MiMedx Group

As Parker Petites Trial is going on, MiMedx reported this disaster: MDXG released their Q3 2020 results and relisted on Nasdaq on November 4, 2020 . MDXGs business continues to struggle and common shareholders are experiencing the brunt of their pain. Sales decreased, earnings decreased in the quarter substantially, and margins declined in the quar... ter on a year-over-year basis. MDXG is also having trouble with collecting placenta during the pandemic, and thus, have been supplementing their normal distribution network with third-party providers of donated placentas. There was limited information about their third-party providers in the 10-Q , particularly where and from who, they were sourced from. This seems like an area of potential safety concern. They cited disruptions in their supply as a reason for the over-manufacturing of product in the quarter, causing an increase in inventory. It seems likely that the increased inventory was merely due to the unexpected decline in sales during the quarter. MDXG continues to expense large legal bills for their former executive management team. The longer the trial continues, the more MDXG and its shareholders will pay. Other expenses decreased in the quarter as MDXG negotiated discounts and deferred merit salary increases. These reductions are only temporary and will resume at some point. MDXGs offering of preferred shares for the Hayfin equity purchase earlier in the summary is lucrative for preferred shareholders and preferred shareholders only. Preferred shareholders are guaranteed an annual dividend of 4% through June 2021, and then 6% thereafter. Each preferred share is convertible into $262.33 ordinary shares. The amortization of the convertible preferred feature cost the common shareholders $31.110 million in the quarter, pushing their net loss to $52 million. Additionally during the quarter, MDXG hired two new executives with lucrative pay packages of nearly $2 million each. The total compensation packages for the new hires are pretty large for a company that ...Read More