Organogenesis Holdings Inc.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
ORGO$0.81-3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-08.
0000950170-25-066962
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-07.
0000950170-25-105048
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 88 previous paragraphs and 94 current paragraphs.
53 unchanged; 28 reworded; 13 added; 5 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Local Coverage Determinations and Centers for Medicare & Medicaid Services (CMS) Proposed Rule
Current report
In July 2025, CMS issued proposed rules that announce and solicit comments on proposed policy changes for Medicare payments under the Physician Fee Schedule (“PFS”) and Hospital Outpatient Prospective Payment System (“OPPS”), and other Medicare Part B issues, effective on or after January 1, 2026. For calendar year 2026, CMS has proposed to pay for skin substitute products as incident-to supplies when they are used as part of a covered application procedure paid under the PFS in the non-facility setting or under the Medicare OPPS in the hospital outpatient department setting. CMS also proposed to align skin substitute categorization consistent with their FDA regulatory status, such as 361 HCT/Ps, PMAs and 510(k)s. CMS indicated that it believes grouping and paying for skin substitute products based on relevant product characteristics, consistent with their FDA regulatory status, recognizes the clinical and resource differences in product types and would incentivize competition to create more innovative products, while also resulting in significant savings to the Medicare Trust Fund. CMS proposed, for calendar year 2026, to use a single payment rate reflecting the highest average for these three categories of skin substitute products to ensure it is not underestimating the resources involved with furnishing these services. For future years, CMS intends to propose payment rates that differentiate between the three FDA regulatory categories. CMS is proposing to implement these policy changes in both the non-facility setting paid under the PFS and the hospital outpatient department setting paid under OPPS to remain consistent across these different sites of care. While we believe CMS’ proposed payment structure will curb abuse under the current system, and the resulting rapid escalation in Medicare spending, and ensure a much-needed consistent payment approach across sites of care, the changes could also materially impact utilization of our products, our business, and our revenue.
Current report
Net product revenue
Current report
Grant income
Current report
Grant income relates to a grant the Company received from a governmental agency during the second quarter of 2025 related to its Smithfield Facility. We expect to recognize grant income through 2027 as the Company recognizes the related expenses that the grant is intended to compensate.
Current report
Impairment and write-down expenses
Current report
Our management uses financial measures that are not in accordance with GAAP (Non-GAAP), in addition to financial measures in accordance with GAAP, to evaluate our operating results. These Non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Our management uses Adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.
Current report
Amount reflects the fair value adjustment of a purchased building classified as held for sale. See Note 6, Property and Equipment, Net.
Current report
Amount reflects the impairment of a purchased building and associated unfinished construction work. See Note 6, Property and Equipment, Net.
Current report
Amount reflects the write-down of costs previously capitalized as construction in progress in the development of internal-use software, that the Company determined have no future value. See Note 6, Property and Equipment, Net.
Current report
Selling, general and administrative expenses decreased by $2.5 million, or 2%, to $146.3 million in the six months ended June 30, 2025, from $148.9 million in the six months ended June 30, 2024. The decrease in selling, general and administrative expenses was primarily due to a $9.4 million decrease in commissions and royalty expense due to decreased sales. These decreases in expenses were partially offset by a $4.0 million increase in headcount-related expenses and facilities expense, a $1.3 million increase in marketing expenses, and a $1.1 million increase in the allowance for expected credit losses.
Current report
Impairment and Write-Down Expenses
Current report
Income Tax Benefit (Expense)
Removed paragraphs (5)
Previous report
Local Coverage Determinations
Previous report
Write down expenses
Previous report
Revenue
Previous report
Write Down Expenses
Previous report
Income Tax Benefit
Reworded paragraphs (28)
Previous wording
In the Advanced Wound Care market, we focus on the development and commercialization of advanced wound care products for the treatment of chronic and acute wounds in various treatment settings. We have a comprehensive portfolio of regenerative medicine products capable of supporting patients from early in the wound healing process through wound closure regardless of wound type. Our Advanced Wound Care products include Apligraf for the treatment of venous leg ulcers (“VLUs”) and diabetic foot ulcers (“DFUs”); Dermagraft for the treatment of DFUs (manufacturing and distribution currently suspended pending transition to a new manufacturing facility or engagement of a third-party manufacturer); PuraPly AM and PuraPly XT as antimicrobial barriers and native, cross-linked ECM scaffold for a broad variety of wound types; CYGNUS Dual as a dual-layered amniotic membrane that promotes an optimal environment for wound healing; CYGNUS Matrix as a dehydrated placental allograft that promotes an optimal environment for wound healing; and VIA Matrix, Affinity, Novachor, and NuShield placental allografts to address a variety of wound sizes and types as a protective barrier and extracellular matrix scaffold. We have a highly trained and specialized direct wound care sales force paired with comprehensive customer support services.
Current wording
In the Advanced Wound Care market, we focus on the development and commercialization of advanced wound care products for the treatment of chronic and acute wounds in various treatment settings. We have a comprehensive portfolio of regenerative medicine products capable of supporting patients from early in the wound healing process through wound closure regardless of wound type. Our Advanced Wound Care products include Apligraf for the treatment of venous leg ulcers (“VLUs”) and diabetic foot ulcers (“DFUs”); Dermagraft for the treatment of DFUs (manufacturing and distribution currently suspended pending transition to a new manufacturing facility or engagement of a third-party manufacturer); PuraPly AM and PuraPly XT as antimicrobial barriers and native, cross-linked extracellular matrix (“ECM”) scaffold for a broad variety of wound types; CYGNUS Dual as a dual-layered amniotic membrane that promotes an optimal environment for wound healing; CYGNUS Matrix as a dehydrated placental allograft that promotes an optimal environment for wound healing; and VIA Matrix, Affinity, Novachor, and NuShield placental allografts to address a variety of wound sizes and types as a protective barrier and ECM scaffold. We have a highly trained and specialized direct wound care sales force paired with comprehensive customer support services.
Previous wording
As previously disclosed, manufacturing of Dermagraft was suspended in the fourth quarter of 2021 and sales of Dermagraft were suspended in the second quarter of 2022. We currently plan to transition our Dermagraft manufacturing to our newly-leased biomanufacturing facility in Smithfield, Rhode Island, which we expect will begin in 2027, and will result in substantial long-term cost savings. If there are significant delays in the build out of the Smithfield Facility or in approval of the facility for manufacturing of Dermagraft, it could have an adverse effect on our future consolidated net revenue and results of operations.
Current wording
As previously disclosed, manufacturing of Dermagraft was suspended in the fourth quarter of 2021 and sales of Dermagraft were suspended in the second quarter of 2022. We currently plan to transition our Dermagraft manufacturing to our newly-leased biomanufacturing facility in Smithfield, Rhode Island, which we expect will begin in 2027, and will result in substantial long-term cost savings. We expect to resume sales of Dermagraft by the end of 2027. If there are significant delays in the build out of the Smithfield Facility or in approval of the facility for manufacturing of Dermagraft, it could have an adverse effect on our future consolidated net product revenue and results of operations.
Previous wording
Apligraf and Dermagraft products for DFUs and VLUs, and our Affinity and NuShield products for DFUs; however, more than 200 products would be classified as “non-covered,” including our PuraPly, PuraPly AM, PuraPly XT, Novachor, TransCyte, Dual and Matrix products for DFUs and VLUs. The LCDs as finalized apply only to DFU and VLU indications for skin substitute products; coverage for other indications would remain subject to case-by-case review of medical necessity by the MACs if the LCDs take effect. It is uncertain if there will be further delays in implementing the new LCDs and/or if the new LCDs will be revised or rescinded going forward. If implemented, the LCDs could materially impact utilization of these products, our business, and our revenue. Any future changes or other developments related to these or other LCDs also could affect utilization of our products, our business, and our revenue.
Current wording
On April 25, 2024, seven Medicare Part A/B Administrative Contractors (“MACs”) published new proposed local coverage determinations (“LCDs”) for skin substitute grafts/cellular and tissue-based products (“CTPs”) for the treatment of DFUs and VLUs in the Medicare population. These LCDs were finalized by the MACs on November 14, 2024, and were originally set to become effective on February 12, 2025. However, on January 24, 2025, the MACs announced a delay in the implementation of the LCDs until April 13, 2025, and on April 10, 2025, the MACs announced another delay in the implementation of the LCDs until January 1, 2026. Under the new LCDs finalized in November 2024, should they take effect in their current form, a total of eighteen products would remain covered, including our Apligraf and Dermagraft products for DFUs and VLUs, and our Affinity and NuShield products for DFUs; however, more than 200 products would be classified as “non-covered,” including our PuraPly, PuraPly AM, PuraPly XT, Novachor, TransCyte, Dual and Matrix products for DFUs and VLUs. The LCDs as finalized apply only to DFU and VLU indications for skin substitute products; coverage for other indications would remain subject to case-by-case review of medical necessity by the MACs if the LCDs take effect. It is uncertain if there will be further delays in implementing the new LCDs and/or if the new LCDs will be revised or rescinded going forward. If implemented, the LCDs could materially impact utilization of these products, our business, and our revenue. Any future changes or other developments related to these or other LCDs also could affect utilization of our products, our business, and our revenue.
Previous wording
We derive our net revenue from our portfolio of Advanced Wound Care and Surgical & Sports Medicine products. We primarily sell our Advanced Wound Care products through direct sales representatives who manage and maintain the sales relationships with hospitals, wound care centers, government facilities, ASCs and physician offices. We primarily sell our Surgical & Sports Medicine products through third party agencies. As of March 31, 2025, we had approximately 256 direct sales representatives and approximately 174 independent agencies.
Current wording
We derive our net product revenue from our portfolio of Advanced Wound Care and Surgical & Sports Medicine products. We primarily sell our Advanced Wound Care products through direct sales representatives who manage and maintain the sales relationships with hospitals, wound care centers, government facilities, ASCs and physician offices. We primarily sell our Surgical & Sports Medicine products through third party agencies. As of June 30, 2025, we had approximately 233 direct sales representatives and approximately 175 independent agencies.
Previous wording
Gross profit is calculated as net revenue less cost of goods sold and generally increases as revenue increases. Our gross profit is affected by product and geographic sales mix, realized pricing of our products, the efficiency of our manufacturing operations, and the costs of materials used and fees charged by third-party manufacturers to produce our products. Regulatory actions, including healthcare reimbursement scenarios, which may require costly expenditures or result in pricing pressures, may decrease our gross profit.
Current wording
Gross profit is calculated as net product revenue less cost of goods sold and generally increases as revenue increases. Our gross profit is affected by product and geographic sales mix, realized pricing of our products, the efficiency of our manufacturing operations, and the costs of materials used and fees charged by third-party manufacturers to produce our products. Regulatory actions, including healthcare reimbursement scenarios, which may require costly expenditures or result in pricing pressures, may decrease our gross profit.
Previous wording
Research and development expenses include expenses for clinical trials, personnel costs for our research and development personnel, expenses related to improvements in our manufacturing processes, enhancements to our currently available products, and additional investments in our product and platform development pipeline. We expense research and development costs as incurred. We generally expect that research and development expenses will increase as we continue to conduct clinical trials on new and existing products, move products through the regulatory pathway (e.g., seek biologics license application approval), add personnel to support product enhancements as well as to bring new products to market, and enhance our manufacturing process and procedures.
Current wording
Research and development expenses include expenses for clinical trials, personnel costs for our research and development personnel, expenses related to improvements in our manufacturing processes, enhancements to our currently available products, and additional investments in our product and platform development pipeline. We expense research and development costs as incurred.
Previous wording
Write down of property relates to the pending sale of one of our buildings located on our Canton, Massachusetts campus that was adjusted to fair market value based on current market conditions. We recorded this charge during the first quarter of 2025.
Current wording
Impairment and write-down of property relates to the pending sale of one of our buildings located on our Canton, Massachusetts campus that was adjusted to fair market value based on current market conditions. We recorded impairment and write-down of the property during the second quarter of 2024 and first and second quarter of 2025. Write-down of capitalized internal-use software costs consists of the development costs for certain modules of our ERP system that were determined to have no future value. We recorded this charge during the second quarter of 2024.
Previous wording
In determining whether a valuation allowance for deferred tax assets is necessary, we analyze both positive and negative evidence related to the realization of deferred tax assets including projected future taxable income, recent financial results and estimates of future reversals of deferred tax assets and liabilities. In addition, we consider whether it is more likely than not that the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. We believe that our net U.S. deferred tax assets did not require a valuation allowance as of March 31, 2025 and December 31, 2024.
Current wording
In determining whether a valuation allowance for deferred tax assets is necessary, we analyze both positive and negative evidence related to the realization of deferred tax assets including projected future taxable income, recent financial results and estimates of future reversals of deferred tax assets and liabilities. In addition, we consider whether it is more likely than not that a tax position will be sustained on examination by taxing authorities based on the technical merits of the position. We believe that our net U.S. deferred tax assets did not require a valuation allowance as of June 30, 2025 and December 31, 2024.
Previous wording
Comparison of Three Months Ended March 31, 2025 and 2024
Current wording
Comparison of Three and Six Months Ended June 30, 2025 and 2024
Previous wording
Net revenue from our Advanced Wound Care products decreased by $23.9 million, or 23%, to $79.9 million in the three months ended March 31, 2025, from $103.9 million in the three months ended March 31, 2024. The decrease in Advanced Wound Care net revenue was primarily attributable to increased ambiguity and disruption in customer behavior following the delayed implementation of the LCDs announced in January 2025.
Current wording
Net product revenue from our Advanced Wound Care products decreased by $30.5 million, or 25%, to $92.7 million in the three months ended June 30, 2025, from $123.2 million in the three months ended June 30, 2024. Net product revenue from our Advanced Wound Care products decreased by $54.5 million, or 24%, to $172.6 million in the six months ended June 30, 2025, from $227.1 million in the six months ended June 30, 2024. The decrease in Advanced Wound Care net product revenue was primarily attributable to increased ambiguity and disruption in customer behavior following the delayed implementation of the LCDs announced in January 2025.
Previous wording
Net revenue from our Surgical & Sports Medicine products increased by $0.7 million, or 11%, to $6.8 million in the three months ended March 31, 2025 from $6.1 million in the three months ended March 31, 2024. The increase in Surgical & Sports
Current wording
Net product revenue from our Surgical & Sports Medicine products increased by $1.1 million, or 16%, to $8.1 million in the three months ended June 30, 2025, from $7.0 million in the three months ended June 30, 2024. Net product revenue from our Surgical & Sports Medicine products increased by $1.7 million, or 13%, to $14.8 million in the six months ended June 30, 2025 from $13.1 million in the six months ended June 30, 2024. The increase in Surgical & Sports Medicine net product revenue was primarily due to an increase in certain customer buying patterns.
Previous wording
Cost of goods sold decreased by $5.0 million, or 17%, to $23.7 million in the three months ended March 31, 2025, from $28.7 million in the three months ended March 31, 2024. The decrease in cost of goods sold in the three months ended March 31, 2025 was primarily due to a decrease in sales volume as well as a shift in product mix.
Current wording
Cost of goods sold decreased by $1.6 million, or 5%, to $27.6 million in the three months ended June 30, 2025, from $29.2 million in the three months ended June 30, 2024. Cost of goods sold decreased by $6.5 million, or 11%, to $51.4 million in the six months ended June 30, 2025, from $57.9 million in the six months ended June 30, 2024. The decrease in cost of goods sold was primarily due to a decrease in sales volume as well as a shift in product mix.
Previous wording
Gross profit decreased by $18.3 million, or 23%, to $63.0 million in the three months ended March 31, 2025 from $81.3 million in the three months ended March 31, 2024. Gross profit decreased as a percentage of revenue due to a shift in product mix.
Current wording
Gross profit decreased by $27.9 million, or 28%, to $73.1 million in the three months ended June 30, 2025, from $101.0 million in the three months ended June 30, 2024. Gross profit decreased by $46.2 million, or 25%, to $136.1 million in the six months ended June 30, 2025, from $182.3 million in the six months ended June 30, 2024. Gross profit decreased as a percentage of revenue due to a shift in product mix.
Previous wording
Research and development expenses decreased by $2.2 million, or 17%, to $10.6 million in the three months ended March 31, 2025 from $12.8 million in the three months ended March 31, 2024. The decrease in research and development expenses was primarily due to a decrease in expenses associated with clinical research and trials.
Current wording
Research and development expenses decreased by $5.2 million, or 33%, to $10.4 million in the three months ended June 30, 2025, from $15.6 million in the three months ended June 30, 2024. Research and development expenses decreased by $7.4 million, or 26%, to $21.0 million in the six months ended June 30, 2025, from $28.4 million in the six months ended June 30, 2024. The decrease in research and development expenses was primarily due to a decrease in expenses associated with clinical research and trials.
Previous wording
Selling, general and administrative expenses increased by $0.2 million, or less than 1%, to $72.5 million in the three months ended March 31, 2025 from $72.3 million in the three months ended March 31, 2024. The increase in selling, general and administrative expenses was primarily due to an increase in headcount-related expenses of $2.7 million and a $1.0 million increase in facilities expense, offset by a decrease in commissions expense of $3.5 million due to decreased sales.
Current wording
Selling, general and administrative expenses decreased by $2.7 million, or 4%, to $73.8 million in the three months ended June 30, 2025, from $76.5 million in the three months ended June 30, 2024. The decrease in selling, general and administrative expenses was primarily due to a $5.9 million decrease in commissions and royalty expense due to decreased sales. These decreases in expenses were partially offset by a $0.8 million increase in facilities expense, a $1.5 million increase in marketing expenses, and a $1.2 million increase in the allowance for expected credit losses.
Previous wording
During the three months ended March 31, 2025, we recorded a $6.6 million write down of costs to adjust certain assets held for sale to their fair market value. There were no such costs recorded in the three months ended March 31, 2024. See Note 6, Property and Equipment, Net, to our condensed consolidated financial statements included in this Form 10-Q.
Current wording
During the three and six months ended June 30, 2025, we recorded a $1.7 million and $8.3 million, respectively, write-down of costs to adjust certain assets held for sale to their fair market value. During the three and six months ended June 30, 2024, we recorded a $4.0 million write-down of costs related to internal-use software and an $18.8 million impairment of a purchased building and associated unfinished construction work. See Note 6, Property and Equipment, Net, to our condensed consolidated financial statements included in this Form 10-Q.
Previous wording
Other income (expense), net, decreased by $1.5 million, or 296%, to $1.0 million in income in the three months ended March 31, 2025 from $0.5 million expense in the three months ended March 31, 2024. The decrease resulted primarily from interest income generated from our interest-bearing sweep accounts offset by amortization of debt discount and debt issuance costs.
Current wording
Other income (expense) net, decreased by $1.4 million to $0.7 million in income in the three months ended June 30, 2025, from $0.6 million in expense in the three months ended June 30, 2024. Other income (expense), net, decreased by $2.8 million to $1.7 million in income in the six months ended June 30, 2025, from $1.1 million in expense in the six months ended June 30, 2024. The decrease resulted primarily from interest income generated from our interest-bearing sweep accounts offset by amortization of debt discount and debt issuance costs.
Previous wording
Income tax benefit increased by $4.7 million, or 209%, to $6.9 million in the three months ended March 31, 2025 from $2.2 million in the three months ended March 31, 2024. The change in the income tax benefit is primarily attributable to a lower estimated effective tax rate for the three months ended March 31, 2025 due to our research and development tax credits, as well as a reduction in expected pre-tax income in 2025 compared to 2024.
Current wording
Income tax expense decreased by $4.9 million, or 198%, to a benefit of $2.4 million in the three months ended June 30, 2025, from expense of $2.5 million in the three months ended June 30, 2024. Income tax expense decreased by $9.6 million, or 3708%, to a benefit of $9.4 million in the six months ended June 30, 2025, from expense of $0.3 million in the six months ended June 30, 2024. The change in the income tax benefit (expense) is primarily attributable to a higher estimated effective tax rate for the twelve months ending December 31, 2025 resulting from an increase in expected pre-tax income in 2025 compared to 2024, partially offset by our research and development tax credits.
Previous wording
As of March 31, 2025, we had working capital of $203.1 million, which included $110.0 million in cash and cash equivalents. We have $125.0 million available for future revolving borrowings under our Revolving Facility (see Note 9, Long-Term Debt Obligations to our condensed consolidated financial statements included in this Form 10-Q). We expect that our cash on hand and other components of working capital as of March 31, 2025, availability under the 2021 Credit Agreement, plus net cash flows from product sales, will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this Form 10-Q.
Current wording
As of June 30, 2025, we had working capital of $189.1 million, which included $73.1 million in cash and cash equivalents. We expect that our cash on hand and other components of working capital as of June 30, 2025, plus net cash flows from product sales will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this Form 10-Q.
Previous wording
Our primary uses of cash are working capital requirements, capital expenditure and debt service payments. Additionally, from time to time, we may use capital for acquisitions and other investing and financing activities. Working capital is used principally for our personnel as well as manufacturing costs related to the production of our products. Our working capital requirements vary from period to period depending on manufacturing volumes, the timing of shipments and the payment cycles of our customers and payers. Our capital expenditures consist primarily of building improvements, manufacturing equipment, and computer hardware and software.
Current wording
Our primary uses of cash are working capital requirements, capital expenditures and debt service payments. Additionally, from time to time, we may use capital for acquisitions and other investing and financing activities. Working capital is used principally for our personnel as well as manufacturing costs related to the production of our products. Our working capital requirements vary from period to period depending on manufacturing volumes, the timing of shipments and the payment cycles of our customers and payers. Our capital expenditures consist primarily of building improvements (including costs related to the build-out of our Smithfield, Rhode Island facility), manufacturing equipment, and computer hardware and software.
Previous wording
During the three months ended March 31, 2024, net cash used in operating activities was $10.2 million, resulting from our net loss of $2.1 million and non-cash charges of $12.6 million, partially offset by net cash used in connection with changes in our operating assets and liabilities of $20.7 million. Net cash used in changes in our operating assets and liabilities included an increase in inventory of $4.7 million, an increase in prepaid expenses and other current assets of $4.3 million, an increase in accounts receivable of $15.1 million, a decrease in operating lease liabilities of $2.2 million, and a decrease in accounts payable of $4.4 million, partially offset by an increase in accrued expenses and other liabilities of $12.3 million.
Current wording
During the six months ended June 30, 2025, net cash used in operating activities was $52.8 million, resulting from our net loss of $28.2 million and net cash used in connection with changes in our operating assets and liabilities of $58.8 million, partially offset by non-cash charges of $34.3 million. Net cash used in changes in our operating assets and liabilities included an increase in inventory of $15.9 million, an increase in accounts receivable of $13.6 million, an increase in prepaid expenses and other current assets and other assets of $12.9 million, a decrease in accrued expenses and other current liabilities of $13.9 million, and a decrease in operating lease liabilities of $4.1 million, partially offset by an increase in accounts payable of $1.6 million.
Previous wording
During the three months ended March 31, 2025, net cash used in operating activities was $19.9 million, resulting from our net loss of $18.8 million and net cash used in connection with changes in our operating assets and liabilities of $20.7 million, partially offset by non-cash charges of $19.6 million. Net cash used in changes in our operating assets and liabilities included an increase in inventory of $8.7 million, an increase in prepaid expenses and other current assets of $5.1 million, a decrease in operating lease liabilities of $2.0 million, a decrease in accounts payable of $2.5 million, and a decrease in accrued expenses and other liabilities of $8.0 million, partially offset by a decrease in accounts receivable of $5.7 million.
Current wording
During the six months ended June 30, 2024, net cash used in operating activities was $5.4 million, resulting from our net loss of $19.1 million and net cash used in connection with changes in our operating assets and liabilities of $28.3 million, partially offset by net non-cash charges of $42.0 million. Changes in our operating assets and liabilities included an increase in inventory of $2.0 million, an increase in prepaid expenses and other current assets of $0.4 million, an increase in accounts receivable of $26.0 million, a decrease in operating lease liabilities of $5.9 million, and a decrease in accounts payable of $2.1 million, partially offset by an increase in accrued expenses and other current liabilities of $8.2 million, and an increase in other liabilities of $0.1 million.
Previous wording
During the three months ended March 31, 2025, we used $3.6 million of cash in investing activities consisting exclusively of capital expenditures.
Current wording
During the six months ended June 30, 2025, we used $7.3 million of cash in investing activities consisting exclusively of capital expenditures.
Previous wording
During the three months ended March 31, 2024, we used $2.2 million of cash in investing activities consisting exclusively of capital expenditures.
Current wording
During the six months ended June 30, 2024, we used $4.1 million of cash in investing activities consisting exclusively of capital expenditures.
Previous wording
During the three months ended March 31, 2025, net cash used in financing activities was $2.1 million. This consisted of principal payments on finance lease obligations of $0.3 million and net cash payments associated with our stock awards activities of $1.8 million.
Current wording
During the six months ended June 30, 2025, net cash used in financing activities was $2.3 million. This consisted of principal payments on finance lease obligations of $0.6 million and net cash payments associated with our stock awards activities of $1.8 million.
Previous wording
During the three months ended March 31, 2024, net cash used in financing activities was $2.6 million. This consisted of the payment of term loan of $1.4 million, principal payments on finance lease obligations of $0.2 million, and net cash payments associated with our stock awards activities of $1.1 million.
Current wording
During the six months ended June 30, 2024, net cash used in financing activities was $4.3 million. This consisted of the principal payment on our term loan of $2.8 million, principal payments on finance lease obligations of $0.5 million, and net cash payments associated with our stock awards activities of $1.0 million.
Previous wording
In August 2021, we and our subsidiaries entered into a credit agreement with SVB and several other lenders (the “Lenders”), which we refer to as the 2021 Credit Agreement. The 2021 Credit Agreement, as amended, provides for a term loan facility not to exceed $75.0 million (the “Term Loan Facility”) and a revolving credit facility not to exceed $125.0 million (the “Revolving Facility”). In November 2024, we and the Lenders amended the 2021 Credit Agreement to allow for the issuance of the Convertible Preferred Stock, and to require the repayment of the Term Loan Facility within one business day of such issuance, among other terms (the “2024 Amendment”).
Current wording
In August 2021, we and our subsidiaries entered into a credit agreement with SVB and several other lenders (the “Lenders”), which we refer to as the 2021 Credit Agreement. The 2021 Credit Agreement, as amended, provides for a term loan facility not to exceed $75.0 million (the “Term Loan Facility”) and a revolving credit facility not to exceed $125.0 million (the “Revolving Facility”). In November 2024, we and the Lenders amended the 2021 Credit Agreement to allow for the issuance of the Convertible Preferred Stock, and to require the repayment of the Term Loan Facility within one business day of such issuance, among other terms (the “2024 Amendment”). In August 2025, we and the Lenders amended the 2021 Credit Agreement (the “2025 Amendment”) to provide that so long as there are no outstanding borrowings under the Revolving Facility, the Consolidated Fixed Charge Coverage Ratio (described below) covenant shall not be tested for the fiscal quarter ended June 30, 2025. Notwithstanding this testing accommodation for the quarter ended June 30, 2025, the covenant is deemed to be in effect for purposes of any transaction contemplated by the 2021 Credit Agreement that requires pro forma compliance with the Consolidated Fixed Charge Coverage Ratio or the financial covenants generally and would preclude us from any additional borrowing under the Revolving Facility unless waived or further amended. The 2025 Amendment further requires us, our subsidiary guarantors, the administrative agent and certain of the Lenders prior to September 30, 2025 to enter into an agreement to reset certain financial covenants or implement new financial covenants and implement other modifications to the 2021 Credit Agreement and related documents, on terms and conditions reasonably acceptable to the administrative agent and such Lenders. The Lenders shall have no further obligation to make revolving extensions of credit under the 2021 Credit Agreement until such an agreement has been executed, and our failure to enter into such an agreement shall constitute an event of default under the 2021 Credit Agreement. Notwithstanding this obligation, we have the right to terminate the 2021 Credit Agreement for our convenience prior to such date, and we expect that the cash on hand and other components of working capital as of June 30, 2025, plus net cash flows from product sales will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this Form 10-Q.
Previous wording
As of December 31, 2024 and March 31, 2025, we were in compliance with the covenants under the 2021 Credit Agreement, as amended by the 2024 Amendment. We did not have outstanding borrowings under our Term Loan Facility or our Revolving Facility as of March 31, 2025 or December 31, 2024.
Current wording
As of June 30, 2025 and December 31, 2024, we did not have outstanding borrowings under our Term Loan Facility or our Revolving Facility.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
On April 25, 2024, seven Medicare Part A/B Administrative Contractors (“MACs”) published new proposed local coverage determinations (“LCDs”) for skin substitute grafts/CTPs for the treatment of DFUs and VLUs in the Medicare population. These LCDs were finalized by the MACs on November 14, 2024, and were originally set to become effective on February 12, 2025. However, on January 24, 2025, the MACs announced a delay in the implementation of the LCDs until April 13, 2025, and on April 10, 2025, the MACs announced another delay in the implementation of the LCDs until January 1, 2026. Under the new LCDs finalized in November 2024, should they take effect as scheduled, a total of eighteen products would remain covered, including our
Previous report — wording carried elsewhere
Medicine net revenue was primarily due to an increase in certain customer buying patterns.