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| PART I FINANCIAL INFORMATION | |
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| Item 1. | Financial Statements | 4 |
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 |
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| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 31 |
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| Item 4. | Controls and Procedures | 32 |
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| PART II OTHER INFORMATION | | |
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| Item 1. | Legal Proceedings | 32 |
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| Item 1A. | Risk Factors | 32 |
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| Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 32 |
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| Item 3. | Defaults Upon Senior Securities | 32 |
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| Item 4. | Mine Safety Disclosures | 32 |
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| Item 5. | Other Information | 33 |
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| Item 6. | Exhibits | 33 |
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| | Signatures | 34 |
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Quarterly Report”) and the documents incorporated by reference herein contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In addition, we may, through our officers and other authorized representatives, make certain forward-looking statements in publicly released materials, both written and oral, including statements contained in filings with the Securities and Exchange Commission, press releases, and our communications with our stockholders.
Forward-looking statements are neither statements of historical facts nor assurances of future performance, but instead discuss the future of our business, operations, future financial performance, future financial condition, plans, anticipated growth strategies, anticipated or perceived trends in our business, the industry in which we operate or the broader economy, and other objectives of management. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would,” the negative of such terms, and other similar expressions although not all forward-looking statements contain these identifying words.
You should understand that the following important factors could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
| ● | estimates regarding future results of operations, financial position, research and development costs, capital requirements and our needs for additional financing; |
| ● | the commercial success and degree of market acceptance of our products; |
| ● | the introduction of new products or product enhancements by us or others in our industry, including new products which may be perceived to negatively impact the demand for our products now or in the future; |
| ● | our ability to expand, manage and maintain our direct sales and marketing organization and to market and sell our products in the U.S. and Europe; |
| ● | the performance of our exclusive contract manufacturer for our OviTex and OviTex PRS products, Aroa Biosurgery Ltd. (“Aroa”), in connection with the supply of product and in the development of additional products and product configurations within these products; |
| ● | our ability to maintain our supply chain integrity and expand our supply chain to manage increased demand for our products; |
| ● | our ability to compete successfully with larger competitors in our highly competitive industry; |
| ● | our ability to achieve and maintain adequate levels of coverage or reimbursement for our current products and any future products we may seek to commercialize; |
| ● | our ability to enhance our products, expand our indications and develop and commercialize additional products; |
| ● | the development, regulatory approval, efficacy and commercialization of competing products; |
| ● | our business model and strategic plans for our products, technologies and business, including our implementation thereof; |
| ● | the size of the markets for our current and future products; |
| ● | our ability to recruit and retain senior management and other highly qualified personnel; |
| ● | our ability to obtain additional capital to finance our planned operations; |
| ● | our ability to maintain regulatory approval for our products; |
| ● | our ability to commercialize or obtain regulatory approvals for our future products, or the effect of delays in commercializing or obtaining regulatory approvals; |
| ● | decreasing selling prices and pricing pressures; |
| ● | regulatory developments in the U.S., including regulatory developments due to changes in the U.S. presidential administration and European markets; |
| ● | the potential impact of healthcare reform in the U.S., including the Inflation Reduction Act of 2022, and measures being taken worldwide designed to reduce healthcare costs; |
| ● | any decrease in frequency of surgical procedures using our products, whether through outbreak of illness or disease, cybersecurity events impacting hospital operations, potential hospital closures, labor and hospital |
staffing shortages, supply chain disruptions to critical surgical and hospital supplies, and any applicable adverse healthcare economic factors;
| ● | the volatility of capital markets and other adverse macroeconomic factors, including due to inflationary pressures, interest rate and currency rate fluctuations, economic slowdown or recession, banking instability, monetary policy changes, changes in trade policies (including tariffs and trade protection measures that have been or may in the future be imposed by the U.S. or other countries), geopolitical tensions or the outbreak of hostilities or war, including from the ongoing Russia-Ukraine conflict, the current conflicts in the Middle East (including any escalation or expansion) and increasing tensions between China and Taiwan; |
| ● | our ability to develop and maintain our corporate infrastructure, including our internal controls; |
| ● | our ability to establish and maintain intellectual property protection for our products, as well as our ability to operate our business without infringing the intellectual property rights of others; |
| ● | our expectations regarding the use of proceeds from recent and any future financings, if any; |
| ● | the occurrence of adverse safety events, restrictions on use with our products or product liability claims; and |
| ● | other risks and uncertainties, including those listed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report”), our subsequent Quarterly Reports on Form 10-Q and the other documents we file with the Securities and Exchange Commission (the “SEC”). |
These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s beliefs and assumptions are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe the expectations reflected in the forward-looking statements are reasonable, the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements may not be achieved or occur at all.
You should refer to the section titled “Risk Factors” in our Annual Report, this Quarterly Report and any subsequent Quarterly Reports for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. Except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
