MARIETTA, Ga., Dec. 27, 2016 /PRNewswire/ -- MiMedx Group, Inc. (NASDAQ: MDXG), the leading regenerative medicine company utilizing human amniotic tissue and patent-protected processes to develop and market advanced products and therapies for the Wound Care, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic, and Dental sectors of healthcare, announced today that the Audit Committee of its Board of Directors has reported preliminary findings of its investigation to the Board of Directors regarding allegations made by two former employees against the Company.
As previously disclosed in its December 15, 2016 press release, the Company terminated two employees when it was discovered that the employees were selling products for other companies, some of which were competitive, in violation of their contractual and common law duties to MiMedx. Following their terminations, the Company filed suit against the employees for these breaches, and the employees in turn filed suit against the Company alleging that the Company engaged in certain fraudulent business practices, including practices that allegedly would affect the Company's revenue recognition policy. As the Company has previously stated publicly, management believes the claims made in the lawsuit brought by these former employees, including claims made about the Company's sales practices, are without merit, and the Company does not anticipate any material effect on the Company's financial statements resulting from these allegations.
The Audit Committee is working closely with independent counsel and its external auditors to conduct an extensive internal investigation into the claims alleged in the lawsuit. The Audit Committee has provided preliminary findings to the Board of Directors and Company management, but the investigation into the claims is ongoing. The Audit Committee has advised the Company's management and the Board of Directors that it has found no credible evidence to indicate that any changes to previously issued financial statements are necessary in light of these allegations.
MiMedx® is an integrated developer, processor and marketer of patent protected and proprietary regenerative biomaterial products and bioimplants processed from human amniotic membrane and other human birth tissues, such as amniotic fluid, umbilical cord and placental collagen, and human skin and bone. "Innovations in Regenerative Biomaterials" is the framework behind our mission to give physicians products and tissues to help the body heal itself. We process the human amniotic membrane utilizing our proprietary PURION® Process, to produce a safe and effective implant. MiMedx proprietary processing methodology employs aseptic processing techniques in addition to terminal sterilization. MiMedx is the leading supplier of amniotic tissue, having supplied over 700,000 allografts to date for application in the Wound Care, Burn, Surgical, Orthopedic, Spine, Sports Medicine, Ophthalmic and Dental sectors of healthcare.
Safe Harbor Statement
This press release includes statements that look forward in time or that express management's beliefs, expectations or hopes. Such statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding the litigation and the preliminary findings of the investigation. These statements are based on current information and belief, and are not guarantees of future performance. Among the risks and uncertainties that could cause actual results to differ materially from those indicated by such forward-looking statements include the normal risks of litigation, and the risk factors detailed from time to time in the Company's periodic Securities and Exchange Commission filings, including, without limitation, its 10-K filing for the fiscal year ended December 31, 2015, and its most recent Form 10Q filing. By making these forward-looking statements, the Company does not undertake to update them in any manner except as may be required by the Company's disclosure obligations in filings it makes with the Securities and Exchange Commission under the federal securities laws.
SOURCE MiMedx Group, Inc.