MiMedx Group Announces Organizational Realignment Program
Kehoe Law Firm, P.C. is making MiMedx shareholders aware that on December 5, 2018, MiMedx Group, Inc. (OTC PINK: MDXG) “. . . announced its plans to implement a broad-based organizational realignment, cost reduction and efficiency program to better ensure the Company’s cost structure is appropriate given its revenue expectations. . . .”
MiMedx also announced that “. . . the realignment will include a reduction of the MiMedx workforce by approximately 240 full-time employees, or 24% of its total workforce, of which about half are salesforce personnel. The cost reductions also include various non-employee expenses. As a result of this realignment program, management expects [MiMedx] to realize material, annualized cost savings beginning in the first quarter of 2019.”
MiMedx reiterated that “[a]s previously announced, [MiMedx] is restating its financial statements. Due to the depth, breadth and complexity of issues identified, management has expanded the scope of work in connection with the preparation of the Company’s financial statements and is unable to estimate the expected completion date at this time.”
MiMedx also stated that
[d]ue to the changes in business practices discussed above and other factors, including the inability to provide the full context of current or past performance, [MiMedx] is not currently in a position to provide any financial performance-related information. Moreover, at this time, the Company cannot estimate its exposure, if any, to potential contingent liabilities related to pending and threatened shareholder lawsuits, pending governmental investigations or other legal proceedings.
As previously disclosed, the Compensation Committee and the Board determined that the separations of the Company’s former CEO, COO, CFO and Corporate Controller should be treated as “for cause” and that these former executive officers had engaged in, among other things, conduct detrimental to the business or reputation of the Company. The departures of these former executives have enabled [MiMedx] to progress in the preparation of its financial statements.
The Audit Committee’s independent investigation is still ongoing, and there may be other actions taken based, at least in part, on information from the investigation. [MiMedx] continues to incur significant legal and accounting-related expenses related to, among other things, the Audit Committee’s independent investigation and other legal matters, the Company’s work to prepare its restated financial statements and the implementation of improved business controls.
Separately, the Board of Directors’ search process for a permanent CEO is active and ongoing, and the Board has been meeting with candidates. However, the ongoing investigation, resulting extensive accounting analysis and pending financial restatement process make it challenging to attract qualified candidates. In addition, the financial restatement process has presented a practical issue with respect to candidates having sufficient information to evaluate the Company’s financial situation and overall business. (Emphasis added).
MiMedx Group Investors and Shareholders
If you purchased, or otherwise acquired, MDXG shares and have questions or concerns, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Kehoe Law Firm, P.C.
