What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-27 compared with 2022-03-01 · 382 added, 368 removed, 1321 unchanged (36% of the section changed)

11 unchanged sentences

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of OPKO Health, Inc.

and subsidiaries (the Company) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and financial statement schedule included at Item 15(a)(1) (collectively referred to as the “consolidated financial statements”).

We have audited the accompanying consolidated balance sheets of OPKO Health, Inc., and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of operations, comprehensive income (loss), equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and financial statement schedule included at Item 15(a)(1) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have 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, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 1, 2022 expressed an unqualified opinion thereon.

We also have 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, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 27, 2023 expressed an unqualified opinion thereon.

Adoption of ASU No.

As discussed in Note 3 to the consolidated financial statements, the Company changed its method of accounting for convertible debt instruments in 2022 due to the adoption of ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).

Basis for Opinion

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate 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 consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Goodwill and IPR&D for Rayaldee and Biologics

Description of the Matter At December 31, 2021, the Company’s goodwill was $520.6 million, and indefinite lived in-process research and development assets (IPR&D) was $590.2 million.

Included in the Rayaldee reporting unit was $86.6 million of goodwill.

Included in the Biologics reporting unit was $139.8 million and $590.2 million of goodwill and IPR&D, respectively.

As discussed in Note 3 to the consolidated financial statements, goodwill and indefinite lived IPR&D are tested at least annually for impairment or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.

To determine the estimated fair value of their reporting units and their intangible assets included within them, management considers both market and income valuation approaches.

Auditing management’s annual impairment tests for the goodwill and intangible assets in these reporting units was complex and highly judgmental due to the significant assumptions used in the determination of guideline companies, market transactions and market multiples, as well as the expected timing and amount of market revenue share and the discount rate used to estimate future cash flows, which are affected by expectations about future development of IPR&D, market, or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s annual goodwill and intangible assets impairment review process, including controls over management’s review of the significant assumptions in the Rayaldee and Biologics analysis described above.

To test the estimated fair value of the reporting units and the intangible assets included within them, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses.

We compared the significant assumptions used by management to current market and economic trends and other relevant factors.

We involved valuation specialists to assist with assessing the methodologies and evaluating certain significant assumptions, such as the determination of guideline companies, market transactions, market multiples and the discount rates.

We assessed the historical accuracy of management’s estimates and performed sensitivity analyses on significant assumptions to evaluate the changes in the fair value that would result from changes in the assumptions.

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 the critical audit matter does not alter in any way our opinion on the consolidated 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.

Variable Consideration in Determining Revenue from Services

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Miami, Florida

March 1, 2022

February 27, 2023

Report of Independent Registered Public Accounting Firm

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In our opinion, OPKO Health, Inc, and subsidiaries (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2021 consolidated financial statements of the Company and our report dated March 1, 2022 expressed an unqualified opinion thereon.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2022 consolidated financial statements of the Company and our report dated February 27, 2023, expressed an unqualified opinion thereon.

Basis for Opinion

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Miami, Florida

March 1, 2022

February 27, 2023

OPKO Health, Inc.

22 unchanged sentences

Current maturities of operating leases 11,628 11,624

Current portion of convertible notes 3,050 —

Liabilities associated with assets held for sale — 28,156

7 unchanged sentences

Total liabilities 605,611 714,589

Common Stock - $ 0.01 par value, 1,000,000,000 shares authorized at December 31, 2021 and 2020, respectively;

Common Stock - $ 0.01 par value, 1,000,000,000 shares authorized;

781,306,164 and 690,082,283 shares issued at December 31, 2022 and 2021, respectively

Treasury Stock, - 8,655,082 and 549,907 shares at December 31, 2021 and 2020, respectively

Treasury Stock, - 8,655,082 shares at December 31, 2022 and 2021, respectively

( 1,791 ) ( 1,791 )

22 unchanged sentences

Amortization of intangible assets 87,784 50,278 56,391

Asset impairment charges — — 92,399

Gain on sale of assets ( 18,559 ) ( 31,508 ) —

8 unchanged sentences

Income (loss) before income taxes and investment losses ( 391,521 ) ( 14,025 ) 48,683

Income tax provision ( 15,489 ) ( 17,617 ) ( 7,060 )

Income tax benefit (provision) 63,499 ( 15,489 ) ( 17,617 )

Net income (loss) before investment losses ( 328,022 ) ( 29,514 ) 31,066

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Exercise of common stock options and warrants 206,875 2 — — 754 — — 756

Adoption of ASU 2018-07 — — — — ( 926 ) — 926 —

2025 convertible notes including share lending agreement 29,250,000 293 — — 50,559 — — 50,852

Sale of common stock 54,227,749 542 — — 75,520 — — 76,062

Net loss — — — — — — ( 314,925 ) ( 314,925 )

Other comprehensive loss — — — — — ( 1,939 ) — ( 1,939 )

Adoption of ASC 326 — — — — — — ( 1,342 ) ( 1,342 )

Net income — — — — — — 30,586 30,586

Other comprehensive income — — — — — 17,845 — 17,845

Balance at December 31, 2020 670,585,576 $ 6,706 ( 549,907 ) $ ( 1,791 ) $ 3,152,694 $ ( 4,225 ) $ ( 1,481,833 ) $ 1,671,551

8 unchanged sentences

Exercise of common stock options and warrants 445,437 5 — — 1,076 — — 1,081

Adoption of ASC 326 — — — — — — ( 1,342 ) ( 1,342 )

Net income — — — — — — 30,586 30,586

Other comprehensive income — — — — — 17,845 — 17,845

Conversion of 2025 convertible notes 19,051,270 190 ( 8,105,175 ) — 55,085 — — 55,275

Net loss — — — — — — ( 30,143 ) ( 30,143 )

Other comprehensive loss — — — — — ( 26,270 ) — ( 26,270 )

Balance at December 31, 2021 690,082,283 $ 6,901 ( 8,655,082 ) $ ( 1,791 ) $ 3,222,487 $ ( 30,495 ) $ ( 1,511,976 ) $ 1,685,126

8 unchanged sentences

Exercise of common stock options and warrants 629,837 6 — — ( 780 ) — — ( 774 )

Conversion of 2025 convertible notes 19,051,270 190 ( 8,105,175 ) — 55,085 — — 55,275

Adoption of ASU 2020-06 — — — — ( 39,100 ) — 17,458 ( 21,642 )

ModeX Acquisition 90,594,044 906 — — 220,756 — — 221,662

Net loss — — — — — — ( 328,405 ) ( 328,405 )

16 unchanged sentences

Equity-based compensation – employees and non-employees 18,509 13,632 8,947

Asset impairment charges — — 92,399

Non-cash revenue from the transfer of intellectual property — ( 3,801 ) —

3 unchanged sentences

Change in fair value of contingent consideration ( 1,312 ) ( 1,703 ) ( 3,989 )

Gain on sale of GeneDx ( 18,559 ) — —

Deferred income tax provision ( 74,405 ) 10,159 15,640

8 unchanged sentences

Accrued expenses and other liabilities ( 90,781 ) ( 33,723 ) 81,828

Net cash provided by (used in) operating activities 38,337 39,476 ( 172,522 )

Net cash (used in) provided by operating activities ( 95,189 ) 38,337 39,476

Cash flows from investing activities:

4 unchanged sentences

Capital expenditures ( 24,578 ) ( 32,156 ) ( 33,682 )

Net cash provided by (used in) investing activities 35,949 ( 18,327 ) ( 13,270 )

Net cash (used in) provided by investing activities 91,038 35,949 ( 18,327 )

Cash flows from financing activities:

Issuance of common stock — — 76,062

Issuance of 2023 Convertible Notes, including to related parties — — 200,293

Debt issuance costs — ( 188 ) —

Proceeds from the exercise of common stock options and warrants 1,080 756 ( 3 )

Net activity from the exercise of common stock options and warrants ( 774 ) 1,081 756

Borrowings on lines of credit 1,059,519 1,684,713 1,107,866

Repayments of lines of credit ( 1,035,774 ) ( 1,695,956 ) ( 1,143,698 )

Redemption of 2033 Senior Notes — — ( 28,800 )

Net cash (used in) provided by financing activities 22,971 ( 10,350 ) ( 35,076 )

6 unchanged sentences

Income taxes paid, net of refunds $ 8,037 $ 5,969 $ ( 903 )

Operating lease right-of-use assets due to adoption of ASU No.

2016-02 $ — $ — $ 39,380

Operating lease liabilities due to adoption of ASU No.

2016-02 $ — $ — $ 39,703

Operating lease right-of-use assets obtained in exchange for lease obligations $ — $ 6,493 $ —

Assets acquired by finance leases $ 4,717 $ — $ —

Non-cash financing:

Shares issued upon the conversion of:

2025 convertible Notes

$ — $ 68,775 $ —

Common Stock options and warrants, surrendered in net exercise $ 1,268 $ — $ —

Issuance of common stock for acquisition of ModeX $ 221,662 $ — $ —

Fair value of shares included in consideration from GeneDx Holdings $ 172,000 $ — $ —

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

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We are a diversified healthcare company that seeks to establish industry-leading positions in large and rapidly growing medical markets.

Our diagnostics business includes BioReference Laboratories, Inc.

(“BioReference”), one of the nation’s largest full service laboratories with an almost 250 -person sales and marketing team to drive growth and leverage new products.

Our diagnostics business includes BioReference Health, LLC (“BioReference”), one of the nation’s largest full service laboratories with a 180 -person sales and marketing team to drive growth and leverage new products, and we offer our 4Kscore prostate cancer test through BioReference.

Our pharmaceutical business features Rayaldee , a U.S.

Food and Drug Administration (“FDA”) approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency and a pipeline of products in various stages of development.

Our leading product in development is Somatrogon (hGH-CTP), a once-weekly human growth hormone for which we have partnered with Pfizer, Inc.

(“Pfizer”) and successfully completed a phase 3 study in August 2019.

Regulatory applications for Somatrogon have been submitted to several countries around the world for review.

In February 2022, the European Commission granted marketing authorization in the European Union for Somatrogon under the brand name NGENLA® to treat children and adolescents from as young as 3 years of age with growth disturbance due to insufficient secretion of growth hormone.

In January 2022, the Ministry of Health, Labour and Welfare in Japan approved NGENLA® (Somatrogon) for the long-term treatment of pediatric patients who have growth failure due to an inadequate secretion of endogenous growth hormone.

In October 2021, Health Canada approved NGENLA® for the long-term treatment of pediatric patients who have growth hormone deficiency, and Australia’s Therapeutic Goods Administration approved NGENLA® for the long-term treatment of pediatric patients with growth disturbance due to insufficient secretion of growth hormone.

Food and Drug Administration (“FDA”) approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency, and Somatrogon (hGH-CTP), a once-weekly human growth hormone injection for which we completed a successful phase 3 study in August 2019 and is partnered with Pfizer Inc.

Regulatory applications for Somatrogon (hGH-CTP) have been submitted to the applicable regulatory bodies for review in several countries around the world.

In February 2022, the European Commission granted marketing authorization in the European Union for Somatrogon (hGH-CTP) under the brand name NGENLA® to treat children and adolescents from as young as 3 years of age with growth disturbance due to insufficient secretion of growth hormone and has been granted pricing approval in Germany.

NGENLA® has also been approved in Japan, Canada, and Australia.

We also submitted the initial Biologics License Application (“BLA”) with the FDA for approval of Somatrogon (hGH-CTP) in the United States and Pfizer received a complete response letter in January 2022.

Pfizer and OPKO are evaluating the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon (hGH-CTP) in the United States.

We are incorporated in Delaware, and our principal executive offices are located in leased offices in Miami, Florida.

Pfizer and OPKO have evaluated the FDA’s comments and will work with the agency to determine an appropriate path forward for the advancement of Somatrogon (hGH-CTP).

In May 2022, we acquired ModeX Therapeutics, Inc.

(“ModeX”), a biotechnology company focused on developing innovative multi-specific immune therapies for cancer and infectious diseases candidates.

ModeX has a robust early-stage pipeline with assets in key areas of immuno-oncology and infectious diseases, and we intend to further expand our pharmaceutical product pipeline through ModeX’s portfolio of development candidates.

Through BioReference, we provide laboratory testing services, primarily to customers in the larger metropolitan areas in New York, New Jersey, Florida, Texas, Maryland, California, Pennsylvania, Delaware, Washington, DC, Illinois and Massachusetts, as well as to customers in a number of other states.

We offer a comprehensive test menu of clinical diagnostics for blood, urine and tissue analysis.

This includes hematology, clinical chemistry, immunoassay, infectious diseases, serology, hormones, and toxicology assays, as well as Pap smear, anatomic pathology (biopsies) and other types of tissue analysis.

This includes hematology, clinical chemistry, immunoassay, infectious disease, serology, hormones, and toxicology assays, as well as Pap smear, anatomic pathology (biopsies) and other types of tissue analysis, as well as testing for COVID-19.

We market our laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities.

We operate established pharmaceutical platforms in Ireland, Chile, Spain, and Mexico, which are generating revenue and from which we expect to generate positive cash flow and facilitate future market entry for our products currently in development.

In addition, we have a development and commercial supply pharmaceutical company and a global supply chain operation and holding company in Ireland.

We own a specialty active pharmaceutical ingredients (“APIs”) manufacturer in Israel, which we expect will facilitate the development of our pipeline of molecules and compounds for our proprietary molecular diagnostic and therapeutic products.

Our research and development activities are primarily performed at facilities in Woburn, MA, Waterford, Ireland, Kiryat Gat, Israel, and Barcelona, Spain.

On January 18, 2022, Sema4 Holdings Corp.

(“Sema4”) and OPKO announced they had signed an Agreement and Plan of Merger and Reorganization (the “GeneDx Merger Agreement”) with Sema4 Holdings Corp., a Delaware corporation (“Sema4”), pursuant to which Sema4 has agreed to acquire OPKO’s wholly owned subsidiary, GeneDx, Inc.

(“GeneDx”), subject to satisfaction of customary closing conditions (the “GeneDx Transaction”).

The GeneDx Transaction is expected to close in the second quarter of 2022.

Under the terms of the GeneDx Merger Agreement, Sema4 has agreed to acquire GeneDx for an upfront payment of $ 150 million in cash plus 80.0 million shares in Sema4, with up to an additional $ 150 million revenue-based milestones over the next two years (which will be payable in cash or Sema4 shares at Sema4’s discretion).

Based on the closing stock price of Sema4 as of January 14, 2022, the total upfront consideration represents approximately $ 473 million, and the total aggregate consideration including potential milestones is approximately $ 623 million.

We operate established pharmaceutical platforms in Spain, Ireland, Chile, and Mexico, which are generating revenue and from which we expect to generate positive cash flow and facilitate future market entry for our products currently in development.

We have a development and commercial supply pharmaceutical company as well as a global supply chain operation.

We also own a specialty active pharmaceutical ingredients (“APIs”) manufacturer in Israel, which we expect will facilitate the development of our pipeline of molecules and compounds for our proprietary molecular diagnostic and therapeutic products.

Our research and development activities are primarily performed at facilities in Woburn, MA, Waterford, Ireland, Kiryat

Gat, Israel, and Barcelona, Spain.

On May 9, 2022 (the “Closing Date”), the Company entered into an Agreement and Plan of Merger (the “ModeX Merger Agreement”), in accordance with which we acquired ModeX pursuant to a merger in which ModeX survived as a wholly owned subsidiary of the Company.

The Company paid the entirety of the $ 300.0 million purchase price pursuant to the issuance of an aggregate of 89,907,310 shares (the “Consideration Shares”) of the Company’s common stock, par value $ 0.01 per share (“Common Stock”), of which 10 % were deposited in a twelve-month escrow for purposes of satisfying the potential indemnity obligations of the sellers under the ModeX Merger Agreement.

Additionally, the Company issued equity awards to ModeX employees in an amount equal to $ 12.4 million, which was deducted from the consideration payable on the Closing Date.

If any of such awards are forfeited or otherwise remain unvested on the four-year anniversary of the Closing Date, up to 812,792 shares of Common Stock may be distributed pro rata to ModeX’s former stockholders in respect of such forfeited or unvested awards.

Shares of Common Stock with respect to such potential distribution have been escrowed and will remain escrowed for such four-year period.

For accounting purposes, the Consideration Shares were valued at $ 219.4 million, based on the closing price per share of our Common Stock of $ 2.44 as reported by NASDAQ Global Select Market (“NASDAQ”) on the Closing Date.

Included in the total fair value of consideration transferred of $ 221.7 million were $ 2.3 million of fully vested equity awards.

On January 14, 2022, the Company entered into an Agreement and Plan of Merger and Reorganization (the “GeneDx Merger Agreement”) with Sema4 Holdings Corp., a Delaware corporation (“Sema4”), pursuant to which Sema4 acquired the Company’s former subsidiary, GeneDx LLC, (f/k/a GeneDx, Inc.

“GeneDx”), in a transaction (the “GeneDx Transaction”) that closed on April 29, 2022 (the “GeneDx Closing”).

Upon the GeneDx Closing, GeneDx Holdings paid to the Company aggregate consideration of $ 150 million in cash (before deduction of transaction expenses and other customary purchase price adjustments), together with 80.0 million shares (the “Closing Shares”) of GeneDx Holdings’ Class A common stock, par value $ 0.0001 per share (“GeneDx Holdings Common Stock”).

Additionally, subject to GeneDx achieving certain revenue targets for the fiscal years ending December 31, 2022 and 2023, we are eligible to receive an earnout payment in cash or stock (at GeneDx Holdings’ discretion) equal to a maximum of 30.9 million shares of GeneDx Holdings’ Class A common stock if paid in stock.

Based on the closing price of GeneDx Holdings Common Stock on April 29, 2022, the total upfront consideration was approximately $ 322 million, and the total aggregate consideration, including the potential Milestone Consideration, was approximately $ 447 million.

In connection with the transactions contemplated by the GeneDx Merger Agreement, on January 14, 2022, the Company entered into a Shareholder Agreement (the “GeneDx Holdings Shareholder Agreement”) with GeneDx Holdings, pursuant to which the Company has agreed to, among other things, be subject to a lock-up period with respect to its shares of GeneDx Holdings Common Stock, which expires on April 29, 2023 with respect to the Closing Shares, and, if earned and received, would extend for periods of one-year and six-months from the date of issuance of such shares in respect of the first and second potential Milestone Consideration payments, respectively.

Pursuant to the GeneDx Merger Agreement, the Company designated, and GeneDx Holdings nominated for election an individual to serve on the board of directors of GeneDx Holdings, and such nominee was elected by GeneDx Holdings’ stockholders to serve as a director until GeneDx Holdings’ 2024 annual meeting of stockholders.

In addition, the Company has further agreed to certain standstill provisions whereby, subject to certain exceptions, it is obligated to refrain from taking certain actions with respect to the GeneDx Holdings Common Stock.

The Company has also agreed to vote its shares of GeneDx Holdings Common Stock in accordance with the recommendations of GeneDx Holdings’s board of directors for so long as it continues to hold at least 5 % of the outstanding shares of GeneDx Holdings Common Stock.

Further, GeneDx Holdings has also granted the Company certain customary shelf, piggyback and demand registration rights that require GeneDx Holdings to register the shares of the Company’s shares of GeneDx Holdings Common Stock for resale under the Securities Act.

OPKO intends to have a designee serving on GeneDx Holdings’s board of directors through the lock-up period applicable to the Company’s shares of GeneDx Holdings Common Stock.

Such designee may continue to sit on the GeneDx Holdings board if elected by the GeneDx Holdings stockholders.

Therefore, OPKO is not actively participating in the policy-making process of GeneDx Holdings.

We recognized a $ 18.6 million gain on the sale of GeneDx during the year ended December 31, 2022.

As of December 31, 2021, GeneDx met the held-for-sale accounting criteria and the related assets and liabilities are classified as held for sale in the consolidated balance sheet.

Depending upon the value Sema4 shares upon closing of the transaction, an impairment charge may be incurred.

GeneDx was included in our diagnostics segment as of December 31, 2021.

2 unchanged sentences

The transaction closed in the third quarter of 2021.

We recognized a gain on the sale of the facility in the third quarter of 2021 of $ 31.5 million.

Note 2 Impact of COVID-19

As the disease caused by SARS-CoV-2, a novel strain of coronavirus, COVID-19 continues to spread and severely impact the U.S.

economy and economies of other countries around the world, we continue to be a part of the coordinated public and private sector response to this unprecedented challenge as the COVID-19 pandemic continues.

There continues to be a high level of uncertainty relating to how the pandemic will evolve, how governments and consumers will react, progress on the distribution of vaccines and whether the pandemic will have a longer-term effect on the healthcare industry and patient habits.

In response to the COVID-19 pandemic, BioReference is providing COVID-19 solutions, including diagnostic molecular testing and serology antibody testing, to meet the testing needs of its numerous customer verticals, including physicians, health systems, long-term care facilities, governments, schools, employers, professional sports teams and entertainment venues, as well as the general public through relationships with retail pharmacy chains.

Revenue from services for the year ended December 31, 2021 increased by $ 344.9 million as compared to 2020 due to COVID-19 testing volumes.

We are unable to predict how long the demand will continue for our COVID-19 related testing, or whether pricing and reimbursement policies for testing will sustain.

In addition, in the second half of 2021, overall demand for COVID-19 testing has declined, and accordingly, the sustainability of our COVID-19 testing volumes is uncertain.

Additionally, beginning in March 2020, BioReference experienced a decline in testing volumes due to the COVID-19 pandemic;

however as stay at home orders and other restrictions have been lifted, we have seen our routine clinical and genomic testing volumes trending towards normalization with prior periods.

Should stay at home orders or other restrictions be reenacted, we could see our routine testing levels decline.

Excluding COVID-19 test volumes, for the year ended December 31, 2021, genomic and routine clinical test volume increased 26.4 % and 6.9 % as compared to volumes for the year ended December 31, 2020.

Additionally, sales of Rayaldee have not increased in accordance with its expected growth trajectory as a result of challenges in onboarding new patients due to the COVID-19 pandemic.

Federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 have resulted in, among other things, a significant reduction in physician office visits, the cancellation of elective medical procedures, customers closing or severely curtailing their operations (voluntarily or in response to government orders), and the adoption of work-from-home or shelter-in-place policies.

In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law.

The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain payroll tax credits associated with the retention of employees.

We have received, or expect to receive a number of benefits under the CARES Act including, but not limited to:

• During the year ended December 31, 2020, we received approximately $ 14 million under The Centers for Medicare & Medicaid Services (CMS) Accelerated and Advance Payment Program, which provides accelerated payments to Medicare providers/suppliers working to provide treatment to patients and combat the COVID-19 pandemic, and the amounts advanced are loans which will be offset against future claims and were repaid in 2021.

These loans are initially recorded as contract liabilities included in Accrued expenses and are reduced as the amounts are recouped by CMS;

• We are eligible to defer depositing the employer’s share of Social Security taxes for payments due from March 27, 2020 through December 31, 2020, interest-free and penalty-free;

• We received approximately $ 16.2 million during 2020 from the funds that were distributed to healthcare providers for related expenses or lost revenues that are attributable to the COVID-19 pandemic.

We recognized the $ 16.2 million grant in other revenues for the year ended December 31, 2020;

Department of Health and Human Services (HHS), will provide claims reimbursement to healthcare providers generally at Medicare rates for testing uninsured patients;

• Clinical laboratories are provided a one-year reprieve from the reporting requirements under the Protecting Access to Medicare Act (“PAMA”) as well as a one-year delay of reimbursement rate reductions for clinical laboratory services provided under Medicare that were scheduled to take place in 2021.

Since the pandemic began in the U.S., we have invested in testing capabilities and infrastructure to meet demand for our molecular and antibody testing for COVID-19.

In 2021, we kicked off company-wide lab operations specimen acquisition, logistics, procurement, customer service, cost reduction initiatives to rightsize our cost structure to match the declining COVID testing volumes and to drive efficiency gains in our core clinical lines of business.

Three vaccines for COVID-19 have received approval or emergency authorization and have had increasingly widespread acceptance.

However, we believe that, based on our experience with the pandemic, the high medical need for efficient and widespread testing for COVID-19 will extend beyond the current phase of the pandemic.

Our belief is supported by the unprecedented healthcare and economic impact of the pandemic thus far, the uneven and incomplete rollout of vaccines and the fact that significant portions of the U.S.

population may never be vaccinated, and the continued likelihood of surges of COVID-19 including from new strains of SARS-CoV-2 with uncertain susceptibility to the current vaccines.

We believe that these factors have greatly magnified the need for more effective therapeutics, and the need for efficient and widespread testing, with properties targeted to the disease processes caused by serious viral infections.

We recognized a $ 31.5 million gain on the sale of the facility during the year ended December 31, 2021.

Note 2 Impact of COVID-19 and foreign exchange rates

Impact of COVID-19

We continue to be a part of the coordinated public and private sector response to the COVID-19 pandemic.

There continues to be a high level of uncertainty relating to the pandemic’s continuing evolution, including how governments and consumers will react to new developments, and whether the pandemic will have a longer-term effect on the healthcare industry and patient habits.

BioReference has been providing COVID-19 solutions, including diagnostic molecular testing and serology antibody testing, to meet the testing needs of its customers, including physicians, health systems, long-term care facilities, governments, schools, employers, professional sports teams and entertainment venues, as well as the general public through relationships with retail pharmacy chains.

Throughout the pandemic, we have managed our company-wide lab operations specimen acquisition, logistics, procurement, customer service, and initiatives to manage our cost structure to match the ever changing COVID-19 testing volumes and to identify and capitalize on efficiencies in our core clinical lines of business.

While BioReference benefitted from significant COVID-19 testing volumes in 2020 and 2021, demand declined in 2022 and we expect COVID-19 test demand to continue to decline in 2023 as compared to 2022.

Revenue from services for the year ended December 31, 2022 decreased by $ 851.5 million as compared to 2021 due to COVID-19 testing volumes.

Excluding COVID-19 test volumes, for the year ended December 31, 2022, routine clinical test volume decreased 2.0 % as compared to volumes for the year ended December 31, 2021.

Foreign Currency Exchange Rates

For the years ended December 31, 2022, 2021, and 2020, approximately 21.6 %, 7.4 %, and 5.7 % of revenue were denominated in currencies other than the U.S.

Dollar (USD).

Our financial statements are reported in USD and, accordingly, fluctuations in exchange rates affect the translation of revenues and expenses denominated in foreign currencies into USD for purposes of reporting the consolidated financial results.

During the years ended December 31, 2022, 2021 and 2020, the most significant currency exchange rate exposures were to the Euro and Chilean Peso.

Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $ 39.9 million and $ 27.1 million on December 31, 2022 and 2021, respectively.

We are subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of transactions.

We limit foreign currency transaction risk through hedge transactions with foreign currency forward contracts.

Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.

At December 31, 2022, we had 194 open foreign exchange forward contracts relating to inventory purchases on letters of credit with various amounts maturing monthly through January 2023 with a notional value totaling approximately $ 11.9 million.

At December 31, 2021, we had 33 open foreign exchange forward contracts relating to inventory purchases on letters of credit with various amounts maturing monthly through January 2022 with a notional value totaling approximately $ 2.6 million.

Note 3 Summary of Significant Accounting Policies

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Inventory obsolescence expense for the years ended December 31, 2022, 2021 and 2020 was $ 4.1 million, $ 6.5 million and $ 4.4 million, respectively.

Pre-launch inventories.

We may accumulate commercial quantities of certain product candidates prior to the date we anticipate that such products will receive final FDA approval.

The accumulation of such pre-launch inventories exposes us to the risk that such products may not be approved for marketing by the FDA on a timely basis, or ever;

however, we may accumulate pre-launch inventories depending on the commercial value of the applicable product launch opportunity.

In accordance with our policy, we expense this pre-launch inventory.

Goodwill and intangible assets.

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Refer to Note 6.

Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions at December 31, 2021 and 2020, was $ 1.4 billion and $ 1.7 billion, respectively.

Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions was $ 1.6 billion and $ 1.4 billion at December 31, 2022 and 2021, respectively.

Assets acquired and liabilities assumed in business combinations, licensing and other transactions are generally recognized at the date of acquisition at their respective fair values.

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Subsequent to acquisition, goodwill and indefinite lived intangible assets are tested at least annually as of October 1 for impairment, or when events or changes in circumstances indicate it is more likely than not that the carrying amount of such assets may not be recoverable.

Goodwill was $ 520.6 million and $ 680.6 million, respectively, at December 31, 2021 and 2020.

In addition, at December 31, 2021, Assets held for sale includes $ 151.8 million of goodwill related to GeneDx.

Estimating the fair value of a reporting unit for goodwill impairment is highly sensitive to changes in projections and assumptions and changes in assumptions could potentially lead to impairment.

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Ultimately, potential changes in these assumptions may impact the estimated fair value of a reporting unit and result in an impairment if the fair value of such reporting unit is less than its carrying value.

Net intangible assets at December 31, 2021 and 2020, other than goodwill were $ 911.9 million and $ 1.1 billion, respectively, including IPR&D of $ 590.2 million.

Goodwill was $ 595.9 million and $ 520.6 million, respectively, at December 31, 2022 and 2021.

At December 31, 2021, Assets held for sale include $ 151.8 million of goodwill related to GeneDx.

Net intangible assets other than goodwill was $ 1.0 billion and $ 1.1 billion at December 31, 2022 and 2021, respectively, including IPR&D of $ 195.0 million and $ 590.2 million at December 31, 2022 and 2021, respectively.

Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products and IPR&D.

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If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, then an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

No impairment charges were recognized for the year ended December 31.

2021 and December 31, 2020.

Impairment charges for the year ended December 31, 2019 were $ 92.4 million and consisted of a goodwill impairment charge of $ 26.2 million to write the carrying amount of the OPKO Diagnostics, CURNA and Transition Therapeutics reporting units down to their estimated fair value, an impairment charge of $ 44.8 million to write our IPR&D assets for OPK88003 and CURNA’s platform technology for oligonucleotide therapeutics down to their estimated fair value, and an impairment charge of $ 20.7 million to write our intangible asset for the Claros Analyzer down to its estimated fair value as a result of our testing.

These impairment charges for the year ended December 31, 2019, resulted from liquidity constraints, longer than expected development timelines and changes in the competitive landscape, which resulted in changes to our estimates and assumptions of the expected future cash flows of the reporting units focused on the development of the Claros Analyzer, OPK88003 and CURNA’s platform technology.

No impairment charges were recognized for the years ended December 31 2022, 2021, and 2020.

We believe that our estimates and assumptions in testing goodwill and other intangible assets, including IPR&D, for impairment are reasonable and otherwise consistent with assumptions that marketplace participants would use in their estimates of fair value.

However, if future results are not consistent with our estimates and assumptions, including as a result of the COVID-19 global pandemic, then we may be exposed to additional impairment charges, which could be material.

Our 2021 impairment test of the OPKO Biologics reporting unit, including IPR&D related to Somatrogon, indicated an excess of estimated fair value over the carrying amount of approximately 19 %.

We submitted the initial BLA with the FDA for approval of Somatrogon (hGH-CTP) in the United States and Pfizer received a Complete Response Letter in January 2022.

Pfizer and OPKO are evaluating the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon in the United States.

If we are unable to successfully commercialize Somatrogon in the U.S., or changes in projections and assumptions negatively impact our forecast of net cash flows, we may be exposed to a material impairment charge related to the IPR&D for Somatrogon.

Based on the current financial performance of our diagnostic segment, if future results are not consistent with our estimates and assumptions, then we may be exposed to impairment charges, which could be material.

In our pharmaceutical segment, Pfizer submitted the initial BLA with the FDA for approval of Somatrogon (hGH-CTP) in the United States, and Pfizer received a Complete Response Letter in January 2022.

Pfizer and OPKO have evaluated the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon (hGH-CTP) in the United States.

If we are unable to get approval for Somatrogon (hGH-CTP) in the United States, then we may be exposed to impairment charges, which could be material.

During the year ended December 31, 2022, we reclassified $ 590.2 million of IPR&D related to Somatrogon (hGH-CTP) from IPR&D in our Consolidated Balance Sheet upon the approval of NGENLA (Somatrogon) in Europe and Japan.

The assets are being amortized on a straight-line basis over their estimated useful life of approximately 12 years.

We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives, ranging from 3 to 20 years.

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Expenditures for repairs and maintenance are charged to expense as incurred.

Assets held under finance leases are included within Property, plant and equipment, net in our Consolidated Balance Sheets and are amortized over the shorter of their useful lives or the expected term of their related leases.

Depreciation expense was $ 20.9 million, $ 28.4 million and $ 29.0 million for the years ended December 31, 2022, 2021 and 2020, respectively.

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deferred tax assets, the relative mix in earnings and losses in the U.S.

versus foreign tax jurisdictions, and the impact of certain discrete tax events and operating results in tax jurisdictions that do not result in a tax benefit.

versus foreign tax jurisdictions, and the impact of certain discrete tax events and operating results in tax jurisdictions which do not result in a tax benefit.

Included in Other long-term liabilities is an accrual of $ 6.0 million related to uncertain tax positions involving income recognition.

We recognize that local tax law is inherently complex and the local taxing authorities may not agree with certain tax positions taken.

In connection with an examination of a 2014 and 2015 tax return in a foreign jurisdiction, the taxing authority has issued an initial income tax assessment of approximately $ 66 million (including interest).

We are protesting this

assessment as we believe that it is without technical merit.

We expect to exhaust all administrative and judicial remedies necessary to resolve the matter, which could be a lengthy process.

In connection with an examination of foreign tax returns for the 2014 through 2020 tax years, a foreign taxing

authority has issued an income tax assessment of approximately $ 246 million (including interest).

We are appealing this assessment, as we believe, other than for uncertain tax positions for which we have reserved, the issues are without technical merit.

We intend to exhaust all judicial remedies necessary to resolve the matter, as necessary, which could be a lengthy process.

There can be no assurance that this matter will be resolved in our favor, and an adverse outcome, or any future tax examinations involving similar assertions, could have a material effect on our financial condition, results of operations and cash flows.

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However, credit risk is limited due to the number of our clients as well as their dispersion across many different geographic regions.

While we have receivables due from federal and state governmental agencies, we do not believe that such receivables represent a credit risk because the related healthcare programs are funded by federal and state governments, and payment is primarily dependent upon submitting appropriate documentation.

While we have receivables due from federal and state governmental agencies, such receivables are not a credit risk because federal and state governments fund the related healthcare programs.

Payment is primarily dependent upon submitting appropriate documentation.

At December 31, 2022 and 2021, receivable balances (net of explicit and implicit price concessions) from Medicare and Medicaid were 14 % and 8 %, respectively, of our consolidated Accounts receivable, net.

At December 31, 2021 and 2020, receivable balances (net of explicit and implicit price concessions) due directly from states, cities and other municipalities, specifically related to our real-time reverse-transcription polymerase chain reaction (real-time RT-PCR) assay to detect COVID-19, were 4.1 % and 6.3 % of our consolidated accounts receivable, net.

At December 31, 2021, receivable balances (net of explicit and implicit price concessions) due directly from states, cities and other municipalities, specifically related to our real-time reverse-transcription polymerase chain reaction (real-time RT-PCR) assay to detect COVID-19 were 4.1 % of our consolidated accounts receivable, net.

The portion of our accounts receivable due from individual patients comprises the largest portion of credit risk.

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We record excess tax benefits realized from the exercise of stock options as cash flows from operations.

During the years ended December 31, 2021, 2020 and 2019, we recorded $ 13.6 million, $ 8.9 million and $ 13.4 million, respectively, of equity-based compensation expense.

For the years ended December 31, 2022, 2021 and 2020, we recorded $ 18.5 million, $ 13.6 million and $ 8.9 million, respectively, of equity-based compensation expense.

Research and development expenses.

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Refer to Note 5.

Pending accounting pronouncements .

Recently adopted accounting pronouncements .

In August 2020, the FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40).” ASU 2020-06 will simplify the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40).” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock.

The ASU is effective for public entities for fiscal years beginning after December 15, 2021, with early adoption permitted.

We are currently evaluating the impact of this new guidance on our Consolidated Financial Statements.

As required, we adopted ASU 2020-06 on January 1, 2022 and used the modified retrospective approach for all convertible debt instruments at the beginning of the period of adoptions.

Results for reporting periods beginning January 1, 2022 are presented under ASU 2020-06, while prior period amounts were not adjusted and continue to be reported in accordance with historic accounting guidance.

Under the modified approach, entities applied the guidance to all financial instruments that are outstanding as of the beginning of the year of adoption with the cumulative effect recognized as an adjustment to the opening balance of retained earnings.

ASU 2020-06 eliminates the cash conversion and beneficial conversion feature models in ASC 470-20 that require an issuer of certain convertible debt and preferred stock to separately account for embedded conversion features as a component of equity.

The adoption of ASU 2020-06 at January 1, 2022 resulted in an increase of the 2025 Convertible notes of $ 21.6 million, a reduction of the Accumulated deficit of $ 17.5 million and a reduction of Additional paid-in capital of $ 39.1 million.

Note 4 Income (loss) Per Share

Basic income (loss) per share is computed by dividing our net income (loss) by the weighted average number of shares of our common stock par value $ 0.01 per share (“Common Stock”) outstanding during the period.

Basic income (loss) per share is computed by dividing our net income (loss) by the weighted average number of shares of our Common Stock outstanding during the period.

Shares of Common Stock outstanding under the share lending arrangement entered into in conjunction with the 2025 Notes (as defined in Note 7) are excluded from the calculation of basic and diluted earnings per share because the borrower of the shares is required under the share lending arrangement to refund any dividends paid on the shares lent.

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A full presentation of diluted earnings per share has not been provided because the required adjustments to the numerator and denominator resulted in diluted earnings per share equivalent to basic earnings per share.

During the year ended December 31, 2021, 445,437 Common Stock options to purchase shares of our Common Stock were exercised, resulting in the issuance of 445,437 shares of Common Stock.

Of the 445,437 Common Stock options exercised, 0 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the agreements.

During the year ended December 31, 2022, an aggregate of 211,187 options were exercised and 1,599,212 restricted stock units were settled, resulting in the issuance of 1,316,570 shares of Common Stock.

Of the 1,810,399 exercised and restricted stock units settled, 493,829 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the related agreements.

During the year ended December 31, 2021, 445,437 Common Stock options to purchase shares of our Common Stock were exercised, resulting in the issuance of 445,437 shares of Common Stock.

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Of the 206,875 Common Stock options exercised, 0 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the agreements .

Note 5 Investments

Note 5 Acquisitions and Investments

ModeX Acquisition

On May 9, 2022, the Company entered into the ModeX Merger Agreement and acquired ModeX in a merger, pursuant to which ModeX survived as a wholly owned subsidiary of the Company.

The Company paid the entirety of the $ 300.0 million purchase price pursuant to the issuance of the Consideration Shares to the former stockholders of ModeX.

The Consideration Shares were valued at $ 219.4 million, based on the closing price per share of our Common Stock of $ 2.44 as reported by NASDAQ on the Closing Date.

Included in the total fair value of consideration transferred of $ 221.7 million were $ 2.3 million of fully vested equity awards.

The following table summarizes the preliminary purchase price allocation and the estimated fair value of the net assets acquired and liabilities assumed at the date of acquisition.

The purchase price allocation for the ModeX transaction is preliminary, pending completion of the fair value analysis of acquired assets and liabilities:

(in thousands) ModeX

Cash and cash equivalents $ 228

Other assets 554

Property, plant and equipment 1,046

IPR&D assets 195,000

Goodwill 80,432

Accounts payable ( 286 )

Deferred tax liability ( 55,312 )

Total purchase price $ 221,662

Goodwill from the acquisition of ModeX principally relates to intangible assets that do not qualify for separate recognition (for instance, ModeX's assembled workforce) and the deferred tax liability generated as a result of the transaction.

Goodwill is not tax deductible for income tax purposes and was assigned to the pharmaceutical reporting segment.

Our IPR&D assets will not be amortized until the underlying development programs are completed and we obtain regulatory approval.

The IPR&D asset is then accounted for as a finite-lived intangible asset and amortized depending on pattern of future use.

Intangible assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, although IPR&D is required to be tested at least annually until the project is completed or abandoned.

Net loss in the Consolidated Statement of Operations for the year ended December 31, 2022 includes $ 10.6 million of net loss of ModeX from the date of acquisition.

The following table reflects the accounting method, carrying value and underlying equity in net assets of our unconsolidated investments as of December 31, 2022 and 2021:

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Variable interest entity, equity method 800 1,370 816 3,043

Equity method investments - FV option 21,120 —

Equity securities 648 4,226

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Equity method investments

Our equity method investments consist of investments in Pharmsynthez (ownership 9 %), Cocrystal Pharma, Inc.

Our equity method investments, other than GeneDx Holdings disclosed below, consist of investments in Pharmsynthez (ownership 9 %), Cocrystal Pharma, Inc.

(“COCP”) ( 3 %), Non-Invasive Monitoring Systems, Inc.

(“NIMS”) ( 1 %), Neovasc Inc.

(“Neovasc”) ( 1 %), InCellDx, Inc.

(“InCellDx”) ( 29 %), BioCardia, Inc.

(“BioCardia”) ( 1 %), and Xenetic Biosciences, Inc.

(“Xenetic”) ( 1 %).

The aggregate amount of assets, liabilities, and net losses of our equity method investees as of and for the year ended December 31, 2021 were $ 223.6 million, $ 37.9 million, and $ 69.4 million, respectively.

The aggregate total assets, liabilities, and net losses of our equity method investees as of and for the year ended December 31, 2020 was $ 90.9 million, $ 28.4 million, and $ 75.4 million, respectively.

We have determined that we and/or our related parties can significantly influence control of our equity method investments through our board representation and/or voting power.

(“NIMS”) ( 1 %), Neovasc

(“Neovasc”) ( 0 %), BioCardia, Inc.

(“BioCardia”) ( 1 %), Xenetic Biosciences, Inc.

(“Xenetic”) ( 3 %), and LeaderMed Health Group Limited (“LeaderMed”) ( 47 %).

The aggregate amount of assets, liabilities, and net losses of these equity method investees as of and for the year ended December 31, 2022 were $ 167.1 million, $ 46.5 million, and $ 101.5 million, respectively.

The aggregate amount of assets, liabilities, and net losses of these equity method investees as of and for the year ended December 31, 2021 was $ 223.6 million, $ 37.9 million, and $ 69.4 million, respectively.

We have determined that we or our related parties have the ability to exercise significant influence over our equity method investments through our board representation or voting power.

Accordingly, we account for our investment in these entities under the equity method and record our proportionate share of their losses in Loss from investments in investees in our Consolidated Statement of Operations.

The aggregate value of our equity method investments based on the quoted market price of their respective shares of common stock and the number of shares held by us as of December 31, 2021 and 2020 was $ 4.5 million and 7.5 million, respectively.

The aggregate value of our equity method investments based on the quoted market prices of their respective shares of common stock and the number of shares held by us as of December 31, 2022 and 2021 was $ 1.3 million and 4.5 million, respectively.

Equity method investments - Fair value option

On April 29, 2022, the Company sold GeneDx to Sema4 (now GeneDx Holdings) in accordance with the terms of the GeneDx Merger Agreement, pursuant to which GeneDx Holdings paid to the Company aggregate consideration of $ 150 million in cash (before deduction of transaction expenses and other customary purchase price adjustments), together with the Closing Shares.

As of December 31, 2022, we held 80.0 million shares of GeneDx Holdings Common Stock, representing an approximate 21 % ownership interest in GeneDx Holdings.

Pursuant to the GeneDx Merger Agreement, the Company designated, and GeneDx Holdings nominated for election an individual to serve on the board of directors of GeneDx Holdings, and such nominee was elected by GeneDx Holdings stockholders to serve as a director until GeneDx Holdings 2024 annual meeting of stockholders.

As a result, we have determined that the Company or our related parties can exercise significant influence over the investee through our board representation or voting power.

However, our influence is restricted by the GeneDx Holdings Shareholder Agreement, pursuant to which we have agreed to vote our shares of GeneDx Holdings Common Stock in accordance with the recommendation of GeneDx Holdings’s board of directors for so long as we continue to hold at least 5 % of the outstanding shares of GeneDx Holdings Common Stock.

Other than through our sole board seat, we are unable to influence GeneDx Holdings’s policy-making process.

We hold one of eleven seats on GeneDx Holdings board of directors, and it is anticipated that our designee will serve until GeneDx Holdings 2024 annual meeting of stockholders or otherwise in accordance with the applicable lock-up period.

The designee may continue to serve following the expiration of the lock-up period if the GeneDx Holdings stockholders elect him to continue serving on the board.

As such, OPKO is not actively participating in the policy-making process of GeneDx Holdings.

We elected to account for our investment in GeneDx Holdings under the equity method fair value option and record gains and losses from changes in fair value in other income (expense), net in our Consolidated Statements of Operations.

For the year ended December 31, 2022 we recognized $ 150.9 million in net losses for fair value changes in our shares of GeneDx Holdings Common Stock.

As of December 31, 2022, the aggregate value of our GeneDx Holdings investment based on the quoted market price of the GeneDx Holdings Common Stock was $ 21.1 million.

Investments in Equity securities

Our equity securities consist of investments in Phio Pharmaceuticals (“Phio”) (ownership 0.01 %), VBI Vaccines Inc.

(“VBI”) ( 1 %), ChromaDex Corporation (“ChromaDex”) ( 0.1 %), Eloxx Pharmaceuticals, Inc.

Our equity securities consist of investments in Phio Pharmaceuticals (“Phio”) (ownership 0.01 %), VBI ( 1 %), ChromaDex Corporation (“ChromaDex”) ( 0.1 %), Eloxx Pharmaceuticals, Inc.

(“Eloxx”) ( 1 %), CAMP4 Therapeutics Corporation (“CAMP4”) ( 2 %), and HealthSnap, Inc.

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Warrants and options

In addition to our equity method investments and equity securities, we hold options to purchase 47 thousand additional shares of BioCardia, all of which were vested as of December 31, 2021 and 2020, and 33 thousand, 0.7 million to purchase additional shares of COCP and InCellDx, Inc., respectively.

In addition to our equity method investments and equity securities, we hold options to purchase 47 thousand additional shares of BioCardia, all of which were vested as of December 31, 2022 and 2021, and 33 thousand and 0.7 million warrants to purchase additional shares of COCP and InCellDx, Inc., respectively.

We recorded the changes in the fair value of the options and warrants in Fair value changes of derivative instruments, net in our Consolidated Statement of Operations.

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Investments in variable interest entities

We have determined that we hold variable interests in LeaderMed Health Group Limited (“LeaderMed”), Detect Genomix, LLC (“Detect Genomix”) and Zebra Biologics, Inc.

We have determined that we hold variable interests in LeaderMed and Zebra Biologics, Inc.

We made this determination as a result of our assessment that they do not have sufficient resources to carry out their principal activities without additional financial support.

On September 14, 2021, we and LeaderMed Health Group Limited (“LeaderMed”), a pharmaceutical development company with operations based in Asia, announced the formation of a joint venture to develop, manufacture and commercialize two of OPKO’s clinical stage, long-acting drug products in Greater China and eight other Asian territories.

On September 14, 2021, we and LeaderMed, a pharmaceutical development company with operations based in Asia, announced the formation of a joint venture to develop, manufacture and commercialize two of OPKO’s clinical stage, long-acting drug products in Greater China and eight other Asian territories.

Under the terms of the agreements, we have granted the joint venture exclusive rights to develop, manufacture and commercialize (a) OPK88003, an oxyntomodulin analog being developed for the treatment of obesity and diabetes, and (b) Factor VIIa-CTP, a novel long acting coagulation factor being developed to treat hemophilia, in exchange for 4,703 shares 47 % ownership interest in the joint venture.

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Therefore, we have the ability to exercise significant influence over the joint venture’s operations and account for our investment in the joint venture under the equity method.

In August 2020, GeneDx, Inc., a subsidiary of BioReference, announced that it had entered into an agreement with Pediatrix Medical Group (“Pediatrix”), a provider of maternal-fetal, and pediatric medical and surgical subspecialty physician services, to offer genomic sequencing to support clinical diagnosis in neonatal intensive care units staffed by Pediatrix’s affiliated neonatologists.

The offering is planned to include whole exome and whole genome sequencing and genomic support services under the brand Detect Genomix.

Our initial capital investment in Detect Genomix was $ 245,000 for which we received a 49 % ownership interest in Detect Genomix.

We are required to make additional capital contributions to Detect Genomix in accordance with our percentage interests if Detect Genomix is unable to generate positive cash flow from operations or is unable to obtain alternative financing.

We have not made any other investments in or loans to Detect Genomix through December 31, 2021.

In January 2022, the Detect Genomix agreement was terminated.

In order to determine the primary beneficiary of Detect Genomix, we evaluated our investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Detect Genomix.

Based on the capital structure, governing documents and overall business operations of Detect Genomix, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Detect Genomix’s economic performance.

We determined, however, that we can significantly influence control of Detect Genomix through our board representation and voting power.

Therefore, we have the ability to exercise significant influence over Detect Genomix’s operations and account for our investment in Detect Genomix under the equity method.

The joint venture was dissolved in January 2022.

We own 1,260,000 shares of Zebra Series A-2 Preferred Stock and 900,000 shares of Zebra restricted common stock (ownership 29 % at December 31, 2022 and 2021).

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In order to determine the primary beneficiary of Zebra, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related parties’ investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Zebra.

Based on the capital structure, governing documents and

overall business operations of Zebra, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Zebra’s economic performance and have no obligation to fund expected losses.

We did determine, however, that we can significantly influence control of Zebra through our board representation and voting power.

Based on the capital structure, governing documents and overall business operations of Zebra, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Zebra’s economic performance and have no obligation to fund expected losses.

We determined, however, that we can significantly influence control of Zebra through our board representation and voting power.

Therefore, we have the ability to exercise significant influence over Zebra’s operations and account for our investment in Zebra under the equity method.

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Inventories, net

Consumable supplies $ 39,447 $ 86,779

Finished products $ 37,139 $ 44,107

Consumable supplies 31,275 39,447

Work in-process 2,449 1,615

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Intangible assets, net:

Customer relationships $ 314,823 $ 448,751

Technologies $ 826,282 $ 246,101

Customer relationships 314,854 314,823

Trade names 49,752 49,770

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Accrued expenses:

Inventory received but not invoiced $ 40,446 $ 72,160

Employee benefits $ 33,765 $ 45,939

Inventory received but not invoiced 7,830 40,446

Commitments and contingencies 4,295 27,819

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Other long-term liabilities:

Mortgages and other debts payable $ 9,098 $ 2,224

Finance leases long-term 7,089 2,924

Contingent consideration 974 2,350

Mortgages and other debts payable 2,224 3,837

Contract liabilities 138 208

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$ 27,371 $ 15,062

Our intangible assets and goodwill relate principally to our completed acquisitions of OPKO Renal, OPKO Biologics, EirGen and BioReference.

Our intangible assets and goodwill relate principally to our completed acquisitions of OPKO Renal, OPKO Biologics, EirGen, BioReference and ModeX.

We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives.

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Our goodwill is not tax deductible for income tax purposes in any jurisdiction in which we operate.

As of December 31, 2021, GeneDx met the held-for-sale accounting criteria and the related assets and liabilities are recognized at the lower of carrying value or fair value less costs to sell in the consolidated balance sheet.

In addition, at December 31, 2021, Assets held for sale includes $ 151.8 million of goodwill related to GeneDx.

The changes in value of the intangible assets and goodwill during the year ended December 31, 2020, are primarily due to foreign currency fluctuations between the Chilean Peso, the Euro and the Shekel against the U.S.

The changes in value of the intangible assets and goodwill during the year ended December 31, 2019 are primarily due to an impairment charge of $ 44.8 million to write our IPR&D assets for OPK88003 and CURNA’s platform technology for oligonucleotide therapeutics down to their estimated fair value, a goodwill impairment charge of $ 26.2 million to write the carrying amount of the OPKO Diagnostics, CURNA and Transition Therapeutics reporting units down to their estimated fair value, and an impairment charge of $ 20.7 million to write our intangible asset for the Claros Analyzer down to its estimated fair value.

As of December 31, 2021, GeneDx met the held-for-sale accounting criteria and its related assets and liabilities were recognized at the lower of carrying value or fair value less costs to sell in the consolidated balance sheet.

In addition, on December 31, 2021, assets held for sale included $ 151.8 million of goodwill related to GeneDx.

The assets will be amortized on a straight-line basis over their estimated useful life of approximately 12 years.

Other changes in value of the intangible assets and goodwill on December 31, 2022 and 2021, were primarily due to foreign currency fluctuations between the Chilean Peso, and the Euro against the U.S.

The following table reflects the changes in the allowance for doubtful accounts, provision for inventory reserve and tax valuation allowance accounts:

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The following table summarizes the changes in Goodwill by reporting unit during the years ended December 31, 2022 and 2021.

(In thousands) Gross goodwill at January 1 Cumulative impairment at January 1 Goodwill impairment Foreign exchange and other Balance at December 31st Gross goodwill at January 1 Cumulative impairment at January 1 Goodwill impairment Foreign exchange and other Balance at December 31st

(In thousands) Gross goodwill at January 1 Cumulative impairment at January 1 Acquisition and dispositions Foreign exchange and other Balance at December 31st Gross goodwill at January 1 Cumulative impairment at January 1 Foreign exchange and other Balance at December 31st

Pharmaceuticals

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FineTech 11,698 ( 11,698 ) — — — 11,698 ( 11,698 ) — —

ModeX — 80,432 — 80,432 — — — —

OPKO Biologics 139,784 — — — 139,784 139,784 — — 139,784

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Foreign exchange and other amounts for the year ended December 31, 2021 includes amounts related to GeneDx which is included as Assets held for sale at December 31, 2021.

As of December 31, 2021 and 2020, our debt consists of the following:

As of December 31, 2022 and 2021, our debt consisted of the following:

(In thousands) As of December 31, 2022 As of December 31, 2021

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Balance sheet captions

Convertible Notes $ 187,935 $ 221,989

Current portion of convertible notes $ 3,050 $ —

Long term portion of convertible notes 210,371 187,935

Current portion of lines of credit and notes payable 33,540 14,694

LT notes payable included in long-term liabilities 2,642 4,513

LT notes payable included in other long-term liabilities 9,290 2,642

Total $ 256,251 $ 205,271

On February 25, 2020, we entered into a credit agreement with an affiliate of Dr.

Frost, pursuant to which the lender committed to provide us with an unsecured line of credit in the amount of $ 100 million.

The line of credit called for a commitment fee equal to 0.25 % per annum of the unused portion of the line.

No funds were borrowed under this line of credit and we terminated this line of credit in June 2021.

In February 2019, we issued $ 200.0 million aggregate principal amount of Senior Convertible Notes due 2025 (the “2025 Notes”) in an underwritten public offering.

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In addition, following certain corporate events that occur prior to the maturity date of the 2025 Notes or if we deliver a notice of redemption, in certain circumstances the indenture governing the 2025 Notes requires an increase in the conversion rate of the 2025 Notes for a holder who elects to convert its notes in connection with such a corporate event or notice of redemption, as the case may be.

We may not redeem the 2025 Notes prior to February 15, 2022.

preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

We may redeem for cash any or all of the notes, at our option, on or after February 15, 2022, if the last reported sale price of our Common Stock has been at least 130 % of the then current conversion price for the notes for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide notice of redemption at a redemption price equal to 100 % of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

No sinking fund is provided for the 2025 Notes.

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In May 2021, we entered into exchange agreements with certain holders of the 2025 Notes pursuant to which the holders exchanged $ 55.4 million in aggregate principal amount of the outstanding 2025 Notes for 19,051,270 shares of our Common Stock (the “Exchange”).

We recorded an $ 11.1 million non-cash loss related to the Exchange.

We recorded an $ 11.1 million non-cash loss related to the Exchange during 2021.

In conjunction with the issuance of the 2025 Notes, we agreed to loan up to 30,000,000 shares of our Common Stock to affiliates of the underwriter in order to assist investors in the 2025 Notes to hedge their position.

Following consummation of the Exchange, the number of outstanding borrowed shares of Common Stock was reduced by 8,105,175 shares.

As of December 31, 2021 and 2020, a total of 21,144,825 and 29,250,000 shares were issued under the share lending arrangement, respectively.

Following the consummation of the Exchange, the number of outstanding borrowed shares of Common Stock was reduced by 8,105,175 shares.

As of December 31, 2022 and 2021, a total of 21,144,825 and 21,144,825 shares remained outstanding under the share lending arrangement, respectively.

We will not receive any of the proceeds from the sale of the borrowed shares, but we received a one-time nominal fee of $ 0.3 million for the newly issued shares.

Shares of our Common Stock outstanding under the share lending arrangement are excluded from the calculation of basic and diluted earnings per share.

As required by ASC 470-20, “Debt with Conversion and Other Options,” we calculated the equity component of the 2025 Notes, taking into account both the fair value of the conversion option and the fair value of the share lending arrangement.

The equity component was valued at $ 52.6 million at issue date and this amount was recorded as Additional paid-in capital, which resulted in a discount on the 2025 Notes.

The discount is being amortized to Interest expense over the term of the 2025 Notes, which results in an effective interest rate on the 2025 Notes of 11.2 %.

The following table sets forth information related to the 2025 Notes which is included in our Consolidated Balance Sheet as of December 31, 2022:

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Amortization of debt discount and debt issuance costs — — 1,094 1,094

Conversion ( 55,420 ) 10,151 1,104 ( 44,165 )

Adoption of ASU 2020-06 — 22,747 ( 1,105 ) 21,642

Balance at December 31, 2022 $ 144,580 $ — $ ( 2,484 ) $ 142,096

In August 2020, the FASB issued ASU No.

The ASU is effective for public entities for fiscal years beginning after December 15, 2021, with early adoption permitted.

As required, we adopted ASU 2020-06 on January 1, 2022 and used the modified retrospective approach for all convertible debt instruments at the beginning of the period of adoptions.

In February 2018, we issued a series of 5 % Convertible Promissory Notes (the “2023 Convertible Notes”) in the aggregate principal amount of $ 55.0 million.

The 2023 Convertible Notes mature 5 years from the date of issuance.

Each holder of a 2023 Convertible Note has the option, from time to time, to convert all or any portion of the outstanding principal balance of such 2023 Convertible Note, together with accrued and unpaid interest thereon, into shares of our Common Stock at a conversion price of $ 5.00 per share of Common Stock.

We may redeem all or any part of the then issued and outstanding 2023 Convertible Notes, together with accrued and unpaid interest thereon, pro rata among the holders, upon no fewer than 30 days, and no more than 60 days, notice to the holders.

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The 2033 Senior Notes mature on February 1, 2033, unless earlier repurchased, redeemed or converted.

Upon a fundamental change as defined in the indenture, governing the 2033 Senior Notes, subject to certain exceptions, the holders may require us to repurchase all or

any portion of their 2033 Senior Notes for cash at a repurchase price equal to 100 % of the principal amount of the 2033 Senior Notes being repurchased, plus any accrued and unpaid interest to but not including the related fundamental change repurchase date.

Upon a fundamental change as defined in the indenture, governing the 2033 Senior Notes, subject to certain exceptions, the holders may require us to repurchase all or any portion of their 2033 Senior Notes for cash at a repurchase price equal to 100 % of the principal amount of the 2033 Senior Notes being repurchased, plus any accrued and unpaid interest to but not including the related fundamental change repurchase date.

From 2013 to 2016, holders of the 2033 Senior Notes converted $ 143.2 million in aggregate principal amount into an aggregate of 21,539,873 shares of Common Stock.

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In 2017, certain terms of the embedded derivatives expired pursuant to the original agreement and the embedded derivatives no longer met the criteria to be separated from the host contract and, as a result, the embedded derivatives were no longer required to be valued separate and apart from the 2033 Senior Notes and were reclassified to additional paid in capital.

In November 2015, BioReference and certain of its subsidiaries entered into a credit agreement with JPMorgan Chase Bank, N.A.

(“CB”), as lender and administrative agent, as amended (the “Credit Agreement”).

The Credit Agreement provides for a $ 75.0 million secured revolving credit facility and includes a $ 20.0 million sub-facility for swingline loans and a $ 20.0 million sub-facility for the issuance of letters of credit.

On August 30, 2021, the Credit Agreement was amended and restated (the “A&R Credit Agreement”).

The A&R Credit Agreement is guaranteed by all of BioReference’s domestic subsidiaries.

The A&R Credit Agreement is also secured by substantially all assets of BioReference and its domestic subsidiaries, as well as a non-recourse pledge by us of our equity interest in BioReference.

Availability under the A&R Credit Agreement is based on a borrowing base composed of eligible accounts receivables of BioReference and certain of its subsidiaries, as specified therein.

In November 2015, BioReference and certain of its subsidiaries entered into the Credit Agreement.

As amended, the Credit Agreement provides for a $ 75.0 million secured revolving credit facility and includes a $ 20.0 million sub-facility for swingline loans and a $ 20.0 million sub-facility for the issuance of letters of credit.

The Credit Agreement is guaranteed by all of BioReference’s domestic subsidiaries and is also secured by substantially all assets of BioReference and its domestic subsidiaries, as well as a non-recourse pledge by us of our equity interest in BioReference.

Availability under the Credit Agreement is based on a borrowing base composed of eligible accounts receivables of BioReference and certain of its subsidiaries, as specified therein.

As of December 31, 2022, $ 16.8 million remained available for borrowing under the Credit Agreement.

Principal under the Credit Agreement is due upon maturity on August 30, 2024.

At BioReference’s option, borrowings under the A&R Credit Agreement (other than swingline loans) bear interest at (i) the CB floating rate (defined as the higher of (a) the prime rate and (b) the LIBOR rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) for an interest period of one month plus 2.50 %) plus an applicable margin of 0.75 % or (ii) the LIBOR rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) plus an applicable margin of 1.75 %.

At BioReference’s option, borrowings under the Credit Agreement (other than swingline loans) bear interest at (i) the CB floating rate (defined as the higher of (a) the prime rate and (b) the LIBOR rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) for an interest period of one month plus 2.50 %) plus an applicable margin of 0.75 % or (ii) the LIBOR rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) plus an applicable margin of 1.75 %.

Swingline loans will bear interest at the CB floating rate plus the applicable margin.

The A&R Credit Agreement also calls for other customary fees and charges, including an unused commitment fee of 0.375 % if the average quarterly availability is 50% or more of the revolving commitment, or 0.25 % if the average quarterly availability is less than or equal to 50% of the revolving commitments.

As of December 31, 2021 and 2020, no amount and $ 7.1 million, respectively, was outstanding under the A&R Credit Agreement.

The A&R Credit Agreement contains customary covenants and restrictions, including, without limitation, covenants that require BioReference and its subsidiaries to maintain a minimum fixed charge coverage ratio if availability under the new credit facility falls below a specified amount and to comply with laws and restrictions on the ability of BioReference and its subsidiaries to incur additional indebtedness or to pay dividends and make certain other distributions to the Company, subject to certain exceptions as specified therein.

Failure to comply with these covenants would constitute an event of default under the A&R Credit Agreement, notwithstanding the ability of BioReference to meet its debt service obligations.

The A&R Credit Agreement also includes various customary remedies for the lenders following an event of default, including the acceleration of

repayment of outstanding amounts under the A&R Credit Agreement and execution upon the collateral securing obligations under the A&R Credit Agreement.

The Credit Agreement also calls for other customary fees and charges, including an unused commitment fee of 0.375 % if the average quarterly availability is 50% or more of the revolving commitment, or 0.25 % if the average quarterly availability is less than or equal to 50% of the revolving commitments.

As of December 31, 2022 and 2021, $ 18.1 million amount and no amount, respectively, was outstanding under the Credit Agreement.

The Credit Agreement contains customary covenants and restrictions, including, without limitation, covenants that require BioReference and its subsidiaries to maintain a minimum fixed charge coverage ratio if availability under the new credit facility falls below a specified amount and to comply with laws and restrictions on the ability of BioReference and its subsidiaries to

incur additional indebtedness or to pay dividends and make certain other distributions to the Company, subject to certain exceptions as specified therein.

Failure to comply with these covenants would constitute an event of default under the Credit Agreement, notwithstanding the ability of BioReference to meet its debt service obligations.

The Credit Agreement also includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the Credit Agreement and execution upon the collateral securing obligations under the Credit Agreement.

Substantially all the assets of BioReference and its subsidiaries are restricted from sale, transfer, lease, disposal or distributions to the Company, subject to certain exceptions.

As of December 31, 2022, BioReference and its subsidiaries had net assets of approximately $ 608.6 million, which included goodwill of $ 283.0 million and intangible assets of $ 187.9 million.

In addition to the A&R Credit Agreement with CB, we had line of credit agreements with eleven other financial institutions as of December 31, 2021 and 2020 in the U.S., Chile and Spain.

On April 29, 2022, we amended the Credit Agreement to, among other things, (i) waive specified defaults under the Credit Agreement resulting from certain internal reorganization transactions that resulted in both BioReference and GeneDx changing their respective forms of organization from New Jersey corporations to Delaware limited liability companies, (ii) provide for the disposition of GeneDx pursuant to the transactions contemplated by the GeneDx Merger Agreement, (iii) amend certain reporting requirements under the Credit Agreement and (iv) provide that the borrowers under the Credit Agreement may effect certain restricted payments to the extent necessary for their parent entities to pay income tax in respect of income earned by the borrowers.

In addition to the Credit Agreement, we had line of credit agreements with thirteen other financial institutions as of December 31, 2022 and eleven other financial institutions as of December 31, 2021 in the U.S., Chile and Spain.

These lines of credit are used primarily as a source of working capital for inventory purchases.

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BICE Bank 5.50 % 2,500 1,661 850

BBVA Bank 5.50 % 1,500 599 —

Security Bank 5.50 % 1,400 755 1,111

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Corpbanca 5.00 % — — 2,935

Consorcio Bank 5.00 % 2,000 925 —

Banco De Sabadell 1.75 % 535 — —

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Our authorized capital stock consists of 1,000,000,000 shares of Common Stock, par value $ 0.01 per share, and 10,000,000 shares of Preferred Stock, par value $ 0.01 per share.

Sales of Common Stock

On October 29, 2019, we issued 50 million shares of our Common Stock at a price of $ 1.50 per share in an underwritten public offering (the “2019 Stock Offering”), resulting in net proceeds to the Company of approximately $ 70 million, after deducting underwriting commissions and offering expenses.

In November 2019, pursuant to an option the Company granted the underwriters, we issued an additional 4,227,749 shares at $ 1.50 per share, less underwriting discounts and commissions,

resulting in net proceeds of approximately $ 6 million.

Frost and Hsiao and Mr.

Steven Rubin, members of OPKO’s senior management purchased an aggregate of 2,415,000 shares in the 2019 Stock Offering.

Subject to the rights of the holders of any shares of Preferred Stock currently outstanding or which may be issued in the future, the holders of the Common Stock are entitled to receive dividends from our funds legally available when, as and if declared by our Board of Directors, and are entitled to share ratably in all of our assets available for distribution to holders of Common Stock upon the liquidation, dissolution or winding-up of our affairs subject to the liquidation preference, if any, of any then outstanding shares of Preferred Stock.

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Equity awards granted under our 2007 Equity Incentive Plan are exercisable for a period of either 7 years or 10 years from the date of grant.

Equity awards granted under the

Modigene Plan are exercisable for a period of up to 10 years from date of grant.

Equity awards granted under the Modigene plan are exercisable for a period of up to 10 years from date of grant.

Vesting periods range from immediate to 5 years.

We currently grant equity awards under the 2016 Equity Incentive Plan only.

We classify the cash flows resulting from the tax benefit that arises when the tax deductions exceed the compensation cost recognized for those equity awards (excess tax benefits) as cash flows from operations.

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Of the $ 8.9 million of equity based compensation expense recorded for the year ended December 31, 2020, $ 6.8 million was recorded as selling, general and administrative expense, $ 1.8 million was recorded as research and development expenses and $ 0.3 million was recorded as cost of revenue.

As of December 31, 2021, there was $ 33.3 million of unrecognized compensation cost related to the stock options granted under our equity-based incentive compensation plans.

As of December 31, 2022, there was $ 23.1 million of unrecognized compensation cost related to the equity awards granted under our equity-based incentive compensation plans.

Such cost is expected to be recognized over a weighted-average period of approximately 1.80 years.

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Expected volatility 58.63 % - 78.52 %

58 % - 78.94 %

Expected dividend yield 0 % 0 % 0 %

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Accordingly, we used a dividend yield of zero in the assumptions.

We maintain incentive stock plans that provide for the grants of stock options to our directors, officers, employees and non-employee consultants.

We maintain incentive stock plans that provide for the grants of equity awards to our directors, officers, employees and non-employee consultants.

As of December 31, 2022, there were 8,675,694 shares of Common Stock reserved for issuance under our equity-based incentive plans.

We intend to issue new shares upon the exercise of stock options.

Stock options granted under these plans have been granted at an option price equal to the closing market value of the stock on the date of the grant.

Stock options granted under these plans were granted at an option exercise price equal to the closing market value of the Common Stock on

the applicable date of the grant.

Stock options granted under these plans to employees typically become exercisable over four years in equal annual installments after the date of grant, and stock options granted to non-employee directors become exercisable in full one-year after the grant date, subject to, in each case, continuous service with us during the applicable vesting period.

We assumed stock options to grant Common Stock as part of the mergers with Acuity Pharmaceuticals, Inc., Froptix, Inc., OPKO Biologics and BioReference, which reflected various vesting schedules, including monthly vesting to employees and non-employee consultants.

A summary of option activity under our stock option plans as of December 31, 2021, and the changes during the year is presented below:

A summary of option activity under our stock option plans as of December 31, 2022, and the change during the year is presented below:

Options Number of

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Exercisable at December 31, 2022 33,747,590 $ 6.78 4.22 $ —

A summary of restricted stock unit activity as of December 31, 2022, and the change during the year is presented below:

Restricted stock units Number of

shares Weighted

fair value Weighted

term (years) Aggregate

intrinsic value

(in thousands)

Unvested at December 31, 2021 661,376 $ 3.78 0.00 $ 3,181

Granted 3,386,579 $ 3.11

Actual vested ( 1,599,212 ) $ 3.44

Unvested and expected to vest at December 31, 2022 2,448,743 $ 3.07 9.39 $ 3,061

The total intrinsic value of stock options exercised for the years ended December 31, 2022, 2021, and 2020 was $ 0.2 million, $ 0.8 million and $ 0.4 million, respectively.

The weighted average grant date fair value of stock options granted for the years ended December 31, 2022, 2021, and 2020 was $ 1.29 , $ 2.62 , and $ 1.39 , respectively.

The weighted average grant date fair value of restricted stock units granted for the years ended December 31, 2022, 2021, and 2020 was $ 3.11 , $ 3.78 and $ 0.00 , respectively.

The total fair value of stock options vested during the years ended December 31, 2022, 2021, and 2020 was $ 17.7 million, $ 8.1 million and $ 10.6 million, respectively.

The total fair value of restricted stock units vested during the years ended December 31, 2022, 2021, and 2020 was $ 5.5 million, $ 0.0 million and $ 0.0 million , respectively.

During the year ended December 31, 2022, we modified the terms of certain outstanding stock options for 95 grantees, including options issued to GeneDx employees, to accelerate the vesting period of the stock options.

For the year ended December 31, 2022, we recognized additional equity-based compensation expense of $ 7.1 million as a result of the stock option modifications.

Note 11 Income Taxes

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Net deferred income tax liabilities $ ( 123,263 ) $ ( 142,709 )

Net deferred income tax liability balance includes $ 4.3 million recorded to Other Assets and $ 1.5 million recorded to Assets Held for Sale on the Consolidated Balance Sheet.

Net deferred income tax liability balances at December 31, 2022 and 2021 include $ 3.2 million and $ 5.8 million, respectively, recorded to Other assets on the Consolidated Balance Sheets.

As of December 31, 2022, we have federal, state and foreign net operating loss carryforwards of approximately $ 423.8 million, $ 774.5 million and $ 83.8 million, respectively, that expire at various dates through 2042 unless indefinite in nature.

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The annual limitation is equal to the value of our stock immediately before the ownership change, multiplied by the long-term tax-exempt rate (i.e., the highest of the adjusted federal long-term rates in effect for any month in the three-calendar-month period ending with the calendar month in which the change date occurs).

This limitation may be increased under the IRC Section 338

Approach (IRS approved methodology for determining recognized Built-In Gain).

This limitation may be increased under the IRC Section 338 Approach (IRS approved methodology for determining recognized Built-In Gain).

As a result, federal net operating losses and tax credits may expire before we are able to fully utilize them.

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There is no current impact on these financial statements as a result of the annual limitation.

This study did not conclude whether OPKO’s predecessor, eXegenics, pre-merger NOLs were limited under Section 382.

This study did not conclude whether OPKO’s predecessor, eXegenics, Inc., pre-merger NOLs were limited under Section 382.

As such, of the $ 423.8 million of federal net operating loss carryforwards, at least approximately $ 38.1 million may not be able to be utilized.

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On December 22, 2017, the 2017 Tax Act was enacted into law and the new legislation contains several key tax provisions, including a reduction of the corporate income tax rate from 35% to 21% effective January 1, 2018 and a one-time mandatory transition tax on accumulated foreign earnings, among others.

We were required to recognize the effect of the tax law changes in the period of enactment, such as remeasuring our U.S.

We were required to recognize the effect of the tax

law changes in the period of enactment, such as remeasuring our U.S.

deferred tax assets and liabilities, as well as reassessing the net realizability of our deferred tax assets and liabilities.

Effective January 1, 2018, the Tax Act provides for a new GILTI provision.

Effective January 1, 2018, the Tax Act provides for a new Global Intangible Low Taxed Income provision (“GILTI”).

Under the GILTI provision, certain foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets are included in U.S.

taxable income.

The Company’s GILTI inclusion is immaterial for the year ended December 31, 2021.

The Company has not recorded any deferred taxes for future GILTI inclusions as any future inclusions are expected to be treated as a period expense and offset by net operating loss carryforwards in the U.S.

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As of December 31, 2021 and 2020, $( 7.9 ) million and $( 10.0 ) million of the unrecognized tax benefits, if recognized, would have affected our effective income tax rate.

We believe it is reasonably possible that up to $ 3.2 million of unrecognized tax benefits may be recognized within the next twelve months, mainly due to an expected audit settlement.

We do not expect any unrecognized tax benefits will be recognized within the next twelve months.

The following summarizes the changes in our gross unrecognized income tax benefits.

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Research and development tax credits 0.2 % 2.3 % ( 1.0 ) %

GeneDx Disposition 0.8 % — % — %

Valuation allowance ( 6.3 ) % 235.4 % 227.7 %

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Unrecognized tax benefits ( 0.7 ) % 11.3 % ( 5.0 ) %

Impairments — % — % ( 1.6 ) %

GILTI ( 4.9 ) % — % — %

IPR&D benefit — % — % ( 309.6 ) %

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income and withholding tax liabilities based on the source of these earnings, as well as the expected means through which those earnings may be taxed.

We have accrued a withholding tax estimate of $ 1.8 million related to earnings that are not deemed to be permanently reinvested.

We maintain an accrued withholding tax estimate of $ 1.1 million related to earnings that are not deemed to be permanently reinvested.

Note 12 Related Party Transactions

In August 2020, we paid a $ 125,000 filing fee to the Federal Trade Commission (the “FTC”) in connection with filings made by us and Dr.

Jane Hsiao, our Vice Chairman and Chief Technical Officer, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) relating to her percentage equity ownership interest in OPKO and potential future purchases of our Common Stock.

In August 2020, Dr.

Phillip Frost, our Chairman and Chief Executive Officer, paid a filing fee of $ 280,000 to the FTC under the HSR Act in connection with filings made by us and Dr.

Frost, relating to his percentage equity ownership interest in OPKO and potential future purchases of our Common Stock.

We reimbursed Dr.

Frost for the HSR filing fee.

In August 2020, GeneDx entered into an agreement with Mednax Services, Inc.

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GeneDx’s initial capital investment in Detect Genomix was $ 245,000 for which GeneDx received a 49 % ownership interest in Detect Genomix, and Mednax Services contributed $ 255,000 in exchange for a 51 % ownership interest in Detect Genomix.

Adam Logal, the Company’s CFO, was the chair and sat on the Board of Managers of the joint venture.

Adam Logal, the Company’s Chief Financial Officer, was the chair and sat on the Board of Managers of the joint venture.

Mednax Services provided administrative services to the joint venture pursuant to an administrative services agreement.

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The joint venture was dissolved in January 2022.

On February 25, 2020, we entered into a credit agreement with an affiliate of Dr.

Frost, pursuant to which the lender committed to provide us with an unsecured line of credit in the amount of $ 100 million.

This line of credit called for a commitment fee equal to 0.25 % per annum of the unused portion of the line.

We terminated this line of credit in June 2021 and as of December 31, 2021, no amount was outstanding thereunder.

On October 29, 2019, we issued 50 million shares of our Common Stock at a price of $ 1.50 per share in the 2019 Stock Offering, resulting in net proceeds to the Company of approximately $ 70 million, after deducting underwriting commissions and offering expenses.

In November 2019, pursuant to an option the Company granted the underwriters, we issued an additional 4,227,749 shares at the public offering price, less underwriting discounts and commissions, resulting in net proceeds to the Company of approximately $ 6 million.

Frost and Hsiao and Mr.

Steven Rubin, members of OPKO’s senior management purchased an aggregate of 2,415,000 shares of Common Stock in the 2019 Stock Offering.

On March 1, 2019, OPKO Pharmaceuticals, LLC entered into an assignment agreement with Xenetic Biosciences, Inc., as amended from time to time (the “Assignment Agreement”), pursuant to which Xenetic acquired all of OPKO Pharmaceuticals’ right, title and interest in and to that certain Intellectual Property License Agreement (the “IP License Agreement”), entered into between The Scripps Research Institute and OPKO Pharmaceuticals, regarding certain patents for novel CAR T platform

technology and through which the Scripps Research Institute granted an exclusive royalty-bearing license in exchange for royalties, subject to the terms of the IP License Agreement.

Under the Assignment Agreement and the IP License Agreement, Xenetic issued to OPKO Pharmaceuticals 164,062 shares of Xenetic common stock (the “OPKO Transaction Shares”).

In connection with the Assignment Agreement, OPKO Pharmaceuticals entered into a voting agreement pursuant to which OPKO Pharmaceuticals agreed, among other things, to vote its shares in Xenetic in favor of the transactions contemplated by the Assignment Agreement, and a lock-up agreement with Xenetic which restricts OPKO Pharmaceuticals’ sale or transfer of any of the OPKO Transaction Shares as provided therein and as otherwise required by law.

The Assignment Agreement and the obligations thereunder took effect on July 19, 2019, after Xenetic satisfied certain closing conditions, including obtaining stockholder approval and securing certain financing.

The Company owns approximately 9 % of Pharmsynthez, and Pharmsynthez is Xenetic’s largest and controlling stockholder.

Richard Lerner, a director of the Company until his death on December 2, 2021, was a co-inventor of Xenetic’s technology and received 31,240 shares of Xenetic upon the closing of the Xenetic transactions described above.

Adam Logal, our Senior Vice President and Chief Financial Officer, is a director of Xenetic.

In March 2019, we paid the $ 125,000 filing fee to the FTC in connection with filings made by us and Dr.

Jane Hsiao, our Vice Chairman and Chief Technical Officer, under the HSR Act relating to her purchases of Common Stock.

In February 2019, Dr.

On April 29, 2022, upon consummation of the GeneDx Transaction, the Company entered into a Transition Services Agreement (the “Transition Services Agreement”), with GeneDx (now a wholly owned subsidiary of GeneDx Holdings), pursuant to which the Company agreed to provide, at cost, certain customary support services in respect of GeneDx’s business through December 31, 2022, including human resources, information technology support, and finance and accounting.

As of December 31, 2022, the Company had incurred aggregate expenses of $ 1.3 million for services rendered under the Transition Services Agreement.

As of December 31, 2022, the company has a receivable of $ 317.7 thousand payable to the Company by GeneDx in accordance with the terms of the Transition Services Agreement.

In August 2020, we paid a $ 125,000 filing fee to the Federal Trade Commission (the “FTC”) in connection with filings made by us and Dr.

In August 2020, Dr.

Phillip Frost, our Chairman and Chief Executive Officer, paid a filing fee of $ 280,000 to the FTC under the HSR Act in connection with filings made by us and Dr.

Frost, relating to his purchases of Common Stock.

Frost, relating to his percentage equity ownership interest in OPKO and potential future purchases of our Common Stock.

We reimbursed Dr.

Frost for the HSR filing fee.

On November 8, 2018, we entered into a credit agreement with an affiliate of Dr.

On February 25, 2020, we entered into a credit agreement with an affiliate of Dr.

Frost, pursuant to which the lender committed to provide us with an unsecured line of credit in the amount of $ 100 million.

Borrowings under this line of credit bore interest at a rate of 10 % per annum and could have been repaid and reborrowed at any time.

The credit agreement included various customary remedies for the lender following an event of default, including the acceleration of repayment of outstanding amounts under this line of credit.

This line of credit would have matured on November 8, 2023.

We repaid approximately $ 28.8 million that was borrowed in 2019 and terminated this line of credit on or around February 20, 2019.

This line of credit called for a commitment fee equal to 0.25 % per annum of the unused portion of the line.

We terminated this line of credit in June 2021 and as of December 31, 2021, no amount was outstanding thereunder.

We hold investments in Zebra (ownership 29 %), Neovasc ( 0 %), ChromaDex Corporation ( 0.1 %), COCP ( 3 %), NIMS ( 1 %), Eloxx ( 1 %), BioCardia ( 1 %) and LeaderMed Health Group Limited ( 47 %).

These investments were considered related party transactions as a result of our executive management’s ownership interests and/or board representation in these entities.

We also hold an investment in GeneDx of 21 % in connection with our sale of GeneDx, Inc.

and subsequent participation in an underwritten offering.

Rick Pfenniger who sits on our Board also sits on the GeneDx Board as a result of the acquisition.

See further discussion of our investments in Note 5.

In the first quarter of 2019, we exercised Neovasc’s Series C warrants for $ 1.2 million and exchanged the Series A warrants and received a total of 22,660 additional shares of Neovasc common stock.

In November 2016, we entered into a Pledge Agreement with the Museum of Science, Inc.

and the Museum of Science Endowment Fund, Inc.

pursuant to which we contributed an aggregate of $ 1.0 million over a four-year period for constructing, equipping and the general operation of the Frost Science Museum.

Frost and Mr.

Richard Pfenniger serve on the Board of Trustees of the Frost Science Museum and Mr.

Pfenniger is the Vice Chairman of the Board of Trustees.

We lease office space from Frost Real Estate Holdings, LLC (“Frost Holdings”) in Miami, Florida, where our principal executive offices are located.

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The rent is inclusive of operating expenses, property taxes and parking.

Elias Zerhouni, our Vice Chairman and President, sits on the board of directors of Danaher Corporation (“Danaher”).

Our subsidiary, BioReference, routinely procures products and services from several subsidiaries of Danaher, including Beckman Coulter, Integrated DNA Technologies Inc., and Leica Microsystems Inc., to which BioReference has paid $ 3.2 million, $ 0.2 million, and $ 0.4 million, respectively, during the year ended December 31, 2022.

BioReference purchases and uses certain products acquired from InCellDx, a company in which we hold a 29 % minority interest.

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Note 14 Commitments and Contingencies

In February 2023, the Office of the Attorney General for the State of Texas (“TX OAG”) informed BioReference that it believes that, from 2005 to the present, BioReference may have violated the Texas Medicaid Fraud Prevention Act with respect to claims it presented to Texas Medicaid for reimbursement.

BioReference has not determined whether there is any merit to the TX OAG claims nor can it determine the extent of any potential liability.

While management cannot predict the outcome of these matters at this time, the ultimate outcome could be material to our business, financial condition, results of operations, and cash flows.

On December 29, 2022, the Israel Tax Authority (the “ITA”) issued an assessment against our subsidiary, OPKO Biologics in the amount of approximately $ 246 million (including interest) related to uncertain tax positions involving income recognition in connection with an examination of foreign tax returns for the 2014 through 2020 tax years.

We recognize that local tax law is inherently complex and the local taxing authorities may not agree with certain tax positions taken.We are appealing this assessment, as we believe, other than for uncertain tax positions for which we have reserved, the issues are without technical merit.

We intend to exhaust all judicial remedies necessary to resolve the matter, as necessary, which could be a lengthy process.

In connection with our acquisitions of CURNA, OPKO Diagnostics and OPKO Renal, we agreed to pay future consideration to the sellers upon the achievement of certain events.

As a result, as of December 31, 2021, we recorded $ 2.8 million as contingent consideration, with $ 0.5 million recorded within Accrued expenses and $ 2.3 million recorded within Other long-term liabilities in the accompanying Consolidated Balance Sheets.

As a result, as of December 31, 2022, we recorded $ 1.0 million as contingent consideration, which is recorded within Other long-term liabilities in the accompanying Consolidated Balance Sheets.

Refer to Note 6.

The Company and BioReference entered into (i) a settlement agreement (the “Settlement Agreement”), effective July 14, 2022, with the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services (“OIG-HHS”), and the Defense Health Agency, acting on behalf of the TRICARE Program (collectively, the “United States”), the Commonwealth of Massachusetts , the State of Connecticut, and the relator identified therein (“Relator”), and (ii) a Corporate Integrity Agreement, effective July 14, 2022 (the “CIA”), with the OIG-HHS, to resolve the investigation and related civil action concerning alleged fee-for-service claims for payment to the Medicare Program, the Medicaid Program, and the TRICARE Program (collectively, the “Federal Health Care Programs”).

Under the Settlement Agreement, the Company and BioReference admitted only to having made payments to certain physicians and physicians’ groups for office space rentals for amounts that exceeded fair market value, and that it did not report or return any such overpayments to the Federal Health Care Programs (the “Covered Conduct”).

The Covered Conduct had commenced prior to the Company’s acquisition of BioReference in 2015.

With the exception of the Covered Conduct, the Company and BioReference expressly deny the allegations of the Relator as set forth in her civil action.

The Company has agreed to pay a total of $ 10,000,000 plus accrued interest from September 24, 2021 at a rate of 1.5 % per annum (the “Settlement Amount”).

The Settlement Amount consists of $ 9,853,958 payable to the United States, $ 141,041 payable to the Commonwealth and $ 5,001 payable to Connecticut, in each case plus interest and paid on July 18, 2022.

Conditioned upon payment of the Settlement Amount, the United States, Massachusetts and Connecticut have agreed to release the Company and BioReference from any civil or administrative monetarily liability arising from the Covered Conduct.

Upon payment of the Settlement Amount and the amount due under a separate agreement with the Relator, the Relator has agreed to release the Company and BioReference from any and all claims and potential claims.

Further, in consideration of the obligations of the Company and BioReference in the Settlement Agreement and the CIA, the OIG-HHS has agreed to release and refrain from instituting any administrative action seeking to exclude the Company or BioReference from participating in Medicare, Medicaid or other Federal health care programs as a result of the Covered Conduct.

Under the CIA, which has a term of 5 years, BioReference is required to, among other things:

(i) maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs;

(ii) provide management certifications and compliance training and education;

(iii) establish written compliance policies and procedures to meet federal health care program requirements;

(iv) create procedures designed to ensure compliance with the Anti-Kickback Statute and/or Stark Law;

(v) engage an independent review organization to conduct a thorough review of BioReference’ s systems, policies, processes and procedures related to certain arrangements;

(vi) implement a risk assessment and internal review process;

(vii) establish a disclosure program for whistleblowers;

and (viii) report or disclose certain events and physician payments.

The Company’s or BioReference’s failure to comply with its obligations under the CIA could result in monetary penalties and the exclusion from participation in Federal Health Care Programs.

The CIA does not apply to any of the Company’s subsidiaries other than BioReference, and its scope is generally limited to “focus arrangements”, which are those “arrangements” (as defined in the CIA) (i) between BioReference

and any actual source or recipient of health care business or referrals and involves, directly or indirectly, the offer, payment, or provision of anything of value, or (ii) is between BioReference and any physician (or a physician’s immediate family member).

Most of these measures have already been implemented at BioReference.

Following its acquisition of BioReference, the Company and BioReference implemented robust compliance measures that substantially align with those actions required under the CIA.

GeneDx, Inc., the Company’s former subsidiary, received a letter dated May 26, 2022 from the Texas Medicaid Office of the Inspector General stating that certain testing provided by GeneDx was not eligible for reimbursement by the Texas Medicaid program, because the testing was considered non-covered by the Texas Medicaid program at the time the tests were performed and/or GeneDx did not hold the requisite CLIA subspecialty classifications for the testing.

The Company is working with GeneDx Holdings to investigate these issues.

Following recent communication, it appears the CLIA subspecialty classification issue has been addressed to the satisfaction of the Texas Medicaid Office of the Inspector General.

The potential non-covered testing issue, however, remains under investigation.

The Texas Medicaid Office has expressed in writing a potential repayment liability of approximately $ 784 thousand.

At this time, the Company can express no opinion as to the likelihood of an unfavorable outcome or the range of potential loss in this matter.

On March 1, 2019, the Company received a Civil Investigative Demand (“CID”) from the U.S.

Department of Justice, Washington, DC.

Department of Justice (“DOJ”), Washington, DC.

The CID sets forth document requests and interrogatories in connection with allegations that the Company and certain of its affiliates violated the False Claims Act and/or the Anti-Kickback Statute.

On January 13, 2022, the Federal Government notified the U.S.D.C., Middle District Florida, Jacksonville Division, that it is declining to intervene in the matter but retains the right, via the Attorney General, to consent to any proposed dismals of the action by the Court.

On February 9, 2022, the States of Florida, Georgia, and Commonwealth of Massachusetts notified the U.S.D.C., Middle District Florida, Jacksonville Division, that they are declining to intervene in the matter.

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The Complaint alleges violations of the False Claims Act, the California Fraud Preventions Act, the Florida False Claims Act, the Massachusetts False Claims Act, the Georgia False Medicaid Claims Act, and illegal kickbacks.

The Company is reviewing and assessing the allegations made in the Complaint and, at this point, has not determined whether there is any merit to these claims nor can it determine the extent of any potential liability.

A motion to dismiss the Complaint was filed on April 25, 2022.

Briefing on the motion to dismiss is complete.

The court has not decided the motion.

While management cannot predict the outcome of these matters at this time, the ultimate outcome could be material to our business, financial condition, results of operations, and cash flows.

As previously reported, BioReference receives and is routinely required to respond to Civil Investigative Demands (“CID”) in the ordinary course of business.

On November 26, 2019, BioReference received a CID from the U.S.

Department of Justice (“DOJ”).

The CID states that DOJ is investigating whether BioReference paid unlawful remuneration to health care practitioners in violation of the Anti-Kickback Statute or Stark law and thus submitted or caused to be submitted false claims to government health care programs in violation of the False Claims Act.

The time period covered by DOJ’s requests is January 1, 2011 through November 26, 2019.

BioReference has fully cooperated with the DOJ by submitting the requested information and making current employees available for interviews, and DOJ recently made a presentation to BioReference regarding its position.

The parties have reached verbal agreement on the settlement amount, which is anticipated to be approximately $ 10 million, excluding attorney fees.

On April 8, 2019, MabVax Therapeutics Holdings, Inc.

filed a lawsuit in the Superior Court of California, County of San Diego against a number of individuals and entities, including the Company, Dr.

Frost, Steven Rubin, the Company’s Executive Vice President-Administration, and an entity affiliated with Dr.

Frost, based on the allegations raised in the SEC Complaint.

The lawsuit seeks an award for actual and punitive damages, pre- and post-judgment interest;

that the defendants be required to make full disclosure and accounting of their interests and transactions in plaintiff’s securities;

costs of the suit, and reasonable attorney’s fees;

and such other legal and equitable relief as the Court may deem proper under the circumstances.

On January 31, 2022, plaintiffs entered into a confidential mutual release and settlement agreement with the Company, Dr.

Frost, Frost Gamma Investment Trust, and Steve Rubin (the “Settlement Agreement”).

The Settlement Agreement is subject to the approval of United States Bankruptcy Court for the District of Delaware.

On April 5, 2019, former shareholders of Claros Diagnostics, Inc.

filed a complaint in the Chancery Court of Delaware against the Company, alleging among other things, that the Company breached the Agreement and Plan of Merger dated October 13, 2011 by and among the Company, Claros Merger Subsidiary, LLC and Claros Diagnostics, Inc.

(the “Claros Merger Agreement”):

(i) by failing to make a milestone payment of $ 2.375 million (payable in OPKO Common Stock) upon obtaining FDA approval of the Claros PSA test;

and (ii) by repudiating its obligations to make additional future milestone payments as required under the Claros Merger Agreement.

In January 2021, the Company and the shareholder representative entered into a settlement agreement providing, among other things, that the Company pay the shareholders $ 1.2 million, which the Company has paid in full.

In April 2017, the Civil Division of the United States Attorney’s Office for the Southern District of New York (the “SDNY”) informed BioReference that it believed that, from 2008 to 2012, BioReference had, in violation of the False Claims Act, improperly billed Medicare and TRICARE (both are federal government healthcare programs) for clinical laboratory

services provided to hospital inpatient beneficiaries at certain hospitals.

In April 2019, the SDNY also informed BioReference that it believed that BioReference provided physicians subsidies for electronic health record systems prior to 2012 that violated regulations adopted by HHS in 2006 which allowed laboratories to provide these donations under certain conditions.

BioReference and the SDNY reached a settlement with respect to these matters and a final settlement and release, including BioReference’s payment of an approximately $ 11.5 million settlement amount, was approved on September 22, 2020.

The amount of related attorneys’ fees is currently being negotiated.

On November 26, 2019, BioReference received a CID from the DOJ.

The CID stated that the DOJ was investigating whether BioReference paid unlawful remuneration to health care practitioners in violation of the Anti-Kickback Statute or Stark law and thus submitted or caused to be submitted false claims to government health care programs in violation of the False Claims Act.

The time period covered by the DOJ’s requests was January 1, 2011 through November 26, 2019.

BioReference has fully cooperated with the DOJ by submitting the requested information and making current employees available for interviews, and the DOJ made a presentation to BioReference regarding its position.

The parties have reached an agreement on the settlement amount, which is approximately $ 10 million, excluding attorney fees.

As of December 31, 2021, $ 10.0 million was recorded in Accrued expenses, respectively, which the Company paid in full during the year ended December 31, 2022.

From time to time, we may receive inquiries, document requests, CIDs or subpoenas from the Department of Justice, OCR, CMS, various payors and fiscal intermediaries, and other state and federal regulators regarding investigations, audits and reviews.

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It’s reasonably possible the ultimate liability could exceed amounts currently estimated and we review established accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information.

To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made.

To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities

would be recorded in the period in which such determination is made.

Because of the high degree of judgment involved in establishing loss estimates, the ultimate outcome of such matters will differ from our estimates and such differences may be material to our business, financial condition, results of operations, and cash flows.

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Reimbursements from government payors are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid.

Revenues consist of amounts billed, net of contractual allowances for differences between amounts billed and the estimated consideration we expect to receive from such payors,

which considers historical denial and collection experience and the terms of our contractual arrangements.

Revenues consist of amounts billed, net of contractual allowances for differences between amounts billed and the estimated consideration we expect to receive from such payors, which considers historical denial and collection experience and the terms of our contractual arrangements.

Adjustments to the allowances, based on actual receipts from the government payors, are recorded upon settlement.

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Client payors include physicians, hospitals, employers, and other institutions for which services are performed on a wholesale basis, and are billed and recognized as revenue based on negotiated fee schedules.

Client payers also include cities, states and companies for which BioReference provides COVID-19 testing services.

Client payors also include cities, states and companies for which BioReference provides COVID-19 testing services.

Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients.

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Actual amounts are adjusted in the period those adjustments become known.

For the years ended December 31, 2021, and December 31, 2020, positive revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $ 40.4 million and $ 0.3 million were recognized, respectively.

For the years ended December 31, 2019, revenue reductions due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $ 24.8 million were recognized.

For the year ended December 31, 2022, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $ 21.5 million were recognized.

For the years ended December 31, 2021 and 2020, positive revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $ 40.4 million and $ 0.3 million were recognized, respectively.

Third-party payors, including government programs, may decide to deny payment or recoup payments for testing they contend were improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received.

Our revenues may be subject to retroactive adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance and changes by government agencies and payors in interpretations, requirements, and “conditions of participation” in various programs.

interpretations, requirements, and “conditions of participation” in various programs.

We have processed requests for recoupment from third-party payors in the ordinary course of our business, and it is likely that we will continue to do so in the future.

If a third-party payer denies payment for testing or recoups money from us in a later period, reimbursement for our testing could decline.

If a third-party payor denies payment for testing or recoups money from us in a later period, reimbursement for our testing could decline.

As an integral part of our billing compliance program, we periodically assess our billing and coding practices, respond to payor audits on a routine basis, and investigate reported failures or suspected failures to comply with federal and state healthcare reimbursement requirements, as well as overpayment claims which may arise from time to time without fault on the part of the Company.

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Taxes collected from customers related to revenues from services and revenues from products are excluded from revenues.

Revenue from intellectual property

Revenue from intellectual property and other

We recognize revenues from the transfer of intellectual property generated through license, development, collaboration and/or commercialization agreements.

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We constrain (reduce) our estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract.

When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue.

determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue.

In making these assessments, we consider the likelihood and magnitude of a potential reversal of revenue.

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For the years ended December 31, 2022, 2021 and 2020 we recorded $ 105.7 million, $ 25.8 million and $ 53.2 million of revenue from the transfer of intellectual property and other, respectively.

For the year ended December 31, 2021, revenue from transfer of intellectual property and other principally reflects $ 10.8 million of revenue related to the Pfizer Transaction, $ 1.0 million related to the LeaderMed joint venture (as defined below), $ 4.9 million related to the CAMP4 Agreement (as defined below) and a $ 5.0 million non-refundable upfront payment received under the Nicoya Agreement (as defined below).

For the years ended December 31, 2020, and 2019 revenue from transfer of intellectual property and other principally reflects $ 28.7 million and $ 66.8 million of revenue related to the Pfizer Transaction.

In addition, revenue from the transfer of intellectual property and other for the year ended December 31, 2020 included $ 16.2 million of grants received by BioReference under the CARES Act and a $ 3 million milestone payment triggered by the first marketing approval of Rayaldee in Europe.

For the year ended December 31, 2022, revenue from transfer of intellectual property and other principally reflects $ 85.0 million regulatory milestone payments from Pfizer based on the commencement of sales from NGENLA (Somatrogon) in Europe and Japan, as well as royalty payments and gross profit share for both NGENLA (Somatrogon) and Pfizer’s Genotropin® (somatropin), $ 3.0 million related to a sales milestone pursuant to the VFMCRP Agreement, and $ 2.5 million from Nicoya tied to the first anniversary of the effective date of the agreement.

For the years ended December 31, 2022, and December 31, 2021, revenue from transfer of intellectual property and other principally reflects $ 9.3 million and $ 10.8 million, respectively, of revenue related to the Pfizer Transaction.

Furthermore, For the year ended December 31, 2021, revenue from transfer of intellectual property and other principally includes $ 1.0 million related to the LeaderMed joint venture (as defined below), $ 4.9 million related to the CAMP4 Agreement (as defined below) and a $ 5.0 million non-refundable upfront payment received under the Nicoya Agreement (as defined below).

For the year ended December 31, 2020, revenue from transfer of intellectual property and other principally reflects

$ 28.7 million of revenue related to the Pfizer Transaction (as defined in Note 16), $ 16.2 million of grants received by BioReference under the Coronavirus Aid, Relief, and Economic Security (CARES) Act and a $ 3 million milestone payment triggered by the first marketing approval of Rayaldee in Europe.

Contract liabilities relate to cash consideration that OPKO receives in advance of satisfying the related performance obligations.

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Amounts included in contracts liability at the beginning of the period $ 328

The contract liability balance at December 31, 2021 related primarily to accelerated payments received as part of the CARES Act.

Refer to Note 2.

Note 16 Strategic Alliances

On September 14, 2021, we and LeaderMed announced the formation of a joint venture to develop, manufacture and commercialize two of OPKO’s clinical stage, long-acting drug products in Greater China and eight other Asian territories.

Under the terms of the agreements, we have granted the joint venture exclusive rights to develop, manufacture and commercialize (a) OPK88003, an oxyntomodulin analog being developed for the treatment of obesity and diabetes, and (b) Factor VIIa-CTP, a novel long-acting coagulation factor being developed to treat hemophilia, in exchange for a 47 % ownership interest in the joint venture.

In addition, we received an upfront payment of $ 1 million and will be reimbursed for clinical trial material and technical support we provide the joint venture.

For the year ended December 31, 2021, we recognized the upfront payment of $ 1 million as revenue from transfer of intellectual property and other.

We recognized the upfront payment of $ 1 million as revenue from transfer of intellectual property and other during the year ended December 31, 2021.

LeaderMed has agreed to be responsible for funding the joint venture’s operations, development and commercialization efforts and, together with its syndicate partners, initially invested $ 11 million in exchange for a 53 % ownership interest.

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As a result of our execution of the CAMP4 Agreement, we will have to pay a percentage of any payments received under the CAMP4 Agreement to the former CURNA stockholders.

For the three months ended September 30, 2021, we recognized the fair value of the upfront payments of cash and shares of Preferred Stock totaling $ 4.9 million in revenue from transfer of intellectual property and other.

For the year ended December 31, 2021, we recognized the fair value of the upfront payments of cash and shares of Preferred Stock totaling $ 4.9 million in revenue from transfer of intellectual property and other.

Unless earlier terminated, the CAMP4 Agreement will remain in effect on a Licensed Product-by-Licensed Product and country by-country basis until such time as the royalty term expires for a Licensed Product in a country, and expires in its entirety upon the expiration of the royalty term for the last Licensed Product in the last country.

CAMP4’s royalty obligations expire on the later of (i) the expiration, invalidation or abandonment date of the last patent right in connection with the royalty bearing product, or (ii) ten ( 10 ) years after a royalty bearing product’s first commercial sale in a country.

In addition to termination rights for material breach and bankruptcy, CAMP4 is permitted to terminate the Agreement after a specified notice period.

In addition to

termination rights for material breach and bankruptcy, CAMP4 is permitted to terminate the Agreement after a specified notice period.

NICOYA Macau Limited

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The license grant to Nicoya covers the therapeutic and preventative use of the Nicoya Product for SHPT in non-dialysis and hemodialysis chronic kidney disease patients (the “Nicoya Field”).

EirGen has received an initial upfront payment of $ 5 million and is eligible to receive an additional $ 5 million upon the first to occur of (A) a predetermined milestone and (B) the first anniversary of the effective date.

EirGen is also eligible to receive up to an additional aggregate amount of $ 115 million upon the achievement of certain development, regulatory and

sales-based milestones by Nicoya for the Nicoya Product in the Nicoya Territory.

EirGen received an initial upfront payment of $ 5 million and is eligible to receive an aggregate additional amount of $ 5 million tied to the first anniversary of the effective date of the Nicoya Agreement, as amended, of which EirGen has received $ 2.5 million plus accrued interest for the delayed payment.

Furthermore, EirGen is eligible to receive the additional $ 2.5 million upon Nicoya’s submission of an investigational new drug (IND) application to the Center for Drug Evaluation (CDE) of China.

EirGen is also eligible to receive up to an additional aggregate amount of $ 115 million upon the achievement of certain development, regulatory and sales-based milestones by Nicoya for the Nicoya Product in the Nicoya Territory.

EirGen will also receive tiered, double digit royalty payments at rates in the low double digits on net product sales within the Nicoya Territory and in the Nicoya Field.

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In addition to termination rights for material breach and bankruptcy, Nicoya is permitted to terminate the Nicoya Agreement after a specified notice period.

Vifor Fresenius Medical Care Renal Pharma Ltd

In May 2016, EirGen and Vifor Fresenius Medical Care Renal Pharma Ltd (“VFMCRP”), entered into a Development and License Agreement (the “VFMCRP Agreement”) for the development and commercialization of Rayaldee (the “Product”) worldwide, except for (i) the U.S., (ii) any country in Central America or South America (excluding Mexico), (iii) Russia, (iv) China, (v) Japan, (vi) Ukraine, (vii) Belorussia, (viii) Azerbaijan, (ix) Kazakhstan, and (x) Taiwan (the “VFMCRP Territory”).

In May 2016, EirGen and Vifor Fresenius Medical Care Renal Pharma Ltd.

(“VFMCRP”) entered into a Development and License Agreement (the “VFMCRP Agreement”) for the development and commercialization of Rayaldee (the “Product”) worldwide, except for (i) the United States and Canada, (ii) any country in Central America or South America (including Mexico), (iii) Russia, (iv) China, (v) South Korea, (vi) Ukraine, (vii) Belorussia, (viii) Azerbaijan, (ix) Kazakhstan, (x) Taiwan (xi) the Middle East, and (xii) all countries of Africa (the “VFMCRP Territory”), as amended.

The license to VFMCRP potentially covers all therapeutic and prophylactic uses of the Product in human patients (the “VFMCRP Field”), provided that initially the license is for the use of the Product for the treatment or prevention of SHPT related to patients with CKD and vitamin D insufficiency/deficiency (the “VFMCRP Initial Indication”).

For the year ended December 31, 2022 we recognized a milestone payment of $ 3.0 million in revenue from transfer of intellectual property and other for the first sale of Rayaldee in Europe.

Effective May 23, 2021, we entered into an amendment to the VFMCRP Agreement pursuant to which the parties thereto agreed to include Japan as part of the VFMCRP Territory.

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We plan to share responsibility with VFMCRP for the conduct of trials specified within an agreed-upon development plan, with each company leading certain activities within the plan.

EirGen will lead the manufacturing activities within and outside the VFMCRP Territory and the commercialization activities outside the VFMCRP Territory and outside the VFMCRP Field in the VFMCRP Territory and VFMCRP will lead the commercialization activities in the VFMCRP Territory and the VFMCRP Field.

EirGen will lead the manufacturing activities within and outside the VFMCRP Territory and the commercialization activities outside the VFMCRP Territory and outside the VFMCRP

Field in the VFMCRP Territory and VFMCRP will lead the commercialization activities in the VFMCRP Territory and the VFMCRP Field.

For the initial development plan, the companies have agreed to certain cost sharing arrangements.

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solely for the treatment of SHPT in dialysis patients with CKD and vitamin D insufficiency (the “Dialysis Indication”).

Upon exercise of the Option, VFMCRP will reimburse EirGen for all of the development costs incurred by EirGen with respect to the Product for the Dialysis Indication in the U.S.

Upon exercise of the Option, VFMCRP has agreed to reimburse EirGen for all of the development costs incurred by EirGen with respect to the Product for the Dialysis Indication in the U.S.

VFMCRP would also pay EirGen up to an additional aggregate amount of $ 555 million of sales-based milestones upon the achievement of certain milestones and would be obligated to pay royalties at percentage rates that range from the mid-teens to the mid-twenties on sales of the Product in the U.S.

for the Dialysis Indication.

To date, VFMCRP has not exercised its option.

To date, VFMCRP has not exercised the Option.

Payments received for regulatory milestones and sales milestones are non-refundable.

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In December 2014, we entered into an exclusive worldwide agreement (the “Pfizer Agreement”) with Pfizer for the development and commercialization of our long-acting Somatrogon (hGH-CTP) for the treatment of growth hormone deficiency (“GHD”) in adults and children, as well as for the treatment of growth failure in children born small for gestational age (the “Pfizer Transaction”).

In early 2022, the European Commission and Ministry of Health, Labour and Welfare in Japan approved the next-generation long-acting recombinant human growth hormone NGENLA (Somatrogon), a once-weekly injection to treat pediatric growth hormone deficiency.

Further, Canada and Australia approved NGENLA in October and November of 2021, respectively.

In January 2022, the FDA issued a Complete Response Letter for the BLA for Somatrogon.

Pfizer and OPKO are evaluating the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon (hGH-CTP) in the United States.

With the achievement of these milestones, we received $ 85.0 million in milestone payments during the year ended December 31, 2022.

Further, Canada and Australia approved NGENLA during the year ended December 31, 2021.

In January 2022, the FDA issued a Complete Response Letter for the BLA for Somatrogon (hGH-CTP).

Pfizer and OPKO have evaluated the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon (hGH-CTP) in the United States.

In May 2020, we entered into an Amended and Restated Development and Commercialization License Agreement (the “Restated Pfizer Agreement”) with Pfizer, effective January 1, 2020, pursuant to which the parties agreed, among other things, to share all costs for Manufacturing Activities, as defined in the Restated Pfizer Agreement, for developing a licensed product for the three indications included in the Restated Pfizer Agreement.

On October 21, 2019, we and Pfizer announced that the global phase 3 trial evaluating Somatrogon dosed once-weekly in prepubertal children with GHD met its primary endpoint of non-inferiority to daily Genotropin® (somatropin) for injection, as measured by annual height velocity at 12 months.

Under the terms of the Pfizer Transaction, as restated, we received non-refundable and non-creditable upfront payments of $ 295.0 million and are eligible to receive up to an additional $ 275.0 million upon the achievement of certain regulatory milestones.

Pfizer received the exclusive license to commercialize Somatrogon worldwide.

In addition, we are eligible to receive initial tiered royalty payments associated with the commercialization of Somatrogon for adult GHD with percentage rates ranging from the high teens to mid-twenties.

Upon the launch of Somatrogon for pediatric GHD in certain major markets, the royalties will transition to regional, tiered gross profit sharing for both Somatrogon and Pfizer’s Genotropin®.

Upon the launch of Somatrogon for pediatric GHD in certain major markets, the royalties will transition to regional, tiered gross profit sharing for both Somatrogon and Pfizer’s Genotropin® (somatropin).

The agreement with Pfizer will remain in effect until the last sale of the licensed product, unless earlier terminated as permitted under the Pfizer Agreement.

In addition to termination rights for material breach and bankruptcy, Pfizer is permitted to terminate the Pfizer Agreement in its entirety, or with respect to one or more world regions, without cause after a specified notice period.

If the Pfizer Agreement is terminated by us for Pfizer’s uncured material breach, or by Pfizer without cause, provision has been made for transition of product and product responsibilities to us for the terminated regions, as well as continued supply of product by Pfizer or transfer of supply to us in order to support the terminated regions.

We recognized the non-refundable $ 295.0 million upfront payments as revenue as the research and development services were completed and as of December 31, 2021 and 2020, we had no contract liabilities related to the Pfizer Transaction.

If the Pfizer Agreement is terminated by us for Pfizer’s uncured material breach, or by Pfizer without cause,

provision has been made for transition of product and product responsibilities to us for the terminated regions, as well as continued supply of product by Pfizer or transfer of supply to us in order to support the terminated regions.

We recognized the non-refundable $ 295.0 million upfront payments as revenue as the research and development services were completed.

As of December 31, 2022 and 2021, we had no contract liabilities related to the Pfizer Transaction.

The Pfizer Transaction includes milestone payments of $ 275.0 million upon the achievement of certain milestones.

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The milestone payments will be recognized as revenue in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met.

To date, no revenue has been recognized related to the achievement of the milestones.

To date, $ 85.0 million revenue has been recognized related to the achievement of the milestones.

We have completed strategic deals with numerous institutions and commercial partners.

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Our leases generally do not provide an implicit interest rate, and we therefore use our incremental borrowing rate as the discount rate when measuring operating lease liabilities.

The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis

over the term of the lease within a particular currency environment.

The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment.

We used the incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date.

28 unchanged sentences

Expense under operating leases and finance leases was $ 16.6 million and $ 2.7 million, respectively, for the year ended December 31, 2022, which includes $ 2.6 million of variable lease costs.

Expense under operating leases and finance leases was $ 17.8 million and $ 3.0 million, respectively, for the year ended December 31, 2020, and includes $ 3.0 million of variable lease

Expense under operating leases and finance leases was $ 18.0 million and $ 2.3 million, respectively, for the year ended December 31, 2021, which includes $ 2.5 million of variable lease costs.

Expense under operating leases and finance leases was $ 17.8 million and $ 3.0 million, respectively, for the year ended December 31, 2020, and includes $ 3.0 million of variable lease costs.

63 unchanged sentences

Diagnostics 283,025 283,025

Corporate — —

$ 595,851 $ 520,601

15 unchanged sentences

and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

As of December 31, 2021, we have equity securities (refer to Note 5), forward foreign currency exchange contracts for inventory purchases (refer to Note 20) and contingent consideration related to the acquisitions of CURNA, OPKO Diagnostics and OPKO Renal that are required to be measured at fair value on a recurring basis.

In addition, in connection with our investment and our consulting agreement with BioCardia, we record the related BioCardia options at fair value as well as the warrants from COCP, InCellDx, Inc., Xenetic and Phio.

As of December 31, 2022, we have equity securities and an equity method fair value option (refer to Note 5), forward foreign currency exchange contracts for inventory purchases (refer to Note 20) and contingent consideration related to the acquisitions of CURNA, OPKO Diagnostics and OPKO Renal that are required to be measured at fair value on a recurring basis.

In addition, in connection with our investment and our consulting agreement with BioCardia, we record the related BioCardia options at fair value as well as the warrants from COCP.

Our financial assets and liabilities measured at fair value on a recurring basis are as follows:

4 unchanged sentences

(Level 3) Total

Money market funds $ 102,773 $ — $ — $ 102,773

Equity securities 648 — — 648

Equity Method - fair value option 21,120 — — 21,120

Common stock options/warrants — 28 — 28

Forward contracts — 122 — 122

Total assets $ 124,541 $ 28 $ — $ 124,569

Forward contracts $ — $ 1,123 $ — 1,123

Contingent consideration:

8 unchanged sentences

Common stock options/warrants — 16 — 16

Total assets $ 14,136 $ 74 $ — $ 14,210

Forward contracts — 122 — 122

Total assets $ 4,226 $ 138 $ — $ 4,364

Contingent consideration:

17 unchanged sentences

Foreign currency impact ( 489 )

Payments ( 1,162 )

Balance at December 31, 2022 $ 1,036

5 unchanged sentences

Included in results of operations ( 1,703 )

Foreign currency impact 7

Payments ( 1,162 )

Balance at December 31, 2021 $ 2,837

3 unchanged sentences

We use several discount rates depending on each type of contingent consideration related to OPKO Diagnostics, CURNA and OPKO Renal transactions.

As of December 31, 2021, of the $ 2.8 million of contingent consideration, $ 0.5 million is recorded in Accrued expenses and $ 2.3 million is recorded in Other long-term liabilities.

As of December 31, 2022, $ 1.0 million of contingent consideration was recorded in accrued expenses and other long-term liabilities.

As of December 31, 2021, of the $ 2.8 million of contingent consideration, $ 0.5 million is recorded in Accrued expenses and $ 2.3 million is recorded in Other long-term liabilities.

11 unchanged sentences

To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge.

At December 31, 2021 and 2020, our derivative financial instruments do not meet the documentation requirements to be designated as hedges.

Accordingly, we recognize the changes in Fair value of derivative instruments, net in our Consolidated Statement of Operations.

At December 31, 2022 and 2021, our derivative financial instruments did not meet the documentation requirements to be designated as hedges.

Accordingly, we recognized the changes in Fair value of derivative instruments, net in our Consolidated Statement of Operations.

The following table summarizes the losses and gains recorded for the years ended December 31, 2022, 2021 and 2020:

19 unchanged sentences

Note 22 Subsequent Events

In February 2022, the European Commission approved the next-generation long-acting recombinant human growth hormone NGENLA (Somatrogon), a once-weekly injection to treat children and adolescents from as young as 3 years of age with growth disturbance due to insufficient secretion of growth hormone.

In January 2022, Pfizer, Inc.

and OPKO announced that the FDA issued a Complete Response Letter for the BLA for Somatrogon.

Somatrogon is an investigational once-weekly long-acting recombinant human growth hormone for the treatment of GHD in pediatric patients.

Pfizer is evaluating the FDA’s comments and will work with the agency to determine an appropriate path forward.

In January 2022, Pfizer, Inc.

and OPKO announced that the long-acting growth hormone injection, NGENLA® (Somatrogon) Inj.

24 mg Pens and 60 mg Pens, has been approved by the Ministry of Health, Labour and Welfare in Japan for the treatment of GHD in pediatric patients.

Somatrogon has also been approved in the Canada and Japan under the brand name NGENLA.

In January 2022, Sema4 and OPKO announced they have signed GeneDx Merger Agreement, pursuant to which Sema4 has agreed to acquire GeneDx, a leader in genomic testing and analysis, from OPKO, subject to satisfaction of customary closing conditions.

The GeneDx Transaction is expected to close in the second quarter of 2022.

Under the terms of the agreement, Sema4 has agreed to acquire GeneDx for an upfront payment of $ 150 million in cash together with 80.0 million shares of Sema4 Common Stock, subject to a customary purchase price adjustment mechanism providing for a normalized level of working capital and that GeneDx be free of debt at closing of the GeneDx Transaction.

Additionally, Sema4 agreed to pay OPKO up to an additional $ 150 million revenue-based milestones over the next two years ( which may be paid in Sema4 Common Stock, cash or a combination thereof in Sema4’s discretion, subject to GeneDx

achieving certain revenue targets ).

Based on the closing stock price of Sema4 as of January 14, 2022, the total upfront consideration is approximately $ 473 million, and the total aggregate consideration including potential milestones is approximately $ 623 million.

As of December 31, 2021, the assets and liabilities of GeneDx are reflected in the consolidated balance sheet as held for sale.

We have reviewed all subsequent events and transactions that occurred after the date of our December 31, 2021 Consolidated Balance Sheet date, through the time of filing this Annual Report on Form 10-K.

On February 10, 2023, the Company amended the 2023 Convertible Notes to extend the maturity to January 31, 2025, and to reset the conversion price to the 10 day volume weighted average price immediately preceding the date of the amended note, plus a 25 % conversion premium, or $ 1.66 .

In addition, under the terms of the 2023 Convertible Note, interest will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance, until the principal and accrued and unpaid interest, are paid in full.

The remaining provisions of the original note are unchanged.

In January 2023, Nicoya submitted the investigational new drug application to China's Center for Drug Evaluation (“CDE”).

Under the terms of the Nicoya Agreement, we are eligible to receive $ 2.5 million upon Nicoya’s submission of the IND, of which we received in February 2023 and will be recognized as license revenue in the first quarter of 2023.

In January 2023, in conjunction with a underwritten public offering, we invested $ 5.0 million for 14,285,714 shares of GeneDx Holdings Class A common stock at a public offering price of $ 0.35 per share.

As of January 26th, 2023, our beneficial ownership in GeneDx Holdings decreased to 11.6 % as a result of their public offering.

Effective January 2, 2023, ModeX entered into a 10-year office lease agreement commencing on August 1, 2023.

ModeX is currently located in Natick, Massachusetts and will relocate to Weston, Massachusetts, upon lease commencement.

The new location will have approximately 33,056 square feet of office space.

Under the new lease, ModeX has two options to extend the lease term for an additional five years per extension, which would commence upon the expiration of the term on August 1, 2033.

Straight-line monthly rent expense for the lease is approximately $ 241 thousand.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data