Mimedx Group, Inc · NASDAQ:MDXG
Mimedx — Proxy Contest (June 2019)
43 slides from Mimedx's proxy contest presentation, Jun 5, 2019
Slide 1: Shareholder Presentation June 2019
Exhibit 99.2 M I M ED X Shareholder Presentation June 2019 1 CONFIDENTIALExhibit 99.2 M I M ED X Shareholder Presentation June 2019 1 CONFIDENTIAL
Slide 2: Disclaimer
DISCLAIMER This presentation (the “Presentation”) has been designed to provide general information about MiMedx Group, Inc. (“MiMedx” or the “Company”). Any information contained or referenced herein is suitable only as an introduction to the Company. The recipient is strongly encouraged to refer to
Slide 3: Table of Contents
MI MED X TABLE OF CONTENTS I Executive Summary II Timeline of Events: 2018 to Present III The Board’s Actions IV The 2018 Annual Meeting V Conclusion VI Appendix: Additional Information About the Company 3MI MED X TABLE OF CONTENTS I Executive Summary II Timeline of Events: 2018 to Present III The B
Slide 4: I. Executive Summary
I. EXECUTIVE SUMMARY 4I. EXECUTIVE SUMMARY 4
Slide 5: Executive Summary
MI MED X EXECUTIVE SUMMARY In Q1 2018, the Company announced that potential accounting issues required investigation before audited financial statements could be provided to shareholders • In Q2 2018, the Audit Committee concluded that the Company’s financial statements could no longer be relied upo
Slide 6: Executive Summary: The Election Contest
MI MED X EXECUTIVE SUMMARY: THE ELECTION CONTEST The Board has developed a comprehensive Board refreshment plan that includes nominating or appointing six new directors to the Board • The Board worked with Prescience Point Capital Management LLC and its affiliates (“Prescience Point”), a 6.8% shareh
Slide 7: MiMedx's Nominees Are New, Experienced and Objective
MIMEDX’S NOMINEES ARE NEW, EXPERIENCED AND OBJECTIVE MIMEDX NOMINEES PETE PETIT’S NOMINEES Tim Wright Kathy Behrens Wilsey Todd Newton Pete Petit David Furstenburg Shawn George NEW TO MIMEDX ✔✔✔✔✔ PUBLIC COMPANY ✔✔✔✔ BOARD EXPERIENCE HEALTHCARE ✔✔✔✔ EXPERIENCE UNBLEMISHED PUBLIC NO RECORD NO RECORD
Slide 8: Company Overview
MI MED X COMPANY OVERVIEW • Leading advanced wound care and emerging therapeutic biologics company focused on developing and 1.5mm marketing proprietary allografts processed from human amniotic tissue for the care and treatment of wounds Allografts Distributed to Date and other degenerative musculos
Slide 9: II. Timeline of Events 2018 to Present
II. TIMELINE OF EVENTS 2018 TO P RESENT 9II. TIMELINE OF EVENTS 2018 TO P RESENT 9
Slide 10: Brief History of MiMedx's Accounting Issues
MI MED X BRIEF HISTORY OF MIMEDX’S ACCOUNTING ISSUES MiMedx announces that it cannot release financials and has begun an investigation E&Y resigns as auditor MiMedx announces hiring of new auditor Audit Committee announces 2012- MiMedx 2016 financials announces cannot be relied Nasdaq upon MiMedx de
Slide 11: Timeline of Events: January to June 2018
MI MED X TIMELINE OF EVENTS: JANUARY TO JUNE 2018 2018 2018 Q1 Q2 Postponed release of financial results Announced unreviewed results for Q1 2018 (that are preliminary and may be • • Financials / • U.S. DOJ conducted investigation in parallel to SEC into subject to change) and 2018 Annual Meeting po
Slide 12: Timeline of Events: July to December 2018
MI MED X TIMELINE OF EVENTS: JULY TO DECEMBER 2018 2018 2018 Q3 Q4 Financials / • Termination of lending parties' commitments to make loans and • Nasdaq delisting announcement due to inability to file audited financials Annual Meeting issue letters of credit • E&Y resigned from engagement to audit t
Slide 13: Timeline of Events: January to June 2019
MI MED X TIMELINE OF EVENTS: JANUARY TO JUNE 2019 2019 2019 Q1 Q2 Financials / • Announced retention of new auditor Annual Meeting • Audit Committee announced the findings of its independent investigation • Announcement of long-range strategic plan to enhance value for all stakeholders Board • Audit
Slide 14: III. The Board's Actions
III. THE BOARD’S ACTIONS 14III. THE BOARD’S ACTIONS 14
Slide 15: The Audit Committee Initiated a Thorough Investigation
MI MED X THE AUDIT COMMITTEE INITIATED A THOROUGH INVESTIGATION The Audit Committee took immediate action to investigate the allegations of potential wrongdoing • The Audit Committee initiated an independent investigation into allegations in five areas: - Revenue recognition practices - Revenue mana
Slide 16: The Investigation Findings
MI MED X THE INVESTIGATION FINDINGS THE FINDINGS OF THE INVESTIGATION INCLUDE:* Improper Revenue Recognition under GAAP. Mr. Petit, the Company’s former Chief Operating Officer, William C. Taylor, the Company’s former Chief Financial Officer, Michael J. Senken, and the Company’s former Controller, J
Slide 17: The Investigation Findings (Continued)
MI MED X THE INVESTIGATION FINDINGS (CONTINUED) THE FINDINGS OF THE INVESTIGATION INCLUDE:* Material Misstatements by Former Senior Management. Messrs. Petit, Taylor, Senken and Cranston made material misstatements and omissions to key stakeholders, such as the Board, the Company’s external auditors
Slide 18: Mr. Petit's Conduct Has Harmed MiMedx and Shareholders
MI MED X MR. PETIT’S CONDUCT HAS HARMED MIMEDX AND S HA RE HO L D ER S Shareholders do not have current or historical financial statements upon which they can rely • MiMedx is in the process of restating its audited financial statements for the years 2012 to 2016 and preparing audited financial stat
Slide 19: The Board Took Decisive Action
MI MED X THE BOARD TOOK DECISIVE ACTION Since February 2018, the Board: • Determined that previously filed financial statements could not be relied upon • Directed management to begin the process of restating the Company’s financials • Determined the employment separation of the Company’s former CEO
Slide 20: New Senior Management Team
MI MED X NEW SENIOR MANAGEMENT TEAM THE BOARD HIRED NEW, EXPERIENCED MANAGEMENT TO OVERSEE THE COMPANY TIMOTHY R. EDWARD J. W RIG HT B O RKO W SKI CE O EVP AND INTERIM CFO Mr. Wright joined MiMedx as CEO in May 2019 Mr. Borkowski joined MiMedx in April 2018 after a comprehensive CEO search as EVP an
Slide 21: The Board Is Committed to Orderly Refreshment
MI MED X THE BOARD IS COMMITTED TO ORDERLY REFRESHMENT • Under the Board’s refreshment plan, following the 2019 annual meeting, the MiMedx Board will consist of six new directors on the Company’s ten-person Board • In addition, except for the Company’s General Counsel, who joined MiMedx in 2015, all
Slide 22: IV. 2018 Annual Meeting
IV. 2018 ANNUAL MEETING 22IV. 2018 ANNUAL MEETING 22
Slide 23: Background on the 2018 Annual Meeting
MI MED X BACKGROUND ON THE 2018 ANNUAL MEETING Under federal proxy rules, a company is required to furnish audited financials in order to issue a proxy statement and hold its annual meeting • Due to the need to restate its financials, the Company could not provide 2017 audited financial statements t
Slide 24: Board's Refreshment Plan
MI MED X BOARD’S REFRESHMENT PLAN The Board developed its Board refreshment plan in cooperation with Prescience Point • Prescience Point owns 6.8% of our stock, making it one of our largest shareholders • Prescience Point has publicly released research on MiMedx indicating their belief that MiMedx s
Slide 25: Our Nominees for the 2018 Annual Meeting
MI MED X OUR NOMINEES FOR THE 2018 ANNUAL MEETING TIMOTHY R. WRIGHT Chief Executive Officer of MiMedx since May 13, 2019. Previously, Mr. Wright served as a Partner at Signal Hill Advisors, LLC, a consulting practice, since February 2011. Mr. Wright served as President and Chief Executive Officer of
Slide 26: Our Nominees for the 2018 Annual Meeting (Continued)
MI MED X OUR NOMINEES FOR THE 2018 ANNUAL MEETING (CONTINUED) K. TODD NEWTON Chief Executive Officer and a member of the board of directors of Apollo Endosurgery, Inc. (Nasdaq: APEN), a medical device company. Mr. Newton has held this position since July 2014. From 2009 to 2014, Mr. Newton served as
Slide 27: Our Planned Additions to the Board for the 2019 Class
MI MED X OUR PLANNED ADDITIO NS TO THE BOARD FOR THE 2019 CLASS Following the 2018 Annual Meeting, the Board Intends to Add Two More New Directors and Identify a Third Director to Stand For Election at the 2019 Annual Meeting JAMES BIERMAN Mr. Bierman served as President and Chief Executive Officer
Slide 28: Mr. Petit's Campaign for Redemption and Retribution
MI MED X MR. PETIT’S CAMPAIGN FOR REDEMPTION AND RETRIBUTION Mr. Petit has nominated himself and two of his business associates for election to the Board • One of Mr. Petit’s nominees, Shawn George, is a West Virginia litigator who, until recently, was engaged by Mr. Petit If the company’s revenues
Slide 29: Mr. Petit Is Not Fit to Serve on MiMedx's Board, in Our View
MI MED X MR. PETIT IS NOT FIT TO SERVE ON MIMEDX’S BOARD, IN OUR VIEW Mr. Petit served as the Company’s CEO and Chairman of the Board from 2009 until his separation from the Company in 2018 • Mr. Petit’s separation was determined to be “for cause” by the Board The independent investigation concluded
Slide 30: Mr. Petit Has Irreconcilable Conflicts of Interest
MI MED X MR. PETIT HAS IRRECONCILABLE CONFLICTS OF INTEREST The Board has announced it intends to clawback some or all of the compensation paid to Mr. Petit and certain members of his management team during the periods in which Mr. Petit’s wrongdoing occurred • MiMedx has noted that the amount of th
Slide 31: Mr. Petit's Return Would Harm MiMedx
MI MED X WE BELIEVE MR. PETIT’S RETURN TO THE MIMEDX BOARDROOM WOULD HARM MIMEDX MiMedx has been working hard to recover from the fallout of the wrongful conduct of Mr. Petit and his senior management team • We are cooperating with regulators and other government constituencies, such as the VA • We
Slide 32: Board Candidate Comparison
MI MED X BOARD CANDIDATE COMPARISON M I M E DX B OA R D NOM I NE E DI S S I DE NT NOM I NE E TIM O TH Y P ETE W R I GHT P ETIT CEO of MiMedx since May 13, 2019 Separated from MiMedx “for cause” MiMedx Role • Lead independent Director of Agenus, Inc., an immune oncology • Long-tenured 23-year board m
Slide 33: Board Candidate Comparison
MI MED X BOARD CANDIDATE COMPARISON M I M E DX I NDE P E NDE NT DI S S I DE NT NOM I NE E B OA R D NOM I NE E DR. KATHLEEN DAV I D BEHRENS WILSEY F U R S T E NB UR G Co-Founder, President & CEO of the KEW Group, Retired Director of Taxes, Pulte Homes, Senior Executive Experience an oncology services
Slide 34: Board Candidate Comparison
MI MED X BOARD CANDIDATE COMPARISON M I M E DX I NDE P E NDE NT DI S S I DE NT NOM I NE E B OA R D NOM I NE E T O DD SH AW N N EW TO N GE OR GE • CEO Apollo Endosurgery, Inc. • EVP, CFO, COO, ArthroCare Corporation • Litigator in West Virginia Senior Executive Experience • President & CEO, Synenco E
Slide 35: We Oppose Mr. Petit's Binding Resolution on 2019 Annual Meeting Date
M I M ED X WE OPPOSE MR. PETIT’S BINDING RESOLUTION TO HOLD THE 2019 ANNUAL MEETING IN AUGUST 2019 Mr. Petit has expressed his intention to present an amendment to the Company’s Bylaws to require the 2019 annual meeting be held on August 19, 2019 Without exemptive relief from the SEC, the Company ca
Slide 36: V. Conclusion
V. CONCLUSION 36V. CONCLUSION 36
Slide 37: Conclusion
MI MED X CONCLUSION MiMedx has had a challenging last 15 months, with accounting and compliance allegations and investigations • The Board has been fully engaged in investigating and recovering from prior management’s misconduct • The Company is on the road to recovery - The Audit Committee has anno
Slide 38: VI. Appendix: Additional Information About MiMedx
VI. APPENDIX ADDITIONAL INFORMATION ABOUT MIMEDX 38VI. APPENDIX ADDITIONAL INFORMATION ABOUT MIMEDX 38
Slide 39: Our Company Timeline 1970 - 2011
MI MED X OUR COMPANY TIMELINE 1970 - 2011 2007 2008 FIRST PATENT I NCORP ORA T I ON MiMedx applies MiMedx Group, Inc. for first patent is incorporated 1970 2000 2011 A QU IS IT IO N H I S T OR Y OF A M NI O T I C M E M B RA NE A M NI O T I C M E M B RA NE D E V E L O P M E N T Completes acquisition
Slide 40: Our Company Timeline 2011 - 2015
MI MED X OUR COMPANY TIMELINE 2011 - 2015 2013 2011 2015 2013 2013 P R O D UC T L A UNC H PAT E N T I S S U E D N E W HE A D Q U A R T E R S C L IN IC A L T R IA L N E W P R O D U C T P U B L IS H E D L A UNC H L a u n c h e s MiMedx’s first MiMedx moves into First peer - r ev i ew e d E p i Bu r n
Slide 41: Our Company Timeline 2016 - 2019
MI MED X OUR COMPANY TIMELINE 2016 - 2019 2019 BLA 1.5 Million Al l og r a f ts 2016 2016 2016 2017 2018 1,500,000 Million Allografts Distributed PR I ME R USP - NF 1 M ILL IO N N E W P R O D U C T S to date B L A P U B L IS H E D MON OG R A PH AL L O G R AF T L A U N CHE D EpiCord, AmnioCord, Publi
Slide 42: MiMedx has Revolutionized the Practice of Wound Care
MiMedx has Revolutionized the Practice of Wound Care Through innovations in processing and foundational clinical and scientific research, MiMedx has revolutionized the Wound Care Industry … E FFI CA CY SAF E TY PURION Process Terminal Sterilization LO GI STI C S EASE OF USE Five Year Shelf Life Supe
Slide 43: Product Portfolio Overview
MI MED X PRODUCT PORTFOLIO OVERVIEW ( 1 ) MiMedx’s product portfolio is comprised of sheet, injectable, cord, and placental ECM products which have uses in a variety of settings and tre a tm e n ts . 2011 Source: Management estimates. (1) The extracellular matrix (ECM) is a meshwork of proteins and