Company: MDXG
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001376339-25-000009
Chunk: 42

Company: MIMEDX GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 42
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 the distribution rights acquired and $0.5 million to inventory. The amount ascribed to the distribution rights will be amortized over five years, generally reflective of the period of time over which the distribution rights are anticipated to contribute to cash flow generation.Any Profit Share Payments exceeding the $3.0 million minimum will be capitalized in the period incurred as a part of the acquired assets and amortized over the remaining life of such assets.

15.         Discontinued Operations

Disbanding of Regenerative Medicine Business UnitIn the second quarter of 2023, the Company announced the disbanding of its Regenerative Medicine reportable segment and the suspension of its Knee Osteoarthritis clinical trial program. The announcement reflected the abandonment of the Company’s efforts to pursue a Biological License Application for its micronized dehydrated amnion chorion membrane product and a major definitive strategic shift in the Company’s focus toward its continuing commercial pipeline as its primary source of value creation.The Company completed the regulatory obligations associated with the clinical trial during the fourth quarter of 2023, at which time material run-off operations had ceased and Regenerative Medicine met the criteria for presentation as a discontinued operation.Financial Statement Impact of Discontinued OperationsThe income and expenses of the discontinued operation have been classified as income (loss) from discontinued operations in the consolidated statements of operations as of December 31, 2024, 2023, and 2022 as follows (in thousands):Year Ended December 31,202420232022Selling, general and administrative expense$(221)$— $116 Research and development expense(200)8,017 10,128 Restructuring expense— 4,168 — Income tax provision benefit— (2,974)— Income (loss) from discontinued operations$421 $(9,211)$(10,244)

F- 33

The assets and liabilities of the discontinued operations have been classified as discontinued operations in the consolidated balance sheet as of December 31, 2024 and 2023 as follows (in thousands):December 31,20242023Current liabilities:Accrued compensation$— $311 Accrued expenses— 1,041 Current liabilities of discontinued operations$— $1,352 GoodwillAs a result of the announcement of the disbanding of Regenerative Medicine business unit, the Company evaluated goodwill associated with the Regenerative Medicine reporting unit for potential impairment. The Company estimated fair value for the reporting unit using