~~AVISTA HEALTHCARE PUBLIC ACQUISITION CORP.~~ORGANOGENESIS HOLDINGS INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(amounts in thousands)


	Three Months Ended March 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(2,969	)	$	(913	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		2,694			1,347
Amortization of intangible assets		1,230			1,221
Reduction in the carrying value of right-of-use assets		1,939			1,847
Non-cash interest expense		107			108
Deferred interest expense		122			151
Provision recorded for credit losses		243			40
Loss on disposal of property and equipment		63			-
Adjustment for excess and obsolete inventories		1,407			2,205
Stock-based compensation		1,914			1,303
Changes in operating assets and liabilities:
Accounts receivable		(3,429	)		2,942
Inventory		(2,163	)		80
Prepaid expenses and other current assets		(4,774	)		(2,165	)
Operating leases		(2,122	)		(1,751	)
Accounts payable		(1,390	)		(1,186	)
Accrued expenses and other current liabilities		2,029			(3,828	)
Other liabilities		22			10
Net cash provided by (used in) operating activities		(5,077	)		1,411
Cash flows from investing activities:
Purchases of property and equipment		(7,562	)		(6,672	)
Net cash used in investing activities		(7,562	)		(6,672	)
Cash flows from financing activities:
Payments of term loan under the 2021 Credit Agreement		(938	)		(469	)
Payments of withholding taxes in connection with RSUs vesting		(298	)		(488	)
Proceeds from the exercise of stock options		-			291
Principal repayments of finance lease obligations		-			(99	)
Net cash used in financing activities		(1,236	)		(765	)
Change in cash, cash equivalents and restricted cash		(13,875	)		(6,026	)
Cash, cash equivalents, and restricted cash, beginning of period		103,290			114,528
Cash, cash equivalents, and restricted cash, end of period	$	89,415		$	108,502
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,271		$	627
Cash paid for income taxes	$	128		$	4
Supplemental disclosure of non-cash investing and financing activities:
Purchases of property and equipment included in accounts payable and accrued expenses	$	1,986		$	1,869
Right-of-use assets obtained through operating lease obligations	$	1,586		$	171

The accompanying notes are an integral part of these unaudited consolidated financial statements.

ORGANOGENESIS HOLDINGS INC.

NOTES TO ~~CONDENSED~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~Note 1—Organization~~(amounts in thousands, except share and ~~Plan~~per share data)

1. Nature of Business ~~Operations~~and Basis of Presentation

~~Organization~~Organogenesis Holdings Inc. (“ORGO” or the “Company”) is a leading regenerative medicine company focused on the development, manufacture, and ~~General~~

~~Avista Healthcare Public Acquisition Corp. (the “Company”) was incorporated as a Cayman Islands exempted company on December 4, 2015. The Company was formed~~commercialization of solutions for the ~~purpose~~Advanced Wound Care and Surgical & Sports Medicine markets. Several of ~~effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (a “Business Combination”). The Company intends to focus its search for a target business~~the existing and pipeline products in the ~~healthcare industry, although it may seek to complete a Business Combination with an operating company in any industry~~Company’s portfolio have Premarket Application (“PMA”) approval, or ~~sector. The Company is an “emerging growth company,” as defined in Section 2(a) of~~Premarket Notification 510(k) clearance from the ~~Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (as amended, the “JOBS Act~~”United States Food and Drug Administration (“FDA”). The Company’s ~~sponsor is Avista Acquisition Corp. (the “Sponsor”), which was incorporated on December 4, 2015.~~

At September 30, 2017, the Company had not commenced any operations. All activity through September 30, 2017 relates to the Company’s formation, its initial public offering of 30,000,000 units (the “~~Units”)~~ ~~at $10.00 per Unit, each consisting of one of the Company’s Class A ordinary shares, par value $0.0001 per share (the “Class A Shares”),~~ ~~and one warrant (the “Warrants”)~~ ~~to purchase one-half of one Class A Share (the “Public Offering~~”customers include hospitals, wound care centers, government facilities, ambulatory service centers (“ASCs”) and efforts directed towards locating a suitable initial Business Combination. The Company also granted the Underwriters (as defined below) of the Public Offering a 45-day option to purchase up to 4,500,000 additional Units to cover over-allotments (the “~~Over-allotment Option~~”). The Class A Shares sold as part of the Units in the Public Offering are sometimes referred to herein as the “public shares.” The Company will not generate any operating revenues until after completion of a Business Combination, at the earliest.

~~Financing~~

~~The registration statement for the Company’s Public Offering was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on October 7, 2016. The Public Offering closed on October 14, 2016 (the “Close Date”). The Sponsor and certain other accredited investors (the “Initial Shareholders”)~~ ~~purchased an aggregate of 16,000,000 warrants (the “Private Placement Warrants”) at a purchase price of $0.50 per warrant, or $8,000,000 in the aggregate, in a private placement at the Close Date (the “Private Placement”).~~

On November 28, 2016, the Company consummated the closing of the sale of 1,000,000 Units which were sold pursuant to the Over-allotment Option. The Company also consummated a simultaneous private placement of an additional 400,000 Private Placement Warrants with the Initial Shareholders. Following the closing of the Over-allotment Option and Private Placement, an additional $10,000,000 was placed into the Trust Account, after paying additional underwriting discounts of $200,000.

The Company intends to finance a Business Combination with net proceeds from its $310,000,000 Public Offering and $8,200,000 Private Placement (see Note 3). Following the Public Offering, after paying underwriting discounts of $6,200,000 and funds designated for operational use of $2,000,000, the remaining net proceeds of $310,000,000 were deposited in a trust account with Continental Stock Transfer and Trust Company acting as trustee (the “~~Trust Account”) as described below.~~

~~The Trust Account~~

On January 6, 2017 the funds in the Trust Account were invested in U.S. government treasury bills, which matured on April 6, 2017. On April 6, 2017 the funds in the Trust Account were reinvested in U.S. government treasury bills, which matured on July 6, 2017. On July 6, 2017, the funds in the Trust Account were reinvested in US government treasury bills, which matured on August 3, 2017. On August 3, 2017, the funds in the Trust Account were reinvested in US government treasury bills, which matured on August 31, 2017. On August 31, 2017, the funds in the Trust Account were reinvested in US government treasury bills, which matured on September 28, 2017. On September 28, 2017, the funds in the Trust Account were reinvested in US government treasury bills, which matured on October 26, 2017. On October 26, 2017 the funds in the Trust Account were reinvested in U.S. government treasury bills, maturing on

~~Table of Contents~~

November 24, 2017. The funds in the Trust Account will continue to be invested in U.S. government treasury bills, or other similar investments until the earlier of (i) the consummation of the Business Combination and (ii) the Company’s failure to consummate a Business Combination within the prescribed time. Placing funds in the Trust Account may not protect those funds from third-party claims against the Company. Although the Company will seek to have all vendors, service providers (other than its independent auditors), prospective target businesses or other entities it engages execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The Sponsor has agreed that it will be liable to the Company under certain circumstances if and to the extent any claims by such persons reduce the amount of funds in the Trust Account below a specified threshold.physician offices. The Company has ~~not independently verified whether~~one operating and reportable segment.

COVID-19 pandemic

On April 10, 2023, President Biden signed a joint congressional resolution ending the ~~Sponsor has sufficient funds~~national emergency related to satisfy its indemnity obligations and believes that the Sponsor’s only assets are securities of the Company. Therefore, the Sponsor may not be able to satisfy those obligations should they arise. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses as well as any taxes. The balance in the Trust Account as of September 30, 2017 was $311,697,781, of this amount $39,744 was accrued interest.

~~Business Combination~~

~~The Company’s management has broad discretion with respect to the specific application of the net proceeds of the Public Offering, the sale of the Private Placement Warrants~~COVID-19 and the ~~Over-allotment Option, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company~~Biden Administration previously announced it will ~~be able to successfully effect a Business Combination. The Company will provide the holders of~~end the public ~~shares (the “Public Shareholders”) with~~health emergency declaration related to COVID-19 on May 11, 2023. While the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a shareholder meeting called to approve the Business Combination or (ii) by means of a tender offer, in either case at a per‑share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest (which interest shall be net of taxes payable) divided by the number of then outstanding public shares. Notwithstanding the foregoing, if the Company seeks shareholder approval of the Business Combination and the Company does not conduct redemptions pursuant to the tender offer rules, a Public Shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “~~Exchange Act~~”), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the public shares. In connection with any shareholder vote required to approve any Business Combination, the Initial Shareholders have agreed (i) to vote any of their respective Ordinary Shares (as defined below) in favor of the Business Combination and (ii) not to redeem any of their Ordinary Shares in connection therewith.

The NASDAQ rules require that the Business Combination must be with one or more target businesses that together have an aggregate fair market value equal to at least 80% of the balance in the Trust Account (less any Deferred Commissions (as defined below) and taxes payable on interest earned) at the time of the Company signing a definitive agreement in connection with the Business Combination.

~~If the Company~~COVID-19 pandemic has not completed a Business Combination by October 14, 2018, the Company will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per‑share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (which interest shall be net of taxes payable, and less up to $50,000 of interest to pay dissolution expenses) divided by the number of then outstanding public shares, which redemption will completely extinguish the rights of the Public Shareholders as Shareholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval ofmaterially adversely affected the Company’s ~~remaining shareholders~~financial results and ~~its Board of Directors, dissolve and liquidate, subject in each case~~business operations through March 31, 2023, the COVID-19 pandemic continues to the Company’s obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. In the event of a liquidation, the Public Shareholders will be entitled to receive a full pro rata interest in the Trust Account (initially anticipated to be approximately $10.00 per share, plus any pro rata interest earned on the Trust Account not previously releasedpresent risks to the Company, and ~~less up~~the Company is unable to ~~$50,000~~predict the impact that COVID-19 (including the emergence of ~~interest to pay dissolution expenses). There~~new variants) will ~~be no redemption rights or liquidating distributions with respect~~have on its financial position and operating results in the future.

2. Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note “2. Significant Accounting Policies” to the ~~Founder Shares (as defined below) or the Private Placement Warrants, which will expire worthless if the Company fails to complete a Business Combination within the 24‑month time period.~~

~~Table of Contents~~

~~Proposed Business Combination~~

~~On August 21, 2017, the Company, Avista Healthcare Merger Sub, Inc. (“Merger Sub”), Avista Healthcare NewCo, LLC (“NewCo”), Envigo International Holdings, Inc. (“Envigo”), and Jermyn Street Associates, LLC, solely in its capacity as Shareholder Representative, entered into a Transaction Agreement (the “Transaction Agreement”).~~

Pursuant to the Transaction Agreement, among other things, (i) the Company will transfer by way of continuation out of the Cayman Islands into the State of Delaware or domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended and the Cayman Islands Companies Law (2016 Revision); (ii) Merger Sub will merge with and into Envigo, the separate corporate existence of Merger Sub will cease and Envigo will be the surviving corporation and a direct wholly-owned subsidiary of the Company (the “~~First Merger”) (Envigo, in its capacity as the surviving corporation~~Consolidated Financial Statements included in the ~~First Merger, is sometimes referred to as the “Surviving Corporation~~”) and (iii) the Surviving Corporation will merge with and into NewCo, the separate corporate existence of the Surviving Corporation will cease and NewCo will be the surviving company and a direct wholly-owned subsidiary of the Company. For additional information regarding the Transaction Agreement, the Parent Sponsor Letter Agreement and the Business Combination, see the CurrentCompany’s Annual Report on Form ~~8-K filed by~~10-K for the ~~Company on August 22, 2017.~~

~~Liquidity~~

~~As of September 30, 2017, the Company had a working capital deficit of $2,336,036.In order to preserve liquidity, as of April 30, 2017, the affiliate of the Sponsor~~fiscal year ended December 31, 2022 (the “~~Affiliate~~”“Annual Report”) has agreed to defer payment of the monthly administrative fee under the Administrative Services Agreement until the initial Business Combination, at which time all such accrued but unpaid fees will be paid. There have been no material changes to the ~~Affiliate. In addition certain vendors have agreed to defer~~significant accounting policies previously disclosed in the ~~payment of invoices until the close or termination of the Proposed Business Combination.~~Annual Report.

Unaudited Interim Financial Information

The Company issued to the Sponsor on August 11, 2017, an unsecured promissory note pursuant to which the Company is permitted to borrow up to $300,000 in aggregate principal amount. The Company has not drawn amounts under this note. This note is non-interest bearing and payable on the earlier of October 14, 2018 or the closing of the Proposed Business Combination.

Based on the foregoing, management believes that the Company will have sufficient working capital to continue as a going concern until the earlier of October 14, 2018 or the close or termination of the Proposed Business Combination.

~~Note 2—Significant Accounting Policies~~

~~Basis of Presentation~~

The accompanying unaudited ~~condensed~~consolidated financial statements have been prepared ~~in U.S dollars~~by management in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States ~~of America~~ (“~~US GAAP~~”GAAP”) ~~for interim financial information~~, and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC ~~for~~regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes ~~necessary~~required by GAAP for ~~a comprehensive presentation of~~complete financial statements. While we believe that the ~~financial position, results of operations or cash flows. In~~disclosures presented are adequate in order to make the ~~opinion of management, the accompanying~~information not misleading, these unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

~~The accompanying unaudited condensed~~quarterly financial statements should be read in conjunction with the financial statements and notes thereto included in the Annual Report.

The unaudited consolidated financial statements include the accounts and results of operations of Organogenesis Holdings Inc. and its wholly-owned subsidiaries, Organogenesis Inc., Organogenesis GmbH (a Switzerland corporation) and Prime Merger Sub, LLC. All intercompany balances and transactions have been eliminated in consolidation. The Company considers events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. In the opinion of management, the unaudited consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the Company’s ~~form 10-K, as filed with~~financial position, results of operations and cash flows at the ~~SEC on March 28, 2017. Operating~~dates and for the periods indicated. The results for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2023 are not necessarily indicative of the results ~~that may~~to be expected for the year ending December 31, ~~2017~~2023, any other interim periods, or any ~~other~~ future ~~period.~~

years or periods.

~~Table of Contents~~

~~Emerging Growth Company~~

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

Use of Estimates

The preparation of ~~the Company’s~~ financial statements in conformity with US GAAP requires ~~the Company’s~~ management to make estimates and assumptions that affect the reported amounts of assets and liabilities, ~~and~~ disclosure of contingent assets and liabilities at the date of the financial ~~statements.~~statements and the reported results of operations during the reporting periods. In preparing the consolidated financial statements, the estimates and assumptions that management consider to be significant and that present the greatest amount of uncertainty include: revenue recognition; sales returns and credit losses; inventory reserve; recognition and measurement of current and deferred income tax assets and liabilities; the assessment of recoverability of long-lived and indefinite lived assets (including intangible assets); assessing impairment of goodwill; valuation of assets and liabilities that use unobservable inputs; and the valuation and recognition of stock-based compensation. Actual results ~~could~~and outcomes may differ significantly from those ~~estimates.~~

~~Cash~~estimates and ~~Cash Equivalents~~assumptions.

~~The Company considers all highly liquid investments purchased with an original maturity~~

Table of three months or less to be cash equivalents.Contents

Concentration of Credit Risk

Financial instruments that potentially subject the Company to ~~concentrations~~concentration of credit risk consist of cash ~~accounts~~and cash equivalents. The Company invests its cash equivalents in ~~a financial institution, which at times,~~highly rated money market funds. Deposits may exceed ~~the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts~~federally insured limits, and ~~management believes~~ the Company is ~~not~~ exposed to ~~significant risks~~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 mitigates the risk by sweeping cash daily overnight and diversifies among financial institutions to reduce such ~~accounts.~~exposure.

Recently Issued Accounting Pronouncements Adopted

Credit Loss

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The FASB subsequently issued a few amendments to ASU 2016-13. ASU 2016-13 and all the related updates replace the incurred loss impairment methodology previously required under generally accepted accounting principles, with an expected loss methodology that requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

The Company adopted the standard as of January 1, 2023 using the modified retrospective method. Under this method, the Company applied the new credit loss measurement guidance to trade accounts receivable, the only financial asset of the Company that is impacted by the ASU and the related updates. The Company recorded a net reduction of $615 to the opening balance of retained earnings as the cumulative effect of initially applying the standard. Results for reporting periods beginning after January 1, 2023 are presented in accordance with Topic 326. Prior period amounts have not been restated and are reported in accordance with legacy GAAP requirements.

3. Acquisition

On September 17, 2020 (the “Acquisition Date”), the Company acquired certain assets and assumed certain liabilities of CPN Biosciences, LLC (“CPN”) pursuant to an asset purchase agreement dated July 24, 2020. CPN offered a physician office management solution and advanced wound care products.

The aggregate consideration amounted to $19,024 as of the Acquisition Date, consisting of $6,427 in cash, 2,151,438 shares of the Company’s Class A common stock with a fair value of $8,815, and contingent consideration (the “Earnout”) with a fair value of $3,782. On the Acquisition Date, the Company paid $5,820 in cash and issued 1,947,953 shares of the Company’s Class A common stock. The remaining consideration of $1,436 was held back and was released in April 2022 by the Company paying $608 in cash and issuing 203,485 shares of the Company’s Class A common stock to the former equity holders of CPN.

The Company was obligated to pay the Earnout to CPN’s former equity holders if CPN’s legacy product revenue in the Earnout Period (July 1, 2021 to June 30, 2022), exceeded CPN’s 2019 revenue. The amount of the Earnout, if any, would be equal to 70% of the excess and would be payable 60 days after the expiration of the Earnout Period. As of the conclusion of the Earnout Period on June 30, 2022, the Company calculated the Earnout liability to be $0. During the Earnout Period, the Company assessed the fair value of the Earnout liability at each reporting period. Subsequent changes in the estimated fair value of the liability were reflected in earnings until the liability was settled. See Note “5. Fair Value Measurement of Financial Assets and Liabilities.”

4. Revenue

The Company generates revenue through the sale of Advanced Wound Care and Surgical & Sports Medicine products. There is a single performance obligation in all of the Company’s contracts, which is the Company’s promise to transfer the Company’s products to customers based on specific payment and shipping terms in the arrangement. Product revenue is recognized when a customer obtains control of the Company’s products which occurs at a point in time and may be upon shipment, procedure date, or delivery, based on the terms of the contract. Revenue is recorded net of a reserve for returns, discounts and Group Purchasing Organization (“GPO”) rebates, which represent a direct reduction to the revenue recognized. These reductions are accrued at the time revenue is recognized, based upon historical experience and specific circumstances. For the three months ended March 31, 2023 and 2022, the Company recorded GPO fees of $1,424 and $1,619, respectively, as a direct reduction of revenue.

The following tables set forth revenue by product category:


	Three Months Ended March 31,
	2023		2022
Advanced Wound Care	$	100,917	$	90,090
Surgical & Sports Medicine		6,725		7,027
Total net revenue	$	107,642	$	97,117

For all periods presented, net revenue generated outside the United States represented less than 1% of total net revenue.

5. Fair Value Measurement of Financial Assets and Liabilities

Earnout Liability

In connection with accounting for the CPN acquisition on September 17, 2020, the Company recorded an Earnout liability of $3,782 on the Acquisition Date, representing the fair value of contingent consideration payable upon the achievement of a certain revenue target. The Earnout liability was classified as a Level 3 measurement within the fair value hierarchy for which fair value was derived from inputs that were unobservable and significant to the overall fair value measurement. The fair value of such Earnout liability was estimated using a Monte Carlo simulation model that utilized key assumptions including forecasted revenues and volatilities of the ~~Company’s~~underlying financial metrics during the Earnout Period that ended on June 30, 2022. Before its settlement, the Company assessed the fair value of the Earnout liability at each reporting period. Any subsequent changes in the estimated fair value of the liability were reflected in selling, general and administrative expenses until the liability was settled. Since September 30, 2021, the Earnout liability remained at $0 through its settlement. For more information about the Earnout liability, refer to Note “3. Acquisition.”

The Company did not have any financial assets and liabilities ~~which qualify as financial instruments under FASB ASC 820, Fair Value Measurements and Disclosures, approximates the carrying amounts represented in the balance sheet.~~

~~Fair Value Measurement~~

ASC 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of investment, characteristics specific to the investment, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements).

Investments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value.

~~The three levels of the fair value hierarchy under ASC 820 are as follows:~~

~~Level I – Quoted prices (unadjusted) in active markets for identical investments at the measurement date are used.~~

Level II – Pricing inputs are other than quoted prices included within Level I that are observable for the investment, either directly or indirectly. Level II pricing inputs include quoted prices for similar investments in active markets, quoted prices for identical or similar investments in markets that are not active, inputs other than quoted prices that are observable for the investment, and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

~~Table of Contents~~

Level III – Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. The inputs used in determination of fair value require significant judgment and estimation.

In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the investment is categorized in its entirety is determined based on the lowest level input that is significant to the investment. Assessing the significance of a particular input to the valuation of an investment in its entirety requires judgment and considers factors specific to the investment. The categorization of an investment within the hierarchy is based upon the pricing transparency of the investment and does not necessarily correspond to the perceived risk of that investment.

~~The following table presents information about the Company’s assets that are~~ measured at fair value on a ~~recurring~~non-recurring basis as of ~~September 30, 2017.~~March 31, 2023 and December 31, 2022.

6. Accounts Receivable, Net

Accounts receivable consisted of the following:


	March 31,			December 31,
	2023			2022
Accounts receivable	$	98,942		$	95,812
Less — allowance for credit losses		(6,921	)		(6,362	)
	$	92,021		$	89,450

Description

September 30, 2017

Level 1

Level 2

Level 3
Investments and cash held in Trust Account

$
311,697,781

$
311,697,781

$
—

$
—
Total

$
311,697,781

$
311,697,781

$
—

$
—

The Company’s allowance for credit losses was comprised of the following:


	Three Months Ended March 31,
	2023			2022
Balance at beginning of period	$	6,362		$	5,153
Cumulative effect of adopting ASU 2016-13		615			-
Additions		243			40
Write-offs		(299	)		(66	)
Balance at end of period	$	6,921		$	5,127

7. Inventories

Inventories, net of related reserves for excess and obsolescence, consisted of the following:

~~Offering Costs~~


	March 31,		December 31,
	2023		2022
Raw materials	$	13,126	$	12,282
Work in process		1,158		1,022
Finished goods		11,255		11,479
	$	25,539	$	24,783

Raw materials include various components used in the Company’s manufacturing process. The Company’s excess and obsolete inventory review process includes analysis of sales forecasts and historical sales as compared to inventory level, and working with operations to maximize recovery of excess inventory. During the three months ended March 31, 2023 and 2022, the Company charged $1,407 and $2,205, respectively, for inventory excess and obsolescence to cost of goods sold within the consolidated statements of operations.

8. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	March 31, 2023		December 31, 2022
Subscriptions	$	5,334	$	4,211
Conferences and marketing expenses		1,277		106
Deposits		652		635
Insurance		2,519		54
Other		65		80
	$	9,847	$	5,086

Deposits are funds held by vendors which are expected to be released within twelve months and therefore they are recorded as current assets.

9. Property and Equipment, Net

Property and equipment consisted of the following:


	March 31,			December 31,
	2023			2022
Leasehold improvements	$	52,369		$	37,607
Buildings		4,943			4,943
Furniture, computers and equipment		58,282			57,147
		115,594			99,697
Accumulated depreciation		(65,490	)		(62,798	)
Construction in progress		56,533			65,564
	$	106,637		$	102,463

Depreciation expense was $2,694 and $1,347 for the three months ended March 31, 2023 and 2022, respectively. Construction in progress primarily represents unfinished construction work on a purchased building located on the Company’s Canton, Massachusetts campus and improvements at the Company’s leased facilities in Canton and Norwood, Massachusetts.

10. Goodwill and Intangible Assets

Goodwill was $28,772 as of March 31, 2023 and December 31, 2022.

Identifiable intangible assets consisted of the following as of March 31, 2023:


	Original		Accumulated			Net Book
	Cost		Amortization			Value
Developed technology	$	32,620	$	(22,040	)	$	10,580
Trade names and trademarks		2,080		(1,442	)		638
Customer relationships		10,690		(2,717	)		7,973
Independent sales agency network		4,500		(4,500	)		-
Patent		7,623		(7,623	)		-
Non-compete agreements		1,010		(641	)		369
Total	$	58,523	$	(38,963	)	$	19,560

Identifiable intangible assets consisted of the following as of December 31, 2022:


	Original		Accumulated			Net Book
	Cost		Amortization			Value
Developed technology	$	32,620	$	(21,164	)	$	11,456
Trade names and trademarks		2,080		(1,393	)		687
Customer relationship		10,690		(2,450	)		8,240
Independent sales agency network		4,500		(4,500	)		-
Patent		7,623		(7,623	)		-
Non-compete agreements		1,010		(604	)		406
Total	$	58,523	$	(37,734	)	$	20,789

Amortization of intangible assets, calculated on a straight-line basis or using an accelerated method, was $1,230 and $1,221 for the three months ended March 31, 2023 and 2022, respectively.

11. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	March 31,		December 31,
	2023		2022
Personnel costs	$	22,049	$	17,113
Royalties		3,041		3,320
Accrued but unpaid lease obligations and interest		1,960		2,463
Accrued taxes		771		2,625
Other		776		926
	$	28,597	$	26,447

The accrued but unpaid lease obligations and the interest accrual on these obligations are related to the buildings in Canton, Massachusetts. See Note “17. Leases.”

12. Restructuring

In order to reduce the Company’s cost structure and improve operating efficiency, the Company ~~complies~~consolidates its manufacturing operations in various locations into Massachusetts facilities.

On October 21, 2020, the Company committed to a plan to restructure its workforce and operations in its La Jolla, California facilities. The restructuring involved 65 employees and was substantially completed as of December 31, 2021, with certain facility and storage activities continuing through 2024. On March 9, 2022, the ~~requirements~~Company committed to a plan to restructure its workforce and operations in its Birmingham, Alabama facilities. The restructuring involved 24 employees and was substantially completed as of ~~ASC 340-10-S99-1~~December 31, 2022, with minimal expenses to be incurred in 2023.

On February 3, 2023, the Company committed to a plan to restructure its workforce to increase productivity and ~~SEC Staff Accounting Bulletin Topic 5A; “Expenses~~enhance profitability. The reduction in force reduced the Company’s headcount by 71 employees, or approximately 7% of ~~Offering”.~~all employees. The Company incurred ~~offering costs~~a total charge of $1,817 in the first quarter of 2023 in connection with ~~its Public Offering of $833,589,~~the restructuring, primarily consisting of ~~accounting~~severance payments.

As a result of the restructuring activities, the Company incurred a pre-tax charge of $1,908 and ~~legal services, securities registration~~$264 during the three months ended March 31, 2023 and 2022, respectively. These charges were included in selling, general and administrative expenses in the consolidated statements of operations. The liability related to the restructuring activities was $1,087 and $1,192 as of March 31, 2023 and December 31, 2022, respectively, and was included in accrued expenses and ~~exchange listing fees,~~other current liabilities in the consolidated balance sheets. The following table provides a roll-forward of the restructuring liabilities.


	Employee			Other			Total
Liability balance as of December 31, 2022	$	1,010		$	182		$	1,192
Expenses		1,817			91			1,908
Payments		(1,740	)		(273	)		(2,013	)
Liability balance as of March 31, 2023	$	1,087		$	-		$	1,087


	Employee			Other			Total
Liability balance as of December 31, 2021	$	2,517		$	651		$	3,168
Expenses		115			149			264
Payments		(2,517	)		(783	)		(3,300	)
Liability balance as of March 31, 2022	$	115		$	17		$	132

13. Long-Term Debt Obligations

Long-term debt obligations consisted of the following:


	March 31,			December 31,
	2023			2022
Line of credit	$	-		$	-
Term loan		70,313			71,250
Less debt discount and debt issuance cost		(444	)		(481	)
Term loan, net of debt discount and debt issuance cost	$	69,869		$	70,769

2021 Credit Agreement

In August 2021, the Company, as borrower, its subsidiaries, as guarantors, and ~~excluding $6,200,000~~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 $75,000 (the “Term Loan Facility”) and a revolving credit facility not to exceed $125,000 (the “Revolving Facility”). The Company’s obligations to the Lenders are secured by substantially all of the Company’s assets, including intellectual property. Capitalized terms used herein and not otherwise defined are defined as set forth in ~~underwriting discounts~~the 2021 Credit Agreement.

Advances made under the 2021 Credit Agreement may be either SOFR Loans or ABR Loans, at the Company’s option. For SOFR Loans, the interest rate is a per annum interest rate equal to the Adjusted Term SOFR plus an Applicable Margin between 2.00% to 3.25% based on the Total Net Leverage Ratio. For ABR Loans, the interest rate is equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and ~~$10,850,000 in deferred underwriting discounts. These offering costs, along with underwriting discounts, were charged~~(c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between 1.00% to ~~shareholders’ equity.~~2.25% based on the Total Net Leverage Ratio.

The 2021 Credit Agreement requires the Company to make consecutive quarterly installment payments equal to the following: (a) from September 30, 2021 through and including June 30, 2022, $469; (b) from September 30, 2022 through and including June 30, 2023, $938; (c) from September 30, 2023 through and including June 30, 2025, $1,406 and (d) from September 30, 2025 and the last

~~Net Income (Loss) Per Share~~13

day of each quarter thereafter until August 6, 2026 (the “Term Loan Maturity Date”), $1,875. The remaining principal balance of $50,625 is also due on the Term Loan Maturity Date. The Company ~~complies~~may prepay the Term Loan Facility. Once repaid, amounts borrowed under the Term Loan Facility may not be re-borrowed.

The Company must pay in arrears, on the first day of each quarter prior to August 6, 2026 (the “Revolving Termination Date”) and on the Revolving Termination Date, a fee for the Company’s non-use of available funds (the “Commitment Fee”). The Commitment Fee rate is between 0.25% to 0.45% based on the Total Net Leverage Ratio. The Company may elect to reduce or terminate the Revolving Facility in its entirety at any time by repaying all outstanding principal and unpaid accrued interest.

Under the 2021 Credit Agreement, the Company is required to comply with ~~accounting~~certain financial covenants including the Consolidated Fixed Charge Coverage Ratio and ~~disclosure requirements ASC Topic 260, “Earnings Per Share.”~~Consolidated Total Net ~~income/(loss)~~Leverage Ratio, tested quarterly. In addition, the Company is also required to make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and acquisitions.

The Company recorded debt issuance costs and related fees of $604 in connection with entering into the Term Loan Facility, as a reduction of the carrying value of the term loan on the Company’s consolidated balance sheets. In connection with entering into the Revolving Facility, the Company recorded debt issuance costs and related fees of $1,223 as other assets. Both of these costs are being amortized to interest expense through the maturity date of the facilities.

As of March 31, 2023 and December 31, 2022, the Company had outstanding borrowings of $70,313 and $71,250 under the Term Loan Facility, respectively, and $0 under the Revolving Facility with $125,000 available for future revolving borrowings.

Future payments of the 2021 Credit Agreement, as of March 31, 2023, are as follows for the calendar years ending December 31:



2023		3,750
2024		5,625
2025		6,563
2026		54,375
Total	$	70,313

14. Stockholders’ Equity

Common Stock

As of March 31, 2023, the issued shares of Class A common stock include 728,548 treasury shares that were reacquired in connection with the redemption of redeemable shares in March 2019.

As of March 31, 2023 and December 31, 2022, the Company reserved the following shares of Class A common stock for future issuance:


	March 31,		December 31,
	2023		2022
Shares reserved for issuance for outstanding options		9,456,596		5,931,742
Shares reserved for issuance for outstanding restricted stock units		4,111,720		1,381,500
Shares reserved for issuance for future grants		4,831,088		11,394,962
Total shares of authorized common stock reserved for future issuance		18,399,404		18,708,204

15. Stock-Based Compensation

Stock Incentive Plans-the 2018 Plan

On November 28, 2018, the Board of Directors of the Company adopted, and on December 10, 2018 the Company’s stockholders approved, the Organogenesis 2018 Equity and Incentive Plan (the “2018 Plan”). The purposes of the 2018 Plan are to provide long-term incentives and rewards to the Company’s employees, officers, directors and other key persons (including

consultants), to attract and retain persons with the requisite experience and ability, and to more closely align the interests of such employees, officers, directors and other key persons with the interests of the Company’s stockholders.

The 2018 Plan authorizes the Company’s Board of Directors or a committee of not less than two independent directors (in either case, the “Administrator”) to grant the following types of awards: non-statutory stock options; incentive stock options; restricted stock awards; restricted stock units; stock appreciation rights; unrestricted stock awards; performance share awards; and dividend equivalent rights. The 2018 Plan is administered by the Company’s Board of Directors.

At the adoption of the 2018 Plan, a total of 9,198,996 shares of Class A common stock was authorized to be issued (subject to adjustment in the case of any stock dividend, stock split, reverse stock split, or similar change in capitalization of the Company). In June 2022, the 2018 Plan was amended to increase the number of shares of Class A common stock reserved for issuance by 7,826,970 shares.

Stock Incentive Plans-the 2003 Plan

The Organogenesis 2003 Stock Incentive Plan (the “2003 Plan”), provides for the Company to issue restricted stock awards, or to grant incentive stock options or non-statutory stock options. Incentive stock options may be granted only to the Company’s employees. Restricted stock awards and non-statutory stock options may be granted to employees, members of the Board of Directors, outside advisors and consultants of the Company.

Effective December 10, 2018, no additional awards may be made under the 2003 Plan and as a result (i) any shares in respect of stock options that are expired or terminated under the 2003 Plan without having been fully exercised will not be available for future awards; (ii) any shares in respect of restricted stock that are forfeited to, or otherwise repurchased by the Company, will not be available for future awards; and (iii) any shares of Class A common stock that are tendered to the Company by a participant to exercise an award will not be available for future awards.

Stock-Based Compensation Expense

Stock options awarded under the stock incentive plans expire 10 years after the grant date and typically vest over four or five years. Restricted stock units awarded typically vest over four years.

Stock-based compensation expense was $1,914 and $1,303 for the three months ended March 31, 2023 and 2022, respectively. The total amount of stock-based compensation expense was included within selling, general and administrative expenses on the consolidated statements of operations.

Restricted Stock Units (RSUs)

The Company granted 3,192,372 and 931,431 time-based restricted stock units to its employees, executives and the Board of Directors in the three months ended March 31, 2023 and 2022, respectively. Each restricted stock unit represents the contingent right to receive one share of the Company’s Class A common stock. A majority of the restricted stock units will vest in four equal annual installments.The fair value of the restricted stock units was based on the fair market value of the Company’s stock on the date of grant.

The activity of restricted stock units is set forth below:


	Number			Weighted Average
	of Shares			Grant Date
				Fair Value
Unvested at December 31, 2022		1,381,500		$	7.62
Granted		3,192,372			2.47
Vested		(416,753	)		7.71
Canceled/Forfeited		(45,399	)		7.25
Unvested at March 31, 2023		4,111,720		$	3.61

As of March 31, 2023, the total unrecognized compensation cost related to unvested restricted stock units expected to vest was $10,551 and the weighted average remaining recognition period for unvested awards was 3.00 years.

Stock Options

The stock options granted during the three months ended March 31, 2023 and 2022 were 3,554,528 and 1,418,224, respectively. The assumptions that the Company used to determine the grant-date fair value of stock options granted during these periods were as follows, presented on a weighted-average basis:


	March 31,			March 31,
	2023			2022
Risk-free interest rate		3.99	%		1.92	%
Expected term (in years)		6.24			6.25
Expected volatility		51.00	%		50.66	%
Expected dividend yield		0.0	%		0.0	%
Exercise price	$	2.51		$	8.03
Underlying stock price	$	2.47		$	7.87

These assumptions resulted in an estimated weighted-average grant-date fair value per ~~ordinary~~ share of stock options granted during the three months ended March 31, 2023 and 2022 of $1.32 and $3.94, respectively.

The following table summarizes the Company’s stock option activity since December 31, 2022:


						Weighted
						Average
				Weighted		Remaining
				Average		Contractual		Aggregate
	Number of			Exercise		Term		Intrinsic
	Shares			Price		(in years)		Value
Outstanding as of December 31, 2022		5,931,042		$	5.91		6.14	$	2,245
Granted		3,554,528			2.51
Exercised		-			-				-
Canceled / forfeited		(28,974	)		11.12
Outstanding as of March 31, 2023		9,456,596			4.62		7.39		1,475
Options exercisable as of March 31, 2023		3,695,292			4.61		4.58		1,475
Options vested or expected to vest as of March 31, 2023		8,153,239		$	4.67		7.06	$	1,475

The aggregate intrinsic value of stock options is ~~computed~~calculated as the difference between the exercise price of the stock options and the fair value of the Company’s Class A common stock for those stock options that have exercise prices lower than the fair value of the Company’s Class A common stock.

The total fair value of options vested during the three months ended March 31, 2023 and 2022 was $2,653 and $1,612, respectively.

As of March 31, 2023, the total unrecognized stock compensation expense related to unvested stock options expected to vest was $8,575 and was expected to be recognized over a weighted-average period of 2.95 years.

16. Earnings (Loss) per Share (EPS)

Basic EPS is calculated by dividing net ~~income/~~income (loss) ~~attributable to ordinary shares~~ by the ~~weighted average~~weighted-average number of ~~ordinary~~ shares outstanding ~~for~~during the period. ~~Ordinary~~Diluted EPS is calculated by dividing net income (loss) by the weighted-average number of shares ~~subject~~outstanding plus the dilutive effect, if any, of outstanding equity awards using the treasury stock method which includes consideration of unrecognized compensation expenses as additional proceeds.

The Company’s potentially dilutive securities include restricted stock units and stock options to ~~possible redemption at September 30, 2017, which are not currently redeemable and are not redeemable at fair value,~~purchase shares of Class A common stock. As the Company had a net loss in the periods presented, the potentially dilutive securities have been excluded from the ~~calculation~~computation of ~~basic income~~diluted net loss per share ~~since such~~as the effect would be to reduce the net loss per share. Therefore, the weighted-average number of common shares ~~if redeemed, only participate in their pro rata~~outstanding used to calculate both basic and diluted net loss per share ~~of the Trust Account earnings. Also excluded,~~attributable to ~~the extent dilutive,~~common stockholders is the ~~incremental number~~same for these periods. For the three months ended March 31, 2023 and 2022, the Company excluded 800,395 and 4,016,433 potential shares of Class A ~~Shares~~common stock, respectively, presented based on the diluted effects of options and restricted stock units outstanding at each period end, from the computation of diluted net loss per share attributable to ~~settle~~ the ~~Private Placement Warrants~~common stockholders for these periods.

17. Leases

The Company’s leases consist primarily of real estate, equipment and vehicle leases.

The Company leases real estate for office, lab, warehouse and production space under noncancelable leases that expire at various dates through 2035, subject to the Company’s options to terminate or renew certain leases for an additional five to ten years. The Company leases vehicles under operating leases for certain employees and has fleet services agreements for service on these vehicles. The minimum lease term for each newly leased vehicle is 367 days with renewal options. The Company may terminate the vehicle lease after the minimum lease term upon thirty days’ prior notice. The Company also leases other equipment under noncancelable operating leases that expire at various dates through 2025.

On January 1, 2013, the Company entered into finance 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. 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 building under the lease with 275 Dan Road SPE, LLC (the “275 Dan Road Building”) for $6,013 and the ~~Warrants~~lease was terminated. Other than the lease with 275 Dan Road SPE, LLC which was terminated in August 2021, the remaining three leases were set to terminate on December 31, 2022, and each contained a renewal option for a five-year period with a rental rate at the greater of (i) rent for the last year of the prior term, or (ii) the then fair market value. The Company exercised the option to extend the leases for an additional five years in November 2021. It remeasured the lease assets and liabilities based on its best estimate of the market rental rate in the renewal period and reassessed the classification for these leases according to ASC 842-10-25-1 Lease Classification. As a result, these leases were reclassified from finance leases to operating leases. The related finance lease assets and liabilities were reclassified to operating lease right-of-use assets and operating lease obligations on the consolidated balance sheet as of December 31, 2021. In December 2022, the Company and the landlord finalized the market rental rate in the renewal period for these properties, resulting in an additional $8,060 to be recorded as variable lease expenses over the renewal period.

The Company owes some accrued but unpaid lease obligations under the aforementioned leases. Effective April 1, 2019, the Company agreed to accrue interest on the accrued but unpaid lease obligations at an interest rate equal to the rate charged under the 2019 Credit Agreement. In connection with the purchase of the 275 Dan Road Building in August 2021, the Company paid 50% of the accrued but unpaid lease obligations associated with this building and the accrued interest thereof. The remaining balance for this building was paid off in five quarterly installments ending on January 3, 2023.

The accrued but unpaid lease obligations as well as the related interest accruals are shown below.


	March 31,		December 31,
	2023		2022
Principal portion of rent in arrears		5,273		5,779
Total accrued but unpaid lease obligations		5,273		5,779

Accrued interest on accrued but unpaid lease obligations		1,960		1,956

Before being paid off in January 2023, the principal portion of rent in arrears related to the 275 Dan Road Building as well as the interest accrual were included in accrued expenses and other current liabilities on the consolidated balance sheet as of December 31, 2022. For the other three buildings, the principal portion of rent in arrears was included in the ~~Units. At September 30,~~short-term portion of operating lease obligations on the consolidated balance sheets as of March 31, 2023 and December 31, 2022. The accrued interest on the accrued but unpaid lease obligations was included in accrued expenses and other current liabilities on the consolidated balance sheets as of March 31, 2023 and December 31, 2022.

The components of lease cost were as follows:


	Classification	Three Months Ended March 31,
		2023		2022
Finance lease
Amortization of right-of-use assets	COGS and SG&A	$	-	$	107
Interest on lease liabilities	Interest Expense		-		5
Total Finance lease cost			-		112
Operating lease cost	COGS, R&D, SG&A		2,291		2,434
Short-term lease cost	COGS, R&D, SG&A		758		669
Variable lease cost	COGS, R&D, SG&A		1,794		918
Total lease cost		$	4,843	$	4,133

Supplemental balance sheet information related to finance leases was as follows:


	March 31, 2023			December 31, 2022
Property and equipment, gross	$	1,174		$	1,174
Accumulated depreciation		(1,174	)		(1,174	)
Property and equipment, net	$	-		$	-

Finance lease obligations	$	-		$	-

Supplemental cash flow information related to leases was as follows:


	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases		2,468		2,337
Operating cash flows for finance leases		-		5
Financing cash flows for finance leases		-		99

Right-of-use assets obtained in exchange for lease obligations
Operating leases		1,586		171
Finance leases		-		-


	March 31, 2023			December 31, 2022
Weighted-average remaining lease term
Finance leases		-			-
Operating leases		7.25			7.54

	March 31, 2023			December 31, 2022
Weighted-average discount rate
Finance leases		-			-
Operating leases		4.65	%		4.61	%

As of March 31, 2023, maturities of lease liabilities were as follows:


	Operating leases
2023 (remaining 9 months)	$	12,157
2024		7,798
2025		7,678
2026		7,542
2027		8,002
Thereafter		18,612
Total lease payments		61,789
Less: interest		(9,304	)
Total lease liabilities	$	52,485

18. Commitments and Contingencies

Royalties

The Company entered into a license agreement with a university for certain patent rights related to the development, use, and production of one of its advanced wound care products. Under this agreement, the Company incurred a royalty based on a percentage of net product sales, for the use of these patents until the patents expired, which was in November 2006. Accrued royalties totaled

$1,187 as of March 31, 2023 and December 31, 2022, respectively, and were classified as part of accrued expenses and other current liabilities on the Company’s consolidated balance sheets. There was no royalty expense incurred during the three months ended March 31, 2023 or 2022 related to this agreement.

In October 2017, the Company ~~had outstanding warrants for~~entered into a license agreement with a third party. Under the ~~purchase~~license agreement, the Company is required to pay royalties based on a percentage of ~~up to 23,700,000 Class A Shares. For the period ended September 30, 2017, the weighted average of these shares was excluded from the calculation of diluted~~ net ~~income/(loss) per ordinary share since the exercise~~sales of the ~~warrants is contingent~~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 royalty expense of $1,440 and $1,601 during the three months ended March 31, 2023 and 2022, respectively, within selling, general and administrative expenses on the ~~occurance~~consolidated statements of ~~future events. As a result, diluted net income/(loss) per ordinary share~~operations.

Legal Matters

In conducting its activities, the Company, from time to time, is ~~equal to basic net income/(loss) per ordinary share.~~

~~Reconciliation Of Net Income (Loss) Per Share~~

~~The Company’s net loss is adjusted for the portion of income that is attributable to ordinary shares~~ subject to ~~redemption, as these shares only participate in~~various claims and also has claims against others. In management’s opinion, the ~~income~~ultimate resolution of such claims would not have a material effect on the ~~Trust Account and not the losses~~financial position, operating results or cash flows of the Company. ~~Accordingly, basic~~The Company accrues for these claims when amounts due are probable and ~~diluted loss per ordinary share is calculated~~estimable. The Company accrued $150 as ~~follows:~~

Three Months

Nine Months

Ended

Ended

September 30, 2017

September 30, 2017

Net loss

$
(2,117,003)

$
(1,595,806)
Less: Income attributable to ordinary shares subject to redemption

(693,179)

(1,598,724)
Adjusted net loss

$
(2,810,182)

$
(3,194,530)

Weighted average shares outstanding, basic and diluted

9,278,550

9,259,196

Basic and diluted net loss per ordinary share

$
(0.30)

$
(0.35)

of March 31, 2023 and December 31, 2022, for certain pending lawsuits.

19. Related Party Transactions

Lease obligations to affiliates, including accrued but unpaid lease obligations, purchase of an asset under a finance lease with an affiliate, and renewal of leases with affiliates are further described in Note “17. Leases.”

~~Table of Contents~~

20. Taxes

~~Income Taxes~~

The Company ~~accounts~~is principally subject to taxation in the United States. The Company has a history of net operating losses both federally and in various states and began utilizing those losses to offset current taxable income in 2020. As net operating loss carryovers become limited or are fully utilized, the Company will accrue current federal and state income tax expense. 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 three months ended March 31, 2023 varied from the U.S. statutory rate of 21% primarily due to the tax adjustments related to executive compensation, other permanent tax adjustments, and discrete items. The Company has a pre-tax book loss for the three months ended March 31, 2023 and expects to benefit from this loss through the forecasted pre-tax book income ~~taxes under FASB ASC 740,~~ for the twelve months ended December 31, 2023. The income tax benefit for the three months ended March 31, 2023 was $1,658, which included a discrete tax expense of $22 related primarily to the interest on certain uncertain tax positions. Income ~~Taxes~~ (“~~ASC 740”). ASC 740 requires~~tax expense for the ~~recognition~~three months ended March 31, 2022 was $45, which included a discrete tax expense of $10 related to the interest on certain uncertain tax positions.

The Company examines all positive and negative evidence to estimate whether sufficient future taxable income in the U.S. will be generated to permit the use of existing deferred tax assets. In the fourth quarter of 2021, the Company released the valuation allowance recorded against its U.S. deferred tax assets. Upon reviewing the positive evidence of net operating loss utilization, cumulative profits, and forecasted taxable income, the Company believed that it was more likely than not that these U.S. deferred tax assets ~~and liabilities~~would be utilized. There are no material deferred tax assets in the other jurisdictions. On a quarterly basis, the Company reassesses the need for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance on deferred income tax assets, weighing positive and negative evidence to ~~be established when~~assess the recoverability of the deferred tax assets. After assessing both the positive and negative evidence, including net operating loss utilization, cumulative profits, and forecasted taxable income, the Company determined that it is more likely than not ~~that all or~~the U.S. deferred assets will be realized in full. As such, the Company did not record a ~~portion of~~valuation allowance against its U.S. deferred tax assets ~~will not be realized.~~as of March 31, 2023 and December 31, 2022.

21. Subsequent Events

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more‑likely‑than‑not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits as of September 30, 2017. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

~~There is currently no taxation imposed on income by the Government of the Cayman Islands.~~

~~Recent Accounting Standards~~

~~Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying balance sheet.~~

~~Subsequent Events~~

~~On October 26, 2017, the Company invested the funds held in the Trust Account in U.S. Treasury Bills maturing on November 24, 2017.~~

~~Other than the foregoing, management~~ has ~~performed an evaluation of~~evaluated subsequent events ~~from September 30, 2017~~ through the date which these financial statements were issued. Based upon the review, management did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements.

~~Note 3—Public Offering~~

In the Public Offering, the Company issued and sold 31,000,000 Units at a price of $10.00 per Unit, including 1,000,000 Units issued upon exercise of the Over-allotment Option. The ordinary shares and warrants comprising the Units began separate trading on November 29, 2016. The holders have the option to continue to hold Units or separate their Units into the component securities. Each Unit consists of one Class A Share and one Warrant to purchase one‑half of one Class A Share. Two Warrants must be exercised for one whole Class A Share at a price of $11.50 per share. The Warrants will become exercisable on the later of 30 days after completion of the Business Combination or 12 months after the Close Date and will expire five years from the completion of the Business Combination or earlier upon redemption or liquidation. The Company may redeem the Warrants at a price of $0.01 per Warrant upon 30 days’ notice, only in the event that the last sale price of the Class A Shares is at least $24.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30‑trading day period ending on the third trading day prior toMay 10, 2023, the date on which notice of redemption is given. The Company will not redeem the Warrants unless a registration statement under the Securities Act covering the Class A Shares issuable upon exercise of the Warrants is effectivethese consolidated financial statements were issued and ~~a current prospectus relating~~has determined that there are no such events to those shares is available throughout the 30 day redemption period, unless the Warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If the Company redeems the Warrants as described above, management will have the option to require all holders that wish to exercise their Warrants to do so on a cashless basis, provided an exemption from registration is available. No Warrants will be exercisable for cash unless the Company has an effective registration statement covering the Class A Shares issuable upon exercise of the Warrants and a current prospectus relating to such shares. If the shares issuable upon exercise of the Warrants are not registered under the Securities Act, holders will be permitted to exercise their Warrants on a cashless basis. However, no Warrant will bereport.

1119

exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any Class A Shares to holders seeking to exercise their Warrants, unless the issuance of the Class A Shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder, or an exemption is available.

~~Note 4—Commitments~~

~~Underwriting Agreement~~

~~The Company entered into an agreement with the underwriters (the “Underwriters”) of the Public Offering (“Underwriting Agreement~~”) that required the Company to pay an underwriting discount of 2.0% of the gross proceeds of the Public Offering and Over-allotment Option to the Underwriters at the Close Date of the Public Offering. The Company will pay the Underwriters a deferred underwriting discount of 3.5% of the gross proceeds of the Public Offering and Over-allotment Option (“~~Deferred Commissions~~”) at the time of the closing of the Business Combination. The Deferred Commission was placed in the Trust Account at the completion of the Public Offering and will be forfeited if the Company is unable to complete a Business Combination in the prescribed time.

~~Registration Rights~~

Holders of the Founder Shares, the Private Placement Warrants, and warrants that may be issued on conversion of working capital loans (and any Class A Shares issuable upon exercise of such warrants and upon conversion of the Founder Shares) will be entitled to registration rights with respect to such securities (in the case of the Founder Shares, only after conversion to Class A Shares) pursuant to an agreement signed on the effective date of the Public Offering. The holders of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities for resale. In addition, the holders have certain “piggy‑back” registration rights with respect to registration statements filed subsequent to the Business Combination. However, the registration rights agreement will provide that the Company will not permit any registration statement to become effective until termination of applicable lock‑up periods with respect to such securities.

~~Note 5—Cash Held in Trust Account~~

Gross proceeds of $310,000,000 and $8,200,000 from the Public Offering and Over-allotment Option, and Private Placement, respectively, less underwriting discounts of $6,200,000 and $2,000,000 designated for offering expenses and to fund the Company’s ongoing administrative and acquisition search costs, were held in the Trust Account at the close date.

~~Note 6—Related Party Transactions~~

~~Related Party Loans~~

The Company issued to the Sponsor on December 14, 2015, as amended and restated on September 1, 2016, an unsecured promissory note pursuant to which the Company was permitted to borrow up to $300,000 in aggregate principal amount. Between inception and the Close Date, the Company borrowed $300,000. This note was non-interest bearing and was repaid in full to the Sponsor at the Close Date.

The Sponsor may make a working capital loan to the Company and up to $1,500,000 of such loan may be converted into warrants, at the price of $0.50 per warrant at the option of the Sponsor. Such warrants would be identical to the Private Placement Warrants.

~~Table of Contents~~

~~Administrative Services Agreement~~

The Company presently occupies office space provided by an Affiliate. The Affiliate has agreed that, until the Company consummates a Business Combination, it will make such office space, as well as certain support services, available to the Company, as may be required by the Company from time to time. The Company will pay the Affiliate an aggregate of $10,000 per month for such office space and support services.

As of April 30, 2017, the Affiliate has agreed to defer payment of the monthly administrative fee under the Administrative Services Agreement until the initial Business Combination, at which time all such accrued but unpaid fees will be paid to the Affiliate.

~~Private Placement Warrants~~

The Initial Shareholders purchased 16,000,000 Private Placement Warrants at $0.50 per warrant (for an aggregate purchase price of $8,000,000) from the Company in a Private Placement on the Close Date. A portion of the proceeds from the sale of the Private Placement Warrants were placed into the Trust Account. The Initial Shareholders have also purchased an additional 400,000 Private Placement Warrants at $0.50 per warrant (for an aggregate purchase price of $200,000) simultaneously with the underwriter’s exercise of the Over-Allotment Option. Each Private Placement Warrant is exercisable for one‑half of one Class A Share. Two Private Placement Warrants must be exercised for one whole Class A Share at a price of $11.50 per share. The Private Placement Warrants are identical to the Warrants included in the Units to be sold in the Public Offering except that the Private Placement Warrants: (i) will not be redeemable by the Company and (ii) may be exercised for cash or on a cashless basis, as described in the registration statement relating to the Public Offering, so long as they are held by the Initial Shareholders or any of their permitted transferees. Additionally, the Initial Shareholders have agreed not to transfer, assign or sell any of the Private Placement Warrants, including the Class A Shares issuable upon exercise of the Private Placement Warrants (except to certain permitted transferees), until 30 days after the completion of the Business Combination.

~~Founder Shares~~

~~In connection with the organization of the Company, on December 14, 2015, an aggregate of 8,625,000 Class B Shares (the “Founder Shares~~”) were sold to the Sponsor at a price of approximately $0.003 per share, for an aggregate price of $25,000. In October 2016, the Sponsor transferred 50,000 Founder Shares to each of the Company’s independent directors at a price per share of approximately $0.003 per share. In addition, at such time, each of our independent directors purchased an additional 421,250 Founder Shares from our Sponsor at a price per share of approximately $0.003 per share. The 8,625,000 Founder Shares included an aggregate of up to 1,125,000 shares that were subject to forfeiture if the Over‑allotment Option was not exercised in full by the Underwriters in order to maintain the Initial Shareholders’ ownership at 20% of the issued and outstanding Ordinary Shares upon completion of the Public Offering. Following the partial exercise of the Over-allotment Option, 875,000 Founder Shares were forfeited in order to maintain the Initial Shareholder’s ownership at 20% of the issued and outstanding Ordinary shares. The Founder Shares are identical to the Class A Shares included in the Units sold in the Public Offering, except that the Founder Shares (i) have the voting rights described in Note 7, (ii) are subject to certain transfer restrictions described below, and (iii) are convertible into Class A Shares on a one‑for‑one basis, subject to adjustment pursuant to the anti‑dilution provisions contained therein. The Founder Shares may not be transferred, assigned or sold until the earlier of (i) one year after the completion of the Business Combination and (ii) the date on which the Company completes a liquidation, merger, share exchange, reorganization or other similar transaction after the Business Combination that results in all of the Public Shareholders having the right to exchange their Class A Shares for cash, securities or other property. Notwithstanding the foregoing, if the last sale price of the Class A Shares equals or exceeds $12.00 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) for any 20 trading days within any 30 trading day period commencing at least 150 days after the Business Combination, the Founder Shares will be released from the lock‑up.

~~Table of Contents~~

~~Note 7—Shareholders’ Equity~~

~~Preferred Shares~~

The Company is authorized to issue 1,000,000 preferred shares with a par value of $0.0001. The Company’s board of directors will be authorized to fix the voting rights, if any, designations, powers, preferences, the relative, participating, optional or other special rights and any qualifications, limitations and restrictions thereof, applicable to the shares of each series. The board of directors will be able to, without shareholder approval, issue preferred shares with voting and other rights that could adversely affect the voting power and other rights of the holders of the Ordinary Shares and could have anti‑takeover effects. At September 30, 2017 there were no preferred shares issued or outstanding.

~~Ordinary Shares~~

~~The Company is authorized to issue 200,000,000 Class A Shares, with a par value of $0.0001 each, and 20,000,000 Class B ordinary shares, with a par value of $0.0001 each (the “Class B Shares” and, together with the Class A Shares, the “Ordinary Shares”). Holders of the Ordinary Shares are entitled to one vote for each Ordinary Share;~~ ~~provided~~, that only holders of the Class B Shares have the right to vote on the election of directors prior to the Business Combination. The Class B Shares will automatically convert into Class A Shares at the time of the Business Combination, on a one‑for‑one basis, subject to adjustment for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like, and subject to further adjustment as provided herein. In the case that additional Class A Shares, or equity‑linked securities, are issued or deemed issued in excess of the amounts sold in the Public Offering and related to the closing of the Business Combination, the ratio at which the Class B Shares shall convert into Class A Shares will be adjusted (unless the holders of a majority of the outstanding Class B ordinary shares agree to waive such anti‑dilution adjustment with respect to any such issuance or deemed issuance) so that the number of Class A Shares issuable upon conversion of all Class B Shares will equal, in the aggregate, 20% of the sum of all Ordinary Shares outstanding upon completion of the Public Offering plus all Class A Shares and equity‑linked securities issued or deemed issued in connection with the Business Combination, excluding any Ordinary Shares or equity‑linked securities issued, or to be issued, to any seller in the Business Combination. Holders of Founder Shares may also elect to convert their Class B Shares into an equal number of Class A Shares, subject to adjustment as provided above, at any time. At September 30, 2017 there were 31,000,000 Class A Shares issued and outstanding, of which 29,191,301 shares were subject to possible redemption and are classified outside of shareholders’ equity at the balance sheet date and 7,750,000 Class B Shares issued and outstanding.

~~Redeemable Ordinary Shares~~

~~The Class A Shares subject to possible redemption will be recorded at redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU~~”) 480, Distinguishing Liabilities from Equity. The Company will proceed with a Business Combination only if it has net tangible assets of at least $5,000,001 upon consummation of the Business Combination and, in the case of a shareholder vote, a majority of the outstanding Ordinary Shares voted are voted in favor of the Business Combination. Accordingly, at September 30, 2017, 29,191,301 of the Company’s 31,000,000 Class A Shares were classified outside of permanent equity at their redemption value.

~~Table of Contents~~

Item ~~2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

~~References in this report (this “Quarterly Report~~”) to “we,” “us” or the “Company” refer to Avista Healthcare Public Acquisition Corp. References to our “management” or our “management team” refer to our officers and directors, and references to the “sponsor” refer to Avista Acquisition Corp. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,” “Item 1A. Risk Factors” and elsewhere in this Quarterly Report.

~~Special Note regarding Forward-Looking Statements~~

~~This Quarterly Report on Form 10-Q contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements under “Item~~ 2. Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations”~~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, 2022, filed with the SEC, on March 1, 2023. 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.

Overview

Organogenesis is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the Advanced Wound Care and Surgical & 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 and smoking. 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, ambulatory service centers (“ASCs”) and physician offices. Our mission is to provide integrated healing solutions that substantially improve medical outcomes and the lives of patients while lowering the overall cost of care.

We offer a comprehensive portfolio of products in the markets we serve that address patient needs across the continuum of care. We have 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 approval, 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 venous leg ulcers and diabetic foot ulcers (“DFUs”); Dermagraft for the treatment of DFUs (manufacturing currently suspended pending transition to a new manufacturing facility or engagement of a third-party manufacturer); PuraPly AM as an antimicrobial barrier for a broad variety of wound types; and the Affinity, Novachor and NuShield wound coverings to address a variety of wound sizes and types. 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 Sports Medicine products include NuShield for surgical applications in targeted soft tissue repairs; and Affinity, Novachor, PuraPly MZ and PuraPly AM for management of open wounds in the surgical setting. We currently sell these products through independent agencies and our direct sales force.

For the three months ended March 31, 2023, we generated net revenue of $107.6 million and reported a net loss of $3.0 million compared to net revenue of $97.1 million and a net loss of $0.9 million for the three months ended March 31, 2022. We have incurred significant losses since inception and, while we reported net income for the most recent three years, we may incur operating losses in the future as we expend resources as part of our efforts to grow our organization to support the planned expansion of our business. As of March 31, 2023, we had an accumulated deficit of $48.9 million. Our primary sources of capital to date have been from sales of our products, borrowings from related parties and institutional lenders and proceeds from the sale of our Class A common stock. We operate as one segment of regenerative medicine.

COVID-19 pandemic

On April 10, 2023, President Biden signed a joint congressional resolution ending the national emergency related to COVID-19 and the Biden Administration previously announced it will end the public health emergency declaration related to COVID-19 on May 11, 2023. While the COVID-19 pandemic has not materially adversely affected our financial results and business operations through March 31, 2023, COVID-19 continues to present risks to the Company, and we continue to closely monitor the impact of the pandemic on all aspects of our business. We are unable to predict the impact that COVID-19 (including the emergence of new variants) will have on our financial position and operating results in the future.

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 currently plan to transition our Dermagraft manufacturing to a new manufacturing facility or engage a third-party manufacturer, which we expect will result in substantial long-term cost savings. In the period when Dermagraft is not available, we expect that customers will be willing to substitute Apligraf for Dermagraft and that the suspension of Dermagraft sales will not have a material impact on our net revenue. However, if we do not realize the expected substantial long-term cost savings or if customers are unwilling to substitute Apligraf for Dermagraft during the period in which Dermagraft is unavailable, it could have an adverse effect on our net revenue and results of operations.

Components of Our 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.

Revenue

We derive our net 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 March 31, 2023, we had approximately 315 direct sales representatives and approximately 155 independent agencies.

We recognize 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 of a contract. We record revenue net of a reserve for returns, discounts and GPO rebates, which represent a direct reduction to the revenue we recognize.

Several factors affect our reported 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.

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 revenue less cost of goods sold and generally increases as 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. We generally expect our selling, general and administrative expenses to continue to increase due to increased investments in market development and the geographic expansion of our sales forces as we drive for continued revenue growth.

Research and development expenses

Research and development expenses include 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. Our research and development expenses also include expenses for clinical trials. We expense research and development costs as incurred. We generally expect that research and development expenses will increase as we continue to conduct clinical trials on new and existing products, move products through the regulatory pathway (e.g., seek biologics license application approval), add personnel to support product enhancements as well as to bring new products to market, and enhance our manufacturing process and procedures.

Other expense, net

Interest expense—Interest expense consists of interest on our outstanding indebtedness, including amortization of debt discount and debt issuance costs, net of interest income recognized.

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 the tax position will be sustained on examination by taxing authorities based on the technical merits of the position. In consideration of the factors discussed above, in the fourth quarter of 2021, we determined it was more likely than not that our deferred tax assets would be realized in the future and released the valuation allowance on our net U.S. deferred tax assets as of December 31, 2021, resulting in a benefit of $48.3 million in income taxes. We maintained the same position that our net U.S. deferred tax assets did not require a valuation allowance as of March 31, 2023 and December 31, 2022.

We account for uncertainty in income taxes recognized in the 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 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 March 31,
	2023			2022
Net revenue	$	107,642		$	97,117
Cost of goods sold		26,607			25,080
Gross profit		81,035			72,037
Operating expenses:
Selling, general and administrative		73,834			63,578
Research and development		11,202			8,587
Total operating expenses		85,036			72,165
Loss from operations		(4,001	)		(128	)
Other expense, net:
Interest expense		(649	)		(737	)
Other income (expense), net		23			(3	)
Total other expense, net		(626	)		(740	)
Net loss before income taxes		(4,627	)		(868	)
Income tax benefit (expense)		1,658			(45	)
Net loss	$	(2,969	)	$	(913	)

EBITDA and Adjusted EBITDA

Our management uses financial measures that are not in accordance with generally accepted accounting principles in the United States (“non-GAAP”), in addition to financial measures in accordance with generally accepted accounting principles in the United States (“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 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 is a reconciliation of GAAP net income to non-GAAP EBITDA and non-GAAP Adjusted EBITDA for each of the periods presented:


	Three Months Ended March 31,
	2023			2022
	(Unaudited) (in thousands)
Net loss	$	(2,969	)	$	(913	)
Interest expense, net		649			737
Income tax expense (benefit)		(1,658	)		45
Depreciation		2,694			1,347
Amortization		1,230			1,221
EBITDA		(54	)		2,437
Stock-based compensation expense		1,914			1,303
Restructuring charge (1)		1,908			264
Settlement fee (2)		-			1,000
Adjusted EBITDA	$	3,768		$	5,004

(1)

Amounts reflect employee severance, retention and benefits as well as other exit costs associated with the Company’s restructuring activities. See Note “12. Restructuring” to our consolidated financial ~~position, business strategy and the plans and objectives of management for future operations. These~~ statements constitute projections, forecasts and forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of performance. They involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by these statements. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When usedincluded in this Quarterly Report on Form 10-Q, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but10-Q.

(2)

Amount reflects the ~~absence of these words does not mean that a statement is not forward-looking. When~~fee the Company ~~discusses its strategies~~agreed to pay to a GPO to settle previously disputed GPO fees.

Comparison of Three Months Ended March 31, 2023 and 2022

Revenue


	Three Months Ended March 31,				Change
	2023		2022		$			%
	(in thousands, except for percentages)
Advanced Wound Care	$	100,917	$	90,090	$	10,827			12	%
Surgical & Sports Medicine		6,725		7,027		(302	)		(4	%)
Net revenue	$	107,642	$	97,117	$	10,525			11	%

Net revenue from our Advanced Wound Care products increased by $10.8 million, or ~~plans, it is making projections, forecasts~~12%, to $100.9 million in the three months ended March 31, 2023 from $90.1 million in the three months ended March 31, 2022. The increase in Advanced Wound Care net revenue was primarily attributable to an increase in sales of certain products to our existing and new customers.

Net revenue from our Surgical & Sports Medicine products decreased slightly to $6.7 million in the three months ended March 31, 2023 from $7.0 million in the three months ended March 31, 2022. The decrease in Surgical & Sports Medicine net revenue was primarily due to attrition within our direct sales force.

Cost of goods sold and gross profit


	Three Months Ended March 31,						Change
	2023			2022			$		%
	(in thousands, except for percentages)
Cost of goods sold	$	26,607		$	25,080		$	1,527		6	%
Gross profit	$	81,035		$	72,037		$	8,998		12	%
Gross profit%		75	%		74	%

Cost of goods sold increased by $1.5 million, or ~~forward-looking statements. Such statements are based on~~6%, to $26.6 million in the ~~beliefs~~three months ended March 31, 2023 from $25.1 million in the three months ended March 31, 2022. The increase in cost of goods sold was primarily due to increased sales volume in our Advanced Wound Care products.

Gross profit increased by $9.0 million, or 12%, to $81.0 million in the three months ended March 31, 2023 from $72.0 million in the three months ended March 31, 2022. The increase in gross profit resulted primarily from increased sales volume in our Advanced Wound Care products as well as ~~assumptions made~~a shift in product mix to our higher gross margin products.

Research and Development Expenses


	Three Months Ended March 31,				Change
	2023		2022		$		%
	(in thousands, except for percentages)
Research and development	$	11,202	$	8,587	$	2,615		30	%

Research and development expenses increased by $2.6 million, or 30%, to $11.2 million in the three months ended March 31, 2023 from $8.6 million in the three months ended March 31, 2022. The increase in research and ~~information currently available~~development expenses was primarily due to an increase in product costs associated with our pipeline products not yet commercialized, an increase in the clinical study and related costs necessary to seek regulatory approvals for certain of our products, and increased headcount associated with our existing Advanced Wound Care and Surgical & Sports Medicine products.

Selling, General and Administrative Expenses


	Three Months Ended March 31,				Change
	2023		2022		$		%
	(in thousands, except for percentages)
Selling, general and administrative	$	73,834	$	63,578	$	10,256		16	%

Selling, general and administrative expenses increased by $10.3 million, or 16%, to $73.8 million in the three months ended March 31, 2023 from $63.6 million in the three months ended March 31, 2022. The increase in selling, general and administrative expenses was primarily due to a $4.2 million increase related to an annual sales meeting that was held in the first quarter of 2023 (and in 2022, the sales meeting was held in the third quarter instead of the first quarter), a $2.2 million increase related to additional headcount, primarily in our direct sales force prior to the ~~Company’s management. Actual results~~February 2023 reduction in force, a $1.9 million increase in legal and ~~shareholders’ value will be affected~~consulting costs associated with the ongoing operations of our business and the ERP system implementation, a $1.7 million increase in restructuring costs primarily due to the reduction in force in the first quarter of 2023, and a $0.3 million miscellaneous increase.

Other Expense, net


	Three Months Ended March 31,						Change
	2023			2022			$		%
	(in thousands, except for percentages)
Interest expense, net	$	(649	)	$	(737	)	$	88		(12	%)
Other income (expense), net		23			(3	)		26	**
Total other expense, net	$	(626	)	$	(740	)	$	114		(15	%)

** not meaningful

Other expense, net, decreased by $0.1 million, or 15%, to $0.6 million in the three months ended March 31, 2023 from $0.7 million in the three months ended March 31, 2022. The decrease in other expense, net was primarily due to the decrease in interest expense resulting from the lower debt balance under the 2021 Credit Agreement.

Income Tax Expense


	Three Months Ended March 31,					Change
	2023		2022			$		%
	(in thousands, except for percentages)
Income tax benefit (expense)	$	1,658	$	(45	)	$	1,703	**

** not meaningful

Income tax benefit (expense) changed to a ~~variety~~benefit of ~~risks~~$1.7 million in the three months ended March 31, 2023 from an expense of $45 thousand in the three months ended March 31, 2022. The change in income tax benefit (expense) is due to a higher pre-tax loss in the three months ended March 31, 2023 and ~~factors, including, without limitation, international, national~~a higher effective rate for the twelve months ended December 31, 2023 resulting from the larger forecasted tax adjustment primarily related to executive compensation in 2023 as compared to 2022.

Liquidity and ~~local economic conditions, merger, acquisition~~Capital Resources

Since our inception, we have funded our operations and ~~business combination risks, financing risks, geo-political risks, acts~~capital expenditures through cash flows from product sales, loans from affiliates and entities controlled by certain of ~~terror or war,~~our affiliates, third-party debt and ~~those risk factors described~~proceeds from the sale of our capital stock. As of March 31, 2023, we had an accumulated deficit of $48.9 million and working capital of $140.7 million which included $88.7 million in cash and cash equivalents. We also have $125.0 million available for future revolving borrowings under ~~“Item 1A. Risk Factors.” Many of the risks and factors that will determine these results and shareholders’ value are beyond the Company’s ability~~our Revolving Facility (see Note “13. Long-Term Debt Obligations” to ~~control or predict.~~

~~All such forward-looking~~our consolidated financial statements ~~speak only as of the date of~~included in this Quarterly Report on Form 10-Q. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’s behalf are qualified in their entirety by this Special Note Regarding Forward-Looking Statements.

~~Overview~~

We are a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a Business Combination in the form of a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more target businesses. We have reviewed, and continue to review, a number of opportunities to enter into a Business Combination with an operating business, but we are not able to determine at this time whether we will complete a Business Combination with any of the businesses that we have reviewed or with any other target business. We intend to effectuate a Business Combination using cash from the proceeds from the Public Offering and the sale of the Private Placement Warrants, and from additional issuances of, if any, our capital stock and debt or a combination of cash, stock and debt. At September 30, 2017, we held cash of $117,728, had current liabilities of $2,696,066 and deferred underwriting compensation of $10,850,000. Further, we expect to continue to incur significant costs in the pursuit of our acquisition plans. We cannot assure you that our plans to complete a Business Combination will be successful.

~~Table of Contents~~

~~Recent Developments~~

~~Proposed Business Combination~~

~~On August 21, 2017, the Company, Merger Sub, NewCo, Envigo, and Jermyn Street Associates, LLC, solely in its capacity as Shareholder Representative, entered into a Transaction Agreement.~~

Pursuant to the Transaction Agreement, among other things, (i) the Company will transfer by way of continuation out of the Cayman Islands into the State of Delaware or domesticate as a Delaware corporation in accordance with Section 388 of the Delaware General Corporation Law, as amended and the Cayman Islands Companies Law (2016 Revision); (ii) Merger Sub will merge with and into Envigo, the separate corporate existence of Merger Sub will cease and Envigo will be the surviving corporation and a direct wholly-owned subsidiary of the Company and (iii) the Surviving Corporation will merge with and into NewCo, the separate corporate existence of the Surviving Corporation will cease and NewCo will be the surviving company and a direct wholly-owned subsidiary of the Company. For additional information regarding the Transaction Agreement, the Parent Sponsor Letter Agreement and the Business Combination, see the Current Report on Form 8-K filed by the Company on August 22, 2017.

~~Results of Operations~~

10-Q). For the three months ended ~~September 30, 2017~~March 31, 2023, we ~~had~~reported net revenue of $107.6 million, a net loss of ~~$2,117,003,~~$3.0 million and $5.1 million of cash outflows from operating activities. We expect that our cash on hand and other components of working capital as of March 31, 2023, availability under the 2021 Credit Agreement, plus net cash flows from product sales, will be sufficient to fund our operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of this quarterly report.

We continue to closely monitor ongoing developments in connection with the COVID-19 pandemic, which ~~consisted~~may negatively affect our commercial prospects, cash position and access to capital in fiscal 2023 or beyond. We will continue to assess our cash and other sources of ~~interest income~~liquidity and, if circumstances warrant, we will make appropriate adjustments to our operating plan.

Our primary uses of cash are working capital requirements, capital expenditure 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 ~~trust account~~production of ~~$736,128~~our products. Our working capital requirements vary from period to period depending on manufacturing volumes, the timing of shipments and ~~operating costs~~the payment cycles of ~~$2,853,131. For~~our customers and payers. Our capital expenditures consist primarily of building improvements, 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:


	Three Months Ended March 31,
	2023			2022
	(in thousands)
Net cash used in (provided by) operating activities	$	(5,077	)	$	1,411
Net cash used in investing activities		(7,562	)		(6,672	)
Net cash used in financing activities		(1,236	)		(765	)
Net change in cash, cash equivalents, and restricted cash	$	(13,875	)	$	(6,026	)

Operating Activities

During the three months ended ~~September 30, 2016 we had a loss of $14,492, which consisted of~~March 31, 2023, net cash used in operating ~~costs of $14,492. For the nine months ended September 30, 2017 we had a~~activities was $5.1 million, resulting from our net loss of ~~$1,595,806, which consisted of interest income from the trust account of $1,697,781~~$3.0 million and operating costs of $3,293,587. For the nine months ended September 30, 2016 we had a loss of $30,542, which consisted of operating costs of $30,542. Our business activities for the nine months ended September 30, 2017 consisted solely of identifying and evaluating prospective acquisition targets for a Business Combination. We will not generate any operating revenues until after completion of our Business Combination at the earliest. Starting in January 2017, we began generating non-operating income in the form of interest income on the funds held in the Trust Account. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our financial statements. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses related to our acquisition plans.

~~Liquidity and Capital Resources~~

~~As of September 30, 2017 we had~~net cash ~~of $117,728 and a working capital deficit of $2,336,036.~~

At September 30, 2017, $311,697,781 was held in the Trust Account and consisted of cash, U.S. Treasury Bills and accrued interest. The U.S. Treasury Bills matured on October 26, 2017. On October 26, 2017 the funds in the Trust Account were reinvested in U.S. Treasury Bills, maturing on November 24, 2017.

On December 14, 2015, our Sponsor purchased 8,625,000 Founder Shares for an aggregate purchase price of $25,000, or approximately $0.003 per share. In October 2016, our Sponsor transferred 50,000 Founder Shares to each of our independent directors at their original per share purchase price. In addition, at such time, each of our independent directors purchased an additional 421,250 Founder Shares from our Sponsor at their original purchase price.

On October 14, 2016, the Company consummated its Public Offering of 30,000,000 Units, each unit consisting of one Class A ordinary share and one Warrant to purchase one-half of one Class A ordinary share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $300,000,000. The Company granted the underwriters a 45-day option to purchase up to 4,500,000 additional Units to cover over-allotments, if any. On November 28, 2016, the underwriters partially exercised the Over-allotment Option, and we sold an additional 1,000,000 Units at a price of $10.00 per Unit, generating an additional $10,000,000 of gross proceeds.

On October 14, 2016, simultaneously with the consummation of the Public Offering, the Company completed a private placement of an aggregate of 16,000,000 Private Placement Warrants to the Sponsor and the Company’s independent directors, at a purchase price of $0.50 per warrant, generating gross proceeds of $8,000,000. On November 28, 2016, the Initial Shareholders purchased an additional 400,000 Private Placement Warrants at a price of $0.50 per warrant (or an aggregate purchase price of $200,000) in conjunction with the exercise of the Over-allotment Option. Following the partial exercise of the Over-allotment Option, 875,000 Founder Shares were forfeited in order to

~~Table of Contents~~

maintain the ownership of the Initial Shareholders at 20% of the issued and outstanding ordinary shares. On November 28, 2016, our Sponsor sold 161,180 Founder Shares and 350,114 Private Placement Warrants to one of our independent directors at their original purchase price. On July 5, 2017, our Sponsor sold 186,320 Founder Shares and 404,723 Private Placement Warrants to one of our independent directors at their original per share purchase price.

A total of $310,000,000 of the net proceeds from the Public Offering and the sale of the Private Placement Warrants was deposited in the Trust Account established for the benefit of the Company’s public shareholders. Remaining proceeds of approximately $2,000,000 were used ~~to repay the sponsor note and accrued offering and formation costs, and the remainder was deposited in the Company’s operating account and is available for working capital purposes.~~

We intend to use substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (which interest shall be net of taxes payable and excluding deferred underwriting commissions) to complete our Business Combination. We may withdraw interest to pay taxes, if any. Our annual income tax obligations will depend on the amount of interest and other income earned on the amounts held in the Trust Account. To the extent that our ordinary shares or debt is used, in whole or in part, as consideration to complete our Business Combination, the remaining proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

We will use the funds held outside the Trust Account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices, plants or similar locations of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, structure, negotiate and complete a Business Combination, and to pay taxes to the extent the interest earned on the Trust Account is not sufficient to pay our taxes. Such expenses may be significant, and we expect that a portion of these expenses will be paid upon completion of a Business Combination.

~~In order to fund working capital deficiencies or finance transaction costs~~ in connection with changes in our operating assets and liabilities of $11.8 million, partially offset by non-cash charges of $9.7 million. Net cash used in changes in our operating assets and liabilities included an ~~intended Business Combination,~~increase in accounts receivable of $3.4 million, an increase in inventory of $2.2 million, an increase in prepaid expenses and other current assets of $4.8 million, a decrease in operating leases liabilities of $2.1 million, and a decrease in accounts payable of $1.4 million, partially offset by an increase in accrued expenses and other liabilities of $2.1 million.

During the Company issued to the Sponsor on August 11, 2017, an unsecured promissory note pursuant to which the Company is permitted to borrow up to $300,000 in aggregate principal amount. The Company has not drawn amounts under this note. This note is non-interest bearing and payable on the earlierthree months ended March 31, 2022, net cash provided by operating activities was $1.4 million, resulting from non-cash charges of October 14, 2018 or the closing of the Business Combination. In the event that our Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of such loans may be convertible into warrants at a price of $0.50 per warrant at the option of the lender. The warrants would be identical to the Private Placement Warrants issued to our Initial Shareholders. The terms of such loans$8.2 million, partially offset by our ~~officers~~net loss of $0.9 million and directors, if any, have not been determined and no written agreements exist with respect to such loans. We do not expect to seek loans from parties other than our Sponsor or an Affiliate as we do not believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in our Trust Account.

In order to preserve liquidity, as of April 30, 2017, the Affiliate has agreed to defer payment of the monthly administrative fee under the Administrative Services Agreement until the initial Business Combination, at which time all such accrued but unpaid fees will be paid to the Affiliate. We do not believe we will need to raise additional funds through October 14, 2018 in order to meet the expenditures required for operating our business. However, if our estimates of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated to redeem a significant number of our Public Shares upon completion of a Business Combination, in which case we may issue additional securities or incur debtcash used in connection with ~~such Business Combination. We believe that~~changes in our operating assets and liabilities of $5.9 million. Net cash used in changes in our operating assets and liabilities included an increase in prepaid expenses and other current assets of $2.2 million, a decrease in operating leases liability of $1.8 million, a decrease in accounts payable of $1.2 million, and a decrease in accrued expenses and other current liabilities of $3.8 million, all of which were partially offset by a decrease in accounts receivable of $2.9 million.

Investing Activities

During the three months ended March 31, 2023, we ~~have sufficient funds available to complete our efforts to effect a Business Combination with an operating business by October 14, 2018, which is 24~~used $7.6 million of cash in investing activities consisting exclusively of capital expenditures.

During the three months ~~from~~ended March 31, 2022, we used $6.7 million of cash in investing activities consisting exclusively of capital expenditures.

Financing Activities

During the ~~closing~~three months ended March 31, 2023, net cash used in financing activities was $1.2 million. This consisted of the ~~Public Offering~~payment of term loan and the stock awards activities.

During the three months ended March 31, 2022, net cash used in financing activities was $0.8 million. This consisted primarily of the payment of $0.6 million for term loan and finance lease obligations, and net payment of $0.2 million in connection with the stock awards activities.

~~We have 24 months after~~Indebtedness

2021 Credit Agreement

In August 2021, we and our subsidiaries entered into a credit agreement with SVB and several other lenders, which we refer to as the ~~Close Date~~2021 Credit Agreement. The 2021 Credit Agreement, as amended, provides for a term loan facility not to ~~complete~~exceed $75.0 million (the “Term Loan Facility”) and a ~~Business Combination. If we do~~revolving credit facility not ~~complete~~to exceed $125.0 million (the “Revolving Facility”).

Advances made under the 2021 Credit Agreement may be either SOFR Loans or ABR Loans, at our option. For SOFR Loans, the interest rate is a Business Combination within this time period, we shall (i) cease all operations except for the purposes of winding up, (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash,per annum interest rate equal to the ~~aggregate amount then~~Adjusted Term SOFRplus an Applicable Margin between 2.00% to 3.25% based on ~~deposit in~~ the ~~Trust Account,~~Total Net Leverage Ratio. For ABR Loans, the interest rate is equal to (1) the highest of (a) the Wall Street Journal Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) the Adjusted Term SOFR rate plus 1.0%, plus (2) an Applicable Margin between 1.00% to 2.25% based on the Total Net Leverage Ratio.

The 2021 Credit Agreement requires us to make consecutive quarterly installment payments equal to the following: (a) from September 30, 2021 through and including ~~interest, net of tax (less up to $50,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding Public~~June 30, 2022, $0.5 million; (b) from September 30, 2022 through and including June 30, 2023, $0.9 million; (c) from September 30, 2023 through and including June 30, 2025, $1.4 million and (d) from September 30, 2025

Shares, which redemption will completely extinguish the shareholder rights of owners of Class A ordinary shares (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining shareholders and the ~~board~~last day of ~~directors, dissolve~~each quarter thereafter until August 6, 2026 (the “Term Loan Maturity Date”), $1.9 million. The remaining principal balance of $50.6 million is also due on the Term Loan Maturity Date. We may prepay the Term Loan Facility. Once repaid, amounts borrowed under the Term Loan Facility may not be re-borrowed.

We must pay in arrears, on the first day of each quarter prior to August 6, 2026 (the “Revolving Termination Date”) and ~~liquidate, subject~~on the Revolving Termination Date, a fee for our non-use of available funds (the “Commitment Fee”). The Commitment Fee rate is between 0.25% to 0.45% based on the Total Net Leverage Ratio. We may elect to reduce or terminate the Revolving Facility in ~~each case~~its entirety at any time by repaying all outstanding principal and unpaid accrued interest.

Under the 2021 Credit Agreement, we are required to comply with certain financial covenants including the ~~Company’s obligations under Cayman Islands law~~Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio, tested quarterly. In addition, we are also required to ~~provide for claims~~make representations and warranties and comply with certain non-financial covenants that are customary in loan agreements of ~~creditors~~this type, including restrictions on the payment of dividends, repurchase of stock, incurrence of indebtedness, dispositions and ~~the requirements of other applicable law.~~acquisitions.

~~Off-Balance Sheet Financing Arrangements~~

As of ~~September 30, 2017,~~March 31, 2023, we ~~did not have any obligations, assets or liabilities which would be considered off-balance sheet arrangements. We do not participate~~were in ~~transactions that create relationships~~compliance with ~~unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for~~ the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

~~Contractual Obligations~~

As of September 30, 2017, we did not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities. On October 10, 2016, we entered into an administrative services agreement pursuant to which have agreed to pay an Affiliate a total of $10,000 per month for office space, administrative and support services. Upon completion of a Business Combination or our liquidation, we will cease paying these monthly fees. In order to preserve liquidity, as of April 30, 2017, the Affiliate has agreed to defer payment of the monthly administrative feecovenants under the ~~Administrative Services Agreement until the initial Business Combination, at which time all such accrued but unpaid fees will be paid to the Affiliate.~~2021 Credit Agreement. We had outstanding borrowings of $70.3 million under our Term Loan Facility and no borrowings outstanding under our Revolving Facility with $125 million available for future revolving borrowings, respectively.

The underwriters are entitled to underwriting commissions of 5.5%, of which 2.0% ($6,200,000) was paid at the closing of the Public Offering and Over-allotment Option, and 3.5% ($10,850,000) was deferred. The deferred underwriting commissions held in the Trust Account will be forfeited in the event we do not complete a Business Combination, subject to the terms of the underwriting agreement. The underwriters are not entitled to any interest accrued on the deferred underwriting commissions.

Critical Accounting Policies and Significant Judgments and Estimates

Our unaudited consolidated financial statements have been prepared in accordance with GAAP. The preparation of ~~condensed~~our unaudited consolidated financial statements ~~and related disclosures in conformity with US GAAP~~ requires ~~management~~us to make estimates, assumptions and ~~assumptions~~judgments that affect the reported amounts of assets, liabilities, and ~~liabilities,~~the disclosure ~~of contingent assets and liabilities~~ at the date of the ~~condensed~~unaudited consolidated financial statements, ~~and income~~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 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 consolidated statements of operations, liquidity and financial condition. See also our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, 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 ~~reported. Actual results could materially differ from those estimates. The Company has identified~~presented, and we do not currently have, any off-balance sheet arrangements, as defined in the ~~following as its critical accounting policies:~~

~~Offering Costs~~

~~The Company complies with the requirements of Accounting Standards Codification (“the ASC”) 340-10-S99-1~~rules and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering”. We incurred offering costs in connection with the Public Offering of $833,589, primarily consisting of accounting and legal services, securities registration expenses and exchange listing fees. These costs, along with paid and deferred underwriting commissions totaling $17,050,000, were charged to additional paid-in capital at the Close Date.

~~Redeemable Ordinary Shares~~

The Class A ordinary shares subject to possible redemption will be recorded at redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 480, ~~Distinguishing Liabilities from Equity. The Company will proceed with a Business Combination only if it has net tangible assets of at least $5,000,001 upon consummation~~regulations of the ~~Business Combination and,~~SEC.

Recently Issued Accounting Pronouncements

We have reviewed all recently issued standards as disclosed in ~~the case~~Note “2. Summary of ~~a shareholder vote, a majority of the outstanding ordinary shares voted are voted~~Significant Accounting Policies” to our consolidated financial statements included in favor of the Business Combination. Accordingly, at September 30, 2017, 29,191,301 of the Company’s 31,000,000 Class A ordinary shares were classified outside of permanent equity at their redemption value.this Quarterly Report on Form 10-Q.

~~Table of Contents~~

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK~~

All activity through September 30, 2017 related to our formation and the preparation for the Public Offering and identifying and evaluating prospective acquisition targets for a Business Combination. On September 28, 2017, the net proceeds of the Public Offering and the sale of the Private Placement Warrants held in the Trust Account were invested in U.S. government treasury bills with a maturity of 180 days or less. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk. ForDuring the three months ended ~~September 30, 2017, the effective annualized interest rate earned~~March 31, 2023, 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 ~~our US Treasury Bills investment was 0.96%~~

~~At September 30, 2017, $311,697,781 was held in the Trust Account~~Form 10-K for the ~~purposes~~fiscal year ended December 31, 2022.

Table of consummating a Business Combination. If we complete a Business Combination within 24 months after the Close Date, funds in the Trust Account will be used to pay for the Business Combination, redemptions of Class A ordinary shares, if any, the deferred underwriting compensation of $10,850,000 and accrued expenses related to the Business Combination. Any funds remaining will be made available to us to provide working capital to finance our operations.
We have not engaged in any hedging activities since our inception. We do not expect to engage in any hedging activities with respect to the market risk to which we are exposed.
Contents

~~ITEM~~Item 4. ~~CONTROLS AND PROCEDURES~~Controls and Procedures

Evaluation of Disclosure Controls and Procedures

~~Disclosure~~The Company’s management, with the participation of its principal executive officer and principal financial officer, evaluated the effectiveness of its disclosure controls and procedures ~~are~~as of March 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in ~~our~~the reports ~~filed~~that it files or ~~submitted~~submits under the ~~Securities~~ Exchange Act ~~of 1934 as amended (the “Exchange Act”)~~ is recorded, processed, summarized and reported, within the time periods specified in the ~~SEC’s~~ rules and ~~forms.~~forms promulgated by the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in ~~Company~~the reports ~~filed~~that it files or ~~submitted~~submits under the Exchange Act is accumulated and communicated to the company’s management, including ~~our Chief Executive Officer~~its principal executive and ~~Chief Financial Officer,~~principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

~~Evaluation~~Based on their evaluation, our management, including our principal executive officer and principal financial officer, concluded that, as of ~~Disclosure Controls and Procedures~~

~~As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of~~March 31, 2023, our disclosure controls and procedures were ineffective because, as disclosed in the Company’s Annual Report for the fiscal year ended December 31, 2022, our management team identified the following material weakness in our internal control over financial reporting: we did not design and maintain effective controls (i) to properly identify and assess significant non-routine transactions and (ii) over information technology general controls and proper segregation of duties to support the proper initiation and recording of transactions and the resulting impact on business process controls and applications that rely on such data.

Because of inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control over financial reporting can only provide reasonable assurance of achieving their control objectives.

Management assessed the effectiveness of the Company’s internal control over financial reporting based on the criteria established in the SEC guidance on conducting such assessments as of ~~September 30, 2017. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer~~the end of the period covered by this report. Management conducted the assessment based on certain criteria established in Internal Control— Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. As a result of this assessment, management concluded that, as of March 31, 2023, our ~~disclosure~~internal control over financial reporting was not effective based on those criteria. Although management has made notable progress in remediating this material weakness, management concluded that the material weakness described above continued to exist as of March 31, 2023.

Plans for Remediation of Material Weakness

Management has taken actions to remediate the deficiencies in its internal controls over financial reporting and implemented additional processes and controls designed to address the underlying causes associated with the above-mentioned material weakness. Management is committed to finalizing the remediation of the material weakness. Management’s internal control remediation efforts include the following:

•

In 2022, we finalized the plan to implement a new company-wide enterprise resource planning, or ERP, system to provide additional systematic controls and ~~procedures (as~~segregation of duties for our accounting processes. Due, in part, to turnover in key positions and changes in design, our ERP system go-live date has been delayed. We anticipate the ERP system going live in 2023.

•

In 2022, we determined that our forward-facing customer sales systems were not catering to our customer needs. We plan to implement a new sales force software system in 2023.

•

We have continued to train and cross train our employees on their internal control responsibilities and how to best support other control owners if personnel turnover issues within their departments occur. We have also supplemented our internal resources with third-party resources, where necessary.

•

We have instituted a new Director of Internal Audit overseeing an outside firm that will continue to assist management with performing control operating effectiveness testing throughout the year.

•

We regularly reported the results of control testing to the key stakeholders across our organization, including our audit committee, on testing progress and defined corrective actions, and we monitored and reported on the results of control remediation. We have strengthened our internal policies, processes, and reviews through these actions.

•

We implemented a new control to ensure that significant transactions are identified and effectively communicated so that they are properly and timely reported.

•

We have continued working on documenting and remediating weaknesses and structuring the Company’s processes to meet SOX 404(b) requirements.

As management continues to evaluate and work to improve our internal control over financial reporting, management may determine it is necessary to take additional measures to address the material weaknesses. However, we believe the above actions will be effective in ~~Rules 13a-15 (e)~~remediating the material weaknesses and ~~15d-15 (e) under~~we will continue to devote significant time and attention to these remediation efforts. Until the ~~Exchange Act) were effective.~~controls have been operating for a sufficient period of time and management has concluded, through testing, that these controls are executed consistently and operating effectively, the material weaknesses described above will continue to exist.

Changes in Internal Control Over Financial Reporting

~~During the most recently completed fiscal quarter, there has~~There have been no ~~change~~changes in our internal control over financial reporting that ~~has~~occurred during the quarter ended March 31, 2023 that have materially affected, or isare reasonably likely to materially affect, our internal control over financial reporting other than those described above related to remediation efforts. However, as the implementation of the new ERP system continues and our remediation efforts continue, we will change our processes and procedures, which in turn, could result in changes to our internal control over financial reporting. As such changes occur, we will evaluate quarterly whether such changes materially affect our internal control over financial reporting.

~~Table of Contents~~

PART II —– OTHER INFORMATION

Item 1. Legal Proceedings

~~ITEM 1. LEGAL PROCEEDINGS~~On December 10, 2021, a class action complaint captioned Somogyi v. Organogenesis Holdings Inc., et al. was filed on behalf of a putative class of all purchasers of our securities against us and our Chief Executive Officer and Chief Financial Officer in the United States District Court for the Eastern District of New York. The court appointed Donald Martin as lead plaintiff. Mr. Martin filed an amended complaint on October 24, 2022 that brings claims on behalf of a purported class of all purchasers of our securities from August 10, 2020 through August 9, 2022 and alleges violations of federal securities law in connection with alleged false and misleading statements with respect to, among other matters, revenue, sales growth and ability to compete in connection with our Affinity and PuraPly XT products. The complaint alleges violations of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks unquantified damages as well as attorneys’ fees, expert fees and other costs. The action is in the early stages of litigation. We believe the claims are without merit and intend to vigorously contest them. On March 13, 2023, we filed our motion to dismiss the litigation for failure to state a claim upon which relief can be granted.

We are not a party to any other 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.

~~None.~~

Item 1A. Risk Factors

~~ITEM 1A. RISK FACTORS~~

~~Factors that could cause~~Investing in our ~~actual results to differ materially~~Class A common stock involves a high degree of risk. Our Annual Report on Form 10-K for the year ended December 31, 2022, includes a detailed discussion of our risk factors under the heading “Part I, Item 1A—Risk Factors.” Except as set forth below, there have been no material changes from ~~those in this report or any of~~such risk factors during the ~~risks disclosed~~quarter ended March 31, 2023. You should consider carefully the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, ~~2016, which was filed with the SEC on March 28, 2017. Any of these factors could result~~2022, and all other information contained in ~~a significant~~ or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

~~As of the date of~~incorporated by reference in this Quarterly Report on Form 10-Q ~~there have been no material changes to~~before making an investment decision. If any of the ~~risk factors disclosed~~risks discussed in ~~our~~the Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2022, 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.

Uncertainty and adverse changes in the general economic conditions, including recent turmoil in the global banking system, may negatively affect our business, financial condition, stock price and results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. For example, the global financial crisis of 2007-2008 caused extreme volatility and disruptions in the capital and credit markets. If general economic conditions in the United States decline, or if consumers fear that economic conditions will decline, sales of our products may decline. Adverse changes may occur as a result of adverse economic conditions, fluctuating oil prices, supply chain problems, inflation, political instability, declining consumer confidence, a continuation or worsening of the COVID-19

pandemic or another pandemic, unemployment, fluctuations in stock markets, contraction of credit availability, or other factors affecting economic conditions generally. These changes may negatively affect the sales of our existing or development of future products, increase the cost, and decrease the availability of financing, or increase costs associated with producing and distributing our products and potential product candidates.

Moreover, there has been recent turmoil in the global banking system. On March 10, 2023, Silicon Valley Bank (“SVB”), one of our lenders at which we maintained deposit and money market accounts, was closed, followed on March 11, 2023 and May 1, 2023, by Signature Bank and First Republic Bank, respectively, and the FDIC was appointed as receiver for those banks. There have been reports of instability at other banks across the globe including Credit Suisse, which was ~~filed with~~acquired by UBS. Despite the ~~SEC~~steps taken to date by U.S. agencies to protect depositors and our current belief that we do not have exposure to loss as a result of SVB’s receivership, the follow-on effects of the events surrounding the SVB, Signature Bank and First Republic Bank failures and pressure on ~~March 28, 2017. However, we may disclose changes~~other banks are unknown and could include failures of other financial institutions or significant disruptions to our operations, financial position, and reputation. A severe or prolonged economic downturn, such ~~factors or disclose additional factors from time~~as the global financial crisis of 2007-2008, could result in a variety of risks to ~~time~~our business, including a decrease in the demand for our products and in our ~~future filings with~~ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy also could strain our suppliers, possibly resulting in supply disruption, or cause our customers to delay making payments for our products. We cannot anticipate all the ~~SEC.~~ways in which the foregoing, and the current economic climate and financial market conditions generally, could adversely impact our business. Furthermore, our stock price may decline due in part to the volatility of the stock market and any general economic downturn.

~~ITEM~~Item 2. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS~~

~~On December 14, 2015 our Sponsor purchased 8,625,000 Class B ordinary shares for $25,000, or approximately $0.003 per share. In October 2016, the Sponsor transferred 50,000 Founder Shares to each~~Unregistered Sales of the Company’s independent directors at a price per share of approximately $0.003 per share. In addition, at such time, each of our independent directors purchased an additional 421,250 Founder Shares from our Sponsor at a price per share of approximately $0.003 per share.

Simultaneously with the consummation of our Public Offering, the Initial Shareholders purchased from the Company an aggregate of 16,000,000 Private Placement Warrants at a price of $0.50 per Private Placement Warrant (or an aggregate purchase price of $8,000,000). On November 28, 2016, the Initial Shareholders purchased an additional 400,000 Private Placement Warrants at a price of $0.50 per warrant (or an aggregate purchase price of $200,000) in conjunction with the exercise of the Over-allotment Option. Following the partial exercise of the Over-allotment Option, 875,000 Founder Shares were forfeited in order to maintain the Initial Shareholder’s ownership at 20% of the issuedEquity Securities and outstanding ordinary shares. On November 28, 2016, our Sponsor sold 161,180 Founder Shares and 350,114 Private Placement Warrants to one of our independent directors at their original per share purchase price. On July 5, 2017, our Sponsor sold 186,320 Founder Shares and 404,723 Private Placement Warrants to one of our independent directors at their original per share purchase price. Each Private Placement Warrant entitles the holder to purchase one-half of one Class A ordinary share at $5.75 per one-half share. The Private Placement Warrants have terms and provisions that are identical to those of the Warrants sold as part of the Units in the Public Offering, except that the Private Placement Warrants may be exercised on a cashless basis and are not redeemable by us so long as they are held by the Initial Shareholders or their permitted transferees.

The sales of the above securities by the Company were deemed to be exempt from registration under the Securities Act, in reliance on Section 4(a)(2) of the Securities Act as transactions by an issuer not involving a public offering.

Use of Proceeds ~~from the Offering~~

None.

On October 14, 2016, we consummated our Public Offering of 30,000,000 Units at a price of $10.00 per Unit. Our Public Offering did not terminate before all of the securities registered in our registration statement were sold. Credit Suisse Securities (USA) LLC and I-Bankers Securities, Inc. acted as underwriters for the offering. The securities sold in the offering were registered under the Securities Act on a registration statement on Form S-1 (File No. 333-213465). The SEC declared the registration statement effective on October 7, 2016. On November 28, 2016, the Underwriters partially exercised the Over-allotment Option, and we sold an additional 1,000,000 Units at a price of $10.00 per Unit.

~~Table of Contents~~

From Inception through September 30, 2017, we incurred $833,589 for costs and expenses related to the Public Offering. Additionally, at the closing of the Public Offering and Over-allotment Option, we paid a total of $6,200,000 in underwriting discounts and commissions. In addition, the underwriters agreed to defer the payment of $10,850,000 in underwriting discounts and commissions, which amount will be payable upon consummation of our Business Combination, if consummated. Prior to the closing of the Public Offering, our Sponsor loaned us $300,000 to be used for a portion of the expenses of the Public Offering. These loans were repaid upon completion of the Public Offering out of the $900,000 of Public Offering proceeds that were allocated for the payment of offering expenses other than underwriting discounts and commissions. Other than such loans, no payments were made by us to directors, officers or persons owning ten percent or more of our ordinary shares or to their associates, or to our affiliates. There has been no material change in the planned use of proceeds from the Public Offering as described in our final prospectus, dated October 10, 2016, filed with the SEC.

After deducting the underwriting discounts and commissions (excluding the deferred portion of $10,850,000 in underwriting commissions, which amount will be payable upon consummation of the Business Combination, if consummated) and the estimated offering expenses, the total net proceeds from the Public Offering and the sale of the Private Placement Warrants were $311,166,411, of which $310,000,000 (or $10.00 per share sold in the Public Offering) was placed in the Trust Account.

Item 3. Defaults Upon Senior Securities

~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES~~None.

~~None.~~

Item 4. Mine Safety Disclosures

~~ITEM 4. MINE SAFETY DISCLOSURES~~

Not ~~applicable.~~Applicable.

Item 5. Other Information

~~ITEM 5. OTHER INFORMATION~~None.

~~None.~~

~~ITEM~~Item 6. Exhibits

~~The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.~~


Exhibit number		Description
Exhibit Number		~~Description~~
2.1*3.1		~~Transaction Agreement, dated August 21, 2017, by and among Avista Healthcare Public Acquisition Corp., Avista Healthcare Merger Sub, Inc., Avista Healthcare NewCo, LLC and Envigo International~~Certificate of Incorporation of Organogenesis Holdings Inc. (incorporated by reference to Exhibit ~~2.1~~3.1 to the ~~Registrant’s Current Report~~Company’s Registration Statement on Form ~~8-k~~S-3/A (File No. 333-233621) filed with the SEC on ~~August 22, 2017).~~September 16, 2019)
10.10*
3.2		~~Parent Sponsor Letter Agreement, dated August 21, 2017, by and among Avista Healthcare Public Acquisition Corp., Avista Acquisition Corp., and certain individuals~~Certificate of Amendment of Certificate of Incorporation of Organogenesis Holdings Inc. (incorporated by reference to Exhibit ~~10.10~~3.1 to the ~~Registrant’s~~Company’s Current Report on Form 8-K (File No. 001-37906) filed with the SEC on ~~August 22, 2017).~~June 27, 2022)
31.1*
3.3		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)

10.1†		Second Amendment to Credit Agreement dated as of March 31, 2023 by and among Organogenesis Holdings Inc., as borrower, the several banks and other financial institutions or entities party hereto and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (successor by purchase to the Federal Deposit Insurance Corporation as receiver for Silicon Valley Bridge Bank, N.A. (as successor to Silicon Valley Bank)), as the Administrative Agent

31.1†		Certification of ~~Chief~~Principal Executive Officer ~~Pursuant~~pursuant to ~~Rules~~Rule 13a-14(a) ~~and~~or Rule 15d-14(a) ~~under~~of the Securities Exchange Act of 1934, as ~~Adopted Pursuant~~adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002
31.2*
31.2†		Certification of ~~Chief~~Principal Financial Officer ~~Pursuant~~pursuant to ~~Rules~~Rule 13a-14(a) ~~and~~or Rule 15d-14(a) ~~under~~of the Securities Exchange Act of 1934, as ~~Adopted Pursuant~~adopted pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002.~~2002
32.1*
32.1†		Certification of ~~Chief~~Principal Executive Officer ~~Pursuant~~and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as ~~Adopted Pursuant~~adopted pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002.~~2002
32.2*		~~Certification of Chief 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*101.INS†		Inline XBRL Instance Document XBRL
101.SCH*
101.SCH†		Inline XBRL Taxonomy Extension Schema Document
101.CAL*
101.CAL†		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*
101.DEF†		Inline XBRL Taxonomy Extension Definition Linkbase Document

~~Table of Contents~~

101.LAB*
101.LAB†		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*
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.~~

† Filed herewith

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: May 10, 2023		Organogenesis Holdings Inc.
	~~Avista Healthcare Public Acquisition Corp.~~
		(Registrant)
~~Date: November 14, 2017~~	~~By:~~	~~/s/ David Burgstahler~~
		~~David Burgstahler~~
		~~Chief Executive Officer (Principal Executive Officer)~~/s/ David Francisco

~~Date: November 14, 2017~~	~~By:~~	~~/s/ John Cafasso~~David Francisco
		~~John Cafasso~~Chief Financial Officer
		~~Chief Financial Officer (Principal~~
		(Principal Financial and Accounting Officer)


~~Cayman Islands~~Delaware	98-1329150
(State or ~~other jurisdiction~~Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
~~incorporation or organization)~~	~~Identification No.)~~
~~65 East 55th Street, 18th Floor~~ ~~New York, NY~~85 Dan Road	~~10022~~
~~(Address~~Canton, MA	02021
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.0001 par value	ORGO	Nasdaq Capital Market


Large accelerated filer	☐	Accelerated filer	☐☒
~~Non-accelerated filer~~	☒ ~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	☐
Non-accelerated filer	☐	Smaller reporting company	☐

		Emerging growth company	☒☐


	As of		As of
	September 30, 2017		December 31, 2016
	(Unaudited)

ASSETS
Current assets
Cash	$	117,728	$	1,040,068
Prepaid expenses		242,302		395,843
Total current assets		360,030		1,435,911

Cash and cash equivalents held in trust account		311,658,037		310,000,000
Accrued interest receivable held in trust account		39,744		—
Total assets	$	312,057,811	$	311,435,911

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Offering costs payable	$	—	$	427,578
Accrued expenses		2,696,066		50,782
Total current liabilities		2,696,066		478,360

Deferred underwriting commission		10,850,000		10,850,000

Total liabilities		13,546,066		11,328,360

COMMITMENTS
Class A ordinary shares subject to possible redemption, $0.0001 par value; 29,191,301 and 29,510,755 shares at conversion value at September 30, 2017 and December 31, 2016		293,511,740		295,107,550
Shareholders' equity
Preferred shares, $0.0001 par value, 1,000,000 shares authorized: no shares issued and outstanding at September 30, 2017 and December 31, 2016		—		—
Ordinary shares, $0.0001 par value, 220,000,000 shares authorized
Class A ordinary shares 200,000,000 shares authorized; 1,808,699 and 1,489,245 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively, (excluding 29,191,301 and 29,510,755 shares subject to possible redemption at September 30, 2017 and December 31, 2016, respectively)		181		149
Class B ordinary shares, 20,000,000 shares authorized; 7,750,000 and 7,750,000 shares issued and outstanding at September 30, 2017 and December 31, 2016		775		775
Additional paid-in capital		6,828,715		5,232,937
Accumulated deficit		(1,829,666)		(233,860)
Total shareholders' equity		5,000,005		5,000,001
Total liabilities and shareholders' equity	$	312,057,811	$	311,435,911


	March 31,			December 31,
	2023			2022
Assets
Current assets:
Cash and cash equivalents	$	88,694		$	102,478
Restricted cash		721			812
Accounts receivable, net		92,021			89,450
Inventory, net		25,539			24,783
Prepaid expenses and other current assets		9,847			5,086
Total current assets		216,822			222,609
Property and equipment, net		106,637			102,463
Intangible assets, net		19,560			20,789
Goodwill		28,772			28,772
Operating lease right-of-use assets, net		42,839			43,192
Deferred tax asset, net		30,014			30,014
Other assets		1,463			1,520
Total assets	$	446,107		$	449,359
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion of term loan	$	5,009		$	4,538
Current portion of operating lease obligations		12,160			11,708
Accounts payable		30,310			32,330
Accrued expenses and other current liabilities		28,597			26,447
Total current liabilities		76,076			75,023
Term loan, net of current portion		64,860			66,231
Operating lease obligations, net of current portion		40,325			41,314
Other liabilities		1,145			1,122
Total liabilities		182,406			183,690
Commitments and contingencies (Note 18)
Stockholders’ equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued		-			-
Common stock, $0.0001 par value; 400,000,000 shares authorized; 131,954,935 and 131,647,677 shares issued; 131,226,387 and 130,919,129 shares outstanding at March 31, 2023 and December 31, 2022, respectively.		13			13
Additional paid-in capital		312,573			310,957
Accumulated deficit		(48,885	)		(45,301	)
Total stockholders’ equity		263,701			265,669
Total liabilities and stockholders’ equity	$	446,107		$	449,359


			Page
PART I. FINANCIAL INFORMATION		4
Item 1.	~~FINANCIAL INFORMATION~~Unaudited ConsolidatedFinancial Statements	3 4
~~Item 1.~~	~~Financial Statements~~Consolidated Balance Sheets	3 4
	~~Condensed Balance Sheets~~Consolidated Statements of Operations	3 5
	~~Condensed~~Consolidated Statements of ~~Operations (unaudited)~~Stockholders’ Equity	4 6
	~~Condensed~~Consolidated Statements of Cash Flows ~~(unaudited)~~	5 7
	Notes to ~~Condensed~~Consolidated Financial Statements ~~(unaudited)~~	6 8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15 20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19 27
Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION		29
Item 4.1.	~~Controls and Procedures~~Legal Proceedings	19 29
~~PART II.~~Item 1A	~~OTHER INFORMATION~~Risk Factors	20 29
Item 1.2.	~~Legal Proceedings~~	20
~~Item 1A.~~	~~Risk Factors~~	20
~~Item 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds	20 30
Item 3.	Defaults Upon Senior Securities	21 30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

~~Item 4.~~SIGNATURES		~~Mine Safety Disclosures~~	21
~~Item 5.~~	~~Other Information~~	21
~~Item 6.~~	~~Exhibits~~	21
	~~Signatures~~	23
		32



	For the		For the		For the		For the
	Three Months Ended		Three Months Ended		Nine Months Ended		Nine Months Ended
	September 30, 2017		September 30, 2016		September 30, 2017		September 30, 2016
Formation and operating costs	$	2,853,131	$	14,492	$	3,293,587	$	30,542
Loss from operations		(2,853,131)		(14,492)		(3,293,587)		(30,542)
Other income:
Interest income		736,128		—		1,697,781		—
Net loss	$	(2,117,003)	$	(14,492)	$	(1,595,806)	$	(30,542)
Weighted average number of shares outstanding, basic and diluted (1)		9,278,550		7,500,000		9,259,196		7,500,000
Basic and diluted loss per share	$	(0.30)	$	(0.00)	$	(0.35)	$	(0.00)


	Three Months Ended March 31, 2023
					Additional
	Common Stock				Paid-in			Accumulated			Total
	Shares		Amount		Capital			Deficit			Stockholders’ Equity
Balance as of December 31, 2022		130,919,129	$	13	$	310,957		$	(45,301	)	$	265,669
Cumulative effect of adopting new accounting principle ASU 2016-13								$	(615	)		(615	)
Vesting of RSUs, net of shares surrendered to pay taxes		307,258		-		(298	)		-			(298	)
Stock-based compensation expense		-		-		1,914			-			1,914
Net income		-		-		-			(2,969	)		(2,969	)
Balance as of March 31, 2023		131,226,387	$	13	$	312,573		$	(48,885	)	$	263,701




	Three Months Ended March 31, 2022
					Additional
	Common Stock				Paid-in			Accumulated			Total
	Shares		Amount		Capital			Deficit			Stockholders’ Equity
Balance as of December 31, 2021		128,680,192	$	13	$	302,155		$	(60,833	)	$	241,335
Exercise of stock options		86,121		-		291			-			291
Vesting of RSUs, net of shares surrendered to pay taxes		120,871				(488	)					(488	)
Stock-based compensation expense		-		-		1,303			-			1,303
Net loss		-		-		-			(913	)		(913	)
Balance as of March 31, 2022		128,887,184	$	13	$	303,261		$	(61,746	)	$	241,528


Description	September 30, 2017		Level 1		Level 2		Level 3
Investments and cash held in Trust Account	$	311,697,781	$	311,697,781	$	—	$	—
Total	$	311,697,781	$	311,697,781	$	—	$	—


	Three Months		Nine Months
	Ended		Ended
	September 30, 2017		September 30, 2017

Net loss	$	(2,117,003)	$	(1,595,806)
Less: Income attributable to ordinary shares subject to redemption		(693,179)		(1,598,724)
Adjusted net loss	$	(2,810,182)	$	(3,194,530)

Weighted average shares outstanding, basic and diluted		9,278,550		9,259,196

Basic and diluted net loss per ordinary share	$	(0.30)	$	(0.35)