Nature of Business

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Nature of Business

MiMedx Group, Inc. (together with its subsidiaries, except where the context otherwise requires, “MiMedx,” or the “Company”) is an industry leader in utilizing amniotic tissue as a platform for regenerative medicine, developing and distributing placental tissue allografts with patent-protected, proprietary processes for multiple sectors of healthcare. As a pioneer in placental biologics, MiMedx has both a core business, focused on addressing the needs of patients with acute and chronic non-healing wounds, and a promising late-state pipeline targeted at decreasing pain and improving function for patients with degenerative musculoskeletal conditions. The Company derives its products from human placental tissues and process these tissues using our proprietary methods, including the PURION® process. MiMedx employs Current Good Tissue Practices, Current Good Manufacturing Practices, and terminal sterilization to produce its allografts. MiMedx provides products primarily in the wound care, burn, surgical, and non-operative sports medicine sectors of healthcare. All of its products are regulated by the United State Food and Drug Administration (“FDA”).

The Company’s business model is focused primarily on the United States of America but the Company is pursuing opportunities for international expansion.

Effect of Covid-19 Pandemic

On March 11, 2020, the World Health Organization designated the outbreak of a novel strain of coronavirus (“Covid-19”) as a global pandemic (the “Pandemic” or “Covid-19 Pandemic”).The Covid-19 Pandemic and associated governmental and societal responses have affected the Company’s business, results of operations and financial condition. The continuation or additional waves of the outbreak of Covid-19 or the outbreak of other health epidemics could harm the Company’s operations and increase the Company’s costs and expenses in numerous ways. As a result of the Pandemic, the Company has experienced delays and impacts on its business and clinical trials. It is uncertain the extent and how long the Pandemic will affect the healthcare system and the global economy as a whole. The effects of the Pandemic or other health epidemics could continue to have an adverse impact on the Company’s business, results of operations and financial condition in the future.

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, loans, and grants to certain businesses, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. As a result of the CARES Act, the Company expects a federal tax refund of approximately $11.3 million, of which $1.2 million has been collected. The income tax benefit was recognized due to the release of a previously-recorded valuation allowance. Of this amount, $10.1 million was recorded as part of income tax receivable on the unaudited condensed consolidated balance sheets as of both March 31, 2021 and December 31, 2020.

Liquidity and Capital Resources

The Company has analyzed its ability to address commitments and potential liabilities for the 12 months extending from the date of the filing of this Quarterly Report, including the full impact of enforcement discretion. The Company believes that its anticipated cash from operating activities, after the anticipated negative effects from the conclusion of the FDA’s enforcement discretion effective May 31, 2021, and existing cash and cash equivalents will enable it to meet our operational liquidity needs for the twelve months following the issuance of this Quarterly Report on Form 10-Q (“Quarterly Report”).