company’s common stock during any 20 consecutive trading days through January 31, 2027 exceeding the stipulated share price goal. The CEO Performance Option expires on February 1, 2030. The Company estimated the fair value of the awards using a Monte Carlo simulation using the following assumptions: Assumption Stock price on grant date $ 3.70 Exercise price $ 3.70 Risk-free interest rate 3.6 % Expected volatility (annualized) 75 % Dividend yield — % Weighted average grant date fair value $ 1.93 The risk-free interest rate was derived based on the U.S. Treasury Yield curve in effect at the date of grant for maturities of similar periods to the contractual term. The expected volatility was estimated principally based on the Company’s historical daily stock price movements for a term similar in length to the contractual term. The dividend yield was based on the Company’s history of dividends on its common stock. The fair value was determined using an expected term which reflects the anticipated holding and post-vesting behavior pattern, calculated for each individual simulation. The total grant date fair value of the CEO Performance Option was $ 7.0 million. The fair value associated with each tranche of the award will be recognized, straight-line, over the associated requisite service period for that tranche, subject to acceleration if the market condition is met prior to the end of the derived service period. Failure to meet the market condition for an award does not result in reversal of previously-recognized expense, so long as the service is provided for the duration of the required service period. The Company recognized $ 1.2 million of expense related to the CEO Performance Option during year ended December 31, 2025. Employee Stock Purchase Plan The Company’s ESPP qualifies as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. All regular full-time employees of the Company (including officers) and all other employees who meet the eligibility requirements of the plan may participate in the ESPP. For the years ended December 31, 2025, 2024 and 2023, the Company recorded $ 0.6 million, $ 0.6 million, and $ 0.5 million, respectively, in stock-based compensation expense related to the ESPP. As of December 31, 2025 and 2024, the Company had cumulative payroll deferrals under the ESPP for future share purchases of $ 0.1 million and $ 0.6 million, respectively. This amount is included in accrued compensation in the consolidated balance sheet. Unrecognized stock compensation as of December 31, 2025 is $ 0.1 million to be recognized over a weighted average period of 0.08 years. Share Withholding for Employee Taxes Repurchases of shares of Common Stock in connection with the satisfaction of employee tax withholding obligations upon vesting of restricted stock and exercise of stock options for the years ended December 31, 2025, 2024, and 2023 were 396,323 , 354,263 , and 0 , respectively, for an aggregate purchase price of $ 3.1 million, $ 2.6 million, and $ 0.0 million, respectively. Series B Preferred Stock Repurchase In October 2023, the Company repurchased 5,000 shares of the Company’s Series B Preferred Stock for $ 9.5 million (the “ Repurchase ”) pursuant to a Securities Purchase Agreement with certain entities managed by or affiliated with Hayfin Capital Management LLP (the “ Hayfin Shareholders ”). In connection with the Repurchase, the Hayfin Shareholders entered into customary lock-up provisions requiring them to retain the balance of their equity positions for a period of at least one year. Management assessed whether the consideration paid could have reflected a non pro-rata distribution and reached the conclusion that it was not. Mandatory Conversion F-25 In December 2023, the remaining 95,000 outstanding shares of the Company’s Series B Preferred Stock, together with accrued dividends, were mandatorily converted into shares of the Company’s Common Stock in accordance with the Series B Preferred Stock terms set forth in the Company’s Articles of Incorporation. As a result of this conversion, the Company issued 29,761,650 shares of Common Stock to the holders of the Series B Preferred Stock. The conversion of the shares ended the dividend accrual associated with the Series B Preferred Stock. As a result of their conversion in December 2023, there were no shares of Series B Preferred Stock outstanding at any point during the years ended December 31, 2025 and 2024. 12. Income Taxes Income Tax Provision Expense (Benefit) Current and deferred income tax expense (benefit) is as follows (in thousands): Year Ended December 31, 2025 2024 2023 Current: Federal $ 6,417 $ 703 $ 576 State 2,534 2,121 422 Foreign 23 — — Total current 8,974 2,824 998 Deferred: Federal 8,165 11,626 ( 31,633 ) State 545 846 ( 9,144 ) Total deferred 8,710 12,472 ( 40,777 ) Income tax provision expense (benefit) $ 17,684 $ 15,296 $ ( 39,779 ) Summary of Deferred Tax Assets and Liabilities Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands): F-26 December 31, 2025 2024 Deferred Tax Assets: Accrued expenses $ 4,364 $ 3,038 Share-based compensation 4,356 3,933 Intangible assets 3,226 580 Net operating loss 2,572 3,713 Credit Loss Expense 2,149 778 Capitalized research and development expenditures 2,100 9,970 Lease liabilities 1,128 1,456 Research and development and other tax credits 998 6,752 Sales return and allowances 601 494 Property and equipment 460 295 Other assets 815 155 Deferred Tax Liabilities: Prepaid expenses ( 1,638 ) ( 949 ) Right of use asset ( 1,073 ) ( 1,392 ) Other liabilities ( 158 ) ( 12 ) Net Deferred Tax Assets 19,900 28,811 Less: Valuation allowance ( 304 ) ( 505 ) Net Deferred Tax Assets after Valuation Allowance $ 19,596 $ 28,306 Certain income and expense items are not reported in tax returns and financial statements in the same year. The tax effects of such temporary differences are reported as deferred income tax assets and liabilities. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefit that, based on available evidence, is not expected to be realized. The Company establishes a valuation allowance for deferred tax assets for which realization is not more likely than not. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. A valuation allowance of $ 0.3 million and $ 0.5 million was recorded against the deferred tax asset balance as of December 31, 2025 and 2024, respectively. In the event that the weight of the evidence changes in the future, any increase or decrease in the valuation allowance would result in a income tax expense or benefit, respectively. The Company has no federal income tax net operating loss (“ NOL ”) carryforward at December 31, 2025. At December 31, 2025, the Company had income tax net operating loss carryforwards for state purposes of $ 42.0 million.. At December 31, 2024, the Company had NOL carryforwards for federal and state purposes of $ 0.7 million and $ 64.2 million, respectively. A portion of the Company’s NOLs and tax credits are subject to annual limitations due to ownership change limitations provided by Internal Revenue Code Section 382. If not utilized, the state tax NOL carryforwards will expire between 2028 and 2038. As of December 31, 2025, the Company recorded a deferred tax asset for state NOL carryforwards of $ 2.6 million. There was no deferred tax asset for federal NOL carryforwards as of December 31, 2025. As of December 31, 2024, the Company recorded a deferred tax asset for federal and state NOL carryforwards of $ 0.1 million and $ 3.6 million, respectively. F-27 Effective Tax Rate Reconciliation The following table provides a tabular rate reconciliation of the federal statutory income tax rate of 21% to the Company’s effective income tax rate for the year ended December 31, 2025, pursuant to the disclosure requirements of ASU 2023-09 (amounts in thousands, except percentages): Year Ended December 31, 2025 Federal statutory rate $ 13,916 21.0 % Domestic federal Tax credits Research and development tax credits ( 422 ) ( 0.6 ) % Nontaxable or nondeductible items Nondeductible compensation 2,213 3.3 % Equity compensation ( 577 ) ( 0.9 ) % Other 68 0.1 % Domestic state income taxes, net of federal effect 2,432 3.7 % Foreign tax effects 23 — % Changes in unrecognized tax benefits 31 0.1 % Effective Tax Rate $ 17,684 26.7 % California, Minnesota, Illinois, Florida and Texas comprise the majority of the Company’s state tax income tax expense. The reconciliation of the federal statutory income tax ra te of 21 % to the effective rate is as follows: 2024 2023 Federal statutory rate 21.0 % 21.0 % State taxes, net of federal benefit 4.1 % ( 21.8 ) % Deferred tax adjustments 0.9 % 1.3 % Nondeductible compensation 1.1 % 1.8 % Meals and entertainment 0.6 % 1.2 % Uncertain tax positions — % 0.4 % Valuation allowance — % ( 123.5 ) % Share-based compensation ( 1.0 ) % 2.8 % Tax credits ( 0.7 ) % ( 3.2 ) % Other 0.7 % ( 0.2 ) % Effective tax rate 26.7 % ( 120.2 ) % The effective tax rate for the year ended December 31, 2023 was favorably impacted by the reversal of a valuation allowance. During that period, the Company concluded that it was no longer in a cumulative three-year loss on a continuing operations basis, after excluding the effects of permanent book-tax differences. The absence of such negative evidence, combined with the Company’s expectation for future taxable income generation, led to a change in the Company’s assessment of the realizability of its deferred tax assets. Income Taxes Paid The following table summarizes income taxes paid net of tax refunds for the year ended December 31, 2025 , pursuant to the requirements prescribed by ASU 2023-09 (amounts in thousands): F-28 Year Ended December 31, 2025 Federal $ 5,940 State 2,511 Foreign 57 Total $ 8,508 In 2025, the individual jurisdictions with cash taxes paid that equaled or exceeded 5% of total income taxes paid were California and Minnesota. Unrecognized Tax Benefits The following is a tabular reconciliation of the total amounts of unrecognized tax benefits (in thousands) included in the consolidated balance sheets: 2025 2024 2023 Unrecognized tax benefits - January 1 $ 831 $ 807 $ 645 Increases - tax positions in current period 48 53 124 Increases - tax positions in prior period — — 38 Decreases in prior year positions ( 17 ) ( 29 ) — Unrecognized tax benefits - December 31 $ 862 $ 831 $ 807 Included in the balance of unrecognized tax benefits are tax benefits of $ 0.9 million and $ 0.8 million as of December 31, 2025 and 2024, respectively, that, if recognized, would affect the effective tax rate. Of these amoun ts, $ 0.9 million and $ 0.2 million, respectively, are recorded as other liabilities in the consolidated balance sheets as of those dates. The remaining balance, if any, is reflected as a reduction to the related deferred tax asset. The Company recognizes accrued interest related to unrecognized tax benefits and penalties as income tax expense. Related to the unrecognized tax benefits noted above, the Company accrued no interest during the years ended December 31, 2025 or 2024. The Company is subject to taxation in the U.S. and various state jurisdictions. As of December 31, 2025, the Company’s tax returns for 2022 through 2024 generally remain open for exam by taxing jurisdictions. Additional prior years may be open to the extent attributes are being carried forward to an open tax year. One Big Beautiful Bill Act On July 4, 2025, the “One Big Beautiful Bill Act” (the “ Tax Act ”) was enacted into law. The Tax Act includes changes to U.S. tax law that will be applicable to the Company beginning in tax year 2025. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense and accelerated fixed asset depreciation. The impact of these provisions resulted in a current tax benefit resulting from the utilization of deferred tax assets, and did not affect the Company’s effective tax rate in the year ended December 31, 2025. This impact is expected to be temporary. F-29 13. Supplemental Disclosure of Cash Flow and Non-cash Investing and Financing Activities Selected cash payments, receipts, and non-cash activities are as follows (in thousands): Year Ended December 31, 2025 2024 2023 Cash paid for interest $ 1,246 $ 2,698 $ 6,034 Income taxes paid (refunded) 8,508 3,247 ( 548 ) Cash paid for operating leases 1,671 1,618 1,635 Non-cash activities: Conversion of Series B Preferred Stock — — 87,870 Fair value of shares received in settlement of litigation — 9,300 — Regen Lab consideration payable (Note 17) 5,000 — — Minimum Profit Share Payments pursuant to TELA APA — 2,731 — Issuance of shares pursuant to employee stock purchase plan 1,585 1,582 1,367 Purchases of equipment included in accounts payable — — 228 Financing costs incurred but not paid for Citizens Financing Transaction — — 138 Legal fees associated with the Repurchase of Series B Preferred Stock — — 45 Lease right of use asset and liability — 5,333 — Contingent consideration payable — 441 — 14. Commitments and Contingencies Profit Share Payments On March 15, 2024, the Company entered into an Asset Purchase Agreement (the “ TELA APA ”) with TELA Bio, Inc. (“ TELA ”) to obtain exclusive rights to sell and market a 510(k)-cleared collagen particulate xenograft product in the United States. Pursuant to the TELA APA, the Company is required to make payments (the “ Profit Share Payments ”) of between a minimum of $ 3.0 million and a maximum of $ 7.0 million based on MIMEDX’s net sales of the product over the two years following its commercialization of the product, which occurred during the second quarter of 2024. The Company has paid a total of $ 1.3 million and $ 0.1 million in Profit Share Payments to TELA during the years ended December 31, 2025 and 2024, respectively. The accretion expense for the year ended December 31, 2025 was $ 0.2 million. The final Profit Share Payment will be made during the third quarter of 2026. As of December 31, 2025, the fair value for the minimum amount of Profit Share Payments was $ 1.6 million. This amount reflects the anticipated timing of such Profit Share Payments, discounted to present value at a discount rate approximating the Company’s borrowing rate plus a risk premium, all of which reflect Level 3 inputs. This amount is reflected as part of other current liabilities in the consolidated balance sheet as of that date. Litigation and Regulatory Matters In the ordinary course of business, the Company and its subsidiaries may be a party to pending and threatened legal, regulatory, and governmental actions and proceedings (including those described below). In view of the inherent difficulty of predicting the outcome of such matters, particularly where the plaintiffs or claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual recovery, loss, fines or penalties related to each pending matter may be. In accordance with applicable accounting guidance, the Company accrues a liability when legal matters present loss contingencies that are both probable and estimable. The Company's financial statements at December 31, 2025 reflect the Company's current best estimate of probable losses associated with pending matters, including costs to comply with various settlement agreements, where applicable. The Company had zero accrued as of December 31, 2025 and December 31, 2024 related to expected settlement costs related to legal matters. The actual costs of resolving pending litigation matters may be in excess of the amounts accrued. F-30 The Company made no payments toward the resolution of legal matters involving the Company during the year ended December 31, 2025 and paid $ 0.6 million and $ 0.2 million during the years ended December 31, 2024 and 2023, respectively. During the second quarter 2024, the Company received 1.2 million shares of its own common stock in the settlement of certain legal matters. The Company accounted for the repayment of shares as a loss recovery, as the repayment related to the recoupment of legal fees previously incurred, but not in excess of the amount originally recorded. The Company recorded $ 9.3 million, reflecting the fair value of the returned shares on the date of the prevailing agreement, as a reduction to investigation, restatement and related expense on the consolidated statements of operations, where the legal fees to which this recovery originally related were recorded as they were incurred, for the year ended December 31, 2024. The Company is a party to a variety of legal matters that arise in the ordinary course of the Company’s business, none of which are deemed to be individually material at this time. Due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s business, results of operations, financial position or liquidity. AXIOFILL The Company received a Warning Letter from the FDA on December 21, 2023, relating to the inspections and classification of AXIOFILL. The Company received a determination letter in March 2024 reaffirming the FDA’s position that AXIOFILL does not meet the regulatory classification requirements of a Human Cell, Tissue or Cellular or Tissue-based Product under Section 361 of the Public Health Service Act. The Company strongly disagrees with this determination. On March 25, 2024, MIMEDX filed suit in the U.S. District Court for the Northern District of Georgia alleging violations of the Administrative Procedure Act and asking the Court to vacate FDA’s designation, declare FDA’s designation as arbitrary, capricious, an abuse of discretion, and contrary to law, and declare that AXIOFILL meets the criteria to be regulated under Section 361 of the Public Health Services Act. The parties each filed motions for summary judgment in the case. On September 25, 2025, the court denied both summary judgment motions without prejudice and requested additional briefing. On December 26, 2025, both MiMedx and the FDA filed renewed summary judgment motions. 15. Revenue Net Sales By Product Category MIMEDX has two product categories: (1) Wound, which reflects products typically used in Advanced Wound Care settings, including the treatment of chronic, non-healing wounds, and (2) Surgical, which reflects products principally used in surgical settings, including the closure of acute wounds or to protect and reinforce tissues and/or regions of interest. The Company manages its product portfolio and pipeline based upon opportunities in each of these settings. Below is a summary of net sales by product line (in thousands): Year Ended December 31, 2025 2024 2023 Wound $ 276,326 $ 231,004 $ 205,660 Surgical 142,304 117,875 115,817 Total $ 418,630 $ 348,879 $ 321,477 The Company did not have significant foreign operations or a single external customer from which 10% or more of net sales were derived during the years ended December 31, 2025, 2024, or 2023. Reimbursement Changes In response to market dynamics that have resulted in increasing Medicare spend on skin substitutes in the physician office and associated care settings over the past several years, Medicare implemented changes related to the reimbursement of skin substitutes, effective with the implementation of the 2026 Physician Fee Schedule and 2026 Hospital Outpatient Prospective Payment System on January 1, 2026. These changes include: 1) reimbursing skin substitute products uniformly across the hospital outpatient department and physician office and associated care settings and 2) capping the reimbursement rate for skin substitutes at $ 127.14 per square centimeter in these care settings, subject to geographic adjustments. These adjustments could adversely affect revenue derived from the Company’s Wound category beginning in 2026. F-31 Sales Returns Allowance Activity related to the Company’s sales returns allowance during the year ended December 31, 2025 was as follows (in thousands): Sales Returns Allowance Balance at December 31, 2023 $ 1,096 Additions 4,314 Deductions and write-offs ( 3,420 ) Balance at December 31, 2024 1,990 Additions 8,357 Deductions and write-offs ( 7,912 ) Balance at December 31, 2025 $ 2,435 16. Segment Information The Company determines its operating segments based on how the Chief Operating Decision Maker (“ CODM ”) reviews the business and makes resource allocation decisions. The Company concluded that Joseph Capper, the Company’s Chief Executive Officer, is the CODM. The Company has a single operating segment, which has not been aggregated with other operating segments. The CODM uses several measures of profit or loss to assess Company performance and allocate resources. Of these measures, net income is the measure that most aligns to GAAP. Other measures used by the CODM include adjusted earnings before interest, taxes, depreciation and amortization. The CODM assesses actual results against budgets and forecasts, and uses this information to inform various strategic investments into the Company’s operations, including headcount and compensation. Each financial statement caption included on the consolidated statements of operations reflects a significant segment expense evaluated by the CODM. In addition to this, the CODM also evaluates selling and marketing expense and general and administrative expense, both of which are components of selling, general, and administrative expense on the consolidated statements of operations. The below table presents selling and marketing and general administrative expense for each of the years ended December 31, 2025, 2024, and 2023 (amounts in thousands): Year Ended December 31, 2025 2024 2023 Selling and marketing $ 209,681 $ 175,562 $ 161,833 General and administrative 56,513 49,525 49,291 Selling, general and administrative $ 266,194 $ 225,087 $ 211,124 Below is a breakout of interest expense and interest income for each of the years ended December 31, 2025, 2024, and 2023 (amounts in thousands): Year Ended December 31, 2025 2024 2023 Interest income $ 4,716 $ 2,932 $ 118 Interest expense ( 1,783 ) ( 3,938 ) ( 6,575 ) Interest income (expense), net $ 2,933 $ ( 1,006 ) $ ( 6,457 ) F-32 Information relating to depreciation expense, amortization expense, income tax expense and significant non-cash items for this segment can be found in Note 5, Property and Equipment, Net , Note 7, Intangible Assets , Net , Note 12, Income Taxes and Note 13, Supplemental Disclosure of Cash Flow and Non-Cash Investing and Financing Activities , respectively. The CODM is not provided and does not review segment assets at a different asset level or category than the presentation on the consolidated balance sheet. 17. Acquisitions and Investments During2025 and 2024, the Company entered into various agreements which conveyed various rights to certain products in an effort to inorganically expand its product offering. In each case, these transactions were accounted for as acquisitions of assets and the Company did not assume any liabilities associated with these activities. Total consideration for these transactions during 2025 was $ 10.1 million. Additional payments may be required in future periods in connection with these transactions. Regen Lab In December 2025, MiMedx entered into a Distributorship Agreement (the “ Regen Agreement ”) with Regen Lab USA LLC (“ Regen Lab ”), which provides the Company with the exclusive right to distribute their RegenKit®-Wound Gel in the United States. The Regen Agreement was accounted for as an acquisition of assets. All costs of acquisition were allocated to the distributorship agreement. In satisfaction of the obligation created by the Regen Agreement, the Company paid Regen Lab an up-front payment of $ 5.0 million during January 2026. This amount is reflected as part of accounts payable in the consolidated balance sheet as of December 31, 2025. In addition, the Company may pay up to an additional $ 5.0 million in contingent consideration upon achievement of cumulative revenue milestones specified in the Regen Agreement. Vaporox Agreement Late in the second quarter of 2025, the Company entered into a Convertible Note Purchase Agreement (the “ Vaporox Note ”) with Vaporox, Inc.(“ Vaporox ”) for $ 2.0 million. The note matures in the second quarter of 2028, and contains certain contingent conversion features upon the occurrence of specified events. The Vaporox Note was funded early in the third quarter of 2025. The Company elected to account for the Vaporox Note pursuant to the Fair Value Option guidance prescribed by Accounting Standards Codification (“ ASC ”) Topic 825. This requires the Company to measure the Fair Value of the Vaporox Note, in its entirety, at each reporting date. As a result of electing the fair value option, direct costs and fees related to the Vaporox Note are expensed as incurred. As of December 31, 2025, the fair value of the note was $ 2.1 million. The fair value of the note was estimated using a relevant valuation techniques and a series of Level 3 inputs. The Vaporox Note funding is recorded as part of other current assets in the consolidated balance sheets as of December 31, 2025. Celera and Emerge During 2024 and the year ended December 31, 2025, the Company entered into various agreements which conveyed trademarks associated with CELERA and EMERGE to MiMedx. The agreements required MiMedx to make payments at the time of the acquisition and additional payments over time when and if product is manufactured. The Company accounted for these transactions as acquisitions of assets. Accordingly, the Company capitalized payments made to acquire assets as payments were made or as the contingencies surrounding such payment were resolved as part of the acquired assets. Any future payments associated with a contingency may also be capitalized as part of the acquired asset, to the extent that such payments are considered to be costs to acquire the associated asset. TELA and Regenity Agreements On March 15, 2024, the Company entered into the TELA APA with TELA Bio, Inc. (“ TELA ”) to obtain exclusive rights to sell and market a 510(k)-cleared collagen particulate xenograft product in the United States. TELA held these rights pursuant to a Manufacturing and Supply Agreement (the “ TELA-Regenity Supply Agreement ”) between TELA and Regenity Biosciences, F-33 Inc. (“ Regenity ”), which retains all intellectual property rights and regulatory clearances related to the product. Pursuant to the TELA APA, the Company paid $ 5.0 million of initial consideration to TELA; additionally, the Company paid $ 0.4 million to acquire TELA’s remaining product inventory, and will be required to make Profit Share Payments of between a minimum of $ 3.0 million and a maximum of $ 7.0 million based on MIMEDX’s net sales of the product over the two years following its commercialization of the product, which occurred during the second quarter of 2024. In connection with the execution of the TELA APA, the Company was able to renegotiate the terms of the TELA-Regenity Supply Agreement, ultimately replacing it with a new Manufacturing and Supply Agreement (the “ Supply Agreement ”) with Regenity. The Supply Agreement maintains MIMEDX’s exclusive right to sell and market the product in the United States. The transaction was accounted for as an acquisition of assets, as substantially all the fair value of the acquired assets was concentrated in the acquired exclusive distribution rights. The cost to acquire the assets on the transaction date was $ 8.1 million, reflecting the $ 5.0 million of initial consideration, $ 0.4 million to acquire inventory, and $ 2.7 million, reflecting the fair value of the minimum amount of the Profit Share Payments. This amount reflected the anticipated timing of such Profit Share Payments, discounted to present value at a discount rate approximating the Company’s borrowing rate plus a risk premium, all of which reflect Level 3 inputs as of the acquisition date. These costs were allocated amongst the assets acquired. The Company assigned $ 7.6 million to the distribution rights acquired and $ 0.5 million to acquired inventory. The amount ascribed to the distribution rights will be amortized over five years , generally reflective of the period of time over which the distribution rights are anticipated to contribute to cash flow generation. Any Profit Share Payments exceeding the $ 3.0 million minimum will be capitalized in the period incurred as a part of the acquired assets and amortized over the remaining life of such assets. 18. 401(k) Plan The Company has a 401(k) plan (the “ 401(k) Plan ”) covering all employees who have completed one month of service. Under the 401(k) Plan, participants could defer up to 90 % of their eligible wages to a maximum of $ 23,500 per year (annual limit for 2025). Employees age 50 or over in 2025 could make additional pre-tax contributions of up to $ 7,500 . In 2025, 2024 and 2023, the Company matched 50 % of employee contributions up to 8 % of the employee’s eligible compensation. The matching contribution for the years ended December 31, 2025, 2024, and 2023 was $ 2.6 million, $ 2.6 million, and $ 2.7 million, respectively. 19. Discontinued Operations Disbanding of Regenerative Medicine Business Unit In the second quarter of 2023, the Company announced the disbanding of its Regenerative Medicine reportable segment and the suspension of its Knee Osteoarthritis clinical trial program. The announcement reflected the abandonment of the Company’s efforts to pursue a Biological License Application for its micronized dehydrated amnion chorion membrane product and a major definitive strategic shift in the Company’s focus toward its continuing commercial pipeline as its primary source of value creation. The Company completed the regulatory obligations associated with the clinical trial during the fourth quarter of 2023, at which time material run-off operations had ceased and Regenerative Medicine met the criteria for presentation as a discontinued operation. Expenses associated with the disbanding of Regenerative Medicine ceased in the third quarter of 2024. Financial Statement Impact of Discontinued Operations The income and expenses of the discontinued operation have been classified as income (loss) from discontinued operations in the consolidated statements of operations as of December 31, 2024 and 2023 as follows (in thousands): Year Ended December 31, 2024 2023 Selling, general and administrative expense $ ( 221 ) $ — Research and development expense ( 200 ) 8,017 Restructuring expense — 4,168 Income tax provision benefit — ( 2,974 ) Income (loss) from discontinued operations $ 421 $ ( 9,211 ) F-34 Goodwill As a result of the announcement of the disbanding of Regenerative Medicine business unit, the Company evaluated goodwill associated with the Regenerative Medicine reporting unit for potential impairment. The Company estimated fair value for the reporting unit using the income approach; specifically, a discounted cash flow method. As a result of this assessment, management concluded that the carrying value of the reporting unit exceeded its fair value by an amount that exceeded its goodwill balance. Accordingly, the Company recognized an impairment loss for the full amount of the goodwill ascribed to the Regenerative Medicine reporting unit. The goodwill impairment loss is included as a component of discontinued operations in the audited consolidated statement of operations for the year ended December 31, 2023. Impairment of goodwill of $ 0.5 million was recorded as part of loss from discontinued operations for the year ended December 31, 2023. 20. Subsequent Events Share Repurchase Plan In February 2026, the Board authorized the Company to periodically repurchase up to $ 100.0 million of its outstanding common stock (the “ Share Repurchase Plan ”) through February 2028. The share repurchase program does not obligate the Company to repurchase any shares. In connection with the Share Repurchase Plan, the Company executed an amendment to the Citizens Credit Agreement (“ Amendment No. 1 ”) which allows the Company to repurchase shares during its term. Amendment No. 1 does not make any other changes to the Citizens Credit Facility. F-35 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.