MARIETTA, Ga., May 23, 2019 /PRNewswire/ --áMiMedx Group, Inc. (OTC PINK: MDXG) ("MiMedx" or "the Company"), an industry
As announced on February 20, 2018, the Audit Committee retained King & Spalding LLP as counsel to assist the Audit Committee in conducting its Investigation. Once engaged, King & Spalding retained KPMG LLP to assist with the Investigation, which focused primarily on five key areas: the Company's revenue recognition practices, revenue management activities, actions taken against whistleblowers, tone set by former senior management and Anti-Kickback Statute and related allegations.
The Investigation was conducted over the course of approximately 15 months during which the Audit Committee met 84 times. King & Spalding and KPMG reviewed over 1.5 million documents, including emails, text exchanges and other electronic and hard-copy records, and interviewed over 85 witnesses, many of them multiple times.
In addition, the independent investigators reviewed significant amounts of data housed in the Company's accounting, customer relationship management, inventory and other systems. They also reviewed over 2,750 hours of video derived from a secret video surveillance system installed at the direction of Parker H. "Pete" Petit, the Company's former Chairman and Chief Executive Officer, as well as telephonic recordings captured without the consent of all conversation participants.
"The Audit Committee, with the assistance of outside independent counsel and advisors, has conducted a thorough investigation. The completion of this investigation is a significant milestone in our concerted efforts to position MiMedx for future success," said Charles R. Evans, Chairman of the MiMedx Board of Directors. "The investigation uncovered evidence of material wrongdoing on the part of the Company's prior senior management team. The Board continues to partner with management to ensure that MiMedx operates at the highest levels of ethics, transparency and compliance."
The findings of the Investigation include:
The Investigation is now complete, subject to concluding one final interview related to the Company's course of dealing with a distributor and the Company's new independent auditor, when selected, confirming its satisfaction with the adequacy of the Investigation.
In addition, since September 2018, the Audit Committee has devoted significant time to investigating, with the assistance of King & Spalding and KPMG, allegations that the Anti-Kickback Statute may have been violated by the Company in its relationships with various physicians, customers and distributors. Through this process, the Investigation has identified certain customer accounts that present potential compliance risks and warrant additional review. This additional work will be undertaken by Company counsel in consultation with management to determine the Company's legal risk, including whether any loss contingencies should be recognized or disclosed under GAAP.
Based on the findings of the Investigation, the Board has taken decisive action on behalf of all MiMedx stakeholders over the past year. The Company has made substantial progress improving the overall business culture and has implemented plans to address internal control weaknesses, including:
Mr. Evans continued, "As a leader in the advanced wound care sector and an emerging therapeutic biologics company, the Company is focused on executing our long-range strategic plan and achieving ethical and sustainable growth in a renewed culture of compliance."
A summary of the findings of the Investigation will be filed with the SEC today on a Form 8-K.
MiMedx« is an industry leader in advanced wound care and an emerging therapeutic biologics company developing and distributing human placental tissue allografts with patent-protected processes for multiple sectors of healthcare. The Company processes the human placental tissue utilizing its proprietary PURION« process methodology, among other processes, to produce allografts by employing aseptic processing techniques in addition to terminal sterilization. MiMedx has supplied over 1.5 million allografts to date. For additional information, please visit www.mimedx.com.
Investors:Hilary DixonCorporate & Investor Communications770.email@example.com
Media:Joele Frank, Wilkinson Brimmer KatcherAndy Brimmer / Jed Repko / Annabelle Rinehart212.355.4449
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SOURCE MiMedx Group, Inc.
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