Organogenesis Q3 2026 revenue falls 70% to $45.5M
Management linked the sales decline primarily to LCD withdrawal and CMS comments on discarded products, and expects a significant year-over-year revenue decline in Q4.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Organogenesis Holdings Inc. (ORGO) reported third-quarter 2026 net product revenue of $45.457 million, down 70% from $150.487 million a year earlier, primarily as Advanced Wound Care sales fell. It recorded a $29.629 million net loss, versus $21.567 million net income; nine-month net loss was $179.052 million versus $6.668 million. Third-quarter adjusted EBITDA was a $22.394 million loss, compared with $30.119 million positive.
Management attributed the sales decline primarily to market disruption following withdrawal of coverage policies for skin substitutes and CMS comments on discarded product, and expects a significant year-over-year revenue decline in the fourth quarter. Nine-month operating cash use was $29.120 million, and cash and cash equivalents were $21.326 million as of September 30, 2026. Management expects available resources to fund operating and capital needs for at least 12 months from issuance of the financial statements. The ATM had $73.162 million of its $75 million sales value remaining, but is not committed financing. Dermagraft’s relaunch is delayed; Amnuvx remediation at Norwood is expected by September 30, 2027, and its PDUFA target date is expected to extend from April 24, 2027.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month operating cash use fell to $29.120 million from $49.729 million.
Negative
- Major pointThird-quarter net product revenue fell 70% year over year to $45.457 million.
- Major pointNine-month net loss was $179.052 million, versus $6.668 million in 2025.
- Minor pointThird-quarter adjusted EBITDA was a $22.394 million loss, versus $30.119 million positive.
Filing Explained
The completed ATM issuance reduced existing holders’ ownership percentages absent offsetting changes; preferred conversion could add 39,996,707 common shares.
The 10-Q reports that Organogenesis sold and issued 1,119,180 Class A shares through its ATM during the quarter, at an average price of
Because those shares were issued, the share count increased and existing holders’ percentage ownership decreased, absent offsetting changes.
At September 30, Series A redeemable convertible preferred stock remained outstanding: 130,000 shares with a reported liquidation preference. The filing says 39,996,707 common shares were available upon conversion and excluded from diluted EPS.
If conversion results in common shares being issued, those additional shares would further reduce existing common holders’ percentage ownership, absent offsetting changes.
Key Figures
Key Terms
Local Coverage Determinations (LCD) regulatory
PDUFA target action date regulatory
ATM Agreement financial
full valuation allowance financial
Adjusted EBITDA financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was ORGO's revenue in Q3 2026?
Why did ORGO revenue fall in Q3 2026?
Does ORGO have enough cash for the next year?
How much remains available under ORGO's ATM agreement?
What is the latest update on ORGO's Amnuvx review?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the Quarterly Period Ended
OR
Commission File Number
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
(
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of the registrant’s Class A common stock outstanding as of October 30, 2026 was
Table of Contents
Organogenesis Holdings Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended September 30, 2026
Table of Contents
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Page |
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PART I. FINANCIAL INFORMATION |
4 |
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Item 1. |
Unaudited Condensed Consolidated Financial Statements |
4 |
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Condensed Consolidated Balance Sheets |
4 |
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Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) |
5 |
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Condensed Consolidated Statements of Redeemable Convertible Preferred Stock and Stockholders’ Equity |
6 |
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Condensed Consolidated Statements of Cash Flows |
8 |
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Notes to Condensed Consolidated Financial Statements |
9 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
18 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
26 |
Item 4. |
Controls and Procedures |
27 |
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PART II. OTHER INFORMATION |
27 |
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Item 1. |
Legal Proceedings |
27 |
Item 1A. |
Risk Factors |
27 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
28 |
Item 3. |
Defaults Upon Senior Securities |
28 |
Item 4. |
Mine Safety Disclosures |
28 |
Item 5. |
Other Information |
28 |
Item 6. |
Exhibits |
29 |
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SIGNATURES |
30 |
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2
Table of Contents
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements. These statements may relate to, but are not limited to, expectations of our future results of operations, business strategies and operations, financing plans, potential growth opportunities, clinical development and commercialization of our product candidates, potential market opportunities and the effects of competition, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those listed under “Risk Factors.” In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “might,” “would,” “continue” or the negative of these terms or other comparable terminology. These forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. These forward-looking statements 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. As a result, any or all of our forward-looking statements in this Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” and discussed elsewhere in this Form 10-Q and in “Part I, Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025. These forward-looking statements speak only as of the date of this Form 10-Q. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the U.S. Securities and Exchange Commission (the “SEC”) after the date of this Form 10-Q.
As used herein, except as otherwise indicated by context, references to “we,” “us,” “our,” “the Company,” “Organogenesis” and “ORGO” will refer to Organogenesis Holdings Inc. and its subsidiaries.
3
Table of Contents
PART I—FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements.
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(amounts in thousands, except share and per share amounts)
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September 30, |
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December 31, |
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2026 |
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2025 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Inventories, net |
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Asset held for sale |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Operating lease right-of-use assets, net |
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Deferred tax asset, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity |
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Current liabilities: |
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Current portion of finance lease obligations |
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$ |
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$ |
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Current portion of operating lease obligations - related party |
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Current portion of operating lease obligations |
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Accounts payable |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Finance lease obligations, net of current portion |
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Operating lease obligations, net of current portion - related party |
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Operating lease obligations, net of current portion |
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Other liabilities |
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Total liabilities |
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Commitments and contingencies (Note 15) |
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Series A redeemable convertible preferred stock, $ |
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Stockholders’ equity: |
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Preferred stock, $ |
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— |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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( |
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Total stockholders’ equity |
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Total liabilities, redeemable convertible preferred stock, and stockholders' equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Table of Contents
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(unaudited)
(amounts in thousands, except share and per share amounts)
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Three Months Ended |
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Nine Months Ended |
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2026 |
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2025 |
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2026 |
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2025 |
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Revenue: |
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Net product revenue |
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$ |
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$ |
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$ |
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$ |
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Grant income |
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Total revenue |
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Operating expenses: |
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Cost of goods sold |
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Selling, general and administrative |
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Research and development |
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Fair value adjustment to assets held for sale |
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( |
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Total operating expenses |
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Income (loss) from operations |
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( |
) |
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( |
) |
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( |
) |
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Other income (expense), net: |
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Interest income (expense), net |
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( |
) |
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Other income (expense), net |
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( |
) |
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( |
) |
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Total other income (expense), net |
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( |
) |
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Net income (loss) before income taxes |
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( |
) |
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( |
) |
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( |
) |
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Income tax benefit (expense) |
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( |
) |
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( |
) |
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Net income (loss) and comprehensive income (loss) |
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( |
) |
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( |
) |
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( |
) |
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Accretion of redeemable convertible preferred stock to redemption value |
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( |
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( |
) |
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( |
) |
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( |
) |
Cumulative dividend on redeemable convertible preferred stock |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Undistributed earnings allocated to participating redeemable convertible preferred stock |
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( |
) |
|
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— |
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— |
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|
Net income (loss) attributable to common stockholders |
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$ |
( |
) |
|
$ |
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$ |
( |
) |
|
$ |
( |
) |
|
Net income (loss) per share: |
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||||
Basic |
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$ |
( |
) |
|
$ |
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$ |
( |
) |
|
$ |
( |
) |
|
Diluted |
|
$ |
( |
) |
|
$ |
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|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted-average common shares outstanding: |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Table of Contents
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
(unaudited)
(amounts in thousands, except share amounts)
|
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Additional |
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|||||||
|
Redeemable Convertible Preferred Stock |
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Common Stock |
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Paid-in |
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Accumulated |
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Total |
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|||||||||||||
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Stockholders’ Equity |
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|||||||
Balance as of December 31, 2025 |
|
|
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$ |
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$ |
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$ |
|
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$ |
( |
) |
|
$ |
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||||||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
— |
|
|
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|
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|
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— |
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— |
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|
|
( |
) |
|
|
— |
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|
|
( |
) |
|
Vesting of RSUs and PSUs, net of shares surrendered to pay taxes |
|
— |
|
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|
— |
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
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|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of March 31, 2026 |
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2026 |
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Issuance of common stock in connection with the ATM facility, net of offering costs |
|
— |
|
|
|
— |
|
|
|
|
|
|
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— |
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|
|
|
|
|
— |
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|
|||
Deemed dividend for anti-dilution adjustment to convertible preferred stock |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
Net loss |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of September 30, 2026 |
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
Table of Contents
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (Continued)
(unaudited)
(amounts in thousands, except share amounts)
|
|
|
|
|
|
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|
|
|
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|
|
Additional |
|
|
|
|
|
|
|
|||||||
|
Redeemable Convertible Preferred Stock |
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Common Stock |
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Paid-in |
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Accumulated |
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Total |
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|||||||||||||
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Shares |
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|
Amount |
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Shares |
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|
Amount |
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Capital |
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|
Deficit |
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|
Stockholders’ Equity |
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|||||||
Balance as of December 31, 2024 |
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Exercise of stock options |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|||
Vesting of RSUs, net of shares surrendered to pay taxes |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of March 31, 2025 |
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of June 30, 2025 |
|
|
|
$ |
|
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
— |
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
Exercise of stock options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Vesting of RSUs, net of shares surrendered to pay taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
|||||
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net income |
|
— |
|
|
|
— |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Balance as of September 30, 2025 |
$ |
|
|
$ |
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7
Table of Contents
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
|
|
Nine Months Ended |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of intangible assets |
|
|
|
|
|
|
||
Reduction in the carrying value of right-of-use assets |
|
|
|
|
|
|
||
Non-cash interest expense |
|
|
|
|
|
|
||
Deferred tax expense (benefit) |
|
|
|
|
|
( |
) |
|
Provision recorded for credit losses |
|
|
|
|
|
|
||
Loss on disposal of property and equipment |
|
|
|
|
|
|
||
Adjustment for excess and obsolete inventories |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Fair value adjustment to assets held for sale |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
|
|
( |
) |
|
Inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets and other assets |
|
|
|
|
|
( |
) |
|
Operating leases |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses and other current liabilities |
|
|
( |
) |
|
|
( |
) |
Other liabilities |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Sale of asset held for sale |
|
|
|
|
|
— |
|
|
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Payments of withholding taxes in connection with RSUs vesting |
|
|
( |
) |
|
|
( |
) |
Proceeds from the exercise of stock options |
|
|
— |
|
|
|
|
|
Principal repayments of finance lease obligations |
|
|
( |
) |
|
|
( |
) |
Issuance of common stock in connection with the ATM facility, net of offering costs |
|
|
|
|
|
— |
|
|
Construction of landlord assets, net of tenant allowance |
|
|
( |
) |
|
|
( |
) |
Net cash used in financing activities |
|
|
( |
) |
|
|
( |
) |
Change in cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
( |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for income taxes |
|
$ |
— |
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
$ |
|
|
$ |
|
||
Change in purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities |
|
$ |
( |
) |
|
$ |
( |
) |
Right-of-use assets obtained through finance lease obligations |
|
$ |
( |
) |
|
$ |
|
|
Right-of-use assets obtained through operating lease obligations |
|
$ |
— |
|
|
$ |
|
|
Deemed dividend for anti-dilution adjustment to convertible preferred stock |
|
$ |
|
|
$ |
— |
|
|
Landlord asset additions included in accounts payable and accrued expenses and other current liabilities, net of tenant allowances |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
8
Table of Contents
ORGANOGENESIS HOLDINGS INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in thousands, except share and per share amounts)
1. Nature of Business and Basis of Presentation
Organogenesis Holdings Inc. (“ORGO” or the “Company”) is a leading regenerative medicine and tissue innovations company focused on empowering healing through the development, manufacturing, and sale of product solutions for the advanced wound care and surgical and sports medicine markets. Several of the existing and pipeline products in the Company’s portfolio have Premarket Application (“PMA”) approval, or Premarket Notification 510(k) clearance from the United States Food and Drug Administration (“FDA”). The Company’s customers include hospitals, wound care centers, government facilities, ambulatory surgery centers (“ASCs”) and physician offices. The Company has
Unaudited Interim Financial Information
The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with generally accepted accounting principles in the United States (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. The interim condensed consolidated financial statements, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the results for the interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, for the year ended December 31, 2025, included in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 26, 2026 (the “Annual Report”). The results for the nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the year ending December 31, 2026, any other interim periods, or any future years or periods.
Our sources of liquidity consist of cash and cash equivalents on hand, cash generated from product sales and the remaining capacity available under the ATM Agreement, under which $
2. Summary of Significant Accounting Policies
The Company’s significant accounting policies are described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025, and the notes thereto, which are included in the Annual Report. There have been no material changes to the significant accounting policies previously disclosed in the Annual Report other than the restricted cash policy detailed below.
These unaudited condensed consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards has had or may have a material impact on its condensed consolidated financial statements or disclosures.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the
9
Table of Contents
10
Table of Contents
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents. The Company invests its cash equivalents in highly rated money market funds. Deposits may exceed federally insured limits, and the Company is exposed to credit risk on deposits in the event of default by the financial institutions to the extent account balances exceed the amount insured by the Federal Deposit Insurance Corporation (“FDIC”). However, the Company sweeps cash daily overnight and diversifies among financial institutions to reduce such exposure.
Restricted Cash
Restricted cash consists primarily of cash balances held as employee deposits in connection with the Company’s health benefit plan, security deposits, and amounts maintained as collateral to support the Company's corporate credit card programs. These funds are legally restricted as to withdrawal or use and are not available for general operating purposes. Restricted cash is presented separately from cash and cash equivalents on the condensed consolidated balance sheets. As of September 30, 2026, the Company had long-term restricted cash of $
Recently Adopted Accounting Pronouncement
In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard introduces a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. ASU 2025-05 is effective for annual periods beginning after
In April 2026, the FASB issued ASU 2026-01, Equity (Topic 505): Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. This standard requires that paid-in-kind (“PIK”) dividends on equity-classified preferred stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. This guidance applies to preferred stock classified as equity, including preferred stock that is classified as temporary equity. The standard is effective for annual periods beginning after December 15, 2026, and interim periods within those annual periods, with early adoption permitted. The Company early
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This standard requires entities to provide additional disclosure regarding certain expenses presented within the statements of operations, and aims to improve such disclosures and address requests from investors for more detailed information about the types of expenses incurred by public entities. As clarified by ASU 2025-01, the requirements of the guidance are effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2024-03 on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This standard removes all references to software development project stages and requires entities to start capitalizing software costs when both of the following occur: (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025-06 is effective for annual periods beginning after December 15, 2027 and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-06 on its consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This standard provides authoritative guidance for recognition, measurement, and presentation of government grants from a government to a business entity. The standard is effective for annual periods beginning after December 15, 2028, and interim periods within those annual periods, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2025-10 on its consolidated financial statements and related disclosures.
11
Table of Contents
3. Net Product Revenue
The following tables set forth net product revenue by product category:
|
|
Three Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Advanced Wound Care |
|
$ |
|
|
$ |
|
||
Surgical & Sports Medicine |
|
|
|
|
|
|
||
Total net product revenue |
|
$ |
|
|
$ |
|
||
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Advanced Wound Care |
|
$ |
|
|
$ |
|
||
Surgical & Sports Medicine |
|
|
|
|
|
|
||
Total net product revenue |
|
$ |
|
|
$ |
|
||
For all periods presented, net product revenue generated outside the United States represented
4. Accounts Receivable, Net
Accounts receivable consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Less — allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
Less — product return reserves |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
The Company’s allowance for credit losses is comprised of the following:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Balance at beginning of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Write-offs |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Recoveries |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at end of period |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
5. Inventories
Inventories, net of related reserves for excess and obsolescence, consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work in process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
12
Table of Contents
6. Asset Held for Sale
During the first quarter of 2025, the Company listed a building for sale, located on the Company’s Canton, Massachusetts campus, and commenced actions to complete the sale within twelve months. Certain events and circumstances, which were beyond the Company’s control, extended the period of time required to sell the asset beyond one year.
During the first quarter of 2025, the Company reclassified the building as an asset held for sale and recognized a $
In July 2026, the Company completed the sale of the asset previously classified as held for sale for gross proceeds of $
7. Long-Lived Assets and Goodwill
Long-Lived Assets
The Company reviews long-lived assets, excluding goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. During the three and nine months ended September 30, 2026, the Company concluded impairment triggers had occurred for its company-wide asset group as a result of a decline in the Company’s market capitalization combined with recent weakened financial performance. The Company performed an impairment review in accordance with ASC 360, Property, Plant and Equipment. The Company did
Goodwill
Goodwill is tested for impairment at least annually (as of December 31), or more frequently if events or circumstances indicate the carrying value may no longer be recoverable. During the nine months ended September 30, 2026, the Company identified factors, including a decline in the Company’s market capitalization combined with recent weakened financial performance, that constituted an impairment trigger relating to its goodwill. During the nine months ended September 30, 2026, the Company performed a quantitative analysis, and used its market capitalization to approximate the fair value of the reporting unit. The fair value of the reporting unit exceeded its carrying value as of September 30, 2026, and accordingly, the Company did
8. Restructuring
During 2025 and 2026, the Company committed to a restructuring plan. For the nine months ended September 30, 2025, the Company reduced its’ headcount by
During the first half of 2026, the Company continued to restructure its workforce and closed its operations in the St. Petersburg, Florida facility to increase productivity and enhance profitability. The restructuring activities in the first and second quarters reduced the Company’s headcount by
13
Table of Contents
income (loss). The Company did
The following table summarizes the changes in the Company’s accrued restructuring balance, which is included in accrued expenses and other current liabilities in the condensed consolidated balance sheets. The movements in the restructuring liability principally consist of severance payments.
|
|
Employee |
|
|
Liability balance as of December 31, 2025 |
|
$ |
|
|
Expenses |
|
|
|
|
Cash disbursements |
|
|
( |
) |
Liability balance as of March 31, 2026 |
|
$ |
|
|
Expenses |
|
|
|
|
Cash disbursements |
|
|
( |
) |
Liability balance as of June 30, 2026 |
|
$ |
|
|
Expenses |
|
|
|
|
Cash disbursements |
|
|
( |
) |
Liability balance as of September 30, 2026 |
|
$ |
|
|
9. Long-Term Debt Obligations
2021 Credit Agreement
In August 2021, the Company, as borrower, its subsidiaries, as guarantors, and Silicon Valley Bank (“SVB”) and the several other lenders thereto (collectively, the “Lenders”) entered into a credit agreement, as amended (the “2021 Credit Agreement”), providing for a term loan facility not to exceed $
10. Equity
Convertible Preferred Stock
The Company recognizes changes in the redemption value of the Convertible Preferred Stock, which include accretion of the associated issuance costs and accrual of unpaid dividends using the effective interest method, over the period from the issuance date to the earliest redemption date, November 12, 2031. Any accrued but unpaid dividends will become part of the liquidation preference of the Convertible Preferred Stock, as set forth in the Certificate of Designations. As of September 30, 2026, the Company had
ATM Agreement
In August 2026, the Company entered into an At-The-Market Sales Agreement (the “ATM Agreement”) with Citizens JMP Securities, LLC (“Citizens”) and BTIG, LLC (“BTIG”), pursuant to which the Company could, at its option, offer and sell shares of its Class A common stock, with a sales value of up to $
14
Table of Contents
“Securities Act”). BTIG and Citizens were entitled to a combined commission of
11. Stock-Based Compensation
Stock-Based Compensation Expense
Stock-based compensation expense was $
As of September 30, 2026, the total unrecognized compensation cost related to unvested stock options, restricted stock units and performance stock units was $
12. Earnings (Loss) per Share
The computation of basic and diluted EPS attributable to the Class A common stockholders was as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Accretion of redeemable convertible preferred stock to redemption value |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Cumulative dividend on redeemable convertible preferred stock |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Undistributed earnings |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Undistributed earnings allocated to participating redeemable convertible preferred stock |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||
Net income (loss) attributable to common stockholders |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding — basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of RSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding — diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per share — basic |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Net income (loss) per share — diluted |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
For the three and nine months ended September 30, 2026 and 2025, outstanding stock-based awards of
13. Leases
The Company’s leases consist primarily of real estate, equipment, and vehicle leases.
On January 1, 2013, the Company entered into lease arrangements with 65 Dan Road SPE, LLC, 85 Dan Road Associates, LLC, Dan Road Equity I, LLC and 275 Dan Road SPE, LLC for office and laboratory space in Canton, Massachusetts (the “Related-Party Leases”). 65 Dan Road SPE, LLC, 85 Dan Road Associates, LLC, Dan Road Equity I, LLC and 275 Dan Road SPE, LLC are related parties as the owners of these entities are also directors, former directors and/or stockholders of the Company. In August 2021, the Company purchased the 275 Dan Road property. The remaining three Related-Party Leases were subsequently renewed with various expiration dates through December 31, 2032.
15
Table of Contents
In November 2024, the Company entered into a lease for a facility in Smithfield, Rhode Island, comprising manufacturing and office space (the “Smithfield Facility”). The initial lease term is approximately
During the nine months ended September 30, 2026, the Company terminated certain research and development (“R&D”) programs and related vendor agreements, a portion of which was accounted for as operating leases. The total net charge of $
14. Segment Information
The Company’s performance is reported in
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net product revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Grant income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Clinical expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Sales and marketing |
|
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other segment items (a) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment net income (loss) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of segment net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciling items |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
(a) Other segment items include: research and development related severance, salary, payroll taxes and benefits, research and development related rent and other facilities expense, research and development related depreciation and amortization, fair value adjustment to assets held for sale, other income (expense), net, and income tax benefit (expense).
15. Commitments and Contingencies
License and Manufacturing Agreement
In November 2023, the Company entered into a trademark license and manufacturing agreement with Vivex Biologics, Inc. (“Vivex”) to sell its CYGNUS Dual (“Dual”) and CYGNUS Matrix (“Matrix”) products, with the option to license the VIA Matrix (“VIA”) products. In March 2024, the Company exercised the option to license VIA, and accordingly in July 2024, entered into the first amendment to the trademark license and manufacturing agreement (together with the original agreement, the “Vivex Agreement”).
The Company paid an upfront licensing fee to Vivex to sell Dual and Matrix, and also agreed to pay a fixed milestone payment for Dual in the event that its average sales price (“ASP”) is published by certain government agencies for a specified period of time, which the Company determined was probable. Additionally, the Company pays a low double-digit royalty on the Net Sales of Dual and VIA and a high single-digit royalty on the Net Sales of Matrix, during the royalty term, as defined in the agreement with Vivex.
16
Table of Contents
The royalty term is commensurate with the initial term of the contract and will continue for each subsequent renewal period. The initial term of the agreement expires on
The Company recorded $
Royalties
In October 2017, the Company entered into a license agreement with a third party. Under the license agreement, the Company is required to pay royalties based on a percentage of net sales of the licensed product that occur, after December 31, 2017, through the expiration of the underlying patent in October 2026, subject to minimum royalty payment provisions.
The Company recorded total royalty expense of $
Legal Matters
In conducting its activities, the Company, from time to time, is subject to various claims and also has claims against others. In management’s opinion, the ultimate resolution of such claims would not have a material effect on the financial position, operating results or cash flows of the Company. The Company accrues for these claims when amounts due are probable and estimable.
16. Related Party Transactions
Lease obligations to affiliates, purchase of assets under a finance lease with an affiliate, and renewal of leases with affiliates are further described in Note 13, Leases.
17. Taxes
The Company’s U.S. provision for income tax benefit (expense) for the three and nine months ended September 30, 2026 and 2025 reflects the tax effects of the Company’s pre-tax results in each respective period. The Company’s wholly-owned Swiss subsidiary, Organogenesis GmbH, is subject to taxation in Switzerland and has a transfer pricing arrangement in place with Organogenesis Inc., its U.S. parent.
The income tax rate for the nine months ended September 30, 2026 was (
During the three months ended June 30, 2026, the Company updated its operating forecasts, which reflected expected taxable losses in the foreseeable future. As a result, the Company reassessed the realizability of its deferred tax assets and recorded a full valuation allowance against its net deferred tax assets. In making this assessment, the Company considered all available positive and negative evidence, including its cumulative loss position, historical operating results, forecasts of future taxable income, the reversal of existing taxable temporary differences and available tax-planning strategies. There was no change in the Company’s assessment during the three months ended September 30, 2026.
17
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with our financial statements and accompanying notes included in this Form 10-Q and the financial statements and accompanying notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026. Please refer to our cautionary note regarding forward-looking statements on page 3 of this Form 10-Q, which is incorporated herein by this reference.
Unless the context otherwise requires, for purposes of this section, the terms “we,” “us,” “our,” “the Company,” “Organogenesis” and “ORGO” will refer to Organogenesis Holdings Inc. and its subsidiaries as they currently exist.
Overview
Organogenesis is a leading regenerative medicine and tissue innovations company focused on empowering healing through the development, manufacturing, and sale of product solutions for the advanced wound care and surgical and sports medicine markets. Our products have been shown through clinical and scientific studies to support and in some cases accelerate tissue healing and improve patient outcomes. We are advancing the standard of care in each phase of the healing process through multiple breakthroughs in tissue engineering and cell therapy. Our solutions address large and growing markets driven by aging demographics and increases in comorbidities such as diabetes, obesity, cardiovascular and peripheral vascular disease. We offer our differentiated products and in-house customer support to a wide range of health care customers including hospitals, wound care centers, government facilities, ASCs and physician offices. Our mission is to advance healing and recovery beyond expectations.
We offer a comprehensive portfolio of products in the markets we serve that address patient needs across the continuum of care. We have generated and intend to continue to generate data from clinical trials, real-world outcomes and health economics research that validate the clinical efficacy and value proposition offered by our products. Several of our existing and pipeline products in our portfolio have PMA or 510(k) clearance from the FDA. Given the extensive time and cost required to conduct clinical trials and receive FDA approvals, we believe that our data and regulatory approvals provide us with a strong competitive advantage. Our product development expertise and multiple technology platforms provide a robust product pipeline, which we believe will drive future growth.
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 VLUs and DFUs; Dermagraft for the treatment of DFUs (manufacturing and distribution currently suspended pending transition to our new manufacturing facility in Smithfield, RI); PuraPly AM and PuraPly XT as antimicrobial barriers and native, cross-linked extracellular matrix (“ECM”) scaffold for a broad variety of wound types; CYGNUS Matrix as a dehydrated placental allograft that promotes an optimal environment for wound healing; Affinity and NuShield as placental allografts to address a variety of wound sizes and types as a protective barrier and ECM scaffold; and AmchoThick as a dehydrated amnion-chorion-amnion placental allograft that provides a protective barrier and supports an optimal environment for healing. We have a highly trained and specialized direct wound care sales force paired with comprehensive customer support services.
In the Surgical & Sports Medicine market, we are leveraging our broad regenerative medicine capabilities to address chronic and acute surgical wounds and tendon and ligament injuries. Our Surgical & Sports Medicine products include NuShield and CYGNUS Matrix for surgical applications in targeted soft tissue repairs; and Affinity, PuraPly MZ, PuraPly AM, and PuraPly SX for management of open wounds in the surgical setting. We currently sell these products through independent agencies and our direct sales force.
Local Coverage Determinations (LCD) and CMS Proposed and Final Rules
On April 25, 2024, seven MACs published new proposed 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 11, 2025, the MACs announced another delay in the implementation of the LCDs until January 1, 2026. On December 15, 2025, CMS released a fact sheet stating that the MACs will issue updated LCDs that were to become effective January 1, 2026. The fact sheet included a new categorization of products as covered, non-covered, or those subject to a 12-month status quo period. However, on December 24, 2025, CMS announced that the LCDs had been withdrawn by the MACs and the most recent draft LCDs were removed from the Medicare Coverage Database. Any future changes or other developments related to these or other LCDs or coverage decisions could negatively affect utilization of our products, our business, and our revenue.
18
Table of Contents
On November 5, 2025, CMS released a final rule adopting policy changes for Medicare payments under the PFS and other Medicare Part B issues, effective on or after January 1, 2026. On November 25, 2025, CMS issued a final rule that adopted policy changes for Medicare payments under the Hospital Outpatient Prospective Payment System (“OPPS”), effective on or after January 1, 2026. For calendar year 2026, under the PFS and OPPS final rules, CMS will pay for certain skin substitute products at a payment rate of approximately $127.14 per square centimeter (prior to the application of the geographic adjustments, as applicable), as incident-to supplies when they are used as part of a covered application procedure paid in the non-facility setting or used in the hospital outpatient department and ambulatory surgery center setting. Both the PFS and OPPS final rules assign skin substitutes to categories based on their FDA regulatory status, namely 361 HCT/Ps, PMAs and 510(k)s. CMS stated that categorizing 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 is intended to incentivize competition to create more innovative products, while also resulting in significant savings to the Medicare Trust Fund. For calendar year 2026, the final PFS and OPPS rules provide for use of a single initial payment rate across these three categories, with CMS indicating that in future years, it intends to propose payment rates that differentiate between the three FDA regulatory categories. CMS is implementing these policy changes in the non-facility setting paid under the PFS and in the hospital outpatient department and ambulatory surgical center settings paid under OPPS to remain consistent across these different sites of care. While we believe CMS’ finalized PFS and OPPS 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 and adversely impact utilization of our products, our business, our revenue and our profitability.
On January 1, 2026, CMS began testing the WISeR Model which uses technology-enabled prior authorization services on select Medicare services, including the use of skin substitutes. The WISeR Model will run in six states for five years and, according to CMS, is intended to reduce waste. Implementation of the WISeR Model could impact beneficiary access to our products in the applicable states, which could also materially and adversely impact utilization of our products, our business, our revenue and our profitability. On December 30, 2025, CMS published comments regarding discarded product, which have resulted in clinician confusion and material disruption in the market.
On July 7, 2026, CMS issued the proposed calendar year 2027 OPPS, and on July 16, 2026, CMS issued the proposed calendar year 2027 PFS. CMS has not proposed a change to the per square centimeter rate discussed above, and CMS has not proposed differential payment for skin substitutes approved, cleared, or registered under different FDA regulatory statuses. While the longer-term impact of CMS’ updated Medicare reimbursement changes is still uncertain, we experienced a significant year-over-year decline in revenue in the first three quarters of fiscal year 2026, and we will continue to experience a significant year-over-year decline in revenue in the fourth quarter of fiscal year 2026.
In light of these developments and any future changes in the rate of reimbursement for our products, we may prioritize the sale of certain products (including licensed products) in our portfolio.
Amnuvx
In December 2025, we completed a planned Type B meeting with the FDA, resulting in confirmation to initiate a rolling BLA for Amnuvx. We initiated our rolling BLA submission in December 2025 and completed the submission on April 24, 2026. During June 2026, the FDA accepted the BLA for review. During the third quarter, the FDA completed a Pre-License Inspection of our Norwood Facility and identified 18 items requiring remediation. In addition, we recently received information requests from the FDA related to the clinical data we submitted in the BLA following a mid-cycle communication teleconference. We are preparing responses to the information requests and currently expect to complete the identified remediation work in the Norwood facility by September 30, 2027. Accordingly, the PDUFA target action date is expected to be extended from April 24, 2027.
Dermagraft
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 planned to transition our Dermagraft manufacturing to our newly-leased biomanufacturing facility in Smithfield, Rhode Island and to commence sales by the end of 2027, however, given the decline in the skin substitute market and the decline in our net revenue, we are delaying the relaunch of Dermagraft and cannot currently project specific timing. If there are continued significant delays in the build-out of the Smithfield Facility, FDA approval of the facility for manufacturing Dermagraft or the relaunch of commercial sales of Dermagraft, it could have an adverse effect on our consolidated net product revenue and results of operations.
Components of Our Condensed Consolidated Results of Operations
In assessing the performance of our business, we consider a variety of performance and financial measures. We believe the items discussed below provide insight into the factors that affect these key measures.
19
Table of Contents
Net Product Revenue
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 September 30, 2026, we had approximately 139 direct sales representatives and approximately 181 independent agencies.
We recognize product revenue from sales of our Advanced Wound Care and Surgical & Sports Medicine products when the customer obtains control of our product, which occurs at a point in time and may be upon procedure date, shipment, or delivery, based on the contractual terms. We record product revenue net of a reserve for returns, discounts and group purchasing organizations (“GPO”) rebates, which represent a direct reduction to the product revenue we recognize.
Several factors affect our reported product revenue in any period, including product, payer and geographic sales mix, operational effectiveness, pricing realization, marketing and promotional efforts, the timing of orders and shipments, regulatory actions including healthcare reimbursement scenarios, competition and business acquisitions.
Grant income
Grant income relates to a grant we received from a governmental agency during the second quarter of 2025 related to our Smithfield Facility. We expect to recognize grant income as we recognize the related expenses that the grant is intended to compensate.
Cost of goods sold and gross profit
Cost of goods sold includes personnel costs, product testing costs, quality assurance costs, raw materials and product costs, manufacturing costs, and the costs associated with our manufacturing and warehouse facilities. The changes in our cost of goods sold correspond with the changes in sales units and are also affected by product mix.
Gross profit is calculated as net product revenue less cost of goods sold and generally increases as product 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.
Selling, general and administrative expenses
Selling, general and administrative expenses generally include personnel costs for sales, marketing, sales support, customer support, and general and administrative personnel, sales commissions, incentive compensation, insurance, professional fees, depreciation, amortization, bad debt expense, royalties, information systems costs, gain or loss on disposal of long-lived assets, and costs associated with our administrative facilities.
Research and development expenses
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.
Fair value adjustments to assets held for sale
Impairment and fair value adjustments to assets held for sale relate to the sale of one of our buildings located on our Canton, Massachusetts campus that was adjusted to its estimated fair market value, net of estimated costs to sell, based on observable market conditions. We recorded write-downs of the property during the first quarter of 2025 and additional write-downs later in 2025, and we recorded a favorable fair value adjustment of $1.2 million during the second quarter of 2026. We completed the sale of the building in July 2026 for net proceeds of $3.6 million.
Other income (expense), net
Other income (expense), net comprises primarily of interest income generated from our interest-bearing sweep accounts offset by amortization of debt discount and debt issuance costs.
20
Table of Contents
Income taxes
We account for income taxes using an asset and liability approach. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Valuation allowances are provided when necessary to reduce net deferred tax assets to an amount that is more likely than not to be realized.
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. As of September 30, 2026, we have established a full valuation allowance against our deferred tax assets that we believe are more likely than not to expire before being utilized.
Our U.S. provision for income taxes relates primarily to the establishment of a valuation allowance and state income taxes. We have also recorded a foreign provision for income taxes related to our wholly-owned subsidiary in Switzerland.
We account for uncertainty in income taxes recognized in the condensed consolidated financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the condensed consolidated financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.
Results of Operations
The following table sets forth, for the periods indicated, our results of operations:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net product revenue |
|
$ |
45,457 |
|
|
$ |
150,487 |
|
|
$ |
124,512 |
|
|
$ |
337,959 |
|
Grant income |
|
|
— |
|
|
|
377 |
|
|
|
1,928 |
|
|
|
603 |
|
Total revenue |
|
|
45,457 |
|
|
|
150,864 |
|
|
|
126,440 |
|
|
|
338,562 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold |
|
|
21,898 |
|
|
|
36,251 |
|
|
|
71,343 |
|
|
|
87,604 |
|
Selling, general and administrative |
|
|
45,087 |
|
|
|
79,743 |
|
|
|
164,238 |
|
|
|
226,062 |
|
Research and development |
|
|
7,961 |
|
|
|
13,221 |
|
|
|
41,419 |
|
|
|
34,256 |
|
Fair value adjustment to assets held for sale |
|
|
— |
|
|
|
922 |
|
|
|
(1,188 |
) |
|
|
9,235 |
|
Total operating expenses |
|
|
74,946 |
|
|
|
130,137 |
|
|
|
275,812 |
|
|
|
357,157 |
|
Income (loss) from operations |
|
|
(29,489 |
) |
|
|
20,727 |
|
|
|
(149,372 |
) |
|
|
(18,595 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income (expense), net |
|
|
(61 |
) |
|
|
415 |
|
|
|
457 |
|
|
|
2,045 |
|
Other income (expense), net |
|
|
(71 |
) |
|
|
18 |
|
|
|
(59 |
) |
|
|
93 |
|
Total other income (expense), net |
|
|
(132 |
) |
|
|
433 |
|
|
|
398 |
|
|
|
2,138 |
|
Net income (loss) before income taxes |
|
|
(29,621 |
) |
|
|
21,160 |
|
|
|
(148,974 |
) |
|
|
(16,457 |
) |
Income tax benefit (expense) |
|
|
(8 |
) |
|
|
407 |
|
|
|
(30,078 |
) |
|
|
9,789 |
|
Net income (loss) and comprehensive income (loss) |
|
$ |
(29,629 |
) |
|
$ |
21,567 |
|
|
$ |
(179,052 |
) |
|
$ |
(6,668 |
) |
EBITDA and Adjusted EBITDA
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
21
Table of Contents
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.
The following table presents a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP Adjusted EBITDA for each of the periods presented:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Net income (loss) |
|
$ |
(29,629 |
) |
|
$ |
21,567 |
|
|
$ |
(179,052 |
) |
|
$ |
(6,668 |
) |
Interest (income) expense, net |
|
|
61 |
|
|
|
(415 |
) |
|
|
(457 |
) |
|
|
(2,045 |
) |
Income tax (benefit) expense |
|
|
8 |
|
|
|
(407 |
) |
|
|
30,078 |
|
|
|
(9,789 |
) |
Depreciation and amortization |
|
|
3,927 |
|
|
|
4,029 |
|
|
|
11,769 |
|
|
|
11,207 |
|
Amortization of intangible assets (1) |
|
|
433 |
|
|
|
842 |
|
|
|
6,574 |
|
|
|
2,525 |
|
EBITDA |
|
|
(25,200 |
) |
|
|
25,616 |
|
|
|
(131,088 |
) |
|
|
(4,770 |
) |
Stock-based compensation expense |
|
|
2,806 |
|
|
|
3,065 |
|
|
|
9,494 |
|
|
|
8,974 |
|
Inventory write-downs (2) |
|
|
— |
|
|
|
— |
|
|
|
3,327 |
|
|
|
— |
|
Restructuring charge (3) |
|
|
— |
|
|
|
516 |
|
|
|
8,957 |
|
|
|
516 |
|
Fair value adjustment to assets held for sale (4) |
|
|
— |
|
|
|
922 |
|
|
|
(1,188 |
) |
|
|
9,235 |
|
R&D program termination costs (5) |
|
|
— |
|
|
|
— |
|
|
|
5,588 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(22,394 |
) |
|
$ |
30,119 |
|
|
$ |
(104,910 |
) |
|
$ |
13,955 |
|
(3) Amount reflects employee severance and benefits as well as other exit costs associated with the Company’s restructuring activities, and inventory write-down adjustments for excess and obsolete inventory resulting from a facility closure. See Note 8, Restructuring.
(4) Amount reflects the fair value adjustment of a building sold in July 2026 classified as held for sale. See Note 6, Asset Held for Sale.
(5) Amount reflects termination costs associated with various R&D programs and vendors. See Note 13, Leases.
Comparison of Three and Nine Months Ended September 30, 2026 and 2025
Net Product Revenue
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Advanced Wound Care |
|
$ |
38,152 |
|
|
$ |
141,451 |
|
|
$ |
(103,299 |
) |
|
|
(73 |
%) |
Surgical & Sports Medicine |
|
|
7,305 |
|
|
|
9,036 |
|
|
|
(1,731 |
) |
|
|
(19 |
%) |
Net product revenue |
|
$ |
45,457 |
|
|
$ |
150,487 |
|
|
$ |
(105,030 |
) |
|
|
(70 |
%) |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Advanced Wound Care |
|
$ |
103,780 |
|
|
$ |
314,074 |
|
|
$ |
(210,294 |
) |
|
|
(67 |
%) |
Surgical & Sports Medicine |
|
|
20,732 |
|
|
|
23,885 |
|
|
|
(3,153 |
) |
|
|
(13 |
%) |
Net product revenue |
|
$ |
124,512 |
|
|
$ |
337,959 |
|
|
$ |
(213,447 |
) |
|
|
(63 |
%) |
22
Table of Contents
The decrease in net product revenue in the three and nine months ended September 30, 2026 was primarily due to a decrease in Advanced Wound Care net product revenue attributed to continued clinician confusion and material disruption in the market following the withdrawal of the LCD coverage policies for skin substitutes and CMS published comments regarding discarded product in December 2025.
Cost of Goods Sold and Gross Profit
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Cost of goods sold |
|
$ |
21,898 |
|
|
$ |
36,251 |
|
|
$ |
(14,353 |
) |
|
|
(40 |
%) |
Gross profit |
|
$ |
23,559 |
|
|
$ |
114,236 |
|
|
$ |
(90,677 |
) |
|
|
(79 |
%) |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Cost of goods sold |
|
$ |
71,343 |
|
|
$ |
87,604 |
|
|
$ |
(16,261 |
) |
|
|
(19 |
%) |
Gross profit |
|
$ |
53,169 |
|
|
$ |
250,355 |
|
|
$ |
(197,186 |
) |
|
|
(79 |
%) |
The decrease in cost of goods sold in the three months ended September 30, 2026 was primarily due to lower costs associated with the decrease in net product revenue.
The decrease in cost of goods sold in the nine months ended September 30, 2026 was primarily due to lower costs associated with the decrease in net product revenue, partially offset by increased inventory write-down adjustments for excess and obsolete inventory resulting from a facility closure and LCD regulatory changes.
The decrease in gross profit in the three and nine months ended September 30, 2026 as a percentage of revenue was due to volume and pricing related impacts of the Medicare reimbursement changes and product mix.
Research and Development Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Research and development |
|
$ |
7,961 |
|
|
$ |
13,221 |
|
|
$ |
(5,260 |
) |
|
|
(40 |
%) |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Research and development |
|
$ |
41,419 |
|
|
$ |
34,256 |
|
|
$ |
7,163 |
|
|
|
21 |
% |
The decrease in research and development expenses in the three months ended September 30, 2026 was primarily due to decreases in clinical spend.
The increase in research and development expenses in the nine months ended September 30, 2026 was primarily due to pre-launch activities related to Dermagraft in our biomanufacturing facility in Smithfield, Rhode Island, terminating certain R&D programs and related vendor agreements and supporting Amnuvx BLA efforts.
23
Table of Contents
Selling, General and Administrative Expenses
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Selling, general and administrative |
|
$ |
45,087 |
|
|
$ |
79,743 |
|
|
$ |
(34,656 |
) |
|
|
(43 |
%) |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Selling, general and administrative |
|
$ |
164,238 |
|
|
$ |
226,062 |
|
|
$ |
(61,824 |
) |
|
|
(27 |
%) |
The decrease in selling, general and administrative expenses during the three and nine months ended September 30, 2026 was primarily due to a decrease in commissions and royalty expenses, as well as a decrease in headcount-related expenses resulting from the Company’s restructuring activities.
Fair Value Adjustment to Asset Held for Sale
During the three and nine months ended September 30, 2025, we recorded decreases of $0.9 million and $9.2 million, respectively, to adjust certain assets held for sale to their fair market value.
During the three months ended September 30, 2026, we recorded no adjustments to certain assets held for sale. During the nine months ended September 30, 2026, we recorded a favorable fair value adjustment of $1.2 million to adjust certain assets held for sale to their fair market value.
Other Income (Expense), net
Other income (expense), net, decreased by $0.6 million in the three months ended September 30, 2026. Other income (expense), net, decreased by $1.7 million in the nine months ended September 30, 2026. The decreases resulted primarily from lower interest income earned on our interest-bearing sweep accounts as a result of lower average cash balances.
Income Tax Benefit (Expense)
|
|
Three Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Income tax benefit (expense) |
|
$ |
(8 |
) |
|
$ |
407 |
|
|
$ |
(415 |
) |
|
|
(102 |
%) |
|
|
Nine Months Ended September 30, |
|
|
Change |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
$ |
|
|
% |
|
||||
|
|
(in thousands, except for percentages) |
|
|||||||||||||
Income tax benefit (expense) |
|
$ |
(30,078 |
) |
|
$ |
9,789 |
|
|
$ |
(39,867 |
) |
|
|
(407 |
%) |
The change in the income tax benefit (expense) for the nine months ended September 30, 2026 is primarily attributable to the establishment of a full valuation allowance against our deferred tax assets during the second quarter of 2026. Income tax expense for the three months ended September 30, 2026 was immaterial as a result of the full valuation allowance.
24
Table of Contents
Liquidity and Capital Resources
As of September 30, 2026, we had working capital of $110.5 million, which included $21.3 million in cash and cash equivalents. We expect that our cash on hand and other components of working capital as of September 30, 2026, plus net cash flows from product sales will be sufficient to fund our operating expenses and capital expenditure requirements for at least 12 months beyond the filing date of this Form 10-Q.
Our sources of liquidity consist of cash and cash equivalents on hand, cash generated from product sales and the remaining capacity available under the ATM Agreement, under which approximately $73.2 million of the $75.0 million aggregate sales value remained available as of September 30, 2026. The remaining capacity under the ATM Agreement is not committed financing and does not assure that we will be able to raise $73.2 million, or any specific amount, under the ATM Agreement. Sales under the ATM Agreement are discretionary and depend on market conditions, the trading price and trading volume of our Class A common stock, applicable securities laws and registration statement limitations, satisfaction of conditions to sales under the ATM Agreement, and other factors. To date, we have sold only a limited amount of Class A common stock under the ATM Agreement, and the pace of sales has been slow relative to the amount of remaining capacity. We therefore may not be able to access the full remaining capacity under the ATM Agreement, or any significant portion of it, within the timeframe in which we may need additional capital.
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.
To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute on our business strategy, we anticipate that they will be obtained through additional equity or debt financings, other strategic transactions or a combination of these potential sources of funds. There can be no assurance that we will be able to obtain additional funds on terms acceptable to us, on a timely basis, or at all.
Cash Flows
The following table summarizes our cash flows for each of the periods presented:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(in thousands) |
|
|||||
Net cash used in operating activities |
|
$ |
(29,120 |
) |
|
$ |
(49,729 |
) |
Net cash used in investing activities |
|
|
(2,100 |
) |
|
|
(9,499 |
) |
Net cash used in financing activities |
|
|
(36,174 |
) |
|
|
(12,551 |
) |
Net change in cash, cash equivalents and restricted cash |
|
$ |
(67,394 |
) |
|
$ |
(71,779 |
) |
Operating Activities
During the nine months ended September 30, 2026, net cash used in operating activities was $29.1 million, resulting from our net loss of $179.1 million, partially offset by net cash provided in connection with changes in our operating assets and liabilities of $71.5 million, and non-cash charges of $78.4 million. Changes in our operating assets and liabilities included a decrease in accounts receivable of $123.6 million, an increase in inventory of $14.7 million, a decrease in prepaid expenses and other current assets and other assets of $6.9 million, a decrease in operating lease liabilities of $5.8 million, a decrease in accrued expenses and other current liabilities of $31.7 million and a decrease in accounts payable of $6.9 million, partially offset by an increase in other liabilities of $0.2 million.
During the nine months ended September 30, 2025, net cash used in operating activities was $49.7 million, resulting from our net loss of $6.7 million and net cash used in connection with changes in our operating assets and liabilities of $88.7 million, partially offset by non-cash charges of $45.7 million. Changes in our operating assets and liabilities included an increase in accounts receivable of $64.3 million, an increase in inventory of $15.0 million, an increase in prepaid expenses and other current assets and other assets of $3.3 million, a decrease in operating lease liabilities of $6.3 million, and a decrease in accrued expenses and other current liabilities of $1.9 million, partially offset by an increase in accounts payable of $0.6 million and an increase in other liabilities of $1.5 million.
25
Table of Contents
Investing Activities
During the nine months ended September 30, 2026, we used $2.1 million of cash in investing activities. This consisted of $5.7 million of capital expenditures, partially offset by $3.6 million of proceeds from the sale of a building previously held for sale.
During the nine months ended September 30, 2025, we used $9.5 million of cash in investing activities consisting exclusively of capital expenditures.
Financing Activities
During the nine months ended September 30, 2026, net cash used in financing activities was $36.2 million. This consisted of payments for landlord assets, net of tenant allowance of $24.0 million, principal payments on finance lease obligations of $10.6 million, net cash payments associated with our stock awards activities of $3.1 million, partially offset by net proceeds of $1.4 million from issuance of common stock in connection with our ATM Agreement.
During the nine months ended September 30, 2025, net cash used in financing activities was $12.6 million. This consisted of payments for landlord assets under construction, net of tenant allowance of $10.0 million, principal payments on finance lease obligations of $0.9 million and net cash payments associated with our stock awards activities of $1.6 million.
Indebtedness
2021 Credit Agreement
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, provided 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”), which was reduced to $75.0 million in October 2025. 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. We prepaid the Term Loan Facility in November 2024, and amounts borrowed under the Term Loan Facility may not be re-borrowed. As of December 31, 2025 and August 6, 2026, the date on which the Revolving Facility expired in accordance with the terms of the credit agreement, we had no outstanding borrowings.
Critical Accounting Policies and Significant Judgments and Estimates
Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP. The preparation of unaudited condensed consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and the disclosure at the date of the unaudited condensed consolidated financial statements, as well as revenue and expenses recorded during the reporting periods. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances. Different assumptions and judgments would change the estimates used in the preparation of our unaudited condensed consolidated financial statements, which, in turn, could materially change our results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis. Historically, our critical accounting estimates have not differed materially from actual results. However, if our assumptions change, we may need to revise our estimates, or take other corrective actions, either of which may also have a material adverse effect on our condensed consolidated statements of operations and comprehensive income (loss), liquidity and financial condition. See also our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, for information about these accounting policies as well as a description of our other significant accounting policies.
Off-Balance Sheet Arrangements
We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Recently Issued Accounting Pronouncements
We have reviewed all recently issued standards as disclosed in Note 2, Summary of Significant Accounting Policies to our condensed consolidated financial statements included in this Form 10-Q.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
During the nine months ended September 30, 2026, there were no material changes to our market risk disclosures as set forth in Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
26
Table of Contents
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act). Based upon that evaluation, our management, including our principal executive officer and our principal financial officer, concluded that, as of September 30, 2026, our disclosure controls and procedures were effective and designed to ensure that the information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the requisite time periods.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal controls over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
We are not a party to any material legal proceedings. From time to time, we may become involved in litigation or other legal proceedings relating to claims arising from the ordinary course of business. These matters may include intellectual property, employment and other general claims. With respect to our outstanding legal matters, based on our current knowledge, we believe that the amount or range of reasonably possible loss will not, either individually or in the aggregate, have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. However, the outcome of such legal matters is inherently unpredictable and subject to significant uncertainties.
Item 1A. Risk Factors
Investing in our Class A common stock involves a high degree of risk. Our Annual Report on Form 10-K for the year ended December 31, 2025, includes a detailed discussion of our risk factors under the heading “Part I, Item 1A—Risk Factors.” Other than the risk factor set forth below, there have been no material changes from such risk factors during the quarter ended September 30, 2026. You should consider carefully the risk factor set forth below, the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, and all other information contained in or incorporated by reference in this Form 10-Q before making an investment decision. If any of the risks discussed in the Annual Report on Form 10-K for the year ended December 31, 2025, or herein actually occur, they may materially harm our business, financial condition, operating results, cash flows or growth prospects. As a result, the market price of our Class A common stock could decline, and you could lose all or part of your investment. Additional risks and uncertainties that are not yet identified or that we think are immaterial may also materially harm our business, financial condition, operating results, cash flows or growth prospects and could result in a complete loss of your investment.
Our future capital needs are uncertain and we may need to raise funds in the future, and such funds may not be available on acceptable terms or at all.
Our cash balance has been declining in 2026 due to reduced product revenue. We may seek to raise cash from stock offerings, including sales under the ATM Agreement, borrowings under future credit facilities or other sources. Our Revolving Facility expired on August 6, 2026, and our net product revenue for the nine months ended September 30, 2026 decreased materially compared to the prior-year period, primarily as a result of market disruption following the withdrawal of the LCD coverage policies for skin substitutes and CMS published comments regarding discarded product in December 2025. Our capital requirements will depend on many factors, including:
27
Table of Contents
We cannot assure you that the ATM Agreement will provide us with meaningful liquidity. Although a substantial portion of the $75.0 million aggregate sales value remained available as of September 30, 2026, the ATM Agreement is not a committed financing facility, and our ability to sell shares under it depends on market conditions, the trading price and trading volume of our Class A common stock, limitations imposed by applicable securities laws and our registration statement and the satisfaction of other conditions. As a result, we may be unable to raise any specific amount, or any amount, under the ATM Agreement when we need capital, and any sales we do make would dilute our existing stockholders.
Our operating plan may change as a result of many factors currently unknown to us and we may need additional funds sooner than planned. Additional funds may not be available when we need them on terms that are acceptable to us, or at all, and our recent operating results, the decline in the trading price of our Class A common stock and the expiration of our Revolving Facility may make additional financing more difficult or more costly to obtain. Furthermore, if we issue equity or convertible debt securities to raise capital, you may experience dilution, and the new equity or convertible debt securities may have rights, preferences, and privileges that are senior to or otherwise adversely affect your rights as a stockholder. In addition, if we raise capital through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products, potential products or proprietary technologies, or grant licenses on terms that are not favorable to us. If we cannot raise capital on acceptable terms, we may not be able to develop our product candidates, enhance our existing products, execute our business plan, take advantage of future opportunities, or respond to competitive pressure, changes in our supplier relationships, or unanticipated customer requirements. Any of these events could adversely affect our ability to achieve our development and commercialization goals, which could have a material adverse effect on our business, results of operations, and financial condition.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the three months ended September 30, 2026,
28
Table of Contents
Item 6. Exhibits
Exhibit number |
|
Description |
|
|
|
3.1 |
|
Certificate of Incorporation of Organogenesis Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-3/A (File No. 333-233621) filed with the SEC on September 16, 2019) |
|
|
|
3.2 |
|
Certificate of Amendment of Certificate of Incorporation of Organogenesis Holdings Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 001-37906) filed with the SEC on June 27, 2022) |
|
|
|
3.3 |
|
Certificate of Designations of Series A Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37906) filed with the SEC on November 12, 2024) |
|
|
|
3.4 |
|
Bylaws of Organogenesis Holdings Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-3/A (File No. 333-233621) filed with the SEC on September 16, 2019) |
|
|
|
31.1† |
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
31.2† |
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|
|
|
32.1† |
|
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|
|
|
101.INS† |
|
Inline XBRL Instance Document XBRL |
|
|
|
101.SCH† |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL† |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF† |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
|
|
|
101.LAB† |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE† |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104† |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
† Filed herewith
29
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: November 5, 2026 |
|
Organogenesis Holdings Inc. |
|
|
|
|
|
(Registrant) |
|
|
|
|
|
|
|
|
/s/ David Francisco |
|
|
|
|
|
David Francisco |
|
|
Chief Financial Officer |
|
|
|
|
|
(Principal Financial Officer) |
|
|
|
|
|
|
30